A Case of Infringement of the Exclusive Right of a Japanese Pharmaceutical Corporation to Use the Registered "" Trademark

Facts of the Case

After it received a complaint, the Shenzhen Administration for Industry and Commerce (SAIC) sealed up 36,628 bottles of the "" tablets (worth up to RMR 356,829.98 yuan) the Xinte Pharmaceutics Company in the Longgang District, Shenzhen City (Xinte) was selling and keeping in its stock. It was found out that Xinte purchased 47,990 bottles of the tablets from the Health and Pharmaceutical Service of Punning County, Guangdong Province in June 1993. At the time of investigation by the Administration, 10,420 bottles had already been sold out with a turnover of RMB 108,344.22 yuan.

SAIC holds that the "" trademark on the goods of the tablets is registered by a Japanese pharmaceutics corporation whose exclusive right to use the trademark is protected by law. The name "" on the "" tablets sold by Xinte is identical with the registered ""trademark of the Japanese Company. Such act is one of selling goods infringing other's registered trademark, and, hence, constitutes an infringement of trademark as defined in Article 38(4) of the Trademark Law. According to the provisions of Article 39 of the Trademark Law and Rule 43 of its Implementing Regulations, SAIC made the following decisions in connection with Xinte:
1. To order it to desist from this infringing act;
2. To take off the sign of "" mark on the tablets, and to destroy the mark and goods if the two are indetachable;
3. To impose a fine of RMB 139,552.26 yuan, 30% of the unlawful turnover of 465,174.20 yuan; and
4. To refer the act of trademark infringement committed by the Health and Pharmaceutical Service of Punning County to the Punning County Administration for Industry and Commerce for adjudication.

Xinte did not apply for reexamination within the prescribed time, but only made a request for reduction of the fine, which was not accepted by SAIC. Three months later, however, Xinte made a statement to the Legal Affairs Department of SAIC on the grounds as follows:

(1) Since the term of validity of the "" trademark expired, with application for renewal filed, the renewal thereof might not be deemed granted; hence the trademark right should not be protected. It held SAIC's adjudication wrong and, hence, requested for a revocation thereof;

(2) What Xinte deals in is the "" tablets, and it is not easy to be mixed up with the "" trademark; and

(3) The SAIC's adjudication with regard to Xinte has inflicted a loss of RMB 360,000 yuan, and a recovery thereof is requested.

To the grounds raised above, SAIC reasoned that it is an extension of the rights of the trademark rightholder to apply for renewal of the "" trademark within the statutory time of validity. The term of validity of a renewed trademark starts from the date after the expiration of the term of the trademark. The Trademark Office has granted renewal to the "" trademark, so it should be protected by law. The investigation and handling of the infringer have preceeded according to the related provisions of the Trademark Law, and there is nothing wrong with it. Therefore, SAIC should not be liable for the recovery.

Analysis
This is a case of infringement "to cause, in other respects, prejudice to the exclusive right of another person to use a registered trademark" as defined in Article 38(4) of the Trademark Law. Upon receiving the complaint, SAIC sealed up the strong "" tablets kept and to be sold by Xinte. Investigation shows that the strong"" tablets and the registrant's "" trademark are the same in the design and arrangement of the written words. What's more, the three words, "strong"and "" are separately arranged, with "" silently standing out. When shopping, consumers would naturally associate them with"" tablets, but hardly call them "strong tablets". It is possible to hold that use of "strong " is apt to create confusion, and it is an act inflicting damages to the rightholder of the registered "" trademark.

The "" trademark involved in the case was registered on 30 September 1982 by a Japanese pharmaceutical corporation, with its term of validity extending to 29 September 1992. To ascertain the validity of the "" trademark, SAIC inquired the company about the renewal of the trademark and obtained the related proof of the trademark registration records of the Trademark Office. It is found out that the trademark registrant applied to the Trademark Office on 12 May 1992 for renewal of the "" trademark, and the Trademark Office, upon examination, granted the renewal, its term of validity being ten years starting from 30 September 1992, so the trademark is under legal protection. Accordingly, SAIC put on file the case involving the strong "" tablets for investigation, and adjudicated it according to law after all the facts were ascertained.

In conclusion, SAIC has clearly ascertained the facts, correctly determined the nature of the case, properly handled the case and applied the correct laws.