IP Court Found LED Chip Supplier Liable to Indemnify, Ruling Duty To Indemnify Is Not Conditioned Upon Judicial Finding Of Patent Infringement

Tong Fang Semiconductor (HK) Co., Ltd. (“Tong Fang”) sued Unity Opto Technology, Ltd. (“Unity”) in Taiwan, alleging overdue payment (US$ 1, 102, 195.57) for the LED chips Tong Fang supplied to Unity. In response, Unity argued that the LED chips provided by Tong Fang infringed third party’s U.S. patents[1], which rendered Unity subject to potential patent infringement liability in the United States[2]. Unity therefore stated that according to the “Intellectual Property Guarantee Letter” (“Letter”) provided by Tong Fang, Tong Fang should be responsible for costs Unity incurred due to the infringement lawsuit. Since Unity paid US$ 1,122,073.35 for the U.S. lawsuit, Unity is entitled to offset the legal fees it paid (i.e., US$ 1,122,073.35) against the payment it allegedly owed to Tong Fang (i.e., US$ 1, 102, 195.57). Thus, Unity argued that Tong Fang is not entitled to the overdue payment.

Since the two parties did not dispute the amount of the overdue payment, the key issue is whether Unity is entitled to hold Tong Fang responsible for the legal fee Unity incurred arising out of the LED chips Tong Fang supplied.

The relevant clauses prepared by Tong Fang in the Letter are as follows:

“We (i.e., Tong Fang) warrant that all Chip products manufactured and/or sold to Unity do not infringe or misappropriate any Intellectual Property Rights, including without limitation,  patent, copyright, trade secret, industrial design, know-how, trademark of any third parties in design, construction, manufacture or use of the Products.

We will defend, indemnify and hold harmless Unity, its agents, directors, officers, employees, affiliates and customers, from and against any asserted claims, suits, injunctions, demands, actions, expenses, losses or damages（including, without limitation, shipping costs, repackaging fees, recalls, handling fees, losses of product distribution, custom tariff, tax, fines, field return expenses and/or attorney fees）arising from or related to we do not comply with the warranty and representation hereinabove in any manner .

We will, at our own cost and expense, select necessary manner to let Unity, its affiliates and/or customers continue to use the Products legally and legitimately…”

Tong Fang argued that the Letter is not applicable because there is no final court’s decision on issue of infringement. In other words, the applicability of Tong Fang’s obligation to indemnify should be conditioned upon a final court’s decision that finds infringement. The IP Court judge disagreed, holding that:

1.     The terms used in the Letter, such as asserted claims, demands, actions, etc., all refer to matters that are not necessarily involving a final court decision. Thus, the literal interpretation of the cited clause suggests that a final determination of infringement by the court is not the premise of Tong Fang’s duty to indemnify.

2.     Besides, Unity required this Letter from Tong Fang because Unity had to manage the legal risk and damages accompanied with the LED chips Tong Fang supplied. Since patent litigation is notorious for its high cost and lengthy procedure, before a court enters its final decision on infringement, there would be considerable costs and expenses incurred. It would be against the purpose of the Letter to construe Tong Fang’s duty to indemnify be premised on a final judicial finding of infringement.

3.     Further, it would be unfair to adopt Tong Fang’s proposed interpretation. Since Tong Fang is the supplier of the accused LED Chip, Tong Fang, compared with Unity, is in a better position to defend patent infringement lawsuit. However, under Tong Fang’s theory, not only will Unity be unable to ask Tong Fang to help defend the infringement lawsuit at the outset of the litigation, Tong Fang may still refuse to compensate Unity when, in the end, Unity obtains a final judicial finding of non-infringement for Tong Fang’s chips.

In view of the above, the IP Court found Tong Fang should indemnify Unity for the costs Unity incurred due to the patent infringement lawsuit. Since the costs Tong Fang should indemnify is higher than the payment it demanded from Unity, after offsetting Unity’s alleged costs from Tong Fang’s demanded payment, there is no need for Unity to pay Tong Fang. As such, the IP Court rejected Tong Fang’s claim accordingly.

TIP: While indemnity clause is helpful in managing and balancing the legal risk between the seller and buyer, it is critical to make sure the circumstance intended to be covered by the indemnity clause should be as clear and definite as possible.

