China: Re-Analysis Of "PRETUL" Retrial Case In Terms Of Infringement Judgment Criterion

Last Updated: 11 October 2018
Article by Xiaomeng Dong

[Brief introduction of "PRETUL" retrial case]

The plaintiff (hereinafter "FOCKER") was the owner of the registered mark "PRETUL" in China. It alleged that the defendant (hereinafter "YAHUAN", a Chinese company) had infringed its trademark rights by using same or similar mark "PRETUL". The "PRETUL" branded padlocks manufactured by YAHUAN were all entrusted by "TURPER" (a Mexican dealer) and all its manufactured padlocks were only for exportation to Mexico. On November 26, 2015, the China's Supreme People's Court ("SPC") rendered a civil judgment on this retrial, affirming that the OEM manufacturer's act of using the trademark in issue did not constitute trademark infringement because it did not qualify as trade mark use in the sense of article 48 of the Trademark Law (2013 version). The SPC overruled the finding of trademark infringement in the first instance (Intermediate Court of Ningbo) and in the second instance (High court of Zhejiang).

In the retrial, the SPC held that "The primary function of a trademark, which the Trademark Law intends to protect, is to be a source indicator. When determining whether the act of using an identical trademark on identical goods, or a similar trademark on identical goods or an identical or similar trademark on similar goods, is likely to cause confusion, the Court shall base its finding on the fulfillment or possible fulfillment of the source indicator function of the trademark. The Court should base its finding on whether trademark infringement is constituted on whether the source identifying function of the trademark is fulfilled or undermined. There is no practical significance in judging that there is a likelihood of confusion where the trademark involved fails to fulfill its identifying function and does not constitute trademark use in the sense of trademark law......Since the padlocks manufactured by YAHUAN were not for distribution in the Chinese market, the PRETUL marks did not fulfill the trademark function of 'distinguishing the origin of the commodities' in China. Therefore, such marks were unlikely to cause confusion and misidentification among the relevant public in China between the products to which they were affixed and the source of the goods manufactured by FOCKER".

There is a voice in Chinese intellectual property circle that the PRETUL retrial case has great guiding significance to OEM infringement cases in China. Some people hold the view that "PRETUL" case has the function to confirm that "trademark use in the sense of trademark law" is the precondition of trademark infringement judgment in China. This article intends to re-analyze "PRETUL" retrial case in terms of Chinese infringement judgment criterion.

I. Is it rational to take "trademark use in the sense of trademark law" as the precondition of trademark infringement judgment in China?

Though in "PRETUL" retrial, the immediate ground for the SPC to deny the infringement complaint is "the trademark in issue did not qualify as trade mark use", it is too early to simply draw a conclusion from this case that "trademark use in the sense of trademark law" is the precondition of trademark infringement judgment in China.

First, there is no provision in the laws under which "trademark use in the sense of trademark law" is an essential factor in determination of trademark infringement.

Second, currently in China, if a mark is used in OEM process, such use evidence will be regarded effective in maintenance of the mark against non-use cancellation request.

Third, whether "trademark use in the sense of trademark law" is a precondition in finding trademark infringement is controversial in theory and practice. Objectors such as Graeme B. Dinwoodie and Mark D. Janis hold that "trademark use in the sense of trademark law" lacks strong basics of law. Boosters such as Stacey L. Dogan and Mark A. Lemley hold that "trademark use in the sense of trademark law" sits at the heart of trademark law, which is a necessary tool to maintain integrity of trademark law. It is not fabrication by imagination.

II. Re-analysis of "PRETUL" retrial case in terms of infringement judgment criterion in China.

According to Art. 57 of the Trademark Law, any of the following constitutes an infringement of the exclusive right to use a registered trademark: 1) Using a trademark that is identical with a registered trademark in connection with the same goods without the authorization of the owner of the registered trademark; 2) Using a trademark that is similar to a registered trademark in connection with the same goods, or that is identical with or similar to a registered trademark in connection with the similar goods, without the authorization of the owner of the registered trademark, which may cause public confusion.

According to Art. 16 of TRIPS, the owner of a registered trademark shall have the exclusive right to prevent all third parties not having the owner's consent from using in the course of trade identical or similar signs for goods or services which are identical or similar to those in respect of which the trademark is registered where such use would result in a likelihood of confusion. In case of the use of an identical sign for identical goods or services, a likelihood of confusion shall be presumed. The rights described above shall not prejudice any existing prior rights, nor shall they affect the possibility of Members making available on the basis of use.

Like provisions of TRIPS, "likelihood of confusion" criterion is adopted in China on trademark infringement issues. Namely, in case of the use of an identical sign for identical goods or services, a likelihood of confusion shall be presumed, while in the other cases, whether infringement should be confirmed will depend on whether there is a likelihood of confusion.

For "likelihood of confusion" criterion, most countries use "Multi factor detection method". Normally, four factors are considered in determining whether there is trademark infringement, i.e., trademark factor, goods/services factor, consumer factor and others. In "PRETUL" case, the four factors could be analyzed as below:

Trademark factor: Though the mark used by the defendant and the plaintiff are similar, on the external packing and directions of the products in issue, the illustrations "Importer: TURPER" in Spanish could all be found. In addition, the contact channels of TURPER, including telephone numbers and website, were also shown on products. Hence, no matter for Mexican or Chinese consumers, they could quickly realize that the products in issue are from TURPER, not FOCKER.

Goods/services factor: The products in issue by the defendant were 100% exported to Mexico, while, the goods of the plaintiff were used in mainland China since there was no contrary evidence proving its goods were exported out of China. The goods of both parties were used in completely different marketing channels and facing totally different consumers. The goods of the plaintiff and defendant are not similar considering the aforementioned.

Consumer factor: All the padlocks manufactured by YAHUAN were exported to Mexico. The consumers of these products are all foreign consumers. But, the plaintiff's consumers are in mainland China. The two brands face different consumers.

Others:

First, the "PRETUL" branded padlocks manufactured by YAHUAN were all entrusted by "TURPER" (a Mexican dealer) and all the padlocks were exported to Mexico. "TURPER" had registered 'PRETUL' mark No. 770611 in class of 6 in Mexico on November 27, 2002

Second, YAHUAN submitted a lot of evidence proving TURPER company's PRETUL mark had high reputation through wide use, but there's no evidence proving the FOCKER company's PRETUL mark had certain influence.

Third, what's more, there are sufficient evidence to testify that the plaintiff's PRETUL mark was filed in plagiarism of the defendant's marks and the plaintiff's mark was obtained against Honesty and Credibility Principle.

In conclusion, considering the trademark, goods, consumers and other factors, no confusion likelihood exists for use of the trademark in issue in this case. Based on "confusion likelihood criterion", it is reasonable to affirm the OEM manufacturer's act of using the trademark in issue did not constitute trademark infringement.

III. How to correctly treat the function of "trademark use in the sense of trademark law" in trademark infringement cases?

"Trademark use in the sense of trademark law" is not an independent factor. It is just one factor of possibility of confusion judgment. "Trademark use in the sense of trademark law" is internalized in judgment of infringement process. In "PRETUL" retrial case, the SPC cracked problem from the angle of "Trademark use in the sense of trademark law" based on case details, which has reflected its extreme high judicial wisdom. But in essence, the spirit of this retrial judgment has followed "likelihood of confusion principle criterion" and based on such criterion, the same conclusion could be achieved, that is, OEM manufacturer's act of using the trademark in issue did not constitute trademark infringement.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
CCPIT Patent & Trademark Law Office
HFG Law & Intellectual Property
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
CCPIT Patent & Trademark Law Office
HFG Law & Intellectual Property
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions