China SPC confirms mere post-sale confusion can lead to trademark infringement

In China, likelihood of confusion is the condition for recognising trademark infringement, and pre-sale confusion is the general principle. However, there has been dispute whether post-sale confusion shall be considered.

Recently, a retrial case ruled by the Supreme People's Court of China (SPC) extended the determination of the possibility of confusion to post-sale confusion based on the particularity of the product. The SPC held that even if there is no possibility of confusion before sale, it is likely to lead to confusion after sale, it shall be deemed as likelihood of confusion, and trademark infringement can be recognised thereof.

This ruling was issued by the SPC (2020最高法民申4768号), in a declaration for trademark non-infringement litigation brought by Shandong Linyi Kaiyuan Education Equipment Co Ltd (Kaiyuan), against Shanghai Yaoji Playing Cards Co Ltd (Yaoji), the trademark owner. The SPC rejected Kaiyuan's retrial application and confirmed trademark infringement of Kaiyuan.

Identical jokers

In September 2017, Kaiyuan filed a lawsuit with the court, requesting confirmation that Kaiyuan's use of the ‘Joker’ pattern on the poker card, does not infringe on Yaoji's registered trademark No. 3727456. 

The case was heard by the courts of the first instance and the appeal court, with both courts recognising trademark infringement.

Kaiyuan filed retrial to the SPC, claiming that the use of the ‘joker’ pattern on the poker cards shall not constitute a trademark use, and the ‘joker’ pattern cannot be used to identify the source of the goods when consumers purchase the poker cards. 

Upon trial, the SPC rejected Kaiyuan's application, and held that: a deck of poker cards has 54 cards in total, and among them, 52 cards are exactly the same.

Based on consumers' habits of playing poker cards, the patterns on the joker cards are more recognisable and distinguishable. Therefore, the ‘joker’ pattern has the function of identifying the source of poker cards. Consumers may consider that products with the same or similar ‘joker’ pattern on the cards are related to Yaoji when using the cards, which may easily mislead or confuse consumers. Therefore, the patterns used by Kaiyuan on the poker cards and ace cards infringed on Yaoji’s trademark.

The likelihood of confusion

From this ruling of the SPC, it can be seen that even if the likelihood of confusion occurs only after the process of sale, the SPC holds that this is also a confusion in the context of trademark infringement, and trademark infringement recognition can be based on such post-sale confusion. 

While there were already precedents in China that confusion of post-sale was also recognised as likelihood of confusion, the precedents mostly also seek pre-sale confusion as the precondition of recognition of trademark infringement, which reflect the reluctance of the Chinese courts to base the likelihood of confusion solely on the post-sale. In this case, post-sale confusion is the sole condition for recognising trademark infringement, and the SPC confirmed this conclusion by a binding ruling, this could be a significant change on this issue.

Such recognition will obviously be more preferrable to the trademark owners. This also reflects that the Chinese government's determination to increase IP protection has also strengthened international companies' confidence in China's IP protection, which is more conducive to creating a good international business environment.

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