HongFangLaw ~ Chinese IP Law Updates ~ n’ 71
23 November 2018

JIA SHI DUO (Castrol) v. JIA SHI JIE
Protection Bridging between the Trademark Law and the Anti-Unfair Competition Law

Co-authors: Edmond Au, Shirley Lin

Recently, Castrol, aka JIA SHI DUO in Chinese, has filed an administrative complaint, claiming for anti-unfair competition protection against a kind of lubricant product named JIA SHI JIE. In the case, the counterpart noticeably labeled his “嘉世捷”(JIA SHI JIE) lubricants as related to “嘉实多” (JIA SHIDUO is the Chinese equivalent of Castrol), the registered trademark and tradename of Castrol in China. Despite the aggressive use of the text “authorized by JIA SHI DUO (China) Ltd.”, “JIA SHI JIE – JIASHI DUO Group”, “supervised by JIA SHI DUO (China) Ltd.” to confuse consumers, the difference between the two Chinese marks make it difficult for trademark infringement. Faced with the conundrum, Article 58 of the Trademark Law caught the attention of the author as a potential solution.

Article 58 was added to the Trademark Law in the 2013 amendment as “Where any entity uses a registered trademark or an unregistered well-known trademark of others as a trade name in its enterprise name to mislead the public, if any unfair competition is constituted, it shall be handled in accordance with the Anti-Unfair Competition Law of the People’s Republic of China.” [1] On the issue, it is similarly provided in Article 1.1 (hereinafter “Interpretation1”) of the Interpretation of the Supreme People’s Court Concerning the application of Laws in the Trial of Cases of Civil Disputes Arising from Trademarks that “using the words that are identical or similar to the registered trademark of any other person as the tradename on identical or similar commodities so that the relevant public is liable to be misled” constitutes an act of “causing other damages to the registered trademark of other people”. The provisions together provide a relatively well-round solution to the conflicts between a prior trademark and the use of it as the trade name. They also serve to complete an improve Article 4 of the provisions of the Supreme People’s Court on Issues Concerned in the Trial of cases of Civil Disputes over the Conflict between Registered Trademark or enterprise Name with Prior Right which regulates the court’s jurisdiction over such issues. [2]

For precise law application of Article 58, the key concepts that the provision entails should be taken right. “A registered trademark” mentioned therein should refer to a registration either well-known or not since the former is unarguably entitled to broader protection, regardless of the singled out “unregistered well-known trademark” that follows as a parallel. It is because the wording intends only to draw the line between a registration and non-registration, and should not be cited against a registered well-known trademark. When bringing in the first Interpretation that outlaws a questionable trademark use “as the trade name”, it becomes obvious that Article 58 actually regulates against a less severe condition — the use” as a trade name” in the user’s enterprise name. While both usages are expected to give rise to confusion, the former imposes graver damages for the high-profile violation, whereas the latter is less noticeable in the disguise of the infringer’s own company name, and thus only constitutes an act of unfair competition as opposed to blatant trademark infringement. Although it has been accepted that any violation that fits in Article 58 should be handled pursuant to the Anti-Unfair Competition Law, opinions still vary on which provision should be cited in practice for the void unfilled.

There are mainly three opinions: firstly people deem it is about the Article 2 of the Anti-Unfair Competition Law, which has been validated by a number of judgments of the High People’s Courts in Tianjin, Chongqing, Jiangsu, Jiangxi, Shandong etc. [3]; the second one to Article 6.2, an approach taken by some other courts[4]; and third opinion agrees that it is to “false advertising” provided in the same law before amendment, citing untruthful statement about the producer[5]. While the former two opinions both have a point and help navigate judicial and administrative enforcement, the other hinges on a condition that is no longer regulated by the Anti-Unfair Competition Law, and thus should not be cited when more applicable provisions are still available, in a way to avoid unnecessary expansion of the interpretation of any specific legal concept.

In citing the more general Article 2, the court is suited to do so as it is within their rights to interpret laws. It is not uncommon for the court to give its take on the intertwined trademark and enterprise name matters at issue based on general rules of laws: in addition to the above mentioned, there is Article 10 of the Notice of the Supreme People’s Court on Issuing the Opinions on several issues concerning Intellectual Property Trials Serving the Overall Objective under the Current Economic Situation, “…We shall, under the principle of good faith, maintaining fair competition and protecting the prior rights, hear such disputes of rights according to law. Where there is a legitimate form of business such as industrial and commercial registration but still trademark infringement or unfair competition substantively constituted, such violation shall be affirmed according to law. For commercial identifiers such as enterprise names acquired outside China, trademark infringement or unfair competition is still applicable if relevant laws are violated and economic order disrupted within the borders, pursuant to the principle that intellectual property is independent and regional…Where an enterprise name appropriates a considerably high-profile registered trademark of others and thus inevitably causes confusion in the market no matter the use is accentuated or not, the court shall rule to ban or change the name at the request of the party concerned…” Therefore, the court may similarly apply Article 2, a general provision of the Anti-Unfair Competition Law, together with Article 58 of the Trademark Law to find unfair competition in hearing such trials.

