CNIPA Enacted Specific Standard on Trademark Infringement and An Interesting Case Related to Adidas Yeezy Boost Shoes

Borsam IP


 Borsam IP
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The China National Intellectual Property Administration (CNIPA) published the Trademark Infringement Judgment Standard (hereafter referred to as “Standard”) on June 15, 2020, which is a guideline for the administrative department in a trademark infringement case. With a total of 38 articles, the Standard mainly specifies the implementation in the aspects of trademark use, similarity on trademarks and designations, and concrete situation about trademark infringement.
According to article 3 of the Standard, the use of a trademark can be divided into two kinds, including 1) the trademarks being used on goods, product packaging, containers, service sites, and transaction documents, 2) or the use of trademarks in advertising, exhibitions and other commercial activities to identify the source of goods or services. But in fact, the judgment of the use of a trademark is complex, a trademark used on a product may not be a violation of the rules. Here is an interesting case about the use of trademark “椰子” which is corresponding to “Yeezy” in China to refer in particular to the jointly-designed shoes of Adidas and Kanye West. 
In 2012, a shoe company, Putian Bailiang Information Technology Co., Ltd. (hereafter referred to as the defendant) registered the trademark “Dliziz 丁丽姿” in class 25 for “clothes, shoes and socks etc.” Afterwards, the company launched a product online described as “Dliziz 椰子 casual shoes”. Then the trademark owner (hereafter referred to as the plaintiff) of a Chinese trademark“椰子”, Fuzhou Da Zhanggui Trading Co., Ltd, claimed violation of the exclusive rights of a trademark. The defendant argued that the use of “椰子” was legitimate and belonged to fair use complying with the law. 
The first and second instance court both held that the use of this trademark by the defendant did not constitute an infringement.
After reading the above case, we may wonder why the defendant used the same word as other’s trademark on designated products but did not constitute infringement. It leads to the following two issues. The first one is the relationship between the significance, fame and trademark protection. The second one is whether the sued behavior constituted commercial use.
As for the above-discussed case, although the term "椰子" refers to a kind of fruit, it is not a fanciful or coined word, when it was originally registered as a trademark on footwear products, it should still have a certain inherent distinctiveness and identification. However, the plaintiff did not provide relevant evidence to prove that it has continued to use, publicize and promote the trademark after its registration, and cannot prove the popularity of the "椰子" trademark. Although there is no evidence that "椰子" has become a statutory or customary generic name, it has actually become a representative of a trendy cultural phenomenon. From the perspective of consumers, they will think the trademark refers to the style of a certain type of shoe, which greatly weakened the distinctiveness of the "椰子" as a trademark on the approved footwear products involved, then the trademark was naturally weakened in terms of the strength of protection.
Regarding the second question, an essential precondition for the determination of trademark infringement is that the use must constitute trademark commercial use. According to the article 59 of the Trademark Law, the holder of the right to exclusively use a registered trademark shall have no right to preclude other from legitimately using the common name, design or model of goods on which the trademark is used, the direct indications of the quality, main raw materials, functions, uses, weight, quantity, and other features of goods, or the place name in the trademark. "Descriptive use", also known as narrative use or illustrative use, refers to the reasonable use of words that are the same or similar to others' trademarks when the perpetrator describes his goods or services. 
The focus of the case is whether such use constituted the use as a trademark prescribed in Trademark Law. Considering the popularity of “Yeezy”, the jointly-designed shoes of Adidas and Kanye West has high fame among Chinese customers. The public has a common sense of comprehension when identifying “椰子” on shoes. It’s a type of shoes which represents fashion and its unique design instead of a certain brand. Besides, the defendant had used the trademark “Dliziz” before the word as an identified part. It can be affirmed that the word “椰子” was not used as a trademark on products. It was to describe the type of shoes, which met the requirements of the legitimacy of use to describe the characteristic of goods. The court of both first instance and second instance ruled in favor of the defendant. The use did not constitute infringement regarding the trademark “椰子”.
In this case, although “it is a trademark being used on goods”, the core is that the use of trademarks is to identify the source of the product or a phrase to describe the type of the products or services. If the actual use does not have the potential to mislead the origin of the source, it should not be deemed as an infringement.