On Rules for Determination of Trademark Infringement by Domain Names, with Comments on Jiayou Shop Group Co. v. Guizhou Jiayo

Bai Fan;Hu Ping,[Trademark]

Key points
1. To start from how general users usually memorize domain names in the Internet environment, the similarity between a domain name and a textual trademark should be determined primarily on their pronunciations and meanings, and secondly on the styles of the letters/numbers.
 
2. To assess the possibility of confusion between a domain name and a textual trademark, consideration should also be given to the current usage of the Internet, and to the search results returned by search engines and the auto fill entries in the address bar of browsers.
 
Applicable statutory provisions
Article 57 of the Trademark Law of the People’s Republic of China, and Article 1 of the Interpretation of the Supreme People’s Court on a Few Issues with the Application of Laws in the Trial of Trademark-Related Civil Disputes.
 
Case review
Jiayou Shop Group Co., Ltd., the plaintiff to the case, was incorporated in June 2010. It was transferred eight registered trademarks in July 2012, including the trademark No. 6693601 “jiayougo,” which was approved to be used to identify services in Category 35, including advertisements and online advertisements through data communication networks, which would not expire until 2020. Guizhou Jiayou Online Network Co., Ltd., the defendant to the case, was incorporated in October 2015. In October 2016, the plaintiff filed a request with the court concerned to preserve and notarize the evidence that the website with the domain name, www.jiayou9.com, which was owned by the defendant, sold folk artifacts, foods and articles of daily use and thereby, engaged in an e-business operation.
 
The plaintiff claimed that the defendant had infringed upon the exclusive user right of the plaintiff to the registered trademark concerned, on the ground that the domain name employed by the defendant was similar to the registered trademark concerned, and that the website of the defendant provided the same e-business services as the website of the plaintiff did. Therefore, it complained to the court, requesting an order that the defendant should cease the infringement, compensating the plaintiff for the loss sustained by the plaintiff as a result of the infringement and for any other reasonable expenses incurred by the plaintiff in maintaining its right, and make a formal apology to the plaintiff.
 
The court of first instance held that the website of the defendant was used to advertise the products of sellers and to facilitate the transaction between sellers and buyers. The services it provided were similar to those approved for the trademark “jiayougo.” Comparing between the main parts of the domain name “jiayou9” and the registered trademark “jiayougo”, it could be found that they both contained the spelling “jiayou”, with the remaining number “9” and the letter “g” looking extremely similar. Viewed separately, the two could be deemed to be similar to each other.
 
The defendant, which was incorporated after the plaintiff, did not have any right to the main part of the domain name, and its use of the domain name was sufficient to cause confusion in the relevant public about the source of the services. Therefore, it was illegitimate for the defendant to register and use the domain name. From that, the court of first instance ruled that the defendant should immediately cease the infringement, deregister the infringing domain name, and compensate the plaintiff for the economic loss sustained by the plaintiff as a result of the infringement and for other reasonable expenses incurred by the plaintiff in protecting its right (First-instance Case No. (2017) Qian 01 Min Chu No. 69).
 
The court of second instance held that the trademark concerned had been approved to identify services in Category 35, “Advertisements, Online Advertisements through Data Communication Networks, and Marketing for Others.” Particularly, the category covered the service to categorize products of sellers, to facilitate customers to browse and buy those products. The service could be provided by retail/wholesale stores, vending machines, mailing lists or e-media (i.e. websites or TV shopping programs).
 
The domain name concerned pointed to a comprehensive e-business platform run by the defendant, which mainly sold local specialties, fresh and live agricultural produce, and folk artifacts.
 
Its functions and customers were the same as those of the plaintiff’s website, and the services were in a similar category as approved for the trademark concerned. The spelling “jiayou,” though it appeared in both of the marks as their main component and sounded the same, was a usual and indistinctive combination. The trademark owner could not be allowed to monopolize the spelling by registering the “jiayougo” mark. The sound of the word “go” was apparently different from that of “9,” and corresponded with the name of the plaintiff, “Jiayou Shop” (whose Chinese pinyin could be spelled as “Jiayou Gou”).
 
Generally, Internet users would exercise a higher level of care when they used domain names to identifying the source of goods or services. The trademark concerned was not very identifiable in the market, and had a small latitude of similarity to other marks. The practice of Internet users to access websites for consumption should be taken into account, as the website of the defendant clearly showed “JIAYOU9.COM” on the homepage. To conclude, although the defendant used the domain name (which was similar to the trademark concerned to a certain extent) to identify its services (which were similar to those approved for the trademark concerned), it would not confuse Internet users and did not constitute an infringement upon the trademark concerned. From the above, the second instance court ruled that the judgment of the first-instance court be repealed and the claim of the plaintiff be dismissed (Second Instance Case No. (2017) Qian Min Zhong No. 822).
 
