Preliminary Research on the Judicial Judgment of Similar Goods in Trademark Infringement Cases

Issue14 By Yu Hui,[Trademark]


Abstract:
The legal significance of judging the similarity of goods lies in determining the common points or relationship between two different goods in terms of their functions, materials, origins or other factors. Judgments concerning whether goods are to be classified as similar goods shall be made from a comprehensive analysis. The relevant international legal standard in judging the similarity of goods is contained in the International Classification of Goods and Services for Registration of Marks and Discrimination of Similar Goods and Services. The basic rule for determining similarity is whether the two goods are so similar as to cause confusion among the public. Fame or notoriety of trademarks should not be considered as being determinative when judging similarity. Otherwise if the scope of similar goods is enlarged by fame, the trans-classification protection advocated for renowned trademarks will be rendered meaningless. The author of this text proceeds with an analysis of the meaning of similar goods by summarizing some rules that can be directly applied in judicial practice.

In cases of trademark infringement, people always focus their attention on judging the similarity of trademarks, while failing to comprehend the importance of the legal concept – similar goods. In fact in judicial practice, the similarity between two trademarks is not sufficient for the determination of trademark infringement. However, there are still different interpretaions in judging the similarity of goods. The most direct reference comes from the International Classification of Goods and Services for Registration of Marks and Discrimination of Similar Goods and Services. For example, in the trademark infringement case of Guifei Vinegar, discussed below, different courts have completely different understandings of the same issue. 

I. The concept of similar goods

Judicial interpretation has given a specific definition1 for the judging criteria of similar goods:
       (1) Similar goods are those having the same function, use, production department, marketing channels or target consumers, or are generally agreed by the public as having a special relationship causing confusion to the public. 
       (2) Similar services are those having the same purpose, content, type or object, or generally agreed by the public as having a special relationship and possibly causing confusion.
       (3) Similarity between goods and services means that the goods and services have a special relationship and will likely cause confusion to the public, e.g. automobiles and automobile repair plants.

From the above definitions, we know that there are two rules in judging the similarity of goods and services. One is the objective rule which is only applicable when a comparison is made between goods or between services; that is, if the goods or services being compared are the same in some respects, they are deemed to be similar. The other is the rule of unified subjectivity with confusion being the judgment basis; that is, although the goods or services have no common features in appearance, the public deems that there is a special relationship between them. This is also considered similarity. For example, if a vehicle repair plant puts up a Volkswagen trademark, the public may reasonably believe that the repair plant has a special relationship with the Volkswagen Company, and that the repair of Volkswagen automobiles there will result in more advantageous technical support than in other places. This comparison rule is not only applicable to goods and services respectively, but also between goods and services.   

Under the objective rule, it is only necessary to compare the objects from their properties. If there are similar features, the two goods are deemed to be similar. Fame of trademarks of goods or services (hereinafter referred to as "goods") shall not be a factor for consideration. Objective criteria exist to establish a uniform rule. The rule shall not be influenced by subjective factors; otherwise the law will be meaningless. "If we must determine whether the goods are similar by considering the fame of the trademark, it will possibly lead to the following result: if the goods use a trademark for ordinary goods, the two are not judged to be similar; but if the goods use a renowned trademark, the two goods will possibly be considered to be similar. In this way, it is actually meaningless to judge whether the goods are "objectively" similar without considering their trademarks2". 

Surely, objective criterion also varies along with social development. The specific contents of function, use, production department, marketing channels and target consumers are different in different cases. Judgment shall be made by the presence of particular goods. For example, different conclusions will be drawn in the comparison between ordinary motorcycles and economy cars, and the comparison between motorcycles and trucks. Ordinary motorcycles and economy cars are both transportation devices. Their target consumers are those requiring riding instead of walking. The production departments and marketing channels are basically the same. Therefore they are deemed as similar goods.

However, the comparison between high grade motorcycles and ordinary cars is different. The price of a "Harley" motorcycles is far higher than that of economy cars. Their target consumers are totally different. Therefore they are not similar goods. The  value in using trucks does not lie in "riding instead of walking", but in "transporting". From the objective rule, trucks and motorcycles will certainly not become similar goods. But the similarity comparison between top grade motorcycles and high grade cars, which are popular among the same targeted consumers, is not so easy and direct. Other factors shall also be put into consideration.  

