| Trademark | ||||
| The Distinction between “Trademark Use” and “Displaying the Company Name” | ||||
| “Company name” herein refers to the distinctive part of a company’s registered name. It is common for enterprises to register all or part of their company name as a trademark—for example, “Nike” for Nike, Inc. and “Disney” for The Walt Disney Company. If someone (hereinafter “the defendant”) uses another’s trademark as its own company name and employs that name in the sale of goods, the trademark owner may bring an infringement action. In such cases, the defendant will typically rely on §36I① of the Trademark Act—arguing that such a use is the display of the company name conforming with customary commercial practices, rather than the display of a trademark. The issue here is how to differentiate between the display of a company name and a trademark. In the Intellectual Property Court’s Decision No. 3, 2008, it was held that only the use of the name on specified goods, services, or related objects constitutes trademark use. Conversely, if the name is merely displayed on a website or indicated next to a product photograph, it serves solely as a company name. However, the standard set by the decision is too rigid and deficient. When a defendant shows its company name, which is identical to another’s trademark, on a website or alongside a product image, the underlying purpose is to market the product and to indicate the product’s source, which is no different in purpose from using a trademark. In Civil Judgment No. 1595 of the Supreme Court, 2009, “good faith” was the key element of “conforming with customary commercial practices.” The Court stated that “[i]f one uses one’s own name, company name, or the name, shape, quality, function, place of origin, or other characteristics of one’s goods or services in a manner that is both in good faith and reasonable, and not as a trademark, one is not bound by the rights conferred by another’s trademark… ‘Good faith’ in this context means that the user was unaware that the name in question was a registered trademark of another.” In other words, if the defendant seeks to claim that its use merely represents its company name, it must prove that it was unaware that the name had been registered as a trademark by another party. Subsequently, the Intellectual Property Court’s Decision No. 6, 2010 clearly articulated four elements of trademark use. To constitute a trademark use, the following must be present: 1) an intent to indicate the source of one’s goods or services; 2) a marketing purpose; 3) an active practice of marking the trademark; and 4) that the mark, as displayed, is sufficient for relevant consumers to recognize it as a trademark. However, when a company advertises its name and services or goods it provides, it often satisfies all four elements (i.e., a marketing purpose, an intent to indicate the source of the goods, and an active practice of marking and recognition as trademark by customers). Consequently, these criteria do not completely resolve the issue. The Intellectual Property Court’s Decision No. 11, 2019, which synthesizes the foregoing opinions, offers a clear standard. The decision held that if the defendant knowingly uses a company name that is identical to another’s trademark—and thereby creates a risk of consumer confusion—the defendant must fully display its complete company name in order to comply with §36I① of the Trademark Act. This ruling combines the “good faith” requirement from the Supreme Court’s decision in 2009 and develops a more precise standard: if a company is aware that its name is identical to another’s trademark and that this identity creates a risk of confusion to consumers, then the company must display its full corporate name, including Inc. corp., LLP…etc. to avoid further confusion and disturbance. Otherwise, the use will be deemed as a use of another’s trademark. To prove that the defendant “knowingly used a company name identical to another trademark,” the trademark owner may simply serve an attorney letter to address the issue. It is also worth noting that §70II② of the Trademark Act stipulates: “Without the consent of the trademark owner, any of the following acts shall be deemed to infringe the trademark rights: Using, in one’s own company name, trade name, group name, domain name, or any other designation for a business entity, the wording from a famous registered trademark of another, where there exists a risk of consumer confusion or a likelihood of diminishing the distinctiveness or reputation of that trademark.” Therefore, if the trademark at issue is a famous one, the defendant will have difficulty claiming §36I① as a defense. In summary, the above cases illustrate that, historically, courts have adopted a lenient approach towards the defense of “merely displaying one’s own company name,” allowing defendants to successfully avoid infringement under §36I① of the Trademark Act. However, current practice is as follows: if a defendant, in good faith, is unaware that its company name is identical to another’s trademark, it may rely on the defense under §36I① (though once an attorney letter is received or an infringement suit is filed, it will be difficult to claim a lack of knowledge). Conversely, if the defendant is aware that its company name is identical to another’s trademark, it must fully display its complete corporate name in order to assert this defense. |
