To respect freedom of speech and expression as well as artistic freedom, "Commercial Trademark Parody" can be used to reasonably restrict the exercise of trademark rights while still satisfying the fair use of trademarks. "Commercial Trademark Parody" is also a common defense in trademark infringement disputes.

 

On January 12, 2023, the Intellectual Property and Commercial Court ("IPCC") rendered Criminal Decision 2022-Shing-Zhi-Shang-Yi-Zi No. 17. In said decision, the Court elaborated on its criteria for distinguishing between trademark parody and trademark infringement.

 

The defendant in the aforementioned case was charged with unauthorized use of the trademarks of several internationally renowned fashion boutique companies while he was operating his own fashion brand. The defendant argued that he had used techniques of humor and parody to "re-create" the disputed trademarks (e.g., he had formed the English letters in the disputed trademarks using interwoven and overlapping arrangements of distorted patterns of human bodies). It was argued that the defendant's derivative work was different from that of the luxury experience highlighted in the disputed trademarks and was used to target different consumer groups. Consequently, no likelihood of confusion for relevant consumers existed.

 

In the aforesaid decision, the IPCC set forth different criteria based on the purposes of trademark use and elaborated that fair use for trademark parody only applies in cases where a person uses another's trademark in the course of non-commercial transactions to express parody or humorous connotations or arguments rather than to identify his/her own goods or services. Alternatively, fair use is allowed in cases where a person uses another's trademark in the course of commercial transactions to both express parody or humorous connotations and identify his/her own goods or services but the presentation and transaction are conducted in a good faith and clear manner. In this way, relevant consumers know at a glance and without confusion that the goods or services in question are not connected with those of the trademark owner.

 

The IPCC held that the defendant in the aforementioned case promoted his brand through fashion magazines and repeatedly cooperated with well-known artists to initiate co-branding. For the IPCC, this was sufficient to conclude that the defendant's brand overlapped with the industry, sales channels, marketing methods, and consumer groups for the trademark owners. However, the IPCC ultimately did not adopt the defendant's defense of trademark parody on the grounds that the defendant failed to clearly deliver information that would have allowed relevant consumers to explicitly distinguish between products from the defendant's brand and those of the trademark owners' brands. The defendant's practice did not conform with good faith methods for business transactions and was deemed as sufficient to cause relevant consumers to develop the impression that goods from both parties in the case came from the same source or that affiliated companies, licensing relationships, franchising relationships, or other similar relationships existed. Therefore, it was likely that relevant consumers might become confused, which could ruin the most important function of a trademark, namely, its ability to distinguish the source of goods.