The mark of the confusion
“It is important to understand exactly what is understood by the term trademark confusion, as the concept can be assessed by reference to how the public may become confused by trademarks that are identical or similar to other marks, and this can best be explained in the context of how the public becomes aware of the goods or services in question,” said Michele Ferrante, founder and managing partner of Ferrante Intellectual Property in Beijing.
Direct confusion, or source confusion, occurs at the time of purchase by the consumer, as the goods displaying the infringing mark cause them to believe that they are purchasing the original products of a well-known brand such as Armani or Versace, not counterfeit copies.
Initial interest confusion, or pre-sale confusion, occurs when the consumer becomes aware of the infringer’s use of an identical or similar pre-existing trademark. However, by the time the purchase is close to completion, they are either aware that they are being misled or they intend to purchase the counterfeit goods. An example is when the infringer uses the original trademark as a keyword to promote their business in a search engine online, which leads the consumer to the infringer’s site.
After-sale confusion occurs when the consumer has purchased counterfeit goods, but confusion arises when others are confused about the origin and status of the goods. For example, a consumer buys a bag with a trademark or design identical or similar to a well-known brand, and others assume that it is an original item from a high-status brand.
Two other examples of confusion are indirect or sponsorship confusion and reverse confusion. The former category arises when the public becomes confused about the potential association between the infringer and the original trademark holder rather than assuming the source of the goods or services in question. They may mistakenly assume that the infringer has a sponsorship arrangement or license agreement with the trademark holder or that the parties operate a joint operation.
An example of this category is where the infringer uses the original trademark in its brochures or on its website but not on the actual goods being sold. However, the effect is to allow the infringer to profit from the trademark holder’s goodwill and create confusion in the minds of the public, who may assume a commercial relationship between the infringer and the trademark holder.
On the other hand, the latter category, reverse confusion, is slightly more complicated but relates to the confusion caused when an infringer adopts a trademark that is identical to or similar to a trademark registered to another party earlier and causes the consumer to believe that the adopted trademark originated from the later party or that there is an association between them. This often arises when the later party is a well-known, larger or more successful brand and their investment and brand promotion have an enhancing effect on the earlier party’s business.
“To determine whether two trademarks are similar, it is necessary to consider the general attention of the relevant public, and that should be taken as the standard,” said Ferrante. “When similar trademarks have been used on the same or similar goods or services simultaneously, and the relevant public carries out the isolated comparison, the confusion will be easily incurred.”
Following legal guidelines
In China, following the 2013 Trademark Law Amendment coming into effect on May 1, 2014, the SPC published Guidelines, Provisions on Several Issues Concerning the Hearing of Administrative Cases Involving the Granting and Affirmation of Trademark Rights (the 2016 Provisions). These Guidelines, which concerned the 2013 Amendment, came into effect on March 1, 2017, and were published on December 12, 2016.
Before 2014, the only reference to the concept of likelihood of confusion was in Article 13.1 of the trademark law, which was renumbered 13.2 in the revision. That article prohibited the registration of a trademark applied in respect of identical or similar goods, which is a duplication, imitation or translation of another person’s well-known trademark not registered in China, and the applied trademark was likely to cause confusion.
There was also no reference to confusion in Articles 28, 31 or 41.2 and 41.3 relating to the refusal to register an identical or similar trademark on identical or similar goods, refusal to register a preemptive application by unfair means of a trademark already used and having a certain influence, invalidation of a trademark in violation of Articles 13, 28 and 31. The new Amendment renumbered these articles 30, 32 and 45.1, but there is no change to their contents or reference to the concept of confusion.
The 2016 Provisions introduced the concept of the likelihood of confusion in administrative litigation, and Article 12 advised that in assessing the likelihood of confusion under Article 13.2. The judge should assess not only the degree of similarity of the trademarks and goods but also the degree of distinctiveness and reputation of the “older” trademark, the general attention of the public and “other pertinent factors.” The SPC also provided that the intention of the junior trademark applicant and the potential evidence of actual confusion may be considered to assess the “global picture.”
These provisions have widened the previously restricted criteria for trademark examination. Each case turns on its facts and requires judges to determine the likelihood of confusion, defined as a “threshold of tolerance” beyond which a junior trademark cannot be accepted. The higher the reputation of the prior trademark, the lower the tolerance threshold regarding the degree of similarity. Included in the assessment are factors such as the distinctiveness and extent of the reputation of the cited trademark, whether the trademarks are sufficiently similar, the designated goods, the extent of the overlapping of the relevant public and its degree of attention and whether similar signs are legitimately used by others.
In 2019, China issued a consolidated version of the trademark law, considering amendments up to the Decision of April 23, 2019. The focus of the fourth amendment to the law was the concept of bad faith in Article 4, intended to prevent trademark hoarding by malicious applications, where there was no intent to use the trademark applied for. The new Article 4 is also added as an explicit ground for opposition and invalidation proceedings under Articles 33 and 44, respectively.
On June 15, 2020, the China National Intellectual Property Administration (CNIPA) issued the Standard on Trademark Infringement Determination (standard), which was applied for dealing with and investigating trademark infringement. The Standards contain 38 Articles, with Articles 9 to 12 guiding how to determine whether infringing goods or services are the same as or similar to the designated goods or services and Articles 13 to 18 guiding how to determine whether an infringing trademark is the same as or similar to, another person’s registered trademark.
The standard defines confusion as sufficient to cause the relevant public to consider that the relevant goods or services are manufactured or provided by the trademark right owner, or the provider of the goods or services has a commercial relationship with the trademark owner. The factors to be taken into account regarding the confusion include the use and similarity of the trademarks, the similarity of the goods or services, the distinctiveness and fame of the registered trademark, the characteristics of the goods or services, the degree of attention and recognition of the relevant public, and other related factors.
“These standards offer guidance to enforcement agencies, as well as to the right holders and other relevant parties so that they can be aware of the evidence that they need to obtain and present in support of their claim and to evaluate the strength of their claim or defense,” said Ferrante.
Meanwhile, the Supreme Court of India held in the case of Amritdhara Pharmacy v. Satya Dev Gupta that while assessing confusion between trademarks, the following factors need to be considered:
- Who are the persons whom the resemblance must be likely to deceive or cause confusion; and
- What rules of comparison are to be adopted in judging whether such resemblance exists. As to confusion, it is perhaps an appropriate description of the state of mind of a customer, who, on seeing the mark, thinks that it differs from the mark on goods which he had previously bought, but is doubtful whether that impression is not due to imperfect recollection.