The Intellectual Property Court rendered the 106-Min-Gong-Su-8 Civil Decision of April 16, 2018 (hereinafter, the “Decision”), holding that Article 45 of the Fair Trade Law stipulates that a justified exercise of rights pursuant to the Copyright Law, the Trademark Law, the Patent Law or other intellectual property laws and regulations is not governed by the Fair Trade Law. The so-called “justified exercise of rights” includes the assertion of rights against an actor through approaches which are peaceful and meet the principle of proportionality. Therefore, an enterprise which requests another enterprise to desist from illegal and unfair competitive acts through approaches which are peaceful and meet the principle of proportionality engages in a justified exercise of rights and does not violate the requirement that termination of supply, purchase or other transaction shall not be a violation of Article 20, Subparagraph 1 of the Fair Trade Law.
With respect to this Decision, both the Plaintiff and the Defendant were organizers of adult expos and were enterprises with competitive relations. The Plaintiff had planned to conduct TAE (Taiwan Adult Expo) 2017. However, it posted in its dedicated Facebook pages event videos about the Taiwan Adult Expo organized by the Defendant in 2016. The Defendant filed a complaint with the Economic Development Department (hereinafter, the “EDD”) of New Taipei City Government alleging that the Plaintiff had violated the Trademark Law on the ground that the Defendant’s hosting of the Taiwan Adult Expo and TAE constituted a distinctive feature of the goods and services provided by the Defendant. The Defendant also issued a letter to IPPA in Japan, requesting it to warn various agencies for adult movie actresses in Japan. As a result, the Plaintiff was successively informed by agencies for adult movie actresses in Japan that their activities in Taiwan would be suspended for the time being. Therefore, the Plaintiff filed a complaint to seek damages for the Defendant’s impediment of supply, purchase or other transactions in violation of the Fair Trade Law (Article 20, Subparagraph 1).
Article 45 of the Fair Trade Law provides: “A justified exercise of rights pursuant to the Copyright Law, the Trademark Law, the Patent Law or other intellectual property laws shall not be governed by this Law.” In this Decision, it was held that in addition to legal action against infringers and compulsory enforcement against the Plaintiff by way of government authority to compel the elimination of infringement and inaction after the legal action is won, a “justified exercise of rights” also includes a direct request lodged by the requesting party to eliminate infringement and inaction and justified and connected peaceful approaches taken, when the infringer refuses, in manners that meet the objectives and are appropriately proportional to compel the elimination of relevant unfair competitive acts and infringer’s inaction.
Although it was held in this Decision that the Defendant had not registered relevant trademarks and thus could not directly exercise its trademark rights, still the Plaintiff’s posting of videos concerning the events hosted by the Defendant in the Plaintiff’s website craftily passed off the events hosted by the Defendant as the Plaintiff’s own activities so that relevant consumers mistakenly thought that the Plaintiff also had prior experience in hosting such events (which is by nature extraction of the Defendant’s experiences in conducting commercial activities). This constituted a violation of Article 21 of the Fair Trade Law, which prohibits false or misleading indications concerning goods or advertisements. In addition, it was held that since such requirement is similar in legal theory to the Trademark Law, it would constitute “other intellectual property laws and regulations” under Article 45 of the Fair Trade Law.
It was further held in this Decision that “the Defendant substantiated that after detecting the Plaintiff’s unfair competitive acts, the Defendant contacted relevant personnel of the Plaintiff to request the removal of relevant pictures and images of the Defendant but to no avail.” Therefore, the Defendant further reported this matter to the EDD and informed the IPPA of the Plaintiff’s behavior. They resulted in impediment of supply of relevant locations and services by peaceful means to correct the Plaintiff’s inaction (stopping the expo event depicted in misleading advertisements). The means and the intended results are objective-based, proportional and justly connected. These were justified actions for exercising rights under other intellectual property laws and regulations under Article 45 of the Fair Trade Law. Since the Fair Trade Law does not apply, there is no compensation issue resulted from any violation of the Fair Trade Law.
Based on the foregoing reasons, the Intellectual Property Court held that a “justified exercise of rights pursuant to the Copyright Law, the Trademark Law, the Patent Law and other intellectual property laws and regulations” within the meaning of Article 45 of the Fair Trade Law should include the assertion of rights by the rights holder against the actor through peaceful means, including means which are peaceful and meet the principle of proportionality. Facing the Plaintiff’s illegal and unfair act of posting in its Facebook event pages videos about the Defendant’s past events for the purpose of advertising, the Defendant’s means which were peaceful and met the principle of proportionality, namely complaint with the competent authority and notification to the IPPA, to put an end to the violation were justified exercise of rights. Therefore, Article 20, Subparagraph 1 of the Fair Trade Law, which prohibits termination of supply and transactions, was not violated.