What is the scope of counterfeiting under Article 20?

Article 20 of the Fair Trade Law provides that “No enterprise shall have any of the following acts with respect to the goods or services it supplies:

1. using in the same or similar manner, the personal name, business or corporate name, or trademark of another, or container, packaging, or appearance of another's goods, or any other symbol that represents such person's goods, commonly known to relevant enterprises or consumers, so as to cause confusion with such person's goods; or selling, transporting, exporting, or importing goods bearing such symbol;
2. using in the same or similar manner, the personal name, business or corporate name, or service mark of another, or any other symbol that represents such person's business or service, commonly known to relevant enterprises or consumers, so as to cause confusion with the facilities or activities of the business or service of such person; or
3. using on the same or similar goods a mark that is identical or similar to a well-known foreign trademark that has not been registered in this country; or selling, transporting, exporting, or importing goods bearing such trademark.

The preceding paragraph shall not apply to any one of the following:

1. using in an ordinary manner the generic name customarily associated with the goods or the symbol customarily used in the trade of the same category of goods; or selling, transporting, exporting or importing goods bearing such name or symbol;
2. using in an ordinary manner the name or symbol that is customarily used in the trade of the same type of business or service;
3. using in good faith one's own name, or selling, transporting, exporting or importing goods bearing such name; or
4. using, with good faith, in the same or similar manner the symbol referred to in the first or second subparagraph of the preceding paragraph before such symbol having become commonly known to the relevant enterprises or consumers, or using such symbol by any successor that acquires such symbol together with the business from a bone fide user; or selling, transporting, exporting or importing goods bearing such symbol.

Where any enterprise has any of the acts set forth in the third and fourth subparagraphs of the preceding paragraph which likely to damage or cause confusion with the business, goods, facilities, or activities of another enterprise, the latter enterprise may request the former to add appropriate symbol unless the former only transports such goods.”

Apart from the constituent elements of counterfeiting of well-known foreign trademarks, which are separately set forth in Article 20(1)(iii), the constituent elements of other kinds of counterfeiting include that the representation being counterfeited be commonly known to relevant enterprises or consumers, as provided in Articles 20(1)(i) and 20(1)(ii). In addition, an act is only considered counterfeiting if it will lead to confusion of the product of the enterprise being counterfeited, its business or service facilities, or activities.

Relevant articles of law: Fair Trade Law, Article 20

Article 20 of the Fair Trade Law provides that “No enterprise shall have any of the following acts with respect to the goods or services it supplies:

1. using in the same or similar manner, the personal name, business or corporate name, or trademark of another, or container, packaging, or appearance of another's goods, or any other symbol that represents such person's goods, commonly known to relevant enterprises or consumers, so as to cause confusion with such person's goods; or selling, transporting, exporting, or importing goods bearing such symbol;
2. using in the same or similar manner, the personal name, business or corporate name, or service mark of another, or any other symbol that represents such person's business or service, commonly known to relevant enterprises or consumers, so as to cause confusion with the facilities or activities of the business or service of such person; or
3. using on the same or similar goods a mark that is identical or similar to a well-known foreign trademark that has not been registered in this country; or selling, transporting, exporting, or importing goods bearing such trademark.

The preceding paragraph shall not apply to any one of the following:

1. using in an ordinary manner the generic name customarily associated with the goods or the symbol customarily used in the trade of the same category of goods; or selling, transporting, exporting or importing goods bearing such name or symbol;
2. using in an ordinary manner the name or symbol that is customarily used in the trade of the same type of business or service;
3. using in good faith one's own name, or selling, transporting, exporting or importing goods bearing such name; or
4. using, with good faith, in the same or similar manner the symbol referred to in the first or second subparagraph of the preceding paragraph before such symbol having become commonly known to the relevant enterprises or consumers, or using such symbol by any successor that acquires such symbol together with the business from a bone fide user; or selling, transporting, exporting or importing goods bearing such symbol.

Where any enterprise has any of the acts set forth in the third and fourth subparagraphs of the preceding paragraph which likely to damage or cause confusion with the business, goods, facilities, or activities of another enterprise, the latter enterprise may request the former to add appropriate symbol unless the former only transports such goods.”

The term “symbol” (trade dress) used in Article 20 of the Law refers to a feature that has distinctive power or secondary meaning and is able to represent the source of goods or services, thus enabling relevant enterprises or consumers to distinguish such goods or services from other goods or services.