Judges’ comments and analyses
According to the theories of the trademark law, generally the infringement upon the exclusive user right to a registered trademark is determined on the similarity of the trademark, the similarity of the goods, and the possibility of confusion to the relevant public, as specified in Articles 57, Items 1 and 2 of the Trademark Law. Moreover, Article 1, Item 3 of the Interpretation of the Supreme People’s Court on a Few Issues with the Application of Laws in the Trial of Trademark-Related Civil Disputes (hereinafter “Interpretation on Trademark Law”) provides that if a person registers a domain name using a text identical or similar to a registered trademark of another person, and uses such domain name to develop e-commerce involving goods in connection with those of such other person, thereby easily causing confusion to the relevant public, these acts shall be deemed as damaging the exclusive user rights of such other person to the registered trademark. By analyzing this clause, it can be found that the determination of a domain name’s infringement upon the exclusive use of a registered trademark is actually very similar to the usual trademark infringement determination. It should be done in the following three respects.
 
(I) Similarity of trademark
Regarding the similarity of the trademark, the Interpretation on Trademark Law states that a domain name shall be deemed as similar to a trademark, if it is registered using “a text identical or similar to the registered trademark.” Apparently the “domain name” here mainly refers to the identifiable distinctive part of an URL, without the prefix and the suffix. In a sense, this middle part is equivalent to a keyword. Article 9, Item 2 of the Interpretation on Trademark Law provides that for a textual trademark, comparison should be done mainly on the pronunciation, style and meaning of the text. However, these authors believe that due to the special nature of domain names, how general users would recognize and memorize them in the Internet environment must be taken into consideration. To make it more specific, the comparison should be done primarily on the pronunciation and meaning and secondly on the style.
 
Currently domain names containing Chinese characters have not been widely used and accepted. Often a domain name consists of English letters and numbers, and the letters are combined into an English word or a Chinese pinyin. For that sake, generally, Internet users memorize a domain name by its pronunciation or meaning. Only few combinations are memorized by their specific styles (such as “dOiOb”). Therefore, to compare between a domain name and a textual trademark, the primary emphasis should be placed on the pronunciation and meaning of the text.
 
In the case, the “jiayougo” registered trademark of the plaintiff and the “jiayou9” keyword of the allegedly infringing domain name of the defendant are similar in the form. The spelling “jiayou” can have more than one pronunciation in Chinese, to mean “things of a family,” “refueling,” “good friends,” or “nice friends.” The spelling “go,” which is quite a common English word, sounds like “shopping” in Chinese.
 
It is different from the number “9” in pronunciation and meaning. Therefore, “jiayougo” and “jiayou9” cannot be deemed as similar to each other.
 
Moreover, in Chinese, “jiayougo” sounds very similar to “Jiayou Shop,” the trade name and trademark of the plaintiff, making it easily recognizable to Internet users. Therefore, it is very difficult to confuse “jiayougo” with “jiayou9.”
 
(II) Similarity of goods
The similarity of goods means that one uses a domain name to “develop e-commerce involving goods in connection with those of (the trademark owner)” under the Interpretation on Trademark Law. It can be understood to contain the following three points.
 
Firstly the trademark law theories of China generally do not accept any presale confusion (i.e. the confusion about the initial interest), as the Interpretation on Trademark Law only requires “goods in connection.” From that, even if the relevant public mistakenly believe that a given domain name should point to a website owned by the provider of any specific goods or services, but as long as after accessing it, they find that the website is totally irrelevant to the specific goods or services, then there is no possibility for trademark infringement.
 
Secondly if the trademark concerned is used to identify goods, the goods that are sold on the allegedly infringing website should be in a similar category of goods.
 
Thirdly the term “goods” that appears in the Interpretation on Trademark Law also includes “services.” Therefore, the circumstance where similar services are provided or promoted on the allegedly infringing website is also covered.
 
There is a special condition in China, as no trademarks to identify the wholesale or retail service of general goods, online or offline, are allowed to be registered. As a result, those service marks are often registered in other service categories, such as “marketing for others” or “advertising” in Category 35. The flexibility of registration, though justifiable to a certain extent, challenges the basic value of the trademark registration system and the existing principles in the public announcement and credit systems. It has led to much controversy in the judicial practice. Some say that the definitions of trademark categories should be strictly followed.
 