The rule of confusion or association. Under this rule, function, use, production department, sales channel and target consumers of goods are not as important, but we can not forget these factors in our study of the similarity issue related to goods. When we see a "Montagut" trademark on a bicycle, we will naturally associate it with that trademark name on shirts. Can we reach a judgment that shirts and bicycles are similar goods? With the slightest thought, no one will think that a shirt factory produces bicycles. The two goods are totally different. Such an association by the public is caused by the popularity of the "Montagut" trademark. This text will not discuss this issue because it is under the protection for renowned trademarks. In the above example, more consideration should be given to the comparison between top grade motorcycles and high grade cars, and to the consumption habits of this particular group of consumers and to such factors as price, service, quality or just the brand name in making their purchase. Generally speaking, "special association" refers to the practical and essential association, not in abstract imagination. For instance, vehicle and vehicle repair have an association between products and services, and ordinary motorcycles and economy cars have the following common points: they are operated by a motor, and the quality of the motor determines the performance of vehicle. But for a"Montagut" shirt and a "Montagut" bicycle, their association only comes from the fame of the shirt brand, without any essential association between the products.

II. The International Classification of Goods and Services for Registration of Marks and Discrimination of Similar Goods and Services

The relevant judicial interpretation prescribes3 that the judgment of similarity of goods or services shall be based on the general understanding of the public. The International Classification of Goods and Services for Registration of Marks and Discrimination of Similar Goods and Services can be used as reference for making this judgment. But this stipulation causes confusion in the judicial practice as to the function of the two documents: what does "reference" mean? Is it only for reference purposes, or can it be relied upon by judicial authorities for guidance?

Property of the International Classification of Goods and Services for Registration of Marks and Discrimination of Similar Goods and Services

Nice Classification, i.e. the classification confirmed in the International Classification of Goods and Services for Registration of Marks, is widely used at present. It divides goods into 34 classes, and services into 11 classes. The fundamental purpose of the Nice Classification is to provide administrative convenience for trademark registration. 

The Discrimination of Similar Goods and Services was formulated by the Trademark Office of the China State Administration for Industry and Commerce according to the Nice Classification and is for the practice and requirements of trademark registration in China. We may interpret it to be the enforcement regulations of the Nice Classification in China. Its preface specifically points out that it is just the main guidance and reference for trademark investigators, managment personnel, agents, applicants and users to judge whether the goods or services are similar. But it is not to be considered as an authoritative documentation carrying the force of administrative regulations. The service objects of this document are the above-mentioned personnel, not the judicial authorities. And due to its insignificant force and effect, it is only applicable for the trademark registration process, not as guidance for judicially determining infringement. 

Therefore, as a search and registration tool, what is provided in the International Classification of Goods and Services for Registration of Marks and Discrimination of Similar Goods and Services is for the classification of goods whose concept is different from the concept of similar goods. 

(1) Goods classification does not occur naturally. It is made by relevant organizations based on certain rules for the convenience of management. Therefore goods classification is only a concept. Whether goods are similar must be determined by actual facts that must be considered in defining the scope of trademark rights in the process of judging infringement. From this judicial interpretation, we can see that similar goods are based on facts that may have confused origins. No matter how the goods are classified, facts exist objectively. 

(2) The similarity judgment of goods based on the International Classification of Goods and Services for Registration of Marks and Discrimination of Similar Goods and Services violates the objective rule and confusion rule. The basis of the judgment rule for similar goods stipulated by law is inconsistent with the Nice Classification rule. Consequently, in judicially determining whether goods are similar, it is rather inappropriate to rely on the Nice Classification as the yardstick. It is not possible for the Nice Classification rules to consider the marketing channels, production departments and other such factors, nor does it cover the objective factor of "special association" caused by confusion. Therefore although we admit that similar goods are always in the same class under the Nice Classification, it does not necessarily have judicial relevance in judging similarity. Article 2.1 of the Nice Agreement prescribes that "in respect to the protection scope for a specific trademark, the classification engenders no binding force to any country". 

