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[IP CHINA] Turri vs Tulli: Trademark And Unfair Competition – Trademark



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Confusion behaviors refers to business operators who
make false representation, description or promise of their
goods or services by various untruths, or improperly use the
intellectual work of others to promote their goods or services,
causing misunderstanding among users or consumers, disrupting the
market order, harming the interests of competitors in the same
industry or the interests of consumers. Such behaviors remain a
difficult and complicated legal matter for business operators in
China, especially the foreign ones.

Despite trademarks being registered or copyright being recorded
in China, the smart infringers can always find an easy alteration
of infringement making the enforcement of such behavior more
expensive and difficult. In such occasions, the practioners will
always look to Art. 6 of Anti-unfair Competition Law.

On March 20th, the Interpretation of the Supreme People’s
Court on Several Issues Concerning the Application of the Law of
the People’s Republic of China against Unfair Competition
(hereinafter referred to as “the Interpretation”) was
officially enacted. The Supreme People’s Court
made further interpretation upon the confusion behavior regulated
under Art. 6 of the PRC Anti-unfair Competition
Law
 using 12 articles amongst 29. During the press
release, the Supreme People’s Court explained that in the
Interpretation, Supreme Court specified the meaning and elements in
considering “certain influence” in Art. 4 of the
Interpretation:

The People’s Court may determine that a distinctive mark
with certain market popularity and distinguishing the source of the
goods “has certain influence” as stipulated in Article 6
of the Law against Unfair Competition.

When determining whether a mark stipulated in Article 6 of the
Law against Unfair Competition has certain market popularity, the
People’s Court shall comprehensively consider the factors such
as the knowledge level of the relevant public within
the territory of China, the time, region, amount and target objects
for sale of the goods, the duration, degree and territorial scope
of the publicity and the protection of the mark
, etc.

In this article, The Supreme Court is saying: to render a
business identifier, not registered as trademark (product name,
product packaging or product decoration, company name, domain name,
etc.) qualifying as protectable under unfair competition, this
business identifier shall be:

  1. Distinctive;

  2. Having certain market popularity;

  3. Can work as distinguishing the source of goods.

And to prove that a business identifier is having certain market
popularity, one must provide evidence on:

  1. How well you are known in the territory of China;

  2. The status of the sales, including how long have you been
    selling, where have you been selling, amount of your sales and who
    are you selling to;

  3. Advertisement and publicity: how long have you been
    advertising, and much have you invested in advertised, which areas
    have you been advertising;

  4. Whether there were prior protections granted on your business
    identifiers

  5. Others

The Interpretation also set a bar in Art. 13 of the
Interpretation, reads below:

Where an undertaking has either of the following confusing acts,
which is sufficient to cause people to mistake its commodities for
others’ commodities or to believe certain relations exist
between it and others, the People’s Court may determine it in
accordance with Item (IV) of Article 6 of the Law against Unfair
Competition:

(I) using, without authorization, a mark that “has certain
influence” other than those as stipulated in Items (I), (II)
and (III) of Article 6 of the Law against Unfair Competition;
or

(II) using others’ registered trademark or unregistered
well-known trademark as the trade name in its enterprise name, so
as to mislead the public. It seemed to us that the Supreme Court is
trying to set a bar for those infringement where the court finds
inappropriate, but difficult to confirm all the elements under Art.
4 of the Interpretation at the brand owners’ side. With above
indication, we would like to review a decision on unfair
competition issued by Hangzhou City Xihu Dist. People’s Court a
few days after the enaction of the
Interpretation1

HFG successfully secured a favorable decision for
Italian furniture brand TURRI (“the
Plaintiff”).

1209038a.jpg

Defendant’s product (left) vs Plaintiff’s product
(right)

The Defendant here is a Chinese furniture company
who is:

  1. Using a similar word mark “TULLI” as the Plaintiff
    during business operation (websites, WeChat accounts, trade
    fairs);

  2. Setting up a company with Chinese characters
    “图礼” (TU LI) having similar pronunciation
    as TURRI. These Chinese characters were never actively used by
    TURRI to represent its brand in China;

  3. Manufacturing and selling furniture highly similar with TURRI
    brand (with similar series names as the Plaintiff).

On the official website of the Defendant, 38 pieces of furniture
were displayed, and 38 of them are identical / similar with TURRI
products.

The decision of the court reads:

The business scope of the plaintiff and the two defendants
includes furniture manufacturing, both parties have a direct
competitive relationship. After long period of continuous
publicity, the plaintiff has a relatively high reputation in the
domestic furniture industry. 

The evidence shows that over 30 pcs of furniture displayed on
Defendant’s website are basically visually indistinguishable
with the product brochure of the Plaintiff. After entering the
Chinese market, the plaintiff cooperated with domestic famous
furniture designers to launch “鑠(铄)” and
“蔓” series of furniture products, while the
website is also using identical names to name their furniture. It
would be easy for consumers to make confusion, mistakenly consider
they are the products of the Plaintiff or having certain connection
with the plaintiff, which is contrary to the principle of good
faith and business ethics, its behavior is improper, constituting
unfair competition.

The court quoted Art. 6 of AUCL in making this analysis.

The court confirmed the market awareness of the brand TURRI,
however did not make analysis on the products itself. It merely
said the products and the series names are highly similar, and
avoiding the issue on whether the products themselves are
distinctive and having certain influence.

Currently the case is pending appeal at Hangzhou City
Intermediate Court, and we wait to see how the final decision comes
out.

Footnote

1 Art. 29 of the Interpretation stipulated that The
Interpretation shall apply to the cases that have not been
finalized after the effectiveness hereof; and the cases that have
been finalized before the effectiveness hereof shall not be
governed by the Interpretation.

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.

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