Sale of genuine goods with modified technical information constitutes infringement

China

On April 26 2012 the Jinan Intermediate People’s Court held that the sale of genuine Michelin tires by the defendant constituted trademark infringement because the tires’ technical information had been modified without the trademark owner's authorisation (2011 Ji Min San Chu Zi No 483).

Compagnie Générale des Établissements Michelin owns the following Chinese trademarks for tires in Class 12 of the Nice Classification:

  • MICHELIN in Chinese:
  • MICHELIN:



  • MICHELIN (and Michelin man device):

The trademarks are well recognised among the public in China.

In 2011 a Mr Jin sold genuine Michelin tires bearing the trademark MICHELIN (and Michelin man device) in his auto parts store. However, the technical characteristics of the tires, such as the load index, the place of production and the dimension of the tires had been modified without Michelin’s approval.

Michelin sued Jin before the Jinan Intermediate People’s Court, requesting that he cease the infringement and seeking financial compensation.

Jin argued that the tires were genuine products manufactured by Michelin and that the trademarks on the tires had been affixed by Michelin, so that his actions could not be regarded as trademark infringement. Further, he argued that he had ordered the products online and knew nothing about the modification of the product information.

After a trial, the court held that Jin's activities constituted trademark infringement, even though the tires that he sold were genuine Michelin products. The court took the view that trademark owners use their registered trademarks not only to distinguish the source of their goods, but also to pass on to the consumers a message of credibility regarding the trademark owner. The capacity of a trademark to distinguish the origin of the goods is linked with the long-term quality of the goods or service identified by the mark. Therefore, the modification of the index, information or place of production of the goods, without the trademark owner’s consent, affected the exclusive relationship between the trademark owner and the goods; consequently, such acts infringed the trademark owner’s rights and damaged its interests.

In addition, the defendant could not provide any legal source to demonstrate how he had obtained the goods. Therefore, he could not be exempted from liability, as provided by law.

The court thus recognised that Jin’s acts constituted trademark infringement; it ordered him to cease the infringing activities and to compensate Michelin for its losses.

The traditional view is that the core function of a trademark is to distinguish the source of the goods. The act of selling products after modification thus seems difficult to prevent under the Trademark Law, as there is no change to the registered trademark.

However, the notion of the 'function' of a trademark seems to have changed significantly. In addition to distinguishing the source of the goods, the registered trademark also plays an important role in the relationship between the trademark and the goods bearing it. In the present case, the relationship between the trademark owner and the goods had been affected. The information shown on the products was wrong, but the registered trademark was still displayed on the goods. The credibility of the trademark was diluted and severely affected. Therefore, the act of selling genuine products bearing a genuine trademark still constituted trademark infringement.

A similar precedent was issued by the Intermediate People’s Court of Changsha in 2008. The present judgment confirms this precedent and gives indications on how to deal with this kind of cases in the future.

Du Binbin, Wan Hui Da Law Firm & Intellectual Property Agency, Beijing

Wan Hui Da represented Michelin in this case

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