Source:

智慧財產法院民事判決108年度民專上字第30號

https://bit.ly/3d5wKBO

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[1] The patents are: US 6,657,236; US 6,885,036; US 6,614,056; US 7,312,474; US 7,976,187; US 8,766,298; US 8,596,819; US 8,628,214; US D653,366; D660,990

[2] The title of the case is: Cree, Inc. v. Feit Electric Company, Inc. et al.

住戶在其屋內裝設監視器，拍攝其屋前之空間，未針對其他人拍攝，不會侵害該他人的隱私權

本案的兩位當事人都住在桃園的玉山官邸社區，因為被告在他房屋1樓面向中庭及社區大門的窗台架設監視器，且鏡頭對準中庭、社區大門及原告住所門外及通道等活動空間，導致原告親友進出社區大門或是在中庭交誼互動時都會遭被告所架設的監視器拍攝，原告因此依民法第18條第1、2項、第184條第1項前段、第195條第1項規定，請求被告拆除監視器、禁止架設拍攝公共空間的監視器並請求被告賠償精神慰撫金新臺幣60萬元

法院判決：

1.      隱私是指個人對他私領域的自主權利，保護範圍包括個人私生活不受干擾以及個人資訊的自我控制，但是人群共處經營社會生活，應受保護的隱私必須有所界限，也就是隱私是否存在，應該以個人對這個事物是否有合理期待作為判斷準則。所謂合理的期待，是指個人可以主張不受侵擾的自由，要以可以合理期待於他人者為限，也就是不僅他不受侵擾的期待已經表現在外，而且這個期待必須依社會通念認為是合理的。

2.      本件被告在他屋內的窗台處架設監視器，拍攝他房屋前面的空間，若調整監視器的角度，則除了可以拍攝到被告房屋前面的花圃以及中庭空間外，還可以拍攝到原告門口盆栽區域，但是經查看這個監視器的錄影擷圖，可以發現這個監視器的拍攝角度主要還是針對被告房屋前面的空間，而不是對準他人住宅門口。

3.      其次，玉山官邸社區的區分所有權人會議雖然決議：住戶不得對共同走道或共用中庭處所裝置供私人使用的錄影(音)設備，但是因為這個社區都是透天屋，各戶的正面都有落地窗，住戶透過落地窗就能觀看中庭活動，而且此中庭及社區大門，並不像有管制的公寓大廈2樓以上電梯間，可以特定出入人士為各層樓住戶以及他們的訪客，所以此中庭及社區大門並非私人空間。

4.       再者，這個社區的中庭是住戶的公共空間，與中庭連接的社區大門是對外鏤空的門扇，因此，住戶可以在屋內由門窗往中庭看，或在社區大門內經過中庭的人，或是在社區大門外的人，都可以看見人員進出中庭或是社區大門的情形，並無隱密性可言，因此住戶或訪客在中庭活動或進出社區大門，應該認知到可能會給不特定人知悉，所以依社會通念，很難認為會有隱私權的合理期待。

5.       因此，被告為了防盜、保障生命財產安全以及蒐集訴訟證據，而在他自己的房屋內設置監視器，拍攝他房屋前面的空間及中庭，並未針對原告拍攝，且被告實際上僅在他與原告或管委會的訴訟上使用這些拍攝的資料，並未散布、公開或為非正當目的之使用，並未侵害原告的隱私權，因此原告依民法第18條第1、2項、第184條第1項前段、第195條第1項規定，請求被告拆除監視器、禁止架設拍攝公共空間的監視器並請求被告賠償精神慰撫金，為無理由。

資料來源：臺灣高等法院108年度上字第1007號民事判決（https://law.judicial.gov.tw/FJUD/default.aspx）

LV Successful In Cancelling Similar “VUIT TON” Trademark in Taiwan’s IP Office

LOUIS VUITTON MALLETIER (“LVM”), the registered owner of “LOUIS VUITTON” and “VUITTON” trademarks in Taiwan, filed opposition against Rise Edge Limited Taiwan (“Rise Edge”), alleging Rise Edge’s trademark (Reg. No. 01940391, see below) would cause dilution to the distinctiveness of its famous trademarks. On March 31, 2020, Taiwan’s Intellectual Property Office (“IPO”) sided with LVM.

