How to Prohibit Cross-Category Use of Registered Trademarks

By Zou Zhengyou,[Trademark]

 

Abstract: If a defendant argues that the use of the licensed logo does not infringe the exclusive right to use the registered trademark, the People's Court shall examine the scope of protection of the licensor's registered trademark. If the type of goods approved for use of the registered trademark used for defense does not include the type of goods requested by the plaintiff, and the alleged infringement mark is the same or similar to the plaintiff’s registered trademark, the defendant’s use of the trademark shall be deemed to infringe the exclusive right to use the registered trademark.
 
Keynote of Judgment
 
If the defendant argues that the use of a licensed logo does not infringe the exclusive right to use a registered trademark, the People's Court shall examine the scope of protection of the licensor's registered trademark. If the type of goods approved for use of the registered trademark used for defense does not include the type of goods requested by the plaintiff, and the alleged infringement mark is the same or similar to the plaintiff’s registered trademark, the defendant’s use of the trademark shall be deemed to infringe the exclusive right to use the registered trademark.
 
Where the defendant uses the plaintiff’s registered trademark and summarizes the protection scope of the plaintiff’s registered trademark as an industry, and combines the name of the defendant’s company with a combination of "enterprise name + industry", it shall be determined that the defendant’s actions constitute an unfair competition.
 
When the defendant “widens” the use of its Zou Zhengyou Jiangxi Higher People's Court Third Civil Division Judge registered trademark to the unprotected scope of the registered trademark, the People's Court shall clarify the business boundaries of the original and defendant, and shall not “injure” the defendant’s exclusive right to use the registered trademark when ordering the defendant to stop infringement.
 
Introduction
 
First-instance case number: (2019) Gan 07 Civil case initial judgment No. 68
 
 Second-instance case number: (2020) Gan Civil case final judgment No. 368
 
Appellant (plaintiff in the original trial): Jiu Mu Kitchen and Bath Co., Ltd. (abbreviated as Jiu Mu Company)
 
Appellant (defendant in the original trial): Jiu Mu Wang Sanitary Ware Sales Department, Zhanggong District, Ganzhou City (abbreviated as Jiu Mu Wang Sales Department)
 
On October 7, 1997, the trademark No. 1117525 “” was approved for registration, and the category of commodities used (category 11) was approved: sanitary water pipe equipment, sprinklers, water pipe faucets, water faucets, bathing equipment, etc. On November 14, 2004, the "Jiu Mu" trademark No. 3489226 was approved for registration, and the approved goods (category 11): faucets, sprinklers, water pipe modulation switches, etc. On May 28, 2006, the trademark "JOMOO Jiu Mu" No. 4044548 was approved for registration, and the products used were approved as the 11th category. On December 30, 2010, Jiu Mu Kitchen & Bath Co., Ltd. (referred to as Jiu Mu Company) was established; on September 13, 2014, Jiu Mu Company was assigned the above three registered trademarks. The business scope of Jiu Mu includes R&D, production and sales of sanitary ware accessories (faucets, electronic sanitary ware, sanitary ceramics, pipe fittings, shower rooms, shower panels, valves, showers, hoses, cabinets, hardware and accessories, hardware products, etc.).
 
On May 21, 2000, the trademark “” No. 1400267 was approved for registration, and the approved commodities (category 6) include: metal bolts, metal door bolts, metal window hooks, metal door handles, hardware appliances, etc. On January 10, 2017, the registrant authorized the trademark to Xingda Company.
 
On June 6, 2002, Jiu Mu Wang Sanitary Ware Sales Department (referred to as Jiu Mu Wang Sales Department) in Zhanggong District, Ganzhou City registered as a distributor of Xingda Company, selling sanitary ware and hardware produced by Xingda Company. On November 6, 2018, Jiu Mu’s notarized evidence preserved the store’s sign of Jiu Mu Wang’s Sales department  (containing the words "Jiu Mu Wang JOOXOD Sanitary Ware" and other words, hereinafter referred to as "Jiu Mu Wang Sanitary Ware (signboard)"). The walls of the store are decorated "" (Hereinafter referred to as "Jiu Mu Wang (Graph)"), "" (hereinafter referred to as "JOXOD (Graph)") trademark graphics. The Sales department of Jiu Mu Wang uses the " " Sanitary Ware General Agent" receipt to sell faucets marked with the "Jiu Mu Wang (Graph)" logo. Jiu Mu Company believed that the actions of Jiu Mu Wang Sales Department constituted trademark infringement and unfair competition, and requested an order to stop the infringement and compensate 50,000 yuan for losses.
 