(3) Viewing the current laws, we can see that in both international and domestic legislation, goods classification and judgment of similar goods are distinguished. The State Administration for Industry and Commerce that exercises the function of trademark registration has issued a specific definition to the concept of similar goods in relevant documents of administrative norms. Article 7 of The Suggestions on Several Issues in Trademark Administration and Law Enforcement stipulates that "similar goods are those having special relationships in the aspects of function, use, target consumer and marketing channels, etc". Article 8 stipulates that the "judgment of similar goods or services shall be established in ordinary consumers' objective understanding". Further, Nice Agreement, Article 2.1 of the Nice Agreement specifies that "in terms of the scope of protection of specific trademarks or recognition of service trademarks, classification has no binding force to the allies". Although China has not joined in the Trademark Law Treaty, it still can serve as a reference for China. Article 9.2 says that "goods or services may not be considered as being similar on the ground that, in any registration or publication by the Office, they appear in the same classes of the Nice Classification. Similarly, goods or services may not be considered as being dissimilar from each other on the ground that, in any registration or publication by the Office, they appear in different classes of the Nice Classification".

(4) Because of the difference of concept and content between goods classification and similar goods, goods classification may not act as the preliminary proof for determining similar goods. A judge from the Supreme People's Court also wrote an article stating that "generally speaking, the major functions for classification and discrimination are to classify the trademarks to be registered and to bring convenience to the registration examination and trademark administration. Classification is different from judging the goods similarity. Therefore, in judging whether goods are similar, it can not serve as the judicial basis, but is for reference only4."

When Changsha Intermediate People's Court of Hunan Province and the High People's Court of Hunan Province heard infringement cases on the trademarks of Guifei Vinegar and SUZUKI, they both made such a judgment. But in judicial practice, there is an understanding that the judgment of similar goods is an important issue in trademark authorization approvals and in the hearing of trademark infringement cases. To ensure judiciary unification, the authoritative departments shall make a uniform judgment. Usually in practical work, the judgment of similar goods shall refer to the Discrimination of Similar Goods and Services or provisions or official replies given by the authorities. On this basis, if the concerned party submits evidence inconsistent with the classification in the Discrimination of Similar Goods and Services, judgment shall be made upon the newly submitted evidence.

The author believes that in fact, it authorizes one party's exemption from the burden of proof, while increases the other party's burden. Taking the judgment under the Discrimination of Similar Goods and Services as the evidence-exemption causes stipulated in Article 9 of the Provisions of Several Issues on Civil Procedure Law is in fact treating the Discrimination as judicial guidance, not just as a reference. When the Supreme People's Court is hearing some civil prosecutor-contested cases, it also deems that in judicial interpretation Article 12 of the Trademark Law shall be the guidance for the People's Court to judge whether the goods are similar, instead of judging only by the "written reply" given in the examination of trademark registration by the State Trademark Office5

(5) Cognizance of similar goods is an embodiment of judicial power. Similar goods are a fact that is recognized through hearings. Such a fact requires cross-examination and argument by both parties before the judgment of the court is rendered. In lawsuits concerning trademark infringement, the facts are crucial. If the goods are not similar, even if they have the same or similar trademarks, it can not be judged to constitute infringement, as long as the allegedly "infringed" trademark is not renowned. If the International Classification of Goods and Services for Registration of Marks and Discrimination of Similar Goods and Services are taken as the guidance for judging whether goods are similar, it results in transfering the right of decision-making to the administrative departments rather than the judicial organization, which is contradictory to jurisdictional independence and TRIPS's requirement on the judiciary organs’ power of final adjudication.     

(6) The goods appearing in analogous groups by classification are not always considered similar goods in the public's eyes. For example, the 13th class in the International Classification of Goods and Services for Registration of Marks includes firearms, ammunition and bullets, explosives and fireworks. Ammunition and bullets are not transacted at all in China. Shall we bring them into our examination of similarity? Shall we judge whether fireworks and TNT explosives for civil use are similar? Shall we consider candles and lubricants to be similar goods because they are both in class 4? On the contrary, rice in class 30 and agricultural products in class 31 are usually considered as agricultural and side products that have a special relationship. Therefore they are judged as similar goods by the public.

