Taiwan: Protection of trade dress

09-08-2016

Victor Lee and Crystal Chen

In Taiwan, the appearance of a product can be subject to intellectual property protection such as a design patent, trademark, copyright or, specifically, trade dress under the Fair Trade Act.

However, trade dress can be protected as a 3D trademark only when it has acquired secondary meaning among relevant consumers after long-term commercial use. Patentability of a design essentially requires creativeness and novelty, which take time to be examined. In other words, expecting immediate trademark or design patent protection for a newly released product that gains rapid popularity is usually unrealistic.

To close the loophole, articles 22 and 25 of the Fair Trade Act serve as legal instruments for trade dress owners to safeguard their IP.

"an appearance may still be protectable under article 25 of the Fair Trade Act by asserting that the infringer’s conduct of substantial copying constitutes a type of unfair competition."

Article 22 requires that a representation such as a corporate title, package or trade dress of goods shall be well-known among relevant consumers to be protectable. Several factors for determining the level of fame include the volumes of commercial advertisements, duration of marketing, sales numbers, coverage in media, reputation and quality, market share, and surveys. Besides, different products do not necessarily preclude similarity. For instance a beer coaster can be infringing a liquor bottle by using the latter’s well-known trade dress even though the two products are classified in different categories under the Trademark Act.

To trigger infringement under article 22 of the Fair Trade Act, the infringing product must have caused confusion to relevant consumers. Among the principles that are available to determine confusing similarity, the principle of ‘observation-in-whole’, which is often applied by the court, requires comprehensive comparison of the two disputed products with their general features, leaving aside the details.

In cases where article 22 fails to apply, an appearance may still be protectable under article 25 of the Fair Trade Act by asserting that the infringer’s conduct of substantial copying constitutes a type of unfair competition. To determine whether the ground of article 25 enters, the court will analyse non-exhaustively whether the trade dress owner’s economic interest is compromised, whether there is a likelihood of confusion, whether the substantial copying is wilful, whether the plagiarism is completely identical or extremely similar, etc. 

Suntory v General Biotech Alcohol

Suntory sued the defendant at the IP Court for infringement due to its whisky bottle’s appearance and packaging. The court first put forth that Suntory’s whisky bottle is famous and therefore a protectable trade dress according to market research. Next, considering the uniqueness of the bottle design, the court confirmed that its distinctiveness was not diluted. Last, the court applied the principle of observation-in-whole and found substantive similarity between Suntory’s and the defendant’s bottles, which would potentially cause confusion in the marketplace.

Rimowa v Deseno

Under articles 22 and 25 of the Fair Trade Act, Rimowa, a luggage product manufacturer with a signature groove design, sued the defendant for unfair competition in copying its groove design. The court first established the groove design as a distinctive representation of the Rimowa suitcase. By observing in whole, the court found the two products were confusingly similar and would therefore mislead consumers. The defendant’s use of the similar design on luggage is accountable as unfair competition.

In fact, it is not always easy for an appearance of a product to enjoy protection under the Fair Trade Act. The plaintiff would need to present considerable evidence for establishing well-known status and distinctiveness. Since the court is discretionary in determining relevant facts, success of a representation being confirmed as well-known is not guaranteed. Hence, trademark and design patents still serve as a good strategic insurance and a prima facie manifestation of IP rights.

To cope with potential litigation, the marketing or sales staff should frequently promote the uniqueness of a product’s appearance in the course of advertising. Last, as trade dress is growing famous in the marketplace, timely legal actions against any fakes or infringing products is necessary to defend dilution challenges.

Victor Lee is a managing partner and patent attorney at Tsai, Lee & Chen. He can be contacted at: legal@tsailee.com.tw

Crystal Chen is a partner at Tsai, Lee & Chen. She can be contacted at: cjchen@tsailee.com.tw

Victor Lee, Crystal Chen, trade dress, Tsai, Lee & Chen, Fair Trade Act, patent, trademark, copyright,

WIPR