Introduction
Facts
IPCC
Supreme Court
Comment
In Taiwan, trade dress and symbols are protected through the same legal systems as design patents, trademarks and copyrights. When a trade dress or symbol does not satisfy the elements required for design patent, trademark or copyright protection, supplementary protection may be sought under article 22 of the Fair Trade Act. In particular, a proprietor may lawfully file for civil damages if confusion arises with regard to another party's use of the proprietor's symbol where such symbol is "well known to the public" and yet "not registered as a trademark" in the same or similar category of merchandise or services.
However, in what situation can the appearance of a product be deemed to be a symbol that is "well known to the public"? And how should it be determined whether the use of such symbol causes confusion with another party's merchandise? With respect to these issues, the Supreme Court seemed to hold a different opinion from the Intellectual Property and Commercial Court (IPCC) in their respective judgments:
- the Tai-Shang-Zi No. 3161 judgment issued by the Supreme Court on 16 February 2022 (the second-instance judgment thereof being the Min-Gong-Shang-Zi No. 3 judgment rendered by the IPCC in 2020); and
- the Min-Gong-Shang-Geng(I)-Zi No. 2 judgment issued by the IPCC on 23 December 2021.
These two cases were filed by the same plaintiff, which is a suitcase manufacturer. The plaintiff claimed that the suitcases under its eponymous brand had been adopting a "grooved design" as a symbol representing its goods for such a number of years that the symbol had become widely known to relevant businesses and consumers as an indication of the source of goods. The defendants, though different, all adopted designs that were identical or highly similar to the grooved design, giving rise to confusion and misunderstanding on the part of consumers.
With respect to the similar facts of the alleged infringement, the IPCC made similar determinations in its Min-Gong-Shang-Zi No. 3 judgment in 2020 and its Min-Gong-Shang-Geng(I)-Zi. No. 2 judgment in 2021. In particular, it held that the grooved design had the function of source identification and therefore deemed it to be a symbol that was well known to the public.
Additionally, with regard to the visual impact created by the allegedly infringing products, which conveyed an "overall implication" through the grooved design, the IPCC held that consumers would be highly likely to get confused and wrongly believe in the presence of a certain type of franchise, association or sponsorship between the plaintiff's symbol and those of the defendants. Therefore, the IPCC ruled that defendants' product appearances constituted an infringement of plaintiff's well-known symbol.
The Supreme Court, however, held a different opinion in its Tai-Shang-Zi No. 3161 judgment of 2021.
The Court first defined a "symbol" as a feature that has a secondary meaning or distinctiveness to an extent that identifies the product source and enables the relevant businesses or consumers to make a distinction among varying products. Such "distinctiveness" means that the feature is so distinguishable that relevant businesses or consumers are able to identify, upon seeing the feature, a specific enterprise as the manufacturer of the products. "Secondary meaning" relates to a feature that was originally indistinctive but has gained another meaning indicative of product source by its continuous use for such a long period of time that consumers know and associate it with the product source.
The Court also cited an analytical report outlining the market survey results of the symbol at issue provided by the plaintiff itself. According to the report, up to 50% of general consumers had no idea of the plaintiff's brand, and up to 46.08% of respondents saw no association between the plaintiff's and the defendant's products. Accordingly, there were doubts as to whether the grooved design was fully ingrained in the consumers' consciousness and whether the suitcases marketed by the plaintiff were immediately identifiable simply by the grooved design.
The Court also provided an interpretation of the criterion "confusion with another party's merchandise". Although actual occurrence of confusion is not a necessary requirement, this criterion applies if a specific danger of confusion exists if general consumers pay average attention and apply average memory capacity. Where only abstract or speculative risks exist, the criterion is not applicable. Further, whether there exists a specific danger of confusion should be determined in light of a comprehensive consideration of factors such as:
- the degree of fame or distinctiveness of the symbol;
- the degree of similarity between the symbol and the products or businesses at issue;
- the overlap of consumers;
- the price difference; and
- the presence of competition.
With reference to the documented evidence, the Court found it doubtful whether the defendant's logo, printed on the front of an allegedly infringing suitcase, was insufficient to help consumers identify the source of the merchandise. Moreover, there were remarkable differences in terms of the price and marketing channel of the two parties' products. The defendant pointed out the obvious price differences and different product appearances that would be noticeable to consumers paying average attention.
The Court believed that the question of whether the defendant's argument was persuasive needed to be further clarified, so revoked the original judgment and remanded the case back to the IPCC for further proceedings.
While the legal meanings put forward by the Supreme Court and the IPCC to define "symbol well known to the public" and "confusion with another party's merchandise" are not significantly different, their application resulted in completely different conclusions.
This may be due to the fact that cases involving infringement of well-known symbols are quite new in the IP law field in Taiwan. Constant efforts should be made to follow up and observe specific cases in practice.
In addition, some proprietors of trademarks or well-known symbols may provide market survey results as evidence showing fame or confusion during the process of litigation. However, a market survey may lead to a completely different conclusion by virtue of factors such as the design of the questionnaire, the sampled respondents or the method of sampling.
In this case, for example, the Supreme Court ruling with regard to the market survey report was unfavourable to the proprietor. Hence, proprietors should make careful consideration as to whether to carry out a market survey and present an analytical report.
For further information on this topic please contact Tsung-Yuan Shen at Lee and Li Attorneys at Law by telephone (+886 2 2763 8000) or email ([email protected]). The Lee and Li website can be accessed at www.leeandli.com.