(By Luo Yanjie) Abstract: Generally, two goods that fall into the same similar group constitute similar goods. “Similar goods” refers to the goods that are identical in such respects as the function, purpose, industry, sales channel and consumers; or goods that are likely to lead the relevant public into thinking they are associated with each other and cause confusion.

Trademark registration in China applies the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks (the “Nice Classification”). Every year the State Trademark Office in China will update the Chinese Goods and Services Classification in accordance with the Nice Classification. A trademark shall be registered in accordance with the Chinese Goods and Services Classification. When a trademark dispute brought to a court, the Chinese Goods and Services Classification is not used only as a reference for judgment of similar goods or services.

Guangzhou Treasure and Enterprise Development Co., LTD (the “Guangzhou Company”) applied for registering “NEXT” trademark (the “disputed trademark”) under Class 25 for socks, belts and gloves (for clothing) on September 27, 1999. British NEXT RETAIL LIMITED filed an opposition, alleging that where its “NEXT” trademark (the “reference trademark”) under Class 25 for clothing and hats that NEXT RETAIL LIMITED has already registered has a certain influence and awareness in Mainland China, the disputed trademark that is identical with the reference trademark for similar goods would be construed as misleading and confusing of consumers. The Trademark Office examined the opposition and decided that the approved goods of the disputed trademark and the reference trademark are not similar. Afterward, the NEXT RETAIL LIMITED applied for a review but was rejected by the Trademark Review and Adjudication Board (the “TRAB”). Then, the NEXT RETAIL LIMITED brought a lawsuit to the court.

Beijing No.1 Intermediate People’s Court heard the case and granted judgment partially in favor of the NEXT RETAIL LIMITED on the following grounds: firstly, the disputed trademark is identical with the reference trademark; secondly, the approved hats of the use of the reference trademark constituted similar goods to the disputed trademark’s; third, there are some differences in the functions and usage of the approved goods of the use of the disputed trademark and the reference trademark. Dissatisfied with the judgment of the first instance, the NEXT RETAIL LIMITED appealed but ended in the Beijing Higher People’s Court’s affirmation of the judgment of first instance.

Lawyers’ Comment:

1.  What is the similar group of goods and services in the Chinese Goods and Services Classification

According to the trademark application system in China, to judge whether two goods are similar shall apply, generally, the Chinese Goods and Services Classification. The Chinese Goods and Services Classification relies on the Nice Classification in accordance with international standard and consists of 45 classes of goods and services together with broadly specific types into categories. In general, two goods that fall into the same similar group constitute similar goods. It should be noted, however, that the Goods and Services Classification is not universally used. In order to allow efficient searching in a country, some countries, including China, continue to classify the classes in the Nice Classification into more subtypes on the basis of the standard of similarity.

2. The court shall not mechanically apply the Chinese Goods and Services Classification to judge whether the goods or services are similar.

Virtually, a judgment that only applies to the similar group of goods and services would not be accurate because to judge whether constitute a similar group shall also consider that the goods are likely to produce confusion among the relevant public. Our laws require the court to use the Chinese Goods and Services Classification as a reference instead of necessarily complying with it. The judgment contained by the Beijing Higher People’s Court in this case is a typical contradictory to the Chinese Goods and Services Classification.

Generally, “similar goods” refers to that the goods and services are associated with each other and thus are likely to produce confusion among the relevant public. Based on the average knowledge of the public, socks, belts, gloves and hats are all comprised of similar goods and thus are likely to operate in a same brand. On one hand, the judgment of Beijing Higher People’s Court considered that gloves and hats are similar goods via a breakthrough of the Chinese Goods and Services Classification. On the other hand, the judgment of Beijing Higher People’s Court also decided that socks, belts and hats are not similar goods, which yet have no further explanation. Such judgment still indicates unclear standard of similar goods in judicial practice. It is no doubt that such judgment is closely related with inadequate evidences provided by the counterparty in the lawsuit. The emergence of the afore-mentioned judgment undoubtedly inspires trademark practitioners not to mechanical apply the Chinese Goods and Services Classification in making judgments of whether goods or services are similar.

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You Yunting：86-21-52134918  youyunting@debund.com/yytbest@gmail.com

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