Does use of trademark in title of product sold online constitute trademark infringement?

Introduction
Xiaomi case
Oppo case
Comment

Introduction

Whether the use of a trademark in the title of a product sold online constitutes trademark infringement typically depends on whether such use is fair. When products are sold online, determining what constitutes fair use can be tricky. Sellers tend to use long product descriptions with many keywords to trigger online searches and attract buyers. If any of these keywords are the registered trademarks of a third party which did not consent to their use, the issue of trademark infringement arises.

Two cases decided by the Chinese courts in 2018 and 2019 involving famous mobile phone manufacturers Xiaomi(1) and Oppo,(2) respectively, illustrate this problem.

Xiaomi case

Xiaomi Technology Co, Ltd sued Rui'an Baorui E-Commerce Co, Ltd before the Wenzhou Intermediate People's Court for the infringement of its registered trademark XIAOMI.

Baorui had been selling two types of portable mobile phone battery:

• the "Ultra-thin mini power bank 1W mA 80000 Apple X universal Xiaomi portable battery 20000"; and
• the "Ultra-thin battery 20000 mA Apple X portable high-capacity battery Xiaomi mobile line only".

The court determined that the first product title constituted trademark infringement, while the second constituted fair use of the trademark.

The first product title linked the word 'Xiaomi' to the term 'portable battery', making it easy for the relevant public to believe that the battery was produced by Xiaomi. The word 'Xiaomi' here functioned as a source identifier of the battery product, which thus constituted trademark use and, consequently, trademark infringement.

The second product title linked the words 'Xiaomi mobile' in order to inform consumers that the portable battery was compatible with Xiaomi mobile phones. Since the alleged infringing product could be applied to the mobile phones of multiple brands (eg, Xiaomi and Apple), objectively, the word 'Xiaomi' here had a descriptive intention and its use thus did not constitute trademark use for the purpose of identifying the source of the battery product. Therefore, such use did not constitute trademark infringement.

Oppo case

Oppo Company sued Ouzhige Company before the Hangzhou Intermediate People's Court for infringement of its registered trademark OPPO.

Ouzhige had been selling headphones using the following sequence of key words: "Yingjuren applicable OPPO wired headphone in-ear R15R11splusA5A1R9sA3A59s original authentic vivo Apple universal female bass mobile phone earplug male". The title of the product was displayed as "HALFSun / Yingjuren applicable OPPO" and the model name was "applicable OPPO headphone in-ear R15R11s".

The Hangzhou Intermediate People's Court determined that such use constituted neither trademark infringement nor unfair competition.

As regards trademark infringement, the court held that Ouzhige's use of the OPPO trademark in its product title and the introduction of its commercial activities had the appearance of trademark use, but that it was still necessary to judge whether such use, subjectively or objectively, had the effect of identifying the source of the goods. The court found that Ouzhige had used the mark to indicate the product's characteristics (ie, that the headphones were compatible with Oppo products). As Ouzhige had used its own brand name, Yingjuren, and the words "applicable OPPO", the use of the word 'Oppo' in relation to the headphones would not mislead consumers that the headphones were an Oppo product. Further, the full product title clearly referenced another mobile phone brand, Vivo. Therefore, the word 'Oppo' in the product title did not function as a source identifier of the headphones product and thus did not constitute trademark infringement.

As regards unfair competition, the court held that this implies a malicious intention. In this case, Ouzhige had clearly indicated that its headphones sold under the Yingjuren brand were compatible with electronic products such as those of Oppo and Vivo, which was confirmed in its chat record with Oppo. Ouzhige had not claimed that its product was an Oppo product or that it had any connection to Oppo. Therefore, Ouzhige was not found to have acted with the subjective intention of free riding on Oppo's goodwill and its acts did not constitute unfair competition.

Comment

These cases show that the title of a product sold online is important for facilitating consumers' searches and attracting them to the seller's store. A product title is also a key way for sellers to inform consumers of the source of the goods, similar to an ad or transaction document in a bricks-and-mortar store. Whether the use of a trademark in the product title constitutes trademark infringement depends on whether it identifies the source of the product and would mislead consumers in this respect.

Article 3 of the China Intellectual Property Administration's Criteria for Judging Trademark Infringement, which came into effect on 17 June 2020, states as follows:

To judge whether (the use of a trademark) constitutes trademark infringement, it is generally necessary to judge whether the alleged infringement constitutes trademark use in the sense of the trademark law. The trademark use refers to using trademark on commodities, commodity packages, containers, service venues and transaction documents or in advertising, exhibitions and other commercial activities in order to identify the source of goods or services.

Correspondingly, to establish a defence of fair use, a trademark user must prove that the use will not mislead the relevant public as to the source of the goods.

Article 39 of the draft criteria provided detailed illustrations of fair use, such as:

• using a mark to indicate the generic name, shape, model, quality, main raw materials, functions, uses, weight, quantity and other features of the goods or services or to mark the production place of the goods or services in a way which will not mislead the relevant public; and
• using a trademark in good faith and reasonably to objectively indicate the source, uses, service objects and other characteristics of the goods or services and their relationship to the goods or services of others in a way which will not mislead the relevant public.

Although the content of this article was not maintained in the final version, it can still be used as a reference in practice.

For further information on this topic please contact Binbin Du at Wanhuida Intellectual Property by telephone (+86 10 6892 1000) or email (dubinbin@wanhuida.com). The Wanhuida Intellectual Property website can be accessed at www.wanhuida.com.

Endnotes

(1) (2018) Zhe 03 Min Zhong 6047.

(2) (2019) Zhe 01 Min Zhong 9115.