The Supreme Administrative Court rendered the 108-Pan-375 Decision of July 30, 2019 (the “Decision”), holding that because the components of a product in the electronics industry come from different companies in different fields, it is improper to conclude that the products are similar just because the components may be used in combination.
In this case, the Appellant applied to the Intellectual Property Office to register Trademark A and designate the same for use on goods under Class 9 of the Classification of Goods and Services detailed in Article 13 of the Enforcement Rules of the Trademark Law effective at that time, and the application was approved. The original intervenor raised an objection on the ground that the registration violated Article 23, Paragraph 1, Subparagraphs 12, 13 and 14 of the Trademark Law effective at the time of registration. During the review by the Intellectual Property Office, the Trademark Law was amended on July 1, 2012, and the provisions asserted for this objection were changed into Article 30, Paragraph 1, Subparagraphs 10, 11 and 13. Pursuant to amended Article 106, Paragraph 1, the Intellectual Property Office based its review on the legal provisions before and after the amendment and rejected the trademark opposition. The original intervenor filed an administrative appeal, and the administrative appeal vacated the rejection of the objection over the “goods under Class 9 of the Classification of Goods and Services detailed in Article 13 of the Enforcement Rules of the Trademark Law effective at that time ” part and required the Intellectual Property Office to render a proper disposition. Appellant then brought the administrative action at the Intellectual Property Court.
According to this Decision, similarity of goods refers to common or related functionality, materials, manufacturers and other elements between different products. In finding that the products are similar, all such elements shall be considered in an overall manner and be based on general public understandings and the state of market transactions. However, since the division of labor in society and industry cannot determine product similarity in abstract terms, it should be determined on a case-by-case basis according to the characteristics of the associated industr(ies) in question. In the electronics industry, the parts contained in the same product actually come from different companies in different fields, so it does not follow that the products are similar just because their parts may be used together. In other words, there is no product similarity in principle between a trademark used for the products and the products’ components or semi-finished product. Unless the purpose of the components or the semi-finished products is to complement the functionality of the product, and the absence of such necessary components or semi-finished product would render it impossible to achieve or seriously impact the economic purpose of the product, there must be some kind of necessary inter-dependency for a finding of similar products; if such components or semi-finished products are used by a broad range of products, those products should in principle not be deemed as similar.
The Decision then states that although the components or semi-finished goods that the objected trademark at issue was designated for were found to be similar products in the original decision, whether those components are actually commonly used by general electronics products based on their characteristics and purposes, and do not exhibit any necessary interdependence with the objected trademark to the extent that it would be inappropriate to conclude that the products are similar, still required further investigation. The original decision therefore reached its conclusion too hastily and the appeal is well taken.