The acts of creating advertisements, web pages, or similar content that replicate or closely resemble the content, arrangement, order, and structure of a website owned by a trademark holder may violate the Fair Trade Act—Supreme Court Civil Judgment 113 Tai-Shang No. 335

01/24/2025

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I.            Facts of the Case

 

1.   The trademark holder, Starek Scientific Co., Ltd., owned Trademark Nos. 0202831241 ("Trademark 1";) and 0203124229 ("Trademark 2"; collectively referred to with Trademark 1 as "Trademarks at Issue") and filed a litigation claiming that it established the "SCiKET" Facebook fan page in November 2017 and officially began using "SCiKET" as the name of its online store in January 2018. The company has worked diligently to make  a well-known trademark and representation. However, the accused infringer, Science Research Market Co., Ltd., knowingly used the well-known registered trademark and representation as part of its company name. It also established a Facebook fan page under the name "Science Research Market Co., Ltd." in collaboration with Rui Long Optoelectronics Co., Ltd., and displayed the text "Science Research Market Co., Ltd." in the upper left corner of its online store. Furthermore, it engaged in advertising and webpage activities that used content, layout, structure, and sequence similar or identical to those of the trademark holder's website (as added by the trademark rights holder in the original trial), and Rui Long Optoelectronics Co., Ltd., applied for several trademarks and filed opposition against Trademarks at Issue, all of which constitute actions that exploit the goodwill and efforts of the trademark holder, and are therefore obviously unfair conduct, thereby infringing upon Trademarks at Issue and violating the provisions of the Fair Trade Act, among other violations.

 

2.   The original judgment 111 Min-Shang-Shang No. 17 held that Trademark 2 lacks distinctiveness and is therefore invalid. Trademarks at Issue are neither well-known trademarks nor well-known representations, and the name of the Science Research Market Co., Ltd. does not pose a risk of confusion among relevant consumers, nor is there any confusion with the business or service facilities or activities of others. Science Research Market Co., Ltd. appropriately marks its company name, and the two companies established a Facebook fan page under the name "Science Research Market Co., Ltd.", which cannot be considered an infringement of Trademarks at Issue or an act of attaching to well-known representations. However, the accused infringers have reproduced and modified the oral and literary works of the trademark holder on their own website and engaged in business operations using them, which constitutes an obvious unfair competition act under Article 25 of the Fair Trade Act. The accused infringers are ordered to refrain from using advertisements or web pages that are identical or similar to the content, layout, order, and structure of the trademark holder's "SCiKET" website (https://www.sciket.com/) and must remove any advertisements or web pages containing content, layout, order, and structure that are identical or similar to those of the trademark holder's "SCiKET" website.

 

3.   The trademark holder, dissatisfied with the original judgment, filed an appeal against the partial original judgment. The Supreme Court's Civil Judgment 113 Tai-Shang No. 335 ruled that the original trial had errors in its reasoning, reversed the original judgment, and remanded the case to the second-instance court for further proceedings.

 

II.          Main Issues of the Case  

 

Main Issues in the 2^nd-instance Trial 

1.   Do Trademarks at Issue lack distinctiveness, resulting in grounds for invalidation?

2.   Are Trademarks at Issue well-known trademarks or well-known representations, and does this case fall under the provisions of Paragraph 2, Article 70 of the Trademark Act The Trademark Act in effect at the time when the registration of Trademarks at Issue was published (hereinafter referred to as the "Trademark Act")[1] and Item 2, Paragraph 1, Article 22 of the Fair Trade Act[2]

3.   Are the accused infringers entitled to claim the good faith prior use under Item 3, Paragraph 1, Article 36 of the Trademark Act[3]

4.   Does the accused infringers' use of advertisements and webpages that are identical or similar to the content, layout, structure, and order of the trademark holder's website (https://www.sciket.com/) violate Article 25 of the Fair Trade Act[4]

 

Main Issues in the 3^rd Trial

Does the original trial judgment constitute a violation of Item 6, Article 469 of the Code of Civil Procedure (i.e., where the judgment does not provide reasons or provides contradictory reasons)?

 

III.        Court Findings 

 

2^nd-Instance Court Findings: 

1.   Trademark 1 is designated for use in goods or services under Class 35 and Class 40. The goods and services associated with Trademark 1 do not have any literal connection to the meaning of Trademark 1 itself, nor does Trademark 1 describe the quality, purpose, raw materials, origin, or related characteristics of the goods or services. It is unrelated to the marks of government agencies or awards issued by them, nor does it constitute a similar or closely resembling trademark to those registered prior by others for the same or similar goods or services. Therefore, it is deemed to possess distinctiveness. Trademark 2 is designated for use in goods and services under Class 1, Class 9, Class 35, and Class 42. The goods and services associated with Trademark 2 have a clear literal connection to the meaning of the trademark. Trademark 2 serves as a description of the quality, purpose, raw materials, origin, or related characteristics of the goods or services, which objectively fails to allow relevant consumers to recognize it as a sign indicating the source of the goods or services, and thus it lacks distinctiveness.