After the trial, the Intermediate People's Court of Ganzhou City, Jiangxi Province held that the actions of Jiu Mu Wang Sales Department did not constitute trademark infringement, but constituted unfair competition. The decision was made: (1) the Sales department of Jiu Mu Wang stopped using the trademarks "Jiu Mu Wang (Graph)" and "JOXOD (Graph)" without marking the "Jiu Mu Wang (Graph)" trademark. )" trademark, "Sanitary Ware" and "Ganzhou General Agent" split and combined graphics and text as its store signs; (2) Jiu Mu Wang Sales Department has not marked "Jiu Mu Wang (Graph)" trademark approved goods are the 6th category, namely " In the case of "hardware", stop hanging the "Jiu Mu Wang (Graph)" trademark on the wall of its store; (3) the Sales department of Jiu Mu Wang shall stop using the graphic text sales ticket marked "Sanitary Ware General Agent" within 10 days from the effective date of the judgment (format); (4) the Sales department of Jiu Mu Wang shall compensate Jiu Mu’s economic losses and reasonable expenses to stop the infringement for a total of 10,000 yuan within ten days from the effective date of the judgment.
 
After the verdict was pronounced in the first instance, both Jiu Mu Company and Jiu Mu Wang Sales Department filed an appeal.
 
The High People’s Court of Jiangxi Province held the second instance that the behavior of "Jiu Mu Wang (figure)" marked prominently in the packaging box of faucet of Jiu Mu Wang's Sales department infringes the exclusive right to use the registered trademark of Jiu Mu Company; the packaging bag label "" (Hereinafter referred to as "Jiu Mu Wang Hardware (Picture)") used by the Jiu Mu Wang Sales department, the behavior of selling faucet labeling "Jiu Mu Wang (Picture)" violates the exclusive right to use the registered trademark of Jiu Mu; the behavior of the Sales department of Jiu Mu Wang using the store signboard of "Jiu Mu Wang Sanitary Ware (signboard)" also infringed the exclusive right to use the registered trademark of Jiu Mu Company. The cross-category use of "Jiu Mu Wang" brand + "Sanitary Ware" by Jiu Mu Wang Sales Department as the company name constitutes unfair competition; the use of "Jiu Mu Wang Sanitary Ware (signboard)" store signs by Jiu Mu Wang Sales Department also constitutes unfair competition. The first-instance judgment was then revoked and the judgment was changed to: (1) the Sales department of Jiu Mu Wang immediately stop using the "Jiu Mu Wang (Graph)" logo on the faucet product packaging box and faucet product sales ticket from the date this judgment take effect, and immediately stop using "Jiu Mu Wang Hardware (Graph)" logo on the faucet product packaging; (2) the Sales department of Jiu Mu Wang shall not use store signs that contain the words "Jiu Mu" as well as "Sanitary Ware" from the date this judgment take effect; (3) the Sales department of Jiu Mu Wang shall not use company names that contain the words "Jiu Mu"as well as"Sanitary Ware" from the date of this judgment take effect; (4) the Sales department of Jiu Mu Wang shall compensate Jiu Mu Company for economic losses and reasonable expenses to stop the infringement within ten days from the effective date of this judgment, totaling 25,000 yuan.
 
Judge's Comments
 
The most significant difference between this case and the traditional infringement of trademark rights and unfair competition disputes is that the defendant himself has the right to use a legally registered trademark to defend against non-infringement, but the defendant “widened” the registered trademark beyond the scope of its registered protection, causing the plaintiff to prosecute its infringement. Therefore, when the people's court orders the defendant to stop the infringement, the defendant's right to exclusive use of the registered trademark shall not be violated.
 
