“Look alike” is not acceptable: case review on a recent judgment by the Supreme Court

The officials at Legislative Affairs Commission of NPC hold that the broad criterion of defining “famous goods” is that once the goods are copied by others without authorization, they can be defined as famous goods. The judicial circle, however, believes that the right owner must prove the goods are famous.2

It is worthy noting that the goods' unique name, packaging and “get-up” (decoration) must be famous in China. That is, if a product is famous overseas and not in China, it will not be protected under Chinese Law. In other words, although the court does not exclude the factor which can prove the goods are famous in other counties it cannot ensure the evidence will be used by Chinese courts. This is because of the nature of territorial IP rights. Secondly, as far as territory is concerned, it is acceptable as long as the goods are famous in a specific territory and it does not necessarily need to be famous nationally. Last, it does not require the goods must be famous in all markets but in the relevant public.

The “uniqueness” of a name, packaging and get-up

As an opposite notion, “unique” could be comprehended by understanding “generic”. Any mark that describes the quality, component or function of a product is generally considered as generic item. Uniqueness, similar to distinctiveness in Trade Mark Law, mainly means the nature of distinguishing origins of goods, i.e. distinguishability.

In the case, the Supreme Court held the arrangement/combination of word character, figure, colour, shape, size etc. used by Ferrero Rocher is unique. It gives off a distinctive “general image”. Such general image has nothing to do with function of goods, and the long term use and promotion of such image already suffices the relevant public to associate it with Ferrero chocolate goods. Hence, it has the function of distinguishing origin of goods, which should be protected by Anti-unfair competition law.

Also of note is that this protected general image, indicated by the Supreme Court, is different to the 3D trade mark. Albeit this image is protected by the court, it does not influence relevant administrations to make independent determination on the register of any 3D trade mark. Hence, it is irrelevant that the other party claimed that Ferrero's 3D trade mark claim was rejected by the State Trade Mark Office (STMO). For the same reason, the patent invalidation decision by the State Intellectual Property Office (SIPO) on Ferrero's design also has nothing to do with whether Ferrero's packaging and get-up is unique or not. Consequently, we can deduce that the court has its own, independent consideration and judgment regarding “uniqueness” and “famous goods”.

“Confusion” and “misunderstanding”

Under anti-unfair competition law, consumers' confusion and misunderstanding are an essential requirement in determining an unfair competition. The Supreme Court held that the similarity between two packagings was the key point where proving the confusion and misunderstanding. The golden criterion is “with basically no visual difference”. It is common and understandable that one business operator learns/copies another's design of packaging and get-up. In the case, Montresor's packaging and getup is visually very similar to Ferrero's. It is still inevitable, therefore, that the relevant public would confuse and misunderstand that there exist an association between two chocolate producers although there are some differences on price, quality, flavour etc. between two chocolate goods.

To sum up, the case tells IP professionals they should have clear and precise command of famous goods, uniqueness and confusion. The Supreme Court protected the right holder well with a good judgment by clarification of some vague understandings. It also warns the infringer not to copy but learn. Ideally, if possible, creation is the best.

Endnotes 1. Art 1, “Interpretation of the Supreme Court on Some Issues Concerning the Application of Law in the Trial of Civil Cases of Unfair Competition”, adopted on December 30, 2006.

2. Where recognizing the status of “famous”, sales history, coverage and volume, market share, consumer awareness, coverage, history and extent of the advertisement, records of protection and so on, are all factors considered by the court. The court should generally and comprehensively judge.

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