III. Judgment rule of similar goods

The judgment of similar goods shall be made in a comprehensive manner. "Comprehensive judgment refers to the macro evaluation incorporating the public's recognition of specific cases, particular situations of goods transactions and factors determining a goods similarity stipulated by judicial interpretations. Meanwhile, we can also refer to the classification of goods and services6". The author believes that in judging similar goods, the following questions deserve attention:  

1. The starting point of judging similar goods is to check for the existence of confusion.

The legal meaning of similarity lies in determining the common or associated points in function, material, origin or other factors between two different goods. When two goods are indicated by the same or similar trademarks, consumers are prone to consider them as having the same or related origins. Therefore confusion is the basic rule for judging similar goods.

In judicial practice, there are always non-infringement defenses on the ground that compared goods fail to conform to the requirements of objective rules. For example, in the the alleged infringement case of Suzuki's trademark7, the plaintiff had already used the trademark of Suzuki on motorcycles, but only on Class 12 in registration with an insufficiently detailed classification. The defendant then raised defenses on the grounds of the new edition of classification,arguing that the plaintiff had not registered the trademark for motorcycles, and vehicles and motorcycles are not similar goods, so there is no infringement.

The defendant argued that "firstly, from classification of goods, the trademark registered by the plaintiff has the restricted use on vehicles in class 12 and spare parts, and they belong in subclass 1202 of class 12 in Goods Classification. The defendant's SUSIKI trademark, however, is used on motorcycles which belong in subclass 1203 of class 12. The two are neither the same goods, nor similar goods. Secondly, from the factors of working principle, structure, appearance, nature of goods and marketing channel, the goods ratified for use by the plaintiff's registered trademark and the goods appointed by defendant's trademark are neither the same nor similar."

Here, the defendant used sophistry by disguised replacement of a concept. He not only mistook "reference" for guidance, but also made a comparison of structure, appearance and marketing channels of motorcycles and vehicles, acknowledging that vehicles and motorcycles are not similar goods. It is a comparison using the objective rule to replace the confusion rule. In fact, the logical relations between the two rules defined by judicial interpretations are sufficient, but not necessary. Goods satisfying objective rules must be similar, but similar goods do not necessarily satisfy the requirement of the objective rule.

2. Make comparison and macro judgment based on the dominance of the public's attention.

The public's understanding of trademark information is from their impression of particular goods. But in comparison, the common understanding of similar goods will unavoidably become guidance. "Common understanding of the relevant public refers to the cognition of goods and general dealing concept by ordinary consumers in relevant markets. It is not limited to the natural characteristics of goods8". For the relevant public, goods are concrete, which determines that the comparison of goods is also concrete. But common understanding and the general dealing concept form the macro impression. In the above SUZUKI trademark infringement case, the court made a verdict with a combination of macro judgment based on concrete facts: "

(1) the defendant's argument that vehicles and motorcycles are neither the same nor similar on the ground that their appearance, operation method, consumers' financial capacity in purchasing and the marketing channels are different, is confusing the final product and general goods in the classification.

The Modern Chinese Dictionary defines "vehicle" as a "collection of all kinds of vehicles". Motorcycle is also in this category. Even if vehicle is limited to the class of automobile, the two are both transportation devices operated by motor. The public generally believes that they have a certain relationship, and can easily result in confusion for they are not easily distinguished goods.

(2) Viewed from the objective fact, the plaintiff's products involve automobiles and motorcycles, and enjoy a certain reputation in the world. Its trademark has the feature of obviousness and is renowned.

(3) In advertising and sales promotion, the defendant and its dealers use the trademark "SUZUKI KING" to sell motorcycles, relying on the market advantage created by the plaintiff and causing confusion to ordinary consumers by leaving them the impression that the defendant and plaintiff have certain relations.

(4) The International Classification of Goods and Services for Registration of Marks and Discrimination of Similar Goods and Services may be used as a reference for judging similar goods. But the main function of Goods Classification is to classify the goods for registration purposes for the convenience of registration examination and trademark administration. Classification is different from a goods similarity, and can not serve as the basis for judging similarity."

