Abstract:

Chapter 1 gives an overall introduction to this research report. Because business names, corporate names, trademarks and service marks are concurrently protected by Article 20 of the Fair Trade Law, Corporate Law and Trademark Law, 24 infringement cases of well-known representations including business name, corporate name, trademark and service mark infringement cases have been decided under Article 20 of the Fair Trade Law by the Fair Trade Commission after the promulgation of the Fair Trade Law. Article 18(1) of the newly amended Corporate Law and Article 65(1) of the Trademark Law both provide criminal sanctions on the trademark or service mark infringements. However, based on its legislative purpose prescribed in Article 37(vii) and the applicability prescribed in Article 37(xi), the Trademark Law treats "corporate name" and "specially selected part" differently from the Corporate Law. In addition, when conflicts arise among the Fair Trade Law, Corporate Law and Trademark Law, no rules specifically state the hierarchy of these three laws. Therefore, which law should be applied becomes a loophole in regulating the trademark or service mark infringements. Whether the Fair Trade Law is applicable in the aforementioned matter is an issue for research.

Chapter 2 introduces the legal theories and principles followed by Article 20 of the Fair Trade Law and the Competition Law and Trademark Law of other leading nations regarding the representations of goods and services. In addition, this Chapter addresses problems in registering a corporate name and problems in choosing governing laws between the Competition Law and Trademark Law to be applied to trademark or service mark infringements. As for the determination and protection of well-known trademarks and service marks, this Chapter provides some explanation to the choice-of-law problems based on the relevant laws governing corporate names and well-known trademarks or service marks and related treatises from Germany, Japan, England, the United States and Chinese Taipei.

A party alleging trademark rights in a business name or corporate name will have to prove either that the business name or corporate name is inherently distinctive or that it has acquired secondary meaning and the business name or corporate name is a well-known representation to the relevant enterprises and consumers.

Chapter 3 discusses the problems in registering a corporate name and the appropriateness in using a corporate name. This Chapter also discusses the conflicts among the Corporate Law, Business Registration Law and Trademark Law. As for the review on the identical corporate names, it was generally handled by the Business Department of the Ministry of Economic Affairs pursuant to the Rules in Reviewing the Corporate Names and Examining the Corporate Affairs prior to the amendment to Article 18 of the Corporate Law.

As for the determination of corporate name infringements under Article 20(1)(ii) of the Fair Trade Law, while the word of "similar" was deleted from the newly amended Article 18 of the Corporate Law, the Fair Trade Commission should still make the infringement determination based on Article 18(1) of the Corporate Law. When two corporations have identical names and the corporation which registers its corporate name with the competent authority in a later time, has specifically indicated itself as a different business from the former corporation, or has specifically differentiated itself with words from the former corporation, the corporate name used by the latter corporation is not considered to be the "identical or similar use" under Article 20 of the Fair Trade Law, unless the latter corporation has actively misled other related businesses or consumers to believe that the latter corporation and the former corporation are the same corporation or two corporations are related enterprises or related in other businesses.

As for the protection of business names under the Business Law in Germany, besides exclusionary power granted by Article 30 of the Business Law to the registered business names, Article 37(2) of the same law provides that when the rights of a legitimate owner of the business name are infringed because of another's unlawful use of his business name, the owner may request the wrongdoer to cease the use of the business name and may also seek compensation under other laws. As for the protection of business names, the Business Law in Japan has identical provisions. In the United States, the principles of the Trademark Law generally govern the protection of business names and corporate names.

The Fair Trade Commission has received several complaints regarding corporate name or business representation infringements. One of these cases involving well-known trademark or service mark infringement in violation of Article 20 of the Fair Trade Law is the Yue Shih Tsong Heng Enterprise Corp. case. In that case, Yue Shih Enterprise knew that the "Blue Sky and Green Mountain" trademark and symbol owned by YES Co. were well-known to the relevant public and were used to represent products of YES Co. Despite such knowledge, Yue Shih Enterprise used the name "Yue Shih Health Group of Enterprise" to publish a full-page advertisement in the newspaper. Yue Shih Enterprise used wordings exactly the same as the "Yue Shih" trademark in the advertisement, reversed the colors of the registered trademark drawing owned by the complainant. The deliberate design of the advertisement misled the consumers to believe that both YES Co. and Yue Shih belonged to the same group of enterprises, resulting in confusion to the source of the products and services, thus adversely affecting trading order and competition ethics, in violation of Article 20(1)(ii) of the Fair Trade Law.

