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Supreme Court Opinion on ‘Infringement of a Well-Known Symbol’
In Taiwan, trade dresses or symbols are currently protected mainly through such legal systems as design patents, trademarks and copyrights. When a trade dress or symbol does not satisfy the elements required for design patent, trademark or copyright protection, supplementary protection may be sought under Article 22 of the Fair Trade Act. That is, a proprietor may lawfully file for civil damages when confusion arises in another party’s use of the proprietor’s symbol that is ‘well known to the public’ and yet ‘not registered as trademark’ in the same or similar category of merchandise or services. However, in what situation can the appearance of a product be deemed as a ‘symbol well known to the public’? And how should it be determined whether the use of such symbol causes confusion with another party’s merchandise? With respect to these issues, the Supreme Court seems to hold different opinions from the Intellectual Property and Commercial Court (IPCC) in their respective judgements, i.e., Tai-Shang-Zi No. 3161 Judgement issued by the Supreme Court on February 16, 2022 (the second-instance judgment thereof being Min-Gong-Shang-Zi No. 3 Judgment rendered by the IPCC in 2020), and Min-Gong-Shang-Geng(I)-Zi No. 2 Judgment issued by the IPCC in December 23, 2021.
The above two cases were filed by the same plaintiff who is a suitcase manufacturer. The plaintiff claimed that the suitcases under its eponymous brand had been adopting a “grooved design” as a symbol representing its goods for such a number of years that the symbol had been widely known to relevant businesses and consumers as an indication of the source of goods. The defendants, though different, all adopted designs identical or highly similar to the “grooved design,” giving rise to confusion and misunderstanding on the part of consumers. With respect to similar facts of the alleged infringement, the IPCC made similar determinations in its Min-Gong-Shang-Zi No. 3 Judgment of 2020 and Min-Gong-Shang-Geng(I)-Zi. No. 2 Judgment of 2021. That is, the ‘grooved design” has the function of source identification, and is therefore deemed as a symbol well-known to the public. Additionally, under the visual impact created by the allegedly infringing products which convey an ‘overall implication’ through a ‘grooved design,’ consumers are highly likely to get confused and wrongly believe in the presence of a certain type of franchise, association or sponsorship between plaintiff’s symbol and those of defendants while the consumers select and purchase suitcases. Therefore, the IPCC ruled that defendants’ product appearances constitute an infringement of plaintiff’s well-known symbol.
The Supreme Court, however, holds different opinions in its Tai-Shang-Zi No. 3161 Judgement of 2021. The Supreme Court first defines ‘symbol’ as a feature having a secondary meaning or distinctiveness to an extent that identifies product source and enables relevant businesses or consumers to make a distinction among varying products. The aforesaid ‘distinctiveness’ means that the feature is so distinguishable that relevant businesses or consumers are able to identify, upon seeing the feature, a specific enterprise as the manufacturer of the products having such feature. ‘Secondary meaning’ relates to a feature that is originally indistinctive and yet imparted with another meaning indicative of product source by its continuous use for so long a period of time that consumers know and associate it with product source. The Supreme Court also cites an analytical report on market survey results of the symbol at issue provided by the plaintiff itself. According to the report, up to 50% of general consumers have no idea of plaintiff’s brand, and up to 46.08% of respondents do not see an association between plaintiff’s and defendant’s products. Accordingly, there are doubts whether the grooved design has lain deep in consumers’ consciousness and whether the suitcases marketed by the plaintiff are immediately identifiable simply by the grooved design.
The Supreme Court also interprets the criterion “confusion with another party’s merchandise.” Although actual occurrence thereof is not a necessary requirement, this criterion applies if a specific danger of confusion exists after general consumers pay average attention and apply average memory capacity. Where there are only abstract or speculative risks, the criterion is not applicable. Furthermore, whether there exists a specific danger of confusion should be determined in light of a comprehensive consideration of the degree of fame or distinctiveness of the symbol, the degree of similarity between the symbol and the products or businesses at issue, overlap of consumers, price difference, presence of competition, and the like. With reference to documented evidence, the Supreme Court found it doubtful whether the defendant’s LOGO printed on the very front of an allegedly infringing suitcase is insufficient to help consumers identify the source of merchandise. Moreover, there are remarkable differences in terms of price and marketing channel of two parties' products. The defendant argued by pointing out the obvious price differences and different product appearances that can be noticed by consumers with average attention. Is such defendant’s argument completely unpersuasive? The Supreme Court believes that the question needs to be further clarified. Hence, the Court revoked the original judgment and remanded the case back to the IPCC for further proceedings.
While defining ‘symbol well known to the public’ and interpreting “confusion with another party’s merchandise,’ the Supreme Court and the IPCC do not convey significantly varying legal meanings, and yet completely different conclusions are delivered after their application. This may be due to the fact that cases involving infringement of well-known symbols are quite new in the IP law field in Taiwan. Constant efforts should be made on following-up and observing specific cases in practice. In addition, some proprietors of trademarks or well-known symbols may provide market survey results as evidence showing fame or confusion during the process of litigation. However, a market survey may lead to a completely different conclusion by virtue of questionnaire designing, sampled respondents, method of sampling, or the like. In this case for example, the Supreme Court ruled unfavorable to the proprietor by citing the market survey report presented by itself. Hence, proprietors should make careful consideration as to whether to carry out a market survey and to present an analytical report.