 

2.   Trademarks at Issue are not well-known trademarks, nor are they well-known representations since the evidence presented by the trademark holder regarding how Trademarks at Issue are used in its designated goods or services is insufficient to prove that Trademarks at Issue have become well-known trademarks or representations. The accused infringer, after its establishment and registration, appropriately marked its company name during marketing, which cannot be considered as infringing Trademarks at Issue or as an act of attaching to well-known representations. The name of the accused infringer's company does not pose a risk of confusion among relevant consumers, nor is there any confusion with the business or service facilities or activities of others.

 

3.   The acts of the accused infringers do not constitute the good faith prior use under Item 3, Paragraph 1, Article 36 of the Trademark Act, as they failed to prove that they began using the same wording as Trademarks at Issue in their goods or services prior to the application date of Trademarks at Issue.

 

4.   Trademarks at Issue are registered trademarks, and the accused infringer has lawfully raised an opposition during the public examination period, which is a permissible act of public scrutiny under the law. Even if the accused infringer is motivated by a desire to avoid accusations of infringement from the trademark holder when raising the opposition against Trademarks at Issue, this should not be interpreted as an unfair act of free-riding on the reputation or exploiting the efforts of the trademark holder.

 

5.   The accused infringers' use of advertising and webpage content, layout, structure, and order that is identical or similar to that of the trademark holder's website (https://www.sciket.com/) constitutes a violation of Article 25 of the Fair Trade Act.

 

Supreme Court Findings: 

The 2^nd-instance court did not adequately address the significant disputed item regarding whether the accused infringers' display of the name "Science Research Market Co., Ltd." in the upper left corner of its online mall, and the use of a trademark similar to Trademarks at Issue in the same service, constitutes an act of unfair competition as defined under Article 25 of the Fair Trade Act by exploiting the reputation and efforts of the trademark holder. The court merely stated that Science Research Market Co., Ltd. appropriately marked its company name during marketing and that the accused infringers did not exploit well-known representations, leading to an erroneous conclusion against the trademark holder.

 

IV.        Lessons Learned from This Case

 

1.   The trademark application should pay attention to whether the trademark applied for has distinctiveness or other grounds for invalidity, in order to avoid issues such as "lack of distinctiveness" becoming an obstacle to asserting rights.

 

When applying for a trademark, attention should be paid to whether the proposed registered text, patterns, etc., have any relevance to the designated goods and services. It is important to consider whether they may merely describe the quality, use, ingredients, origin, or related characteristics of the goods or services, which could lead to a determination of lack of distinctiveness or other potential grounds for invalidating the trademark. This should be noted to avoid becoming an obstacle to asserting rights. 

2.   Actively use registered trademarks and retain relevant evidence to support future claims of well-known trademarks or representations for broader protection

 

There are specific criteria for determining whether a trademark or a representation is well-known[5]. If a trademark qualifies as a well-known trademark, its protection scope is broader than that of a general registered trademark, not limited to use by the alleged infringer on identical or similar goods/services. Additionally, if a well-known trademark's text is used as the name of a company, business, organization, domain, or other identifiers, leading to consumer confusion or diminishing the trademark's distinctiveness or reputation, claims for infringement of the famous trademark can be made. If a representation qualifies as a well-known representation, using it on the same or similar goods in a similar manner may lead to confusion with others' goods, potentially violating the Fair Trade Act. Therefore, rights holders should actively use registered trademarks and widely promote them to accumulate significant reputation in the market, ensuring they are widely recognized by relevant businesses or consumers. They should also retain evidence of the use of registered trademarks and their widespread recognition for future enforcement. 

3.   When creating product and service advertisement, websites or other marketing materials, avoid using similar or identical content, layouts, structures, or sequences as others to mitigate infringement risks

 

When creating advertisement, websites or other marketing materials for products and services, it is crucial to avoid using similar or identical content, layouts, structures, or sequences as others. Such actions may constitute copyright and trademark infringement and may also violate the Fair Trade Act, even if they do not constitute trademark infringement. Therefore, one must exercise caution to avoid liability for damages and removal of infringement. 

4.   If a party is dissatisfied with a 2^nd-instance court judgment, they should carefully review whether the court provided detailed reasoning for each disputed-item

 

Even if the 2^nd-instance court provides a brief rationale, parties can actively argue in a third instance litigation that the 2^nd-instance court failed to adequately explain why a party's certain reasons were not adopted, constituting a lack of sufficient reasoning in the judgment. In this case, the 2^nd-instance court did not completely neglect the discussion regarding whether the alleged infringer's use of "Science Research Market Co., Ltd." in the upper left corner of its online mall, while using a similar trademark to that of the trademark holder, constituted unfair competition under Article 25 of the Fair Trade Act. However, the Supreme Court still found that the 2^nd-instance court failed to adequately explain why a party's certain reasons were not adopted, constituting a lack of sufficient reasoning in the judgment. Therefore, parties intending to appeal a 2^nd-instance court judgment can refer to the Supreme Court's holding in 113 Tai-Shang No. 335, actively arguing that the brief reasoning provided by the 2^nd-instance court constitutes a lack of sufficient reasoning in the judgment.