“Marketing for others” does not include the business operator selling goods for itself. Others argue that the above phenomenon should be accepted, in light of the special condition of China and the perception of consumers, in order to prevent people from profiting from others’ toil. By far, no consensus has been achieved between the two sides.
 
In the case, it was held by the courts in the first and second instances that the website of the defendant advertised the goods of sellers and facilitated the transaction between the seller and the buyer. The functions and the targeted audience of the website were similar to those of the website of the plaintiff, and the services were in a similar category approved for the “jiayougo” trademark.
 
To make it convenient for our discussion, these authors will presently put aside the above controversy in the judicial practice, but presume that the two are in the same service category.
 
(III) Possibility of confusion
After the comparison is done over the similarity of the trademark and the similarity of the goods, it is often necessary to comprehensively assess the possibility of confusion to the relevant public, with respect to the distinctiveness and fame of the marks concerned, the focus of the relevant public, and the legitimacy of the defendant to use its mark. Infringement cannot be determined until the marks concerned are sufficient to “easily cause confusion to the relevant public” under the Interpretation on Trademark Law.
 
Without regard to the issue with the category of services, as long as both of the parties to the case are considered to be e-business operators (i.e. the online sales service providers), then the relevant public would be mostly consumers who access websites and buy general goods (i.e. the general Internet users). As far as these authors see it, to assess the possibility of confusion to the relevant public, consideration should also be given to the current usage of the Internet, and to the search results returned by search engines and the autofill entries in the address bar of browsers.
 
While surfing the Internet, general users who are not familiar with or cannot remember the essential part of a domain name would often try to type in a keyword out of their blurred memories. The entry would be filled up automatically by the autofill function in the search box of a search engine or at the address bar of a browser. Therefore, the search results so returned play an essential role in the determination of possible confusion to the public. Take the case for example, these authors selected a few common search engines in China to search for three keywords, namely, “jiayou,” “jiayougo” and “jiayou9.” The results are as shown in the following table [1].
 
 
As shown, when “jiayou” was searched, only bing.com.cn displayed the website of the plaintiff on the last of the returned search pages. When “jiayougo” was searched, the website of the plaintiff was displayed by most of the search engines. When “jiayou9” was searched, only baidu.com displayed the website of the defendant. Therefore, it is impossible for the specific information and websites of both of the parties to be displayed on the search result pages, if these three keywords are searched for by general Internet users using common search engines. Also, the search for the “jiayougo” trademark cannot return pages that display the allegedly infringing domain name or website.
 
To search for these keywords using the keyword association and autofill functions at the address bars of common browsers in China, the results are in the following table.
 
 
As shown, when “jiayou” was typed in the address bar of the above five browsers, neither of the URLs of the parties was filled up automatically. When “jiayougo” or “jiayou9” was entered, the browsers could not associate it with either of the URLs. Therefore, they cannot cause confusion to the general Internet users.
 
To conclude, in view of the less distinctiveness and the less wellknowness of the two marks, finally it is unlikely for general Internet users to confuse between the service provider that the allegedly infringing domain name points to and the service source that the registered trademark identifies.
 
Moreover, these authors hope that judges would use a developing perspective and look to the future, to take into account how the commercial goodwill and fame of the parties will accumulate or change in terms of business growth, publicity and marketing. This will likely lead to changes in the search results returned by search engines and the autofill entries at the address bar of browsers. It will in turn change the perception of the relevant public about the trademark and the domain name. As both of the parties run an e-business, it seems reasonable to order the party who came to have the right later (i.e. the defendant) to add to its website any other appropriate mark which is sufficient to enable the relevant public to differentiate its source of goods, in order to prevent consumers from confusing between the two sources of goods, and help the right owner from being constrained by the principle of “Non bis in idem” (i.e. “not twice in the same (thing)”).
 
Understanding its relationship with the Interpretation on Domain Names
It is necessary to clarify the relationship between the Interpretation on Trademark Law and the Interpretation of the Supreme People’s Court on a Few Issues with the Application of Laws in the Trial of Computer Domain Name-Related Civil Disputes (“Interpretation on Domain Names”).
 