3. Judgment of similar goods

According to the confusion rule and the general understanding of goods, the following are considered similar goods:
 (1) Goods having the same functions. The so-called same functions cover the categories of complete sameness of functions and sameness of certain functions. The more identical one specific function of the two goods is, the more similar the two goods are. For example, pen, sign pen and aluminum pen, with the same usage of writing, are recognized as having the same functions. However, the same such functions shall be based on the common recognition of the public. The function of fly-swatter is for killing flies and other pests, and some goods, such as magazines, can also be used to kill pests. Obviously fly-swatters and magazines are not similar goods. 

(2) Between some goods there are accessory and complementary functions, so they are easily mistaken by people as being associated goods or coming from one series. For example, blankets (bedding) and electric blankets (electrical appliance) obviously belong in different classifications, but in common sense usage, they both belong in the "bedding" category, and therefore they are similar goods. 

(3) Goods having a matching relationship in use, such as belts and neckties. In common understanding, they are the important parts of men's wear, and usually placed in one gift box for sale, so they are considered as similar goods.  

(4) Goods having relations between raw materials and products, or spare parts and finished products, such as rice and rice-made products. It is generally agreed that biscuits and cakes made of high quality rice are of higher quality. There is a certain relationship between the two goods which will influence consumers' decision in purchasing them or not. Therefore these two goods are similar. 

(5) Goods produced and sold from the same industry, or services from the same provider, such as footbath service and massage service, and bathing service and massage service. 

(6) Goods and services deemed similar for having certain connections between them. The"Blue Cat Monopoly Shop" mainly sells children's articles from the Blue Cat series, therefore the services of this shop and the children's articles it sells are similar goods. 

4. Distinguish the confusion of similar goods and that of identical or similar trademarks

Some scholars believe that "once if confusion is introduced into the judgment of similar goods, it will result in a problem: in one respect, cognizance of confusion depends on whether the goods or services are similar. In the other respect, whether confusion exists is the standard for judging whether the goods or services are similar. It can be foreseen that this "egg first or chicken first" problem will exist for a long time9". 

(1) The use of the confusion rule shall also be based on taking into account the function, use, production department, marketing channel and target consumer for reference. Other factors, such as handling custom, shall also be considered in a comprehensive judgment. The judgment standard is lower than the "same" standard defined by objective rules. In the trademark infringement case of Guifei Vinegar10, the defendant argued that its product was a "soft drink containing vinegar", belonging in class no. 32 for soft drinks. The registered trademark of the plaintiff was only applicable to vinegar products, which was in class no. 30. Therefore the two goods were not similar and there was no infringement. Actually in this case, it is meaningless to discuss the different classifications of vinegar products and soft drinks containing vinegar. The key to the case is the public's understanding. People's understanding of goods is obtained by tasting them, buying them or from advertisements. They care nothing about the classification of vinegar products or vinegar soft drinks. The marketing channels of the plaintiff's vinegar products and the defendant's vinegar soft drinks are completely the same. They are placed in the same goods category for sale. The main compositions and degree of acetic acid of the two products are basically the same. What's more important is that the defendant's publicity concerning the product's function and recommended eating method is identical to the plaintiff's. From the consumers' perspective, the two goods are undoubtedly similar goods. Therefore, the court found that the two goods were similar. The Supreme People's Prosecutorate also found that the accused infringeing product was not a vinegar soft drink, but goods similar to Guifei Vinegar11.  

(2) Fame of trademarks shall not be used as a reference for the judgment of similar goods. Whether the goods are similar is an objective fact which is free from the influence of other subjective factors. The basis for our judgment that two goods have a certain relationship is because such relations are true and certain. When we see a motorcycle using a "McLaren" motor, we certainly expect a lot from its performance, because we have related the motor to the world famous "McLaren" racing car. And the connection is very direct. A motor marked with the brand of "Montagut" will infringe the trademark, but we will not expect the "Montagut" motor to be powerful from the "Montagut" shirt because there is no direct relationship between the shirt and the motor. Therefore the two goods are not similar. The establishment of infringement is made on the basis of protecting renowned trademarks. In fact, the fame of trademarks shall not be used to judge a goods similarity. We can deduce this in a reverse manner from the protection system for renowned trademarks. Protection of renowned trademarks is mainly represented by span-class protection. If the range of similar goods can be expanded by fame, the span-class protection advocated by renowned trademarks will be meaningless.