The term “distinctive power” in the preceding paragraph refers to the ability of an especially distinguishing characteristic to enable relevant enterprises or consumers, upon seeing it, to recognize that the goods or services it represents are manufactured or supplied by a particular enterprise. The term “secondary meaning” refers to where a characteristic does not have intrinsic distinctive power but, through long-term sustained usage, relevant enterprises or consumers have come to recognize the mark and associate it with the source of the goods or services, and consequently the characteristic has the additional significance of enabling differentiation of the sources of goods or services.

Factors considered in the determination of symbols (trade dress): The term “symbol” (trade dress) in Article 20 of the Law refers to any of the following:

1. Any word, graphic, mark, product container, packaging, shape, or combination of the above sufficiently distinctive to make relevant enterprises or consumers to recognize it as a mark representing the goods or services, and to distinguish the goods or services from those of other parties.
2. Any word, graphic, mark, product container, packaging, shape, or combination of the above that are not especially distinctive, but through long-term use, are sufficient to make relevant enterprises or consumers to recognize the symbol and associate it with the source of the goods or services.

Relevant articles of law: Fair Trade Law, Article 20

Article 20 of the Fair Trade Law provides that “No enterprise shall have any of the following acts with respect to the goods or services it supplies:

1. using in the same or similar manner, the personal name, business or corporate name, or trademark of another, or container, packaging, or appearance of another's goods, or any other symbol that represents such person's goods, commonly known to relevant enterprises or consumers, so as to cause confusion with such person's goods; or selling, transporting, exporting, or importing goods bearing such symbol;
2. using in the same or similar manner, the personal name, business or corporate name, or service mark of another, or any other symbol that represents such person's business or service, commonly known to relevant enterprises or consumers, so as to cause confusion with the facilities or activities of the business or service of such person; or
3. using on the same or similar goods a mark that is identical or similar to a well-known foreign trademark that has not been registered in this country; or selling, transporting, exporting, or importing goods bearing such trademark.

The preceding paragraph shall not apply to any one of the following:

1. using in an ordinary manner the generic name customarily associated with the goods or the symbol customarily used in the trade of the same category of goods; or selling, transporting, exporting or importing goods bearing such name or symbol;
2. using in an ordinary manner the name or symbol that is customarily used in the trade of the same type of business or service;
3. using in good faith one's own name, or selling, transporting, exporting or importing goods bearing such name; or
4. using, with good faith, in the same or similar manner the symbol referred to in the first or second subparagraph of the preceding paragraph before such symbol having become commonly known to the relevant enterprises or consumers, or using such symbol by any successor that acquires such symbol together with the business from a bone fide user; or selling, transporting, exporting or importing goods bearing such symbol.

Where any enterprise has any of the acts set forth in the third and fourth subparagraphs of the preceding paragraph which likely to damage or cause confusion with the business, goods, facilities, or activities of another enterprise, the latter enterprise may request the former to add appropriate symbol unless the former only transports such goods.”

The term “relevant enterprises or consumers” in Article 20 of this Law refers to trading counterparts with whom transactions such as sale or purchase of the goods or services may occur. Generally speaking, the trading counterparts of goods and services vary according to the nature of the goods and services. For instance, for daily necessities, the trading counterparts are general consumers. However, if the goods or services are professional products or specific in nature, “relevant enterprises or consumers” refers to those who possess the necessary professional or specific qualifications.

The term “commonly known to relevant enterprises and consumers” means having a considerable degree of recognition and known to a majority of the relevant enterprises and consumers. In actual practice, it is determined on a case-by-case basis by taking into account various factors such as sales region, time, and, frequency of advertising.

Relevant article of law: Fair Trade Law, Article 20

The totality of the following factors is taken into consideration in judging whether a certain symbol (trade dress) is commonly known to relevant enterprises or consumers:

1. Whether there has been enough advertising of the symbol to have caused the relevant public to form an impression of the symbol;
2. Whether goods or services bearing the symbol have been marketed long enough to cause relevant enterprises or consumers to form an impression of the symbol;
3. Whether the volume of sales of goods or services bearing the symbol has been large enough to cause relevant enterprises and consumers to form an impression of the symbol;
4. Whether the market share of the gods or services bearing the representation is large enough to have caused relevant enterprises and consumers to form an impression of the symbol;
5. Whether media coverage of goods or services bearing the representation has been extensive enough to cause relevant enterprises or consumers to form an impression of the symbol;
6. Quality and reputation of the goods or services bearing the symbol;
7. Scientific, fair, and objective market surveys submitted by the party concerned regarding the goods and services marketed under the symbol;
8. Opinions of the relevant competent authorities.

