The Intellectual Property Court rendered the 102-Min-Zhuan-Su-3 Civil Decision of August 15, 2014 (hereinafter, the "Decision"), holding that the creation of structural drawings of machines does not involve reproduction or adaptation of the original manufacturers' structural drawings, and that shapes in the appearance design of products for technical functions are not representations that the Antitrust Law seeks to protect.

According to the facts underlying the Decision, Company A believed that Company B should be liable for damages for reproducing, adapting, editing, distributing and publicly transmitting the engineering drawings of ultra-precision die and mold assemblies owned by Company A (hereinafter, the "Drawings at Issue") and for counterfeiting the appearance design of the products sold by Company A. In this Decision, it was first affirmed that the Drawings at Issue are protected under the Copyright Law. Two important legal issues lie in this case include (1) whether Company B was clearly aware that the Drawings at Issues are the graphic works whose copyright is enjoyed by Company A and infringed the copyright through unlicensed reproduction; and (2) whether the products of Company B counterfeited the appearance design of Company A's products with the same products produced for the purpose of competition in the industry in violation of the Antitrust Law.

  1. The creation of structural drawings based on the machines does not reproduce or adapt the structural drawings of the original manufacturers 

According to the Decision, engineering design drawings are graphic works under the Copyright Law. Nonetheless, in order to ensure average manufacturer can engineer and produce the machines/products according to the drawings, the engineering design drawings should meet design and skill requirements by conveying the dimension and size of a machine/product through specific drawings. Such functional expression is a combination of expression and thinking. Therefore, if a design drawing is observed independently and a professional is asked to create and characterize a drawing according to the same information and conditions, the similar outcome will be achieved. According to the Decision, everyone is permitted to create all kinds of drawings on the same physical machine, as long as the original drawings is not reproduced or adapted, such independent work does not infringe copyrights.

In this case, Company A believed that Company B may be exposed to Company A's product catalogues and corporate webpages. However, it was held in the Decision as a result of review that Company B's drawings are different due to different ways of expressing the product and that Company B substantiated the source of its creation. Accordingly, the two creations were perceived to be not substantively similar because their creative space is constrained by the technologies to manufacture and drawing methods, by comprehensively survey on the quality and quantity of the drawings.

In addition, the Drawings at Issue pertain to a type of customized precision processing component. Even if the design of others is referenced in the beginning of the design, still the creative thoughts should be incorporated in the course of design in order to modify the design. Therefore, the independent creativity of the Drawings at Issue cannot be denied.

  1. Appearances with technical functions are not representations protected under the Antitrust Law 

Article 20, Paragraph 1, Subparagraphs 1 and 2 of the Fair Trade Law(the Antitrust Law in Taiwan) provide: "No enterprise shall have any of the following acts with respect to the goods or services it supplies: (1) using in the same or similar manner, the personal name, business or corporate name, or trademark of another, or container, packaging, or appearance of another's goods, or any other representation that represents such person's goods, commonly known to relevant enterprises or consumers, so as to cause confusion with such person's goods; or selling, transporting, exporting, or importing goods bearing such representation; (2) using in the same or similar manner, the personal name, business or corporate name, or service mark of another, or any other representation that represents such person's business or service, commonly known to relevant enterprises or consumers, so as to cause confusion with the facilities or activities of the business or service of such person."

This Decision reiterated the opinion of the Supreme Administrative Court by pointing out that the representation under Article 20 of the Antitrust Law refers to a certain representation with distinctiveness or secondary meaning which may identify the sources of goods or services so that the general public may use such representation to differentiate different goods or services. Habitual shapes of goods or functional shapes with practical or technical purposes are not representations protected under the Antitrust Law for lack of distinctiveness; otherwise, this is tantamount to creating exclusive rights of functional appearances beyond the patent system. The product appearances of Company A and Company B are different. Company B may have achieved the functional design of its product due to the factors of function, customer demands, and product requirements. Therefore, the functional designs do not meet the requirements for representations under Article 20 of the Antitrust Law.

In this case, if Company A had filed for patent in Taiwan for its ultra-precision die and mold assemblies and had met patentability requirements, it could have sought remedies directly on the ground that Company B infringed its patent. According to the opinion reflected in the Decision, in the absence of patent protection, the indirect application of the Copyright Law and the Antitrust Law as the basis of claims barely achieved the wanted protection, in comparison with patent protection.