Another case involving well-known trademark or service mark infringement in violation of Article 24 of the Fair Trade Law is the Yung Chang Gas Station Corp. case. In that case, Yung Chang Gas Station Corp. changed its name to Formosa Plastics Gas Station Corp. in July 1998 and proceeded to use the well-known "Formosa Plastics" corporate name and trademark. Yung Chang Gas Station's act of changing its name and using a name identical or similar to that of the well-known company Formosa Plastics Corp. was clearly aimed at securing business opportunities by manipulating the trust that consumers and related enterprises have in the well-known Formosa Plastics name. It was an active and intentional effort to pass off the goodwill of Formosa Plastics Corp. and affected Formosa Plastics Corp.'s ability to efficiently compete in the gas station market. Yung Chang Gas Station's acts therefore constituted obviously unfair acts sufficient to adversely affect the trading order.

Chapter 4 discusses the problems in registering a well-known trademark or service mark and the appropriateness in using a well-known trademark or service mark. This Chapter also discusses the conflicts within provisions of the Trademark Law, especially the applicability of Article 65 of the same law, resulting cybersquatting issues on corporate names and well-known trademarks. In addition, this Chapter addresses the respective applicability of the Competition Law in Germany, Unfair Competition Law in Japan, Competition Law in England and Fair Trade Law in the United States on trademark or service mark registration and protection.

In Germany, well-known trademarks or service marks are generally protected under Article 25 of the Trademark Law. In order to be given the trademark-type protection, a product or container must have distinctiveness and goodwill pursuant to theories advanced by German scholars and judicial decisions made by German courts.

In Japan, trademark or service mark infringements are generally governed by Article 1, Paragraph 1, Subparagraphs 1 and 2 of the Unfair Competition Law. Creating a "likelihood of confusion" on the part of the consumers is the test for trademark or service mark infringements. Courts in Japan have interpreted the term "likelihood of confusion" broadly. Once the wrongdoer's product or service misleads the consumers to believe that the wrongdoer is related to the trademark or service mark owner, or the wrongdoer has made an active and intentional effort to pass off the goodwill of the trademark or service mark owner, or the wrongdoer has misappropriated the results of the trademark or service mark owner's hard work, the wrongdoer's conduct has constituted a trademark or service mark infringement even if the confusion on the part of the consumers has not actually occurred.

In England, well-known trademarks or service marks will be protected if the owner's trademark or service mark has goodwill, the wrongdoer's conduct has deceived the consumers and the wrongdoer's conduct has damaged the goodwill of the trademark or service mark owner. Well-known trademarks or service marks in England will also be protected if the wrongdoer has made an active and intentional effort to pass off the goodwill of the trademark or service mark owner, or the wrongdoer has misappropriated the results of the trademark or service mark owner's hard works even if the confusion between two products or two services has not actually occurred.

In the United States, in determining whether a wrongdoer's use of another's trademark or service mark has created a likelihood of confusion under the Trademark Law and Unfair Competition Law, several factors should be considered, including whether the wrongdoer's use of another's trademark or service has misled the consumers to believe that the wrongdoer's product or service belongs to the trademark or service mark owner, or the wrongdoer is related to or sponsored by the trademark or service mark owner. Whether a likelihood of confusion has been created on the part of the consumers should be focus on the overall impression of the wrongdoer's use of another's trademark or service mark. The owner of the trademark or service mark will be protected if the wrongdoer's infringement to the owner's trademark or service mark has created a likelihood of confusion even if the wrongdoer's product or service is entirely different from the product or service of the trademark or service mark owner and two products or two services are not competing with each other.

Most of the well-known trademark or service mark infringement cases decided by the Fair Trade Commission to be in violation of Article 20(1) of the Fair Trade Law are limited to a broader scope of confusion created by the wrongdoer's use of another's trademark or service mark. An example of these cases is the Yue Shih Tsong Heng Enterprise Corp. case. In that case, Yue Shih Enterprise used the name "Yue Shih Health Group of Enterprise" to publish a full-page advertisement in the newspaper. Yue Shih Enterprise used wordings exactly the same as the "Yue Shih" trademark in the advertisement, reversed the colors of the registered trademark drawing owned by the complainant. The deliberate design of the advertisement misled the consumers to believe that both YES Co. and Yue Shih belonged to the same group of enterprises, resulting in confusion to the source of the products and services, thus violating Article 20(1)(ii) of the Fair Trade Law.

