Pursuant to a recent IP court decision, the wording in a company name need no longer be identical to a well-known trademark for the rights holder to claim that the company name infringes its well-known trademark.

In recent years the use of well-known trademarks as company names has become increasingly common. As such, disputes between the owners of trademark rights and company names are also increasing. Article 70 of the Trademark Law provides that “knowingly using words contained in another person’s well-known registered trademark as the name of a company, business, group, or domain, or any other name that identifies a business entity, and hence causes a likelihood of confusion among relevant consumers or a likelihood of dilution of the distinctiveness or reputation of” a well-known trademark is deemed infringement of that well-known trademark.

Previously, however, for a finding of infringement, the offending company name had to include words that were identical to the trademark, because Article 70 expressly refers to “using words contained in another person’s well-known registered trademark”.

For example, in one case the owner of the well-known trademark 全國徵信 (NATIONAL INVESTIGATION) demanded that 全國女人徵信有限公司 (National Women Investigation Ltd) change its company name, as the ‘全國’ element of the company name was identical to its own well-known trademark, given that ‘徵信’means ‘investigation’ and is descriptive. However, the IP court held that ‘全國女人’ (‘national women’) was not identical to 全國徵信 (NATIONAL INVESTIGATION) and thus rejected the plaintiff’s demand by citing Article 70.

In another case, Taiwan company Swaro Co Ltd used and registered the trademark 施華洛, which was similar to the translation of ‘Swarovski’ in Chinese, ‘施華洛世奇’.  The trademarks SWAROVSKI and 施華洛世奇, registered for use on or with crystal, jewellery and cosmetics, are both owned by Swarovski Aktiengesellschaft and are well known around the world.  The registration for 施華洛 was invalidated by the Taiwan IP Office through an invalidation procedure.  However, Swaro continued using ‘施華洛’ as a portion of its company name.  Swarovski sued Swaro under Article 70 and demanded that it change its company name.

Swaro argued in response that the ‘施華洛’ portion of its company name was not identical to Swarovski’s well-known Chinese trademark and asserted that the plaintiff could not rely on Article 70.

However, the IP Court held that “using words contained in another person’s well-known registered trademark” is covered by Article 70, and that the wording need not be identical for a finding of infringement.  In a departure from its previous rulings, it stated that the wording need only be sufficiently similar that it may result in a likelihood of confusion among the relevant consumers.

The decision confirms that the previous restrictive interpretation of Article 70 is now being relaxed.

Yulan Kuo and Ching-i Lu

This article first appeared in IAM magazine. For further information please visit www.iam-magazine.com.