(1) Judging the use of trademarks should not only relate to the source of the goods, but also concern business common sense
 
Article 48 of the "Trademark Law" stipulates: "The use of a trademark as mentioned in this Law means the use of a trademark on the packaging or containers of commodities and on documents of trade of commodities, or the use of a trademark in advertising, publicity, exhibition or other commercial activities to identify the source of commodities.” The shop decoration of Jiu Mu Wang Sales Department uses the “Jiu Mu Wang Hardware (graph)” logo, and the main products are towel racks, drying racks, toilet paper holders, and toilet brushes. In real life, towel racks and drying racks may be used in bathrooms, bedrooms, offices, or even outdoors according to their functions or purposes. There is a fuzzy region from the sanitary products requested by Jiu Mu Company. Because the real economy is limited by the place of business, it is not appropriate to judge the use of "Jiu Mu Wang Hardware (graph)" logo for trademark infringement or unfair competition in the store decoration of Jiu Mu Wang Sales Department. In the same way, the front desk decoration of Jiu Mu Wang Distribution Department uses the "Jiu Mu Wang (graph)" logo, which is not related to the specific source of goods. It is also inappropriate to judge the front desk decoration of Jiu Mu Wang Sales Department for trademark infringement or unfair competition.
 
(2) The protection of the exclusive right to use a registered trademark shall not exceed the boundary, as well as the use of the registered trademark
 
Article 56 of the "Trademark Law" stipulates: "The exclusive right to use a registered trademark shall be limited to the trademarks that have been approved for registration and to the commodities that have been approved for use." Article 23 provides: "Where a registered trademark needs to acquire the exclusive right to use the trademark on goods not within the scope of approved use, a new application for registration shall be filed.” Based on this, the author believes that the protection of exclusive use of a trademark does not go beyond the boundary, and the use of a registered trademark cannot cross the boundary. People's courts shall conduct civil cases in strict accordance with the litigation requests of the parties. After explanation, after Jiu Mu Company clarified the protection scope of trademark rights, the court of second instance demarcated the trademark No. 1400267 "Jiu Mu Wang (graph)" from the trademark of Jiu Mu Company in accordance with the Trademark Law. No. 1400267 "Jiu Mu Wang (graph)" trademark approved products (category 6) including metal bolts, metal door bolts, metal window hooks, metal safety chains, metal door handles, metal accessories for furniture, metal tool handles, hardware, padlocks, key. The faucet products sold by the Sales Department of "Jiu Mu Wang" belong to category 11 of the "Similar Goods and Services Categoryification Table", which are the same as the registered trademarks of Jiu Mu Company No. 1117525 "", No. 3489226 "Jiu Mu", and No. 4044548 "JOMOO Jiu Mu". The act of marking the packaging of faucet with "Jiu Mu Wang (graph)" in a prominent position shall be regarded as ‘use’ in the sense of trademark law. Compared with the "Jiu Mu" series of registered trademarks of Jiu Mu Company, the "Jiu Mu Wang" logo has the same pronunciation and similar composition. It is easy for consumers to misunderstand that the faucet labeled "Jiu Mu Wang" is the high-end products of the series of faucet products produced by Jiu Mu Company, resulting in confusion. In this way, Jiu Mu Wang’s sales department’s behaviour of marking"Jiu Mu Wang (picture)" in a prominent position of faucet’s packaging violated the exclusive right to use the registered trademark of Jiu Mu Wang.
 
