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Criteria for Determination of Fair Use of Trademarks In Parody
Whether "parody" with entertainment nature and sense of humor, satire, or criticism constitutes is one of the types of fair use of trademarks, there have been judgements in Taiwan that have adopted an affirmative view and have imposed reasonable limitations on trademark rights based on the respect for freedom of speech, expression, and freedom of artistic expression. However, whether it actually constitutes fair use of trademarks without infringing on trademark rights still hinges on the specific circumstances of each case. Taipei District Court's Criminal Judgement 113-Zhi-Yi-Zi No. 9 dated August 21, 2024 revealed the requirements for claiming fair use of trademark rights in parody, and further explained that even if the products involved humorous implications, it does not necessarily constitute fair use of parody.
I. The Trademark Act does not regulate the fair use of parody
Paragraph 1, Article 36 of the Trademark Act specifies four (4) types of fair use of trademarks, which include descriptive fair use, nominative fair use, functional use, and prior use with good faith. There is no general provision in the Trademark Act similar to Paragraph 2, Article 65, of the Copyright Act, which sets out a general provision for a fair use. This reveals that even though the judicial practice of Taiwan has recognized parody as one of the types of fair use of trademark rights, there is no explicit provision in the Trademark Act regarding the fair use of parody.
II. Judgement of the case
(i.) The defendants used trademark designs that is similar to the registered trademarks owned by well-known international fashion brands (hereafter "the disputed trademarks"), and instructed uninformed company employees to print the trademark designs on clothing products. They then opened a store on the Shopee website to sell such products. Taipei District Court's Criminal Judgement 113-Zhi-Yi-Zi No. 9 ruled that the defendants violated Paragraph 3, Article 95 of the Trademark Act, which constituted trademark infringement, and confiscated the seized clothing products.
(ii.) The judgment reveals that parody can be claimed fair use of trademark rights on the following grounds:
1. Non-trademarked use
The use of another person's trademark is only for the purpose of expressing humor or satire, and not as a means of identifying one's own goods or services in commercial transactions. For example, using another person's trademark for specific public interest purposes, such as to express criticism or protest in a proportionate manner.
2. Fair use of trademark use
In the process of commercial transactions, using others' trademarks to express sense of humor or satire, to serve as a sign that identifies source of the one's goods or services, shall be conducted with honesty in line with the conventions of commercial transactions, clearly conveying the message that there is no relationship with the original trademark owner's goods or services, and ensuring that consumers can easily distinguish the two, without any risk of confusion or misunderstanding.
(iii.) The defendants' arguments on fair use of parody were not accepted by the court.
1. Even though the trademark designs on the seized clothing products featured humorous characteristics, they failed to present explanatory texts or designs that had nothing to do with defendants' products and the original trademark owners' goods. The defendants did not utilize any instantly recognizable method to clearly convey information that can help relevant consumers clearly distinguish the seized goods from the original trademark owners' products.
2. The defendants' company internal LINE group conversation records indicated that the company classified the products based on the "brands" of the disputed trademarks, which clearly showed that the defendants aimed to attract consumers' attention by using trademark designs with humorous connotations that were similar to the disputed trademarks. The defendants also took advantage of the spillover effect generated by the trademark owners' years of operation of the trademarks to stimulate the sales and increase the reputation of the disputed trademark, in attempt to free ride the reputation of the disputed trademarks.
III. Brief analysis of determining parody as fair use in judicial practice in Taiwan
(i.) In judicial practice of Taiwan, the determination of whether "parody of trademarks" constitutes fair use mostly emphasizes the trademark owner's interests deriving from the trademark rights and public interest to avoid consumers' confusion. Thus, if the "parody of a trademark" is to be allowed, the trademark that imitates a well-known trademark shall be entertaining with sense of humor, satire and criticalness as well as conveying messages contrast and contradiction. The "public interest of avoiding confusion" and the "public interest of expressing freely" shall be taken into consideration in a balanced manner. (see Intellectual Property and Commercial Court's Civil and Commercial Judgment 107-Min-Shang-Su-Zi No. 1 and Intellectual Property and Commercial Court's Criminal Judgment 103-Xing-Zhi-Shang-Yi-Zi No. 63)
(ii.) The Intellectual Property and Commercial Court's Civil Judgement 111-Min-Shang-Su-Zi No. 35 further provided the requirements for claiming parody as fair use:
1. It is entertaining with sense of humor, satire or criticalness, and conveys a message contrast and contradiction.
2. When consumers see a parody trademark, they immediately associate it with the well-known trademark.
3. There is a significant difference between the two trademarks, allowing consumers to clearly distinguish between them and avoiding any confusion.
4. Parody trademarks, which undergo strict scrutiny under freedom of speech, are justifiable in term of serving the public interest, even if they come at the expense of sacrificing the trademark rights.
5. There is no improper use of a well-known trademark, nor does cause likelihood of diminishing the distinctiveness or reputation of a well-known trademark.
(iii.) Regarding whether parody is satirical or humorous or not, the Intellectual Property and Commercial Court's Judgement 108-Min-Shang-Shang-Zi No. 35 determined that a parody or a joke is closely related to a country's language, culture, social background, life experience, and history. Thus, whether a parody or a joke is humorous hinges on whether "Taiwan's consumers" can understand the humorous connotation. Whether a trademark design will cause the likelihood of confusion among the relevant consumers hinges on the immediate reaction of those consumers when they see the trademark. That is to say, relevant consumers will form an identical or associated impression on sources of others' goods or services without much reasoning and inferring to understand. In this case, the court ruled that the "MyOtherBag…" joke originated from the classic joke of Americans often posting "MyOtherCar…" (my other car is a Mercedes or another luxury model) stickers on the bumpers of inexpensive or old cars. However, it is difficult for relevant consumers in Taiwan to find any humorous or funny point in it.
(iv.) It is worth noting that, although parody is recognized fair use of trademark in judicial practice of Taiwan, there has been no judgement that has successfully argued for fair use of parody. This indicates that the judicial practice seems to take a more conservative stance towards the defense of fair use of parody, leaning towards protecting trademark owners and their well-known trademarks from being exploited and free ridden by third parties. The future trends in practice are worth observing.
IV. Conclusion
In conclusion, the judicial practice of Taiwan adopts strict a standards for trademark fair use of parody. Taipei District Court's Criminal Judgment 113-Zhi-Yi-Zi No. 9 determined that parody must not only possess the sense of humor, satire, or criticism, but also must be instantly distinguishable and recognizable by consumers in Taiwan. Before adapting other's trademarks for entertainment effects such as humor, satire, or criticism, one should carefully assess the risk of trademark infringement to avoid violating the law.