Company A and Company B, established and incorporated respectively in 1998 and 2005; both used Company C’s well-known registered trademark as a distinctive part of their respective company names. Company C therefore filed lawsuits against Company A and Company B, claiming that the practices of Company A and Company B misled consumers into believing that the goods and services provided by Company A and Company B originated from Company C, and were sufficient to dilute the distinctiveness of the well-known trademark thereof.

When Company A was established and incorporated in 1998, the Trademark Act in force then did not expressly state whether using another person’s registered trademark as a distinctive part of one’s company name constitutes infringement. In the 2003 amendment to the Trademark Act, the newly-inserted Article 62 provides that: “Any of the following acts, without consent of the proprietor of a registered trademark, shall be deemed infringement of the right of such trademark: (1) knowingly using a trademark that is identical with or similar to another person’s well-known registered trademark, or using words contained in said well-known registered trademark as the name of a company, business, domain, or any other mark that identifies a business entity or the source of goods/services, to the effect that the distinctiveness or reputation of said well-known trademark is diluted; and (2) knowingly using words contained in another person’s registered trademark as the name of a company, business, domain, or any other mark that identifies a business entity or the source of goods/services, to the effect that there is confusion among relevant consumers.” Accordingly, the use of another person’s well-known registered trademark as one’s company name became a type of trademark infringement.

Given the foregoing change to the Trademark Act, should the version in force at the time of the alleged infringement or the current version of the 2003 amendment apply when a court determines whether the practices of Company A and Company B constitute an infringement of Company C’s trademark?

In this regard, the Intellectual Property Court held that the Trademark Act in force at the time of the establishment and incorporation of Company A and Company B should apply in both the 2014 Min Shang Su Zi No. 31 judgment of first instance (dated March 31, 2015) and the 2015 Min Shang Shang Zi No. 7 judgment of second instance (dated January 14, 2016). In the second-instance judgment, the court specifically pointed out that, while using another person’s trademark as the distinctive part of a company name was deemed a type of trademark infringement, the infringing act was completed when the company was established and incorporated; and although this single infringing act continued to cause damages to another person due to the continuing existence of the company name, the damage was caused by the continuation of the damaging state rather than the infringing act.  Hence, the court held that the question whether the conducts of Company A and Company B constituted a trademark infringement should be determined in accordance with the Trademark Act in force at the time of the establishment and incorporation of the companies. Since these conducts were not deemed trademark infringement under the Trademark Act then in force, based on the principle of the non-retroactivity of law, no request to enjoin or prevent an infringement may be filed pursuant to the current Trademark Act, even if all of the elements of a trademark infringement were satisfied after the amendment.

The Supreme Court, however, came to a different opinion in the 2017 Tai Shang Zi No. 2088 judgment (dated March 15, 2018). According to the Supreme Court, where words contained in another person’s well-known trademark are used as one’s own company name, even if the companies were established and incorporated prior to the 2003 amendment, the incorporation of the words from said well-known trademark into the company names lasts through the periods of both the old and the new versions of the Trademark Act, and still continues to exist after the entry into force of the new version. Given that the new Trademark Act adopts the position holding the public interest in protecting consumers from confusion to be superior to the protection of one's good faith in continuing the use of certain company name, the new Trademark Act should be applicable to the facts emerging in the future in combination with some of the essential past facts. This application is a “retrospective combination of essential legal facts” rather than the retroactivity of the force of law, and therefore does not give rise to any contravention of the principle of the non-retroactivity of law. The second-instance judgment by the Intellectual Property Court was thereby overturned.