Based on the records of IPO, Rise Edge filed the contested trademark on January 8, 2018, and designated such trademark for service in class 43, including cuisine service such as Japanese food restaurant, Japanese noodles, drink, shabu-shabu (Japanese-style hot pot), ramen, Japanese bar, etc. Rise Edge’s application was granted on September 16, 2018. LVM filed opposition with IPO on December 17, 2018, citing violation of Article 30.1.11 of Trademark Act, which prescribes that a trademark shall not be registered if such mark is “identical with or similar to another person’s well-known trademark or mark, and hence there exists a likelihood of confusion on the relevant public or a likelihood of dilution of the distinctiveness or reputation of the said well-known trademark or mark.”

The IPO found Rise Edge’s contested trademark may dilute the distinctiveness of LVM’s “LOUIS VUITTON” and “VUITTON” trademarks.

1. LVM claimed, and the IPO agreed, that LVM’s registered “LOUIS VUITTON” and “VUITTON” trademarks“ are well-known trademarks (see below). The trademark “LOUIS VUITTON” is based on the name of its founder, and has been put in use by LVM since as early as 1896. Based on the records of trademark use and other supporting judicial and administrative determinations at hand, IPO found both “LOUIS VUITTON” and “VUITTON” are highly distinctive and famous in fashion goods such as apparel, clothes, bag, watches, accessories, hats, and boots after LVM’s continuous use and successful marketing throughout the world.                                          
2. With regard to similarity, the IPO determines that Rise Edge’s trademark is highly similar with LVM’s aforesaid famous trademarks, for the characters “VUITTON” are also presented and clearly discernible in Rise Edge’s contested trademark. Although Rise Edge tried to distinguish its trademark by disconnecting “VUIT” from “TON”, and replacing the “O” in “TON” with a piggy nose, IPO considers such difference is insufficient to make Rise Edge’s trademark distinguishable from LVM’s famous trademarks.
3.  Besides, the IPO notes that no matter it is “VUITTON” or “LOUIS VUITTON”, one can hardly find any other similar trademark used by third party in other different goods or services. In other words, LVM’s aforesaid trademarks are not only famous, but also unique. Thus, LVM’s famous trademarks shall be entitled to higher degree of exclusivity.
4. The more well-known a trademark becomes, the more likely that its distinctiveness will be diluted by other similar trademark, even when the designated goods or service is different, because the well-known trademark is so popular and widely recognized by the relevant consumers. If Rise Edge’s contested trademark is not cancelled, its continuous use may gradually erode and weaken the distinctiveness and uniqueness of LVM’s cited famous trademarks.

Based on the above reasons, the IPO concluded that Rise Edge’s contested trademark shall be cancelled in accordance with Article 30.1.11 of Trademark Act.

Source: https://twtmsearch.tipo.gov.tw/OS0/OS0401_SCN3.jsp?issueNo=XpJ13RyT4cnJuYVJUNkxPckFEVDh2YmlZR3N5dz09&l6=zh_TW&isReadBulletinen_US=&isReadBulletinzh_TW=true

 

“NIVEA” Prevails In Opposition Proceeding Against Convatec’s “MEVIA”

On November 15, 2018, BEIERSDORF AG (“BEIERSDORF”), the registrant of “NIVEA” trademark in Taiwan (see below), filed opposition against CONVATEC INC.’s (“CONVATEC”) registered trademark “MEVIA” in Taiwan’s Intellectual Property Office (“IPO”), alleging violation of Article 30.1.11 of Taiwan’s Trademark Act. On March 18, 2020, IPO sided with “NIVEA”.

(Reg. No. 000039212)

The opposed trademark, “MEVIA” (see below), was filed on June 6, 2017, and granted on August 16, 2018, designated for goods under class 10 (mainly covers medical and diagnostic device) and class 5 (mainly covers medical product such as wound dressing, gel, and bandage). BEIERSDORF filed opposition against MEVIA for goods under class 5, claiming similarity between the two trademarks may raise confusion among the relevant consumers.