The author thinks that the puzzlement and confusion problem originates from the different cognizance of confusion. In judging whether goods are the same or similar, the criterion of confusion is the "special relationship between goods". People will also be puzzled by the natural property of goods: whether this commodity is related with another? The author's opinion is that such relationship emphasizes the natural property instead of the legal meaning, not to mention the origin of the confusion. Siemens once ordered some commemorative SX1 mobile phones for the "McLaren" racing team with the phones printed with eye-striking characters of "Mclaren". Later these phones sold like hot cakes among collectors. These phones definitely have a certain relationship with the "McLaren" racing team, but mobile phones and racing cars are obviously not similar goods.

Similar goods means goods having a certain relationship, but goods with a certain relationship are not always similar goods. In making a correct judgment concerning similar goods, whether the two goods are produced by the same manufacturer is not what we care about. Therefore, in the sentence "in one respect, cognizance of confusion depends on whether the goods or services are similar. In the other respect, whether confusion exists is the standard for judging whether the goods or services are similar", the first confusion refers to production origin, and the second refers to the usage of the commodity. By such an explanation, we will be mired in meaningless analysis. Too much consideration of factors other than the commodity itself in making the judgment of similarity is the main cause of the above contradiction.

In summation, different from judging identical or similar trademarks, the judgment of similar goods has explicit definitions and rules. However, under China's legal system which is heavily influenced by the executive branch in China, the judiciary sectors dare not go one step beyond the prescribed limit in the judgment of similar goods for their obedience to administrative customs. Their thought is confined to the International Classification of Goods and Services for Registration of Marks and Discrimination of Similar Goods and Services that originally served as a guidance and reference for administrative organs in trademark registration. Moreover, they even require the administrative departments to give written replies in explaining their judgments. Final judicial review becomes a mere formality in the end. This is disadvantageous for the protection of the rights of owners, and causes more problems for China's judicial reform.


Endnotes 
    1.Article 11 in Internation of Several of Applicable Laws in Hearing Civil Disputes on Trademark by the Sumpreme People's Court
    2.Huang Hui, Trademark Law. Law Press, Sep. 1, 2004; P 123.
    3. Article 12 of The Interpretation of the Supreme People's Court for Several Issues of the Application of Law to the Hearing of Civil Disputes over Trademarks
    4.Jiang Zhipei, How to Understand and Apply Interpretation of Several Issues of Applicable Law in Hearing of Civil Disputes on Trademark by the Supreme People's Court, Science, Technology and Law, 2002, 4th Periodical
    5.No. [2004] 38 Civil Written Protest from Supreme People's Prosecuratorate
    6. Jiang Zhipei, How to Understand and Apply the Interpretation of the Supreme People's Court for several Issues of Application of  Law to the Hearing of Civil Disputes over Trademarkt, Science, Technology and Law, 2002, 4th issue
    7. Judhment of SUZUKI Trademark Infringement is in the No.439 Civil Judgment (in the first instance decisions) of Changsha Intermediate People's Court
    8. Jiang Zhipei, How to Understand and Apply the Interpretation of the Supreme People's Court for several Issues of Application of  Law to the Hearing of Civil Disputes over Trademarkt, Science, Technology and Law, 2002, 4th issue
    9. Huang Hui, Trademark Law. Law Press, Sep. 1, 2004; P125
    10. No.220 (2002) Civil Judgment by Changsha Intermediate People's Court of Hunan Province
    11. No, [2004] 38 Civil Written Protest from Supreme People's Prosecuratorate


About the author
    Yu
Hui is a judge from the Changsha Intermediate People's Court of Hu'nan Province

                                                                                             (Translated by Ma Jing)

Member Message


Only our members can leave a message,so please register or login.

International IP Firms
Inquiry and Assessment

Article Search

Keywords:

Online Survey

In your opinion, which is the most important factor that influences IP pledge loan evaluation?

Control over several core technologies for one product by different right owners
Stability of ownership of the pledge
Ownership and effectiveness of the pledge

-