On April 29th 2016, the Intellectual Property Court entered the 2015 Min Shang Su Zi No.23 judgment, which relates to infringement arising from usage of special stripes as a trademark. In the judgment, the court announced standards for determining whether a pattern is used as a trademark when suchtype of trademark is used together with a brand owned by the user. The judgment concluded that unique horizontal stripes embossed on leather products were a trademark with distinctiveness. Even though the products, tags or zips accused of infringement carried additional patterns or characters, the court deemed them non-obvious compared with the striped pattern covering leather bags and thereby affirmed that the defendant used the embossed horizontal-stripe pattern as a trademark. Such a conclusion differs from the conclusion held by the prosecutor of a criminal case, ofwhich the defendant involved was in violation of the Trademark Act.

The plaintiff claimed that the originality of the disputed trademark came from unique horizontal stripes embossed upon an intensely dyed leather. This striped pattern is known as EPI, or Ripples () in Taiwan. Products carrying Ripples, with a history of 30 years, are a major property of the plaintiff, who has registered the pattern and obtained a trademark. Knowing that the disputed trademark was owned by the plaintiff, the defendant still sold counterfeited leather bags which infringed the disputed trademark in order to earn profits. Therefore, the plaintiff contended that the defendant violated the Trademark Act and the Fair Trade Act.

The Intellectual Property Court held that the unique horizontal stripes embossed upon leather products differed from natural strips of leather. The court also noted that the Taiwan Intellectual Property Office considered the striped pattern distinctive and allowed it to be registered as a trademark. Therefore, no person shall use the registered trademark without consent or license from the trademark proprietor. Even though the products accused of infringement were stamped with iki2 and a butterfly-shaped trademark on their front centers, tags and zips, the court believed that compared with the embossed horizontal-stripe pattern covering a bag, iki2 and the butterfly-shaped mark were insignificant and non-obvious. The court thereby determined that the embossed horizontal-stripe pattern covering a bag was the major eye-catching part that distinguishes the bag. Considering that the disputed trademark of the plaintiff is often called Ripples in Taiwan, and the defendant even used the identical term as a marketing phrase on its webpage, it was therefore obvious that the pattern of Ripples was used by the defendant as a tool to attract consumers. As a result, the court announced that the defendant used the disputed pattern as a trademark with an intent of counterfeit.

Regardingthe criminal case in which the defendant was involved of a violation of the Trademark Act, a ruling not to indict the defendant was given based on criminal investigations because the prosecutor held that the trademark used by the defendant to sell the disputed products was iki2, not Ripples. According to the prosecutor, Ripples was a mere design describing the appearance of products, and the defendant had no intent to use it as a trademark. Obviously, the prosecutor and the civil court of the Intellectual Property Court hold different opinions on how to define “use of a trademark” regarding this disputed case. The Intellectual Property Court noted that the court was not bound by the investigation results of the prosecutor in charge of the criminal case. The court thereby held a different opinion.

In conclusion, the Intellectual Property Court ruled that the defendant infringed the trademark right of the plaintiff and also violated Subparagraph 1, Paragraph 2, Article 20 of the Fair Trade Act before amendment; thus, the defendantshall compensate the plaintiff’s damages of infringement.