On the other hand, cases involving trademark or service mark infringements resulting in a narrower scope of confusion on the part of the consumers are governed by Article 20 of the Fair Trade Law. The narrower scope of confusion created by the wrongdoer's conducts include misappropriating the results of another's hard works by free-riding or making an active and intentional effort to pass off the goodwill of another, thus constituting obviously unfair acts sufficient to adversely affect the trading order. Enacted by the Fair Trade Commission, Point 16, Paragraph 1 of the "Principles for Handling Cases Involving Article 20 of the Fair Trade Law"
provides that using another's well-known trademarks or service marks is to make an active and intentional effort to pass off the goodwill of another even though using another's well-known trademarks or service marks may not give rise to a likelihood of confusion. In addition, Point 16, Paragraph 2 of the "Principles for Handling Cases Involving Article 20 of the Fair Trade Law" provides that while misappropriating the results of another's hard works by exact copying or free-riding may not be punishable under Article 20 of the Fair Trade Law but is punishable under Article 24 of the Fair Trade Law.

An example of well-known trademark or service mark infringement case decided by the Fair Trade Commission at the 506th Commissioners' Meeting to be in violation of Article 24 of the Fair Trade Law is the Global Pao Tao Watch Co. Ltd. case. In that case, the design of sign, color and service mark of Global Pao Tao Watch Co. are different from the design of sign, color and service mark of Pao Tao Watch Co. However, when Global Pao Tao Watch Co. was established and registered as a corporation in 2000, it ought to have known that Pao Tao Watch Co. is a well-known watch company. Yet it has registered a name that is similar to the name of Pao Tao Watch Co. as its corporate name and it operates the same type of business as Pao Tao Watch Co. does. It is obvious that Global Pao Tao Watch Co. has made an active and intentional effort to pass off the goodwill of Pao Tao Watch Co., thus misappropriating the results of Pao Tao Watch Co.'s hard works.

Chapter 5 discusses the limitation set forth in the Fair Trade Law for the protection of a "representation". To constitute a "representation" under Article 20 of the Fair Trade Law, the representation must be related to a product, service or business. If the representation at issue is not related to a product, service or business, but is nevertheless a false statement or dissemination such as giving a wrong impression about the magnitude of the wrongdoer's business through advertisement, or misleading the consumers to believe that the wrongdoer is related to other enterprises or business activities. The characteristics of these representations are false or misleading representations, in violation of Article 21 of the Fair Trade Law.

As for the proper conduct in connection with the exercise of rights pursuant to the provisions of the Copyright Law, Trademark Law, or Patent Law, this Chapter also provides some detailed explanation in the applicability of Article 45 of the Fair Trade Law. In addition, this Chapter discusses the limitation in applicability of Article 20 or Article 24 of the Fair Trade Law based on the prior infringement cases decided by the Fair Trade Commission under Article 20 or Article 24 of the Fair Trade Law. In fact, the violated provisions of the Fair Trade Law and the evidence relevant to the Fair Trade Law violation provided by the complainant are merely a basis for the Fair Trade Commission to determine the criteria for each type of the Fair Trade Law violation and to investigate and decide the merit of the violation. Since the trademark or service mark infringement cases are governed concurrently by Articles 20, 21, 24 of the Fair Trade Law, the provision of the Fair Trade Lawwhich is applicable in a given case is often determined by the characteristics of the unlawful conduct.

Chapter 6 gives a conclusion to this research report. In order to provide a comprehensive protection to trademarks and service marks, the Corporate Law was recently amended and the proposed amendments to the Trademark Law have also expanded the applicability of the Trademark Law. As a result, cases involving identical or similar corporate names and business representations used by two different businesses on the same or similar product or service, creating likelihood of confusion on the part of the consumers, would probably be no longer governed by Point 14 of the "Principles for Handling Cases Involving Article 20 of the Fair Trade Law". In addition, cases involving trademark or service mark infringement resulting a narrower scope of confusion on the part of the consumers are governed by Article 20 or Article 24 of the Fair Trade Law. In deciding these cases, the Fair Trade Commission deals with a choice-of-law problem. However, whether a trademark or service mark infringement has created a narrower scope of confusion should be determined mostly upon whether the wrongdoer's use or registering another's trademark or service mark has exceeded the boundary of reasonable use resulting passing off the goodwill of another, or has created a likelihood of dilution to another's well-known trademark or service mark, including direct or indirect confusion and less serious types of confusion created by the wrongdoer's conducts. In order to establish a consistency in regulating the trademark and service mark infringements, the Fair Trade Commission should decide their trademark or service mark infringement cases under the Fair Trade Law in accordance with other trademark or service mark infringement cases decided under the Trademark Law and make reference to other foreign trademark and service mark infringement cases as well.

Written by
Wu T. H., Chiang Kuo-Lun, Lai Mei-Hua (Third Department)