Like many trademark infringement matters, the dispute in the instant case is centered on the proximity of the “Jiayu Changcheng and graphic” and “Changcheng Pai” trademarks. According to the principles that are usually applied in China’s judicial practice, two trademarks are generally compared with regard to pronunciation, shape and meaning. In any trademark infringement case, the parties will find a number of similarities and dissimilarities between trademarks, and the final judgments always contain many subjective elements that tend to arouse controversy. As the highest authority, the Supreme People’s Court, in its final judgment in the “Jiayu” case, clarifies the criteria to judge the proximity between trademarks, which undoubtedly offers essential guidance to the determination of trademark proximity in similar cases.

    1. The principle for comparison of elements
    According to the judgment of the Supreme People’s Court, “trademark proximity shall also be the proximity about the major parts besides the whole body. In terms of the Trademark Law, the major parts of a trademark mean such constructive elements of the trademark that are most distinguishing about the origin of the commodity or most possibly make the relevant public relate the trademark to the commodity under it”.  Obviously, the comparison rules contained in the judgment are no longer restricted to the mechanical comparison of pronunciation, shape, meaning, graphical composition or color, but more importantly, the most identifiable elements in the trademarks are highlighted.
    The Trademark Law has laid down a number of unreasonable restrictions on the use of a trademark, among which the most disputed are: (1) the user of a registered trademark shall not change the trademark out of its own accord; and (2) the user of a registered trademark shall maintain the proper quality of the commodities under the trademark. For the latter, the dispute is on the division of two executive powers - the administrative power for the trademark and the supervisory power for its quality. The former is a strict restriction that the Trademark Law has imposed on the pronunciation, shape and meaning of a trademark.
     In real economic activities, the user under certain circumstances often has to adjust the letter style or the composition of the graphic of a trademark, for the sake of its design. Although no change is made to the identifiableness and distinctiveness of the trademark, the user must apply for a new trademark. Meanwhile, many infringers, taking advantage of the mechanical restrictions of the Trademark Law, apply for trademarks which have the same distinctiveness as the existing trademark but use different pronunciations, shapes or meanings with regard to the text or graphic, and then recklessly snatch the commodity under the registered trademark. As a result, the trademark owner must register all of the variations with regard to pronunciation, shape and meaning of the existing registered trademark in order to prevent snatching.   Consequently, China at present has the largest number of trademark applications and almost every trademark, as long as it is considered to be somewhat famous, must be accompanied by scores of proximate trademarks.
     In some countries, the trademark law establishes a doctrine that the elements of a registered trademark shall remain constant, i.e. the exclusive owner may change the trademark if its distinctiveness is not undermined. Therefore, the trademark user may, out of some actual need, modify the registered trademark as long as the distinctiveness of the trademark remains the same; and any use by others of trademarks which appear to be similar with the existing one with regard to distinctiveness and identifiableness constitutes trademark infringement upon the existing registered trademark despite differences in pronunciation, shape or meaning.
     The most important function of trademarks is to allow consumers to identify the source of a given commodity, and infringement is essentially established by the malicious use of the distinctive parts of trademarks. Obviously, the principle of element comparison, as the Supreme People’s Court decided in its judgment, stands closer to the prevailing international principle. According to the principle of element comparison, if “A+B” is the distinctive part of a trademark, any other trademark containing “A”, “B”, or “A+B” is a proximate trademark, despite any modifier, such as a prefix or suffix, or any difference in pronunciation, shape or meaning. In this way, infringement can be clearly determined without any dispute.
     2. The principle of constructive confusion
    According to the judgment of the Supreme People’s Court, proximity can be determined if two trademarks “may easily lead to confusion among the relevant public in the market”, with regard to the whole or the major part of the trademarks. Therefore, the Supreme People’s Court deems “confusion” as a possibility rather than an established fact.
    The “confusion” caused to consumers has always been an issue in question in trademark disputes or infringement cases. An alleged infringer may request that the other party provide evidence to support its argument of “confusion”, and certain administrative decisions or judgments even conclude that proximate trademarks do not lead to confusion. Under these circumstances, “confusion” is regarded as being determined on a factual basis, which cannot be established unless proven by evidence
However, according to the principle confirmed by the Supreme People’s Court in its judgment, “confusion” is a possible outcome and can be established through presumption without the burden of proof as long as other parties have used any distinctive elements of an existing registered trademark in their trademarks, which may easily cause consumers to believe there is some special connection between such other trademarks and the existing registered trademark.
    3. The principle of seeking for justice within the scope of discretion 
    The judgment demonstrates a spirit in adjudication to try to be just within the scope of discretion. Justice includes not only procedural and substantive justice in a given case, but also that in terms of social effects.
    The ultimate goal of adjudication is to achieve justice when seen from the aim of a state in establishing its judicial organization or that of a party to resort to a court of law to resolve disputes. Under the premise of adhering to legal rules, a judge should, within the scope of discretion, pay more attention to the embodiment of justice.
    The provisions of law are never perfect or omnipotent. The methods of infringement are ever changing and continuously emerge. The infringer tries to find ways to circumvent the intentions of the judicial authorities by seeking loopholes of law. If a judge only sticks to the literal provisions of the Trademark Law, and fails to understand the original idea behind the legislation and justice in social effects, he/she will unavoidably fall into the trap set by the infringer. This is particularly true in trademark infringement cases as the infringer, when preparing the infringing trademark, has already taken into account the applicable legal provisions and their limitations and has tried every possible means to evade the law. As shown in the Supreme People’s Court judgment, a court of law shall not only correctly apply the law, but also attend to its social effects when rendering its judgment, so that the malicious party may be subject to just assessment and punishment.