[Author: Binghui Wang]

Article 4 of the Trademark Law stipulates that "the use of the trademark referred to in this Law refers to the use of the trademark on goods, goods packaging or containers and goods transaction documents, or the use of the trademark in advertising, exhibitions and other business activities for the identification of the source of goods." The article clarifies the external manifestation of the use of trademark and the internal purpose of identifying the source of goods, which can also be called "use in the sense of Trademark Law". In practice, in addition to "use in the sense of Trademark Law", it also includes the fair use of the trademark, which is generally divided into "descriptive use" and "indicative use" in theory.

I. Use in the Sense of Trademark Law

Regarding the manifestation of "use in the sense of Trademark Law", detailed and specific regulations are provided in Chapter 17 of the second part of the Trademark Examination and Trial Guidelines. To sum up, the public use of a trademark in business activities is generally recognized as "use in the sense of Trademark Law", which shall serves the purpose of identifying the source of goods. In practice, generally it is required to prove the existence of "use in the sense of Trademark Law" in the non-use cancellation case, where the trademark right holder bears the burden of proof, and provides evidence proving the use of the registered trademark for three consecutive years. According to the Guidelines, "token use" is not qualified as evidence of use.

"Token use" refers to the use that is not actually in the commercial field but only for the purpose of maintaining the trademark registration. Although there is no explicit provision on the specific manifestation of "token use", there are many relevant cases in judicial practice, based on which it can be presumed that the following elements are generally met: small number of commercial transactions, small transaction volume, and the single trading object, etc.

II. Fair use of trademark

1. Descriptive use

"Descriptive use" generally refers to the provisions of Article 59 of the Trademark Law, that is, where a registered trademark contains a generic name, or the part indicating the characteristics of goods lacking distinctiveness, the fair use of these non-distinctive parts by others is generally not considered as infringement. The above provision echoes Article 11 of the same law, which stipulates that a mark lacking distinctive features shall not be registered as trademarks, and that text or devices lacking distinctive features are not signally directional and lack the basis of private rights, which can be used by the general public.

For example, in the case (2017) SPC Civil Retrial No. 4380 concerning whether the use of "青花（blue-and-white porcelain）" constituted an infringement of the trademark No. 1482564 "青花 & Device", though the word " 青花 " itself was distinctive, the court found that the respondent used both the word "青花" and the trademark "苏誉" on the disputed goods, and "青花" is to indicate that the Chinese Baijiu is served in a blue and white porcelain bottle. In the Chinese Baijiu industry, "青花" is a description of liquor in blue and white porcelain bottles which is the name of a series or style of liquor in the liquor industry. In particular, the respondent labeled the goods with its well-known "苏誉" trademark and other related information, and subjectively did not intend to take free ride of the goodwill of the company San Cao's goods, so it was found to be in line with the fair use of the trademark.

The text or devices for "descriptive use" should generally be consistent in size and font with other text or devices describing the quality, main raw materials, functions, and other characteristics of the goods. Thus, when the“mark for descriptive use”is prominently displayed with an obvious intention to identify the source of the goods, it shall not belong to fair use.

In addition to the aforementioned cases, in practice, the debate on whether a trademark constitutes "descriptive use" mainly occurs in the infringement dispute of "using another person's prior trademark, but believing that the prior trademark has become a generic name". According to the Trademark Examination and Trial Guidelines, the key to determining whether a trademark is a generic name for goods is to determine whether the function of the trademark is to distinguish different goods or to distinguish different sources of goods, that is to say, to return to trademark’s fundamental nature of identifying the source of goods to make determination.

2. Indicative use

Indicative use of trademark, as the name implies, refers to the business operator's fair use of others' trademark in business activities with good faith in order to indicate the source or characteristics of the goods or services, etc. The act does not affect the judgment of the relevant public on the source of the goods or services.

"Indicative use" usually occurs in the course of product distribution or agency, for instance, an operator’s legal distribution of the goods of the relevant brand as an agent and putting up posters of the brand in the store. From the precedent cases, "indicative use" cannot go beyond what is necessary, which means, when the user uses the trademark for "indicative" purposes, it cannot exceed the original identification scope of the "trademark", nor it shall exceed the scope of authorization of the trademark right holder.

The aforementioned is a brief summary of the basic concepts and issues related to the "use of trademarks", and hopefully it will provide some thoughts to trademark practitioners.

References:

(2020) SPC Administrative Retrial No. 5237

(2019) SPC Administrative Retrial No. 13987

(2017) SPC Civil Retrial No. 4380

(2020) SPC Civil Retrial No. 5897