According to Article 68(1)(1) of the Trademark Act, using a trademark that is identical to a registered trademark in relation to goods or services identical to those for which it is registered, without the consent of the trademark owner, constitutes infringement.  According to Article 70 (1) of the same Act, knowingly using a trademark that is identical or similar to another person’s well-known registered trademark, without the consent of the trademark owner, and where there exists a likelihood of dilution of the distinctiveness or reputation of the said well-known trademark, shall also be deemed infringement.  Nowadays, online group purchasing has become a common consumption channel for consumers.  If the trademark of group purchasing goods is used in commercial documents or advertisements related to the goods or services for marketing purposes, there is a risk of infringement of trademark rights.

 

In its Judgment No.: 112-Ming-Shang-Su-49, the Intellectual Property and Commercial Court ("IPCC") held that the group purchasing initiator, who had never been authorized by OMEGA to use its trademarks in website advertisements, nevertheless used OMEGA's trademarks for group purchasing products on his Facebook fan page.  He also posted advertisements containing phrases such as “In partnership with OMEGA, a Swiss brand for 160 years...”.  The IPCC found that the group purchasing initiator's use of OMEGA trademarks to promote the purchase of OMEGA watch products would likely confuse relevant consumers and constituted trademark infringement.  The court also expressed the view that, since the group purchasing initiator had not entered into a cooperative sales agreement with OMEGA, his statement on his Facebook fan page claiming to have “cooperated with OMEGA” could hardly be considered an honest and trustworthy practice consistent with customary commercial standards.  As such, it does not constitute indicative fair use.  This behavior—advertising false information and engaging in commercial free-riding—also violates Articles 21(1) and 25 of the Fair Trade Act.

 

In practice, it is common to use the original manufacturer's trademarks in group purchasing or sales of genuine goods, and to use “descriptive fair use” or “indicative fair use” as a defense of fair use.  However, if such descriptive or indicative use of the trademark involves false advertising or deviates from honest, trustworthy or customary commercial practices, the court may determine that the use is not fair, thereby constituting an infringement of trademark rights and a violation of the Fair Trade Act.  Therefore, even if online group purchasing products are genuine, the group purchasing initiator should also be mindful of the reasonable limits on the use of the trademarks in relevant advertisements.