As for Article 6.2, it provides for “using without permission another person’s name with certain influence, such as the name(including abbreviations and trade names) of an enterprise”. Such uses should include the direct and high-profile way, as well as sneakily incorporating other’s trade name into one’s enterprise name. The latter is exactly what we have discussed in the context of Article 58. To finish the case building, the last piece is to establish that the trademark being cited (“a registered trademark of an unregistered well-known trademark”) is also the rights holder’s trade name. Compared to Article 2 above, Article 6.2is a specific regulation easier to enforce in administrative proceedings. All conditions being fulfilled, law enforcers may take action against unfair competition by citing Article 58 of the Trademark Law and Article 6.2 of the Anti-Unfair Competition Law. This was precisely the way they pursued the infringer in “JIA SHIDUO” v. “JIA SHI JIE”. With “JIA SHI DUO” being the trademark and trade name of Castrol Ltd., it was argued on grounds of unfair competition pursuant to the articles, winning the support from the authorities who punished the adverse party accordingly.

In summary, to bring out the potential of Article 58 of the Trademark Law in synergy with the Anti-Unfair Competition Law for law enforcement in judicial and administrative practice, we should understand what the provisions are for and how they can be applied in both proceedings to achieve substantial outcomes.


Notes:

[1] Article 1 of the Interpretation of the supreme people’s Court Concerning the Application of Laws in the Trial of Cases of Civil Disputes Arising from Trademarks:

a. Using the words that are identical or similar to the registered trademark of any other person as the name of one enterprise on identical or similar commodities so that the relevant public is liable to be misled.

b. Copying, imitating or translating the registered well-known trademark of another person or the major part thereof is used on non-identical or dissimilar commodities as a trademark for the purpose of misleading the general public so that the interests of the registrant of the well-known trademark may be damaged;

c. Registering the words or characters identical or similar to the registered trademark of another person as a domain name and engaging in the electronic commerce of relevant commodities via the domain name so that the relevant general public is liable to be misled.

[2] Article 4 of the Provisions of the Supreme People’s Court on Issues Concerned in the Trial of Cases of Civil Disputes over the conflict between Registered Trademark or Enterprise Name with Prior Right: If the enterprise name of the defendant infringes upon the right to the exclusive use of a trademark or constitutes unfair competition, the people’s court may, by taking the plaintiff’s claim and the specific situation of the case into account, order the defendant to stop or regularize the use of enterprise name and assume corresponding civil liability.

[3] Article 2 of the Anti-Unfair Competition Law of the People’s Republic of China: Businesses shall, in their production and distribution activities, adhere to the free will, equality, fairness, and good faith principles, and abide by laws and business ethics.

For the purposes of this Law, “act of unfair competition” means that in its production or distribution activities, a business disrupts the order of market competition and causes damage to the lawful rights and interests of the other businesses or consumers, in violation of this Law.

For the purposes of this Law, “business” means a natural person, a legal person, or a non-legal person organization that engages in the production or distribution of commodities or the provision of services (commodities and services are hereinafter collectively referred to as “commodities”).

[4] Article 6 of the Anti-Unfair Competition Law of the People’s Republic of China: A business shall not commit the following acts of confusion to mislead a person into believing that a commodity is one of another person or has a particular connection with another person:

(1) Using without permission a label identical or similar to the name, packaging or decoration, among others, of another person’s commodity with certain influence.

(2) Using without permission another person’s name with certain influence, such as the name (including abbreviations and tradenames) of an enterprise, the name (including abbreviations) of a social organization, or the name (including pseudonyms, stage names, and name translations) of an individual.

(3) Using without permission the principal part of a domain name, the name of a website, or a web page with certain influence, among others, of another person.

(4) Other acts of confusion sufficient to mislead a person into believing that a commodity is one of another person or has a particular connection with another person.

[5] Article 9 of the Anti-Unfair Competition Law of the People’s Republic of China (1993): Managers shall not use advertisement or the other methods to make a false propaganda for the quality, composition, function, usage, producer, time of efficacy and place of production of commodities.

Advertising company shall not be an agent of, or design, or make, or propagandize false advertisement if it knows or should know the truth.

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