Newsletter
Opinions of IPCC on Whether a Well-Known Trade Dress is Infringed Upon
Under current practice, regarding the intellectual property system to protect the design appearance of products, in addition to applying for a design patent or registering a trademark, Article 22 of the Fair Trade Act ("Act") also expressly provides that "No enterprise shall perform any of the following acts with respect to the goods or services it supplies: i. using a well-known personal name, business or corporate name, trademark, container, packaging, appearance, or other trade dress that shows another’s goods, in the same or similar manner or category of merchandise which causes confusion with another person's goods; selling, transporting, exporting, or importing goods bearing such trade dress (omitted below)." Article 29 of the Act further provides that "If any enterprise violates the provisions of this Act and thereby infringes upon the rights and interests of another, the injured party may request the removal of such infringement; if there is a likelihood of infringement, prevention may also be claimed." However, what kind of product appearance can be deemed as a "well-known trade dress" prescribed in the aforesaid Act? Furthermore, how does the court determine whether "confusion with another’s goods" is caused? The Intellectual Property and Commercial Court (IPCC) expressed its opinions in the 2021 Min Gong Shang Geng (1) Zi No. 2 civil judgment rendered on 23 December 2021, and factual matters of the case and grounds of the judgement are summarized as follows.
The plaintiff of this case alleged that the company was a globally reputed manufacturer for suitcases, whose eponymous brand had suitcases with a "grooved design" as a trade dress for a number of years, widely known to relevant businesses and consumers as an indication of the source of goods; however, a variety of suitcases of the defendants utilized designs either identical or highly similar to the plaintiff’s "grooved design," causing consumers to be misled to with regard to the products at issue being manufactured or sold by the plaintiff, constituting a violation of the Fair Trade Act. In response to the above allegation, the defendants argued that the "grooved design" was not a trade dress as prescribed in the Fair Trade Act; additionally, the defendant’s suitcases differed from the "grooved design" in appearance, and were sold at starkly different prices via remarkably distinct sales channels; therefore, there was obviously no such concern of engendering confusion among general consumers. The IPCC adopted the plaintiff’s claims, and ruled that the defendants infringed upon the plaintiff’s well-known trade dress, the "grooved design." The rationale is summarized as follows.
1. The system of the intellectual property laws is not merely limited to technical protection, but extended to innovativeness and fairness in market competition. The system of the "well-known trade dress of goods" prescribed in Article 22 of the Act is aimed at maintaining a fair market and at preventing business owners from disturbing the order of transaction by clinging to the reputation of other business, or by means of a high degree of plagiarism. The texts and drawings of the "grooved design" provided by the plaintiff can be considered as constituting the scope of the "well-known trade dress" if such texts and drawings are sufficient to show the innovativeness of goods or to be a basis for identifying the source of goods. As for the specific technical properties such as dimensions, ratios or textures, they were not the elements for determining the "well-known trade dress."
2. Whether or not the trade dress of the plaintiff’s "grooved design" is well-known:
The IPCC pointed out that a trade dress is deemed well-known when the distinctiveness and business reputation represented thereby are widely known to relevant businesses and consumers, and thus sufficient to indicate the source of goods or services. The relevant businesses and consumers include actual and potential consumers that will buy the goods or services with the trade dress, distributors utilizing goods or services with the trade dress, and relevant businesses supplying the goods with the trade dress, and the like. Furthermore, after comprehensively considering the conceptual strength of the "grooved design," and the situation that such design has been advertised and marketed for a long time; suitcases with the "grooved design" sold well and enjoyed an excellent brand reputation with extensive media coverage; the "grooved design" obtained trademarks in other countries (indicating that such design appearance is certainly distinctive), the IPCC determined that the "grooved design" is a trade dress.
3. Whether or not the defendants’ products at issue "caused confusion with another's goods":
The IPCC pointed out that, from the perspective of "average attention paid by general consumers" and the "degree of fame or distinctiveness of the trade dress or the degree of similarity between the trade dress and the products," while the defendant’s products printed the defendant's trademarks or logos thereon, when consumers purchase the suitcases, the impression as a whole is overwhelmed by the visual impact from the "grooved design," so it is still very likely that such consumers may be confused by the impression that a certain type of franchise, association or sponsorship between the defendant's goods and the plaintiff’s trade dress does exist. Moreover, the IPCC stated that from the perspective of marketing channels, overlapping customers, a competitive relationship, and price difference, it was hard to exclude the competitive relationship between the plaintiff and the defendants, since both the plaintiff’s goods and the defendants’ products were aimed at the travel-loving middle class, to whom the aforesaid price difference was also not obvious, which caused overlapping customers. Furthermore, the IPCC stated that the term "confusion" prescribed in Subparagraph 1, Paragraph 1, Article 22 of the Act covered the situation wherein consumers wrongly believed in the presence of a certain type of franchise, association or sponsorship between counterfeits and the trade dress of the authentic goods, which was very likely to have consumers wrongly believe in the fact that the defendant’s goods were from the second brand of the original brand of the plaintiff, which was a concrete risk of confusion.
4. Given the above, the IPCC held the opinion that the defendants’ products could engender confusion among general consumers, and thus infringed on the plaintiff’s "grooved design," which is a well-known trade dress.
In view of the above, a variety of evidence provided by the plaintiff, which can prove the fact that the specific design does have a function in indicating the source of goods, will help convince the court to determine such design to be a well-known trade dress. Furthermore, the IPCC indicated in the above judgment that the term "confusion" shall cover the situation wherein customers wrongly believe in the presence of a certain type of franchise, association or sponsorship between counterfeits and the trade dress of the authentic goods. It is worth noting that the IPCC appears to adopt a loose standard when determining the scope of "confusion."