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09 July 2012
The Jinan Intermediate People's Court has held that selling genuine products with modified technical information constitutes an act of infringement. The case involved the sale of tyres. Although the products were genuine, the defendant's acts of sale constituted infringement because technical information - including load index, size and place of manufacture - was modified without the trademark owner's consent.
In China, Michelin owns trademarks in Class 12 consisting of the name MICHELIN, the transliteration of the name in Chinese and the name accompanied by the Bibendum 'tyre man' device. The trademarks are well known to the public in China.
Mr Jin sold genuine Michelin tyres which bore the MICHELIN and Bibendum trademark. However, the technical characteristics of the tyres, such as their load index, dimensions and place of manufacture, had been modified without Michelin's approval.
Michelin became aware of Jin's actions and sued him before the Jinan Intermediate People's Court, seeking an order to desist from infringement, as well as compensation.
Jin argued that the tyres were genuine products, manufactured by Michelin, and that the trademarks had been affixed by Michelin; therefore, his actions could not be considered trademark infringement. Furthermore, he argued that he had ordered the products online and knew nothing about the changes to the product information.
The court held that Jin's activity constituted trademark infringement, despite the fact that the tyres were genuine Michelin-manufactured products. The court considered that registered trademarks are used not only to indicate the origin of goods, but also to convey to consumers a message of credibility in respect of the trademark owner. The capacity of a trademark to indicate the origin of goods is linked to the long-term consistency of quality of the goods or services identified by the mark. The act of modifying technical information or an indication of the place of manufacture, without the trademark owner's consent, severs the exclusive relationship between the trademark owner and the goods, damages the owner's interests and constitutes infringement.
The defendant could not provide legally verifiable information about how he had obtained the goods. Therefore, by law, he could not claim exemption from liability.
On April 26 2012 the court ruled(1) that Jin's act constituted trademark infringement. It ordered him to cease the infringing activity and compensate Michelin for its losses.
The traditional view is that the core function of a trademark is to identify the origin of goods. The act of modifying another party's products and offering them for resale is difficult to challenge under the law, as there is no change to the registered trademark. However, views on trademark function have changed significantly in recent years. Besides identifying the origin of goods, a registered trademark plays an important role in the correspondence between the trademark and the goods to which it is applied. In this case the specific relationship between the trademark owner and the goods provided had been severed. The goods displayed incorrect information to consumers, although they still bore the registered trademark, resulting in serious damage to, and dilution of, the trademark and its credibility. Thus, the act of selling genuine products which bear a genuine trademark may, as in this case, constitute trademark infringement.
The decision follows precedent from the Intermediate People's Court of Changsha in 2008. The judgment in this case confirms the earlier analysis and solution, and provides a further point of reference for dealing with such issues in future.
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