When considering market survey materials submitted by a party as referred to in subparagraph 7 of the preceding paragraph, the Fair Trade Commission Criteria for Assessing Market Survey Reports Submitted by Parties passed by the 322nd Commissioners’ Meeting and amended and passed by the 347th Commissioners’ Meeting shall apply.

Article 20 of the Fair Trade Law provides that “No enterprise shall have any of the following acts with respect to the goods or services it supplies:

1. using in the same or similar manner, the personal name, business or corporate name, or trademark of another, or container, packaging, or appearance of another's goods, or any other symbol that represents such person's goods, commonly known to relevant enterprises or consumers, so as to cause confusion with such person's goods; or selling, transporting, exporting, or importing goods bearing such symbol;
2. using in the same or similar manner, the personal name, business or corporate name, or service mark of another, or any other symbol that represents such person's business or service, commonly known to relevant enterprises or consumers, so as to cause confusion with the facilities or activities of the business or service of such person; or
3. using on the same or similar goods a mark that is identical or similar to a well-known foreign trademark that has not been registered in this country; or selling, transporting, exporting, or importing goods bearing such trademark.

The preceding paragraph shall not apply to any one of the following:

1. using in an ordinary manner the generic name customarily associated with the goods or the symbol customarily used in the trade of the same category of goods; or selling, transporting, exporting or importing goods bearing such name or symbol;
2. using in an ordinary manner the name or symbol that is customarily used in the trade of the same type of business or service;
3. using in good faith one's own name, or selling, transporting, exporting or importing goods bearing such name; or
4. using, with good faith, in the same or similar manner the symbol referred to in the first or second subparagraph of the preceding paragraph before such symbol having become commonly known to the relevant enterprises or consumers, or using such symbol by any successor that acquires such symbol together with the business from a bone fide user; or selling, transporting, exporting or importing goods bearing such symbol.

Where any enterprise has any of the acts set forth in the third and fourth subparagraphs of the preceding paragraph which likely to damage or cause confusion with the business, goods, facilities, or activities of another enterprise, the latter enterprise may request the former to add appropriate symbol unless the former only transports such goods.”

The term “use in an identical manner” refers to words, graphics, marks, product containers, packaging, shape, or combination of the above in physical appearance, arrangement, or color design being used in exactly the same manner. The term “use in a similar manner” refers to the copying of major portions of the symbol, thus leading to concerns that the buyers will be confused when generally observing the goods or services during purchase.

To determine whether a symbol is identical or similar, the facts should be observed and evaluated objectively, and the following principles applied during determination:

1. Principle of the relevant public with general knowledge or experience using general observation: Whether a symbol is used in a similar manner should be determined based on whether there is any confusion or misidentification during general observation by the general public; the observation of a specialist should not be used as the basis for determination.
2. Principle of overall observation and comparison of major components: Whether a trademark or a symbol is used in a similar manner should be determined by observing the overall or major components of such trademark or symbol. The term major components refers to the most distinct, most eye-catching portion of the trademark or symbol, or that part which can most easily attract the attention of prospective buyers.
3. Principle of observing the items separately at different locations and at different times: Whether a trademark or symbol is used in a similar manner should not be determined by placing the two trademarks or symbols at the same location and making careful comparisons. Rather, the two trademarks should be separated (different times and different locations) and observed, and determination thus made.

Relevant article of law: Fair Trade Law, Article 20

Article 20 of the Fair Trade Law provides that “No enterprise shall have any of the following acts with respect to the goods or services it supplies:

1. using in the same or similar manner, the personal name, business or corporate name, or trademark of another, or container, packaging, or appearance of another's goods, or any other symbol that represents such person's goods, commonly known to relevant enterprises or consumers, so as to cause confusion with such person's goods; or selling, transporting, exporting, or importing goods bearing such symbol;
2. using in the same or similar manner, the personal name, business or corporate name, or service mark of another, or any other symbol that represents such person's business or service, commonly known to relevant enterprises or consumers, so as to cause confusion with the facilities or activities of the business or service of such person; or
3. using on the same or similar goods a mark that is identical or similar to a well-known foreign trademark that has not been registered in this country; or selling, transporting, exporting, or importing goods bearing such trademark.

