Armstrong case highlights problem in determining similar goods
By Kevin Nie (China IP)
Updated: 2014-01-20

The plaintiff’s lawyer, partner of Beijing Unitalen Law Office Zhang Yazhou, said the case reflects the complex relationship that may exist between the goods registered for the trademark and the goods which are in actual use. Some companies and individuals have taken advantage of this to confuse the public. The successful resolution of this case has laid a solid legal foundation for Armstrong World Industries to protect intellectual property in China. Unitalen’s work in this case has also been highly praised by Armstrong World Industries.

“The key to winning the case is to clarify the nature of the allegedly infringing goods. To be honest, the nature of the accused infringing goods is quite confusing. To discover out their function and uses, we can not just rely on self-perception of the goods or the superficial interpretation of the Distinction. We must rely on numerous sources of objective evidence to illustrate the similarity. I am very pleased that the judges hearing the case were not fooled by the illusion. They managed to uncover the truth and accurately recognized that the allegedly infringing goods were used for indoor ceiling decoration,” said Zhang Yazhou.

According to Zhang Yazhou, lawyers for this case undertook a great deal of careful and meticulous preparation in order to obtain this satisfying result. To understand what the accused infringing goods exactly are, lawyers looked up the literature for the comprehensive evolution history of interior ceiling materials. They meticulously researched patent literature and especially professional books to understand the difference between what “mineral wool” is and what “mineral wool board” is. Moreover, lawyers bought mineral wool, mineral wool boards and other products, visited building materials markets and consulted with experts and relevant participants of the building materials market. With reference to views from all parties, they successfully identified that the allegedly infringing goods were in fact indoor ceilings.

In this case, the court also concluded that the acts of Anhui Armstrong Building Material Co., Ltd. constituted unfair competition. As Zhang Yazhou explained, in this case the accused infringer registered “Anhui Armstrong Building Material Co., Ltd.” as the enterprise name. The word “Armstrong” in the trade name conflicted with the plaintiff’s wellknown trademark, and could cause confusion to the public. This infringed upon the plaintiff’s goodwill and went against the principle of good faith. Based on Article 2 of the Antiunfair Competition Law, the court ruled that the accused infringer’s acts constituted unfair competition.

In addition, the accused infringer used the false slogan “Armstrong, 150-Years of Quality Inheritance,” which showed the intent to promote products by taking advantages of other’s goodwill which constituted unfair competition. The unfair competition acts involved in this case are typical in the sense of using other’s earlier registered trademark as a trade name and thus causing public confusion.

Legal basis

The Nice Agreement is an important agreement that China has joined. Its most important content is to provide a unified international classification of goods or services for the purposes of trademark registration. The Nice Agreement establishes a specialized organ to explain, comment, revise and improve the International Classification of Goods and Services for the Purposes of the Registration of Marks (Nice Classification). After years of continuous development and improvement, Nice Classification has been widely used and accepted by countries throughout the world and its influence is also increasing.

The Distinction is the normative document developed and published by China’s trademark authority according to the Nice Agreement and Nice Classification. In practice, China’s trademark examination authority and the Trademark Appeal Board often use the Distinction as the basis for determining whether goods or services are similar without any further breakthrough in independent research. However, courts also treat the Distinction as the criteria, but often break from the classification standards.

Talking about the role and limitation of the Distinction in determining the similarity of goods, Zhang Yazhou believes that the Distinction is useful in that it is a really important part for trademark registration. Trademark registration can not be done without it. However, the Distinction has its limitations mainly in two aspects: Firstly, the classification of the Distinction is disjointed from real life. For example, some industries have established standards for identification and classification of goods, but the classification of the Distinction conflicts with the industry standards. In determining the nature of goods in accordance with industry standards, the class of product may be quite different from the Distinction; in judging in line with the Distinction, the result may not match with the actual products applied by the trademark registrants. Secondly, the Distinction has always lagged behind changes in the goods, which evolves with social and economic development. Previously unrelated goods can become closely linked over time. If the closely related goods are mechanically determined as “not similar” according to the Distinction and thus not protected, it would be very unfavorable for the right holders.

Article 28 of China’s Trademark Law provides the “same or similar trademarks” as criteria for refusing an application for trademark registration. In addition, Article 52 applies the “same or similar trademarks” criteria for trademark infringement. Article 52 provides that the act of using a trademark that is identical with or similar to a registered trademark in respect of the identical or similar goods without the authorization from the trademark registrant shall be an infringement of the exclusive right to use a registered trademark. According to Article 11 of the Interpretations on Several Issues Related to the Trial of Trademark Civil Disputes by the Supreme People’s Court, “similar goods” means goods that have identical functions, uses, production entities, sales channels, target consumers, etc., or goods that the relevant public would normally consider to have a certain connection and thus easily cause confusion. Article 12 of the interpretations also provides, to determine whether goods or services are similar, it should make an overall determination based on the normal knowledge of the relevant public with regard to the goods or services. The Nice Classification and the Distinction may be used as references for determining the similarity of goods or services.

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