Background
Facts
Decision
Comment
With regard to the IP system that protects the design appearance of products, in addition to applying for a design patent or registering a trademark, article 22 of the Fair Trade Act expressly provides as follows:
No enterprise shall perform any of the following acts with respect to the goods or services it supplies: i. using a well-known personal name, business or corporate name, trademark, container, packaging, appearance, or other trade dress that shows another's goods, in the same or similar manner or category of merchandise which causes confusion with another person's goods; selling, transporting, exporting, or importing goods bearing such trade dress (omitted below). (Emphasis added.)
Article 29 of the Act further provides that:
If any enterprise violates the provisions of this Act and thereby infringes upon the rights and interests of another, the injured party may request the removal of such infringement; if there is a likelihood of infringement, prevention may also be claimed.
However, what kind of product appearance can be deemed "well-known trade dress" as set out in the Act? Furthermore, how does the court determine whether "confusion with another's goods" is caused? The Intellectual Property and Commercial Court (IPCC) expressed its opinions on this matter in a civil judgment rendered on 23 December 2021.(1)
The plaintiff alleged that its company was a globally reputed manufacturer for suitcases. Its eponymous brand had sold suitcases with a "grooved design" as a trade dress for several years. Such trade dress was widely known to relevant businesses and consumers as an indication of the source of the goods.
However, the plaintiff claimed that a variety of suitcases, sold by the defendants, used designs that were either identical or highly similar to the plaintiff's grooved design. According to the plaintiff, such products misled consumers into believing that the products at issue had been manufactured or sold by the plaintiff. This constituted a violation of the Fair Trade Act.
In response to the plaintiff's allegation, the defendants argued that the grooved design did not constitute trade dress as prescribed in the Fair Trade Act. Further, the defendant's suitcases differed from the grooved design in appearance and were sold at starkly different prices via remarkably distinct sales channels. Therefore, there could be no confusion among general consumers.
The IPCC adopted the plaintiff's claims and ruled that the defendants had infringed upon the plaintiff's well-known trade dress, the grooved design.
Could the grooved design constitute trade dress?
The IPCC held that the system of IP laws is not limited to technical protection, but extended to innovativeness and fairness in market competition. The system of well-known trade dress prescribed in article 22 of the Act aims to maintain a fair market and prevent business owners from disturbing the order of transactions by clinging to the reputation of other businesses or by means of a high degree of plagiarism.
With regard to this particular case, the IPCC held that the texts and drawings of the grooved design provided by the plaintiff could be considered to constitute well-known trade dress if such texts and drawings were sufficient to show the innovativeness of goods or to be a basis for identifying the source of goods. Specific technical properties such as dimensions, ratios or textures are not relevant elements for determining well-known trade dress.
Was the grooved design well known?
The IPCC pointed out that trade dress is deemed to be well known when the distinctiveness and business reputation it represents are widely known to the relevant businesses and consumers, and are thus sufficient to indicate the source of goods or services.
The relevant businesses and consumers include:
- actual and potential consumers that will buy the goods or services with the trade dress;
- distributors utilising goods or services with the trade dress; and
- relevant businesses supplying the goods with the trade dress.
The IPCC then comprehensively considered the conceptual strength of the grooved design. It took into account the facts that:
- the design had been advertised and marketed for a long time;
- suitcases with the grooved design sold well and enjoyed an excellent brand reputation with extensive media coverage; and
- the grooved design was covered by trademarks in other countries (indicating that such design appearance is certainly distinctive).
The IPCC thus determined that the grooved design was a well-known trade dress.
Could the defendants' products cause confusion?
The IPCC considered the "average attention paid by general consumers" and the "degree of fame or distinctiveness of the trade dress or the degree of similarity between the trade dress and the products". It held that the impression as a whole was overwhelmingly that of the visual impact of the "grooved design". Therefore, it was likely that consumers could be misled into thinking that a certain type of franchise, association or sponsorship existed between the defendant's goods and the plaintiff's trade dress.
Moreover, the IPCC stated that, taking into account the products' marketing channels, overlapping customers, competitive relationship and price difference, it was hard to exclude the competitive relationship between the plaintiff and the defendants. Both the plaintiff's goods and the defendants' products were aimed at the travel-loving middle class, to whom the price difference would not be obvious, which caused overlapping customers.
Furthermore, the IPCC stated that the term "confusion" prescribed in article 22(1)(1) of the Act covered the situation wherein consumers wrongly believed in the presence of a certain type of franchise, association or sponsorship between counterfeits and the trade dress of the authentic goods.
The IPCC therefore opined that the defendants' products could engender confusion among general consumers and thus infringed on the plaintiff's grooved design, which was a well-known trade dress.
The variety of evidence provided by the plaintiff in this case may have helped to prove the fact that the specific design did have a function in indicating the source of goods. This could have helped to convince the IPCC that the design constituted well-known trade dress. Furthermore, the IPCC indicated that the term "confusion" shall cover the situation wherein customers wrongly believe in the presence of a certain type of franchise, association or sponsorship between counterfeits and the trade dress of the authentic goods. It is worth noting that the IPCC appears to adopt a loose standard when determining the scope of "confusion".
For further information on this topic please contact Hsiu-Ru Chien or Elina Yu at Lee and Li Attorneys at Law by telephone (+886 2 2763 8000) or email ([email protected] or [email protected]). The Lee and Li Attorneys at Law website can be accessed at www.leeandli.com.
Endnotes