(I) The Interpretation on Domain Names differentiates between wellknown trademarks and general registered trademarks, and grants different protections accordingly
Article 4, Item 2 of the Interpretation on Domain Names provides that for a general registered trademark, the discovery in court shall be done on the identicalness or similarity between the main part of the domain name of the defendant and the registered trademark of the plaintiff. For a wellknown trademark, it may be extended, as appropriate, to any copying, imitation, translation or transliteration of the well-known trademark. Article 5, Item 1 provides that the defendant who registers a domain name for business purposes by using any well-known trademark may be directly determined as containing a malice in registering and using the domain name. Although the Interpretation on Trademark Law does not differentiate between well-known trademarks and general ones, it seems to provide stronger protection for wellknown trademarks, under its Articles 13 and 48.
 
However, it should be noted that in the case, the registered trademark concerned was not a well-known one. For well-known trademarks, the necessity of stronger protection will further expand the test criteria for infringement determination. In other words, the weights of different factors will change in assessing the possibility of confusion.
 
For example, in Michelin Group Co., Ltd.v. Li Daowei, Qingtao Senqilin Tire Co., Ltd. and Sentaida Group Co., Ltd. over Trademark Infringement Dispute ((2015) Min Ti Zi No. 37), the Supreme People’s Court (SPC) held that the “MICHELIN”trademark No. 136402 that Micheline Group claimed for protection was included in the list of key trademarks protected nationwide in June 2000. It had achieved a high fame before the incorporation of Sentaida Co. or Senqilin Co., and was distinctive in and by itself. The domain name that was registered by Sentaida Co. and jointly used by Sentaida Co. and Senqilin Co. contained “cenchelyn” as its main component. Compared with “MICHELIN,” except its first three letters, namely “cen,” which were different from “MI,” the remaining six letters of the domain name highly resembled those of the registered trademark. Also, the visual effects of the two were close, so were their sounds. Sentaida Co. had worked as a distributor of Michelin Group before, and should have known very well about the latter and how its trademarks were used. Therefore, the court decided that Sentaida Co. and Senqilin Co.’s using “cenchelyn.com” as their domain name and through the domain name, engaging in an e-business involving goods in connection with those of Michelin Group, at the same time with Michelin Group, would easily cause confusion to the relevant public. Their acts constituted an infringement upon the exclusive use of the registered trademark of Michelin Group.
 
(II) The Interpretation on Domain Names helps prevent pre-sale confusion
Article 5, Item 2 of the Interpretation on Domain Names provides that the defendant who registers and uses a domain name that is identical or similar to a registered trademark of the plaintiff, for business purposes, intending to cause confusion with the product, service or website of the plaintiff and to misguide users to his website or the website of any other person shall be deemed to be malicious in the registration and use of the domain name. As shown, the clause does not require any specific content of the website that the allegedly infringing domain name points to, but the only requirement is that the domain name confuses and misguides Internet users. This protects the right owner by providing a pre-sale protection. It should be noted that the protection is given to prevent any induced access or malicious competition for traffic, as the latter constitutes unfair competition on the Internet. Although this is achieved by means of the Unfair Competition Law other than the Trademark Law, it does not conflict with the Trademark Law and its judicial interpretation.
 
(III) The two interpretations have different perspectives
Both of the Interpretations are purposed to protect the legal and justifiable rights and interests of the owner, and protect the relevant public from confusion, but from different perspectives. The Interpretation on Domain Names is focused on how to justify the use of a domain name by the defendant, including whether the defendant is malicious. The Interpretation on Trademark Law puts emphasis on the traditional rules for trademark infringement determination.
 
In fact, this difference can be evened out. As a test in trademark infringement determination, the assessment of possible confusion to the relevant public contains a judgment whether the act of the alleged infringer is justifiable.
 
(IV) The time of formulation and the range of regulation are different
The Interpretation on Domain Names covers various infringing and unfair competitive acts, and its area of regulation is widespread. The Interpretation on Trademark Law, which was formulated later, specializes in domain name-related trademark infringements, by establishing test criteria under trademark law theories.
 
To conclude, as far as authors see, the criteria under the Trademark Law and the Interpretation on Trademark Law should be used to adjudicate domain name-related trademark infringements. However, in determining the similarity of trademarks, the similarity of goods, and the possible confusion to the relevant public, consideration should be given to the specific condition of the Internet environment, the practice of general Internet users, and the characteristics of the e-business. Moreover, in assessing the possible confusion to the relevant public and in particular, the justifiability of the defendant’s use of a trademark, relevant provisions of the Interpretations on Domain Names may be applied.
(Translated by Ren Qingtao)
Note:
1. The search was conducted before the judgment given by the second-instance court.

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