The preceding paragraph shall not apply to any one of the following:

1. using in an ordinary manner the generic name customarily associated with the goods or the symbol customarily used in the trade of the same category of goods; or selling, transporting, exporting or importing goods bearing such name or symbol;
2. using in an ordinary manner the name or symbol that is customarily used in the trade of the same type of business or service;
3. using in good faith one's own name, or selling, transporting, exporting or importing goods bearing such name; or
4. using, with good faith, in the same or similar manner the symbol referred to in the first or second subparagraph of the preceding paragraph before such symbol having become commonly known to the relevant enterprises or consumers, or using such symbol by any successor that acquires such symbol together with the business from a bone fide user; or selling, transporting, exporting or importing goods bearing such symbol.

Where any enterprise has any of the acts set forth in the third and fourth subparagraphs of the preceding paragraph which likely to damage or cause confusion with the business, goods, facilities, or activities of another enterprise, the latter enterprise may request the former to add appropriate symbol unless the former only transports such goods.”

According to Article 20(2), Article 20(1) does not apply to any of the following:

1. Using in an ordinary manner the generic name or representation associated with the goods. For instance, the Chinese-language transliterations of “cola” and “aspirin” are customarily used as generic names for goods of the same kind, so using those names on products does not violate this law.
2. Using in an ordinary manner the name or representation customarily associated with a business or service. For instance, “KTV” is customarily used as a generic name for karaoke (sing-along) establishments, so use of the name “KTV” by competitors in the industry does not violate this law.
3. Using one’s own name in good faith.
4. Using the representation of other goods or services before the representation has become commonly known to relevant enterprises or consumers.

Relevant article of law: Fair Trade Law, Article 20

I. Article 62 of the Trademark Law regarding trademark right infringements is applicable only to “the same or similar goods” as prescribed in the Trademark Law Enforcement Rules. Acts of counterfeiting that do not involve the same or similar goods fall outside the scope of Article 62. Application of the provisions of Fair Trade Law Articles 20(1)(i) and 20(1)(ii), however, is not limited to acts involving the same or similar goods, but is contingent on the goods or services being commonly known to relevant enterprises or consumers and on resultant confusion as to the source of the goods.

II. The protection of the Trademark Law extends only to trademarks that have been registered. Registration is not a condition of protection under the Fair Trade Law.

Relevant article of law: Fair Trade Law, Article 20; Trademark Law, Article 62

For effective protection of intellectual property rights, after consulting with relevant ministries and commissions pursuant to Article 9 of this Law, the Fair Trade Commission made the following decisions regarding the division of related tasks:

1. Counterfeiting of registered trademarks is handled by the Anti-Counterfeiting Committee of the Ministry of Economic Affairs (MOEA).
2. Cases of patent counterfeiting are also handled by the MOEA Anti-Counterfeiting Committee.
3. Cases involving unregistered trademarks and non-patented articles are handled by the Fair Trade Commission under the Fair Trade Law.
4. Although counterfeiting cases involving registered trademarks and patents are in principle handled by the MOEA Anti-Counterfeiting Committee, counterfeiters with records of repeat counterfeiting offenses or whose counterfeiting offenses have harmed the country’s image may be subject to prohibition by the Fair Trade Commission under Article 41 of the Fair Trade Law.
5. In the course of handling a counterfeiting case on its own or by referral of the Commission, if the MOEA Anti-Counterfeiting Committee deems the case to be a gravely pernicious case that demands immediate handling and where the facts of crime constitute an offense under Article 20 of the Fair Trade Law, the Anti-Counterfeiting Committee may simultaneously refer the case for handling by the prosecuting authorities and the Fair Trade Commission.

Relevant article of law: Fair Trade Law, Articles 9, 20, 41, 45

If a company has registered a trademark similar to an unregistered well-known foreign trademark for use with goods in the same class and thus obtained exclusive use rights for the trademark in Taiwan, can the owner of the foreign trademark bring legal action under Article 20(1)(iii) of the Fair Trade Law?

Article 45 of the Fair Trade Law provides that no provision of this Law shall apply to any proper conduct in connection with the exercise of rights pursuant to the provisions of the Copyright Law, Trademark Law, or Patent Law. In the scenario in question above, if the company has obtained the right of exclusive use of trademark in Taiwan and its exercise of rights is proper conduct under the Trademark Law, application of the Fair Trade Law is precluded pursuant to Article 45 of the Fair Trade Law. Therefore, the owner of the well-known foreign trademark cannot claim any rights under Article 20(1)(iii) of the Fair Trade Law until the trademark authority has cancelled the other company’s trademark registration.

Relevant article of law: Fair Trade Law, Articles 20, 45