Newsletter
Issues Relating to Trade Dress Protection
Currently, under Taiwan’s legal regime, trade dress may be protected mainly by design patent, trademark and copyright . Briefly, if trade dress meets the requirements of novelty, non-obviousness and utility, the owner may apply for a design patent pursuant to Taiwan’s Patent Act, so that the trade dress in question will enjoy protection under the Civil Code; if the trade dress is capable of serving as a recognizable trademark, then it may be registered as a trademark pursuant to the Trademark Act, and enjoy both civil and criminal protection; if the trade dress constitutes a creative work, then it may qualify for protection under the Copyright Act, and be able to enjoy both civil and criminal protection. If trade dress does not conform to any of the above, then currently, under Taiwan’s legal regime, supplementary protection is provided under the Fair Trade Act.
Article 22 of the amended Fair Trade Act, as promulgated on February 4, 2015, stipulates that, if an enterprise uses a “commonly known” symbol of goods or services, which is not a registered trademark, for “the same or similar” goods or services so as to cause confusion, the right-holder may bring a civil claim for damages. The provisions of Article 22 of the amended Fair Trade Act are clearly more restrictive than the provisions of Article 20 of the previous Fair Trade Act. For example: (1) Article 20 of the previous Fair Trade Act stipulated that the object of protection should be marks that are “commonly known to relevant enterprises or consumers” whether it is registered or not. (2) Article 20 of the previous Fair Trade Act referred to “using in the same or similar manner … so as to cause confusion”; i.e., the requirement “the same or similar goods or services” was not required. (3) With regard to legal effect, under the previous Fair Trade Act, those who violated Article 20 were not only required to bear civil liability but were also liable to administrative penalties imposed by the Fair Trade Commission; nevertheless, this administrative penalty provision in violation of Article 22 of the amended Fair Trade Act has now been removed.
If trade dress does not constitute a “commonly known” symbol, for example if the trade dress has not yet been registered as a trademark, or if the appearance or configuring of a new product for which the enterprise in question has not yet had time to apply for a trademark or a design patent becomes the subject of dead copy by a rival firm, this is treated as the references in violation of Article 25 of the Fair Trade Act (Article 24 of the previous Fair Trade Act): (x) an attempt to “free ride” on the firm’s business reputation or (y) “dead copy.” Those violating the provisions of Article 25 of the Fair Trade Act are not only required to bear civil liability but also liable to administrative penalties imposed by the Fair Trade Commission. Since the protection afforded to a commonly known symbol which is not a registered trademark no longer has the provision for administrative penalties included, the Fair Trade Commission considered that if attempting to free ride on another firm’s business reputation, or engaging in dead copy, were subject to administrative penalties, this would create a situation wherein punishment for a less serious offence might be more severe than punishment for a more serious offence, and thus the Fair Trade Commission proposed to delete the references to attempting to free ride on another firm’s business reputation and to dead copy from its Guidelines. However, the Taiwanese legal acts have always lacked clear regulations regarding the protection of trade dress and prevention of dead copy, and the application of Article 25 of the Fair Trade Act has played a supplementary role to make up for this deficiency. If references to attempting to free ride on another firm’s business reputation and to dead copy are removed from the Fair Trade Commission’s Guidelines, then how will it be possible to provide protection for trade dress and prevent dead copy in the future? Does the removal of references to free riding and dead copy from the Guidelines imply that the Fair Trade Act’s provisions regarding civil protection do not apply to these types of behavior? Does it imply that Taiwan’s Intellectual Property Court would no longer have jurisdiction over these categories of behavior, and that they must be dealt with by the ordinary courts? If they are to be returned to the jurisdiction of the ordinary courts, are there suitable Civil Code provisions that can be applied to them?
For such a significant dispute, the Intellectual Property Office, Ministry of Economic Affairs convened a conference on August 4, 2015, at which the officials from the Fair Trade Commission, the academics, and the experts in related fields were invited to discuss the issue. The participating academics and experts were unanimous in holding that, even if administrative penalties would be considered to be removed in cases involving dead copy or free riding on another firm’s business reputation, these types of behavior should still be covered by Article 25 of the Fair Trade Act. It remains to be seen whether and how the Fair Trade Commission will revise its Guidelines in response to this issue, which is of great importance in relation to the overall development of intellectual property rights protection and unfair competition law in Taiwan.