The store sign of Jiu Mu Wang Sales Department is "Jiu Mu Wang Sanitary Ware (signboard)", and the relevant public with general attention often judges it as a bathroom product with the sales mark " Jiu Mu Wang" and " JOXOD" of Jiu Mu Wang Sales Department. The approved products (category 11) are mainly sanitary products. Obviously, the "Jiu Mu Wang Sanitary Ware (signboard)" store signs of the Sales Department of Jiu Mu Wang prominently use the word "Jiu Mu Wang", and include the behavior of advertising the "Jiu Mu Wang" sanitary ware products, which is easy to mislead consumers. It is recognized that the products sold by the Sales Department of Jiu Mu Wang originated from the Jiu Mu Company, and that the use of the shop sign of "Jiu Mu Wang Sanitary Ware (signboard)" by the Sales Department of Jiu Mu Wang infringed the exclusive right of the registered trademark of Jiu Mu Wang Company. (3) When using other’s trademark as a company name, attention shall be paid to the review of the behavior during registration, comprehensively determine whether it constitutes infringement Article 58 of the "Trademark Law" stipulates: "Where someone else's registered trademark or unregistered well-known trademark is used as the name of an enterprise to mislead the public and constitute an act of unfair competition, it shall be treated in accordance with the Anti-Unfair Competition Law of the People's Republic of China. "In this case, the full name of Jiu Mu Wang Sales Department is "Jiu Mu Wang Sanitary Ware Sales Department, Zhanggong District, Ganzhou City", "Jiu Mu Wang" is the trade name, and "Sanitary Ware" is the industry, which ostensibly complies with Article 7 of the "Regulations on Enterprise Name Registration Management", which stipulated "enterprise name shall consist of the following parts in sequence: company name (or trade name), industry or business characteristics, and organizational form". However, when we look closely, the Sales Department of Jiu Mu Wang has admitted that it has established a distribution relationship with Xingda since 2000. The certificate of registered trademark change used by the Sales Department of Jiu Mu Wang for defense confirms that Xingda and Jiu Mu are both located in Nan'an City, Fujian Province. Xingda Company and its sellers should be aware of the registered trademark of Jiu Mu and its popularity in the sanitary ware industry. Therefore, Jiu Mu Wang’s Sales Department should be more cautious when choosing the name of the company to avoid confusion of consumers. The Sales Department of Jiu Mu Wang used "'Jiu Mu Wang" brand + "Sanitary Ware" as the company name across categories, which essentially summarized the scope of protection of the registered trademark of Jiu Mu as an industry. There was a subjective intention to cling to the reputation of Jiu Mu Wang's sanitary ware products, so the act of Jiu Mu Wang’s Sales Department registering the company name and sell sanitary products under the name of "Jiu Mu Wang Sanitary Ware Sales Department of Zhanggong District, Ganzhou City" is very easy to confuse the relevant public with Jiu Mu’s sanitary ware products, and violates the "Anti-Unfair Competition Law" Article six, and constitutes unfair competition. (4) Selling goods that are not known to infringe the exclusive right of a registered trademark is a prerequisite for the seller not to bear the liability for compensation The Paragraph Two of Article 64 of the "Trademark Law" stipulates: "Selling goods that are not known to infringe the exclusive rights of registered trademarks can prove that the goods are legally obtained by oneself and explain the provider, and shall not be liable for compensation."Since Jiu Mu Wang Sales Department is a long-term cooperative seller of Xingda Company, a producer of alleged infringing products. It deliberately used "Jiu Mu Wang" to sell sanitary ware. Although it can prove that the alleged infringing goods were legally obtained from Xingda Company, it does not comply with Article 64 of the Trademark Law, the situation of not bear the liability for compensation. (5) Reasonable separation of the trade name and industry is an appropriate approach of protecting the rights of both trade name and industry The court of second instance ruled that the Jiu Mu Wang Sanitary Ware Sales Department of Zhanggong District, Ganzhou City shall not use store signs that also contain the words "Jiu Mu" as well as"Sanitary Ware", and shall not use business names that contain the words "Jiu Mu" as well as "Sanitary Ware" at the same time. The author believes that the judgment instructs the operators to isolate the "brand name and industry", which not only clarifies the business boundaries between the original and the defendant, but also avoids the accused infringer from being seriously "violated". It essentially takes into account the series of trademarks of Jiu Mu Company. The right to use the goods in the 11th category, at the same time, it also prohibits the Jiu Mu Wang Sales Department from using the "Jiu Mu Wang" on the 11th commodity. The judgment does not prevent the Jiu Mu Wang Sales Department from using the "Jiu Mu Wang" in the 6th category and other legally approved use on the products, the legal use of the registered trademark No. 1400267 "Jiu Mu Wang (graph)" is guaranteed. For example, it is completely legal to change the company name of "Jiu Mu Wang Sanitary Ware Sales Department of Zhanggong District, Ganzhou City" to "Jiu Mu Wang Hardware Distribution Department of Zhanggong District, Ganzhou City" and operate hardware products.

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