The Intellectual Property Court rendered the 105-Min-Shang-Shang-10 Civil Decision of 2016 (hereinafter, the “Decision”), holding that the front and back sides of the purses offered for sale were both embossed with EPI pattern very similar to that of the Trademark at Issue and the offering for sale constituted trademark use rather than just decoration of products with such pattern.
According to the facts underlying this Decision, the Appellee was a world famous boutique brand company. After long-term use, the company acquired distinctiveness and registered an EPI trademark (hereinafter, the “Trademark at Issue”) in Taiwan on December 1, 2003 for use on goods such as wallets under Class 18. The series of goods represented by the Trademark at Issue have been marketed for 30 years since 1985, and trademark rights have been obtained in 79 countries and regions such as the US, UK and mainland China. The Appellee also produced advertising and promotional materials for the series of goods represented by the Trademark at Issue in Taiwan. The Trademark at Issue has been recognized as a famous mark by the Intellectual Property Office. The Appellant sold on the Internet and its physical distribution channels purses with front, back and bottom sides embossed with EIP pattern very similar to that of the Trademark at Issue, and the styles of the purses were also classic styles such as the Appellee’s bucket bags and Boston bags (hereinafter, the “Goods at Issue”). This was sufficient to conclude that the Appellant used the pattern of the Trademark at Issue in purse products to represent the sources of its products with an intent to counterfeit. Therefore, this certainly constituted trademark use. The Appellant was found by the police to have been selling the Goods at Issue and was referred to the Taipei District Prosecutors Office for investigation. However, the prosecution rendered a final disposition not to prosecute after investigation. Therefore, the Appellee separately brought this civil action to eliminate infringement and seek damages in the amount of NT$5.22 million from the Appellant.
The Appellant contended that the Goods at Issue were displayed in special counters with a conspicuous “iki2” sign, and that the Products at Issue bore the “iki2” trademark with butterfly design on their central front, tags and zippers. Therefore, the consumers should be able to identify “iki2” as the brand of the Goods at Issue. As for the horizontal embossed stripes of the Goods at Issue, they were decorative patterns rather than used as a trademark.
According to the Decision, the pattern of the Trademark at Issue is often referred to as “EPI pattern.” The Appellant’s sales webpages not only used “genuine leather bucket bag with striped ripple pattern” and “genuine leather Boston bag with striped ripple pattern” as product names but also expressions such as “dual highlights of special EPI pattern plus a classic bucket bag,” “embossed with natural EPI pattern,” “unforgettable special wavy patterns coupled with a classic bucket bag style,” “genuine leather and EPI pattern are keys to their uniqueness,” and “stylish EPI pattern makes the overall product more topical” as advertising and promotional expressions. The Appellant obviously used the EPI pattern as a major appeal to attract purchase by relevant consumers and created association with the Appellee’s classic products such as bucket bags and Boston bags. This was sufficient to conclude that the Appellant used the pattern of the Trademark at Issue as a trademark out of an intent to counterfeit.
As for the damages in the amount of NT$5.22 million claimed by the Appellee, they were calculated by the unit price of the genuine leather bucket bags with striped ripple pattern at NT$3,980 and of the genuine leather Boston bag with striped ripple pattern at NT$2,980 to arrive at the average retail unit price of the Goods at Issue at NT$3,480 before it was multiplied by 1,500 times. The original trial court held that it would be appropriate to award damages in the amount of NT$870,000, which was obtained by multiplying the average retail unit price of the Goods at Issue at NT$3,480 by 250 times. According to the Decision, the various types of goods made or sold by the infringer all constituted trademark infringement. If the items of goods varied, the infringing items would be separate goods. In this case, therefore, the unit prices of NT$2,980 should be separately multiplied by a multiplier of 250 before the sums were aggregated to arrive at the amount of damages. If calculation is conducted this way, the damages which may be claimed by the Appellee should be NT$1.49 million (formula: NT$2,980 × 250 times + NT$2,980 × 250 times = NT$1,490,000).
It was additionally pointed out in this Decision that although the above criminal case involving the Appellant’s violation of the Trademark Law was concluded when a disposition not to prosecute was rendered by the Taipei District Prosecutors Office after its investigation on the ground that the trademark used by the Appellant for selling the Goods at Issue was “ik2,” that the EPI pattern was merely the appearance design of goods, and that the Appellant did not willfully used “EPI pattern” as a trademark, the evidence investigated in criminal litigation and the facts found in the criminal decision are independent of civil adjudications and a civil court is not bound by them pursuant to the provisions of Article 222, Paragraphs 1, 3 and 4 of the Code of Civil Procedure and according to the Supreme Court’s 41-Tai-Shang-1307 Decision. Therefore, the gist of the entire oral arguments and the results of evidence investigation as well as the freedom of discretional evaluation of evidence should be considered. Even though the findings ran counter to a criminal decision, such findings were not illegal on such basis.