(Reg. No. 01934233)

The IPO found “MEVIA” should be cancelled based on the following reasons:

1.     First of all, “NIVEA” is a famous trademark. Records shows that BEIERSDORF has been using “NIVEA” for more than 100 years. In as early as 1905, BEIERSDORF had registered “NIVEA” for its sunscreen and body lotion product, and its first NIVEA trademark was registered with Taiwan’s IPO in 1970. Through its continuous use, NIVEA has become a famous trademark for skin care products prior to the filing date of “MEVIA” trademark (June 6, 2017).

2.     Besides, NIVEA and MEVIA are similar. Both trademarks present the combination of characters “E”, “V”, “I”, and “A”, with different initial character and different sequence. Such differences are minor, and a consumer with ordinary degree of care may still find the two trademarks similar.

3.     Further, NIVEA is highly distinctive, because it bears no relation with its designated goods such as body cleansing, beauty or cosmetic products. Comparing with MEVIA, NIVEA is more famous and should be given more favorable light when it comes to protectability.

4.     In addition, there is evidence showing that BEIERSDORF has expanded its business to medical product like medical bandage, ointment, etc., and acquired numerous trademark registrations for similar goods under class 5. Thus, there is likelihood that consumers may mistakenly believe that the two trademarks represent the same product, or there exists license or other business relationship between BEIERSDORF and CONVATEC.

In light of the above, the IPO found for “NIVEA” and ruled that “MEVIA” should be cancelled.

Source: https://twtmsearch.tipo.gov.tw/OS0/OS0401_SCN3.jsp?issueNo=XpJ13RyT4U0ZTNkhJMTdITkx4TWNIODg4Uk1Wdz09&l6=zh_TW&isReadBulletinen_US=&isReadBulletinzh_TW=true

Taiwan’s Intellectual Property Office found “Skyrover” similar with Jaguar’s famous “RANGE ROVER” trademark

On March 12, 2020, Taiwan’s Intellectual Property Office (“IPO”) denied trademark application for “Skyrover” (application no. 108046610, see below), which is applied for use in goods including wallet, umbrella, suitcase, handbag, briefcase, schoolbag, etc.

According to IPO, the trademark application is denied for being similar with Jaguar Land Rover Limited’s (“Jaguar”) registered trademarks (see below), which may cause confusion among relevant consumers.

(Reg. No. 720458)

 
(Reg. No. 02019128)

(Reg. No. 096055056)

The legal ground cited by IPO is Article 30.1.10 of Trademark Act, which provides that a trademark shall not be registered for “being identical with or similar to another person’s registered trademark or earlier filed trademark and to be applied for goods or services identical with or similar to those for which the registered trademark is protected or the earlier filed trademark is designated, and hence there exists a likelihood of confusion on relevant consumers.”

In this case, the IPO first found that the applicant’s “Skyrover” and Jaguar’s registered trademarks all share similar character “ROVER”, which are similar with each other. Although the applicant combines “ROVER” with another word “sky”, such difference is minor, and consumers may still find “Skyrover” similar with Jaguar’s registered trademarks.

In addition, the goods covered by Jaguar’s registered trademarks are not limited to car or automotive parts only, but also include goods such as shopping bag, backpack, camping bag, smartphone case and tablet case, which serve similar function with goods designated by applicant’s “Skyrover”. Hence, the goods designated by “Skyrover” are similar with those designated by Jaguar’s registered trademarks.

Further, pursuant to IPO, Jaguar’s registered trademarks are highly distinctive, because they bear no relation with the nature or function of their designated goods. In light of such high degree of distinctiveness, the IPO posited that it is particularly likely that consumers may confuse applicant’s “Skyrover” with Jaguar’s registered trademarks.

Based on the aforesaid reasons, IPO denied the trademark application for “Skyrover” accordingly.

Source:

https://twtmsearch.tipo.gov.tw/OS0/OS0401_SCN3.jsp?issueNo=XpJ13RyT4OVhjeDJ5WGk2NzNkZS9FcHpMWjlvQT09&l6=zh_TW&isReadBulletinen_US=&isReadBulletinzh_TW=true

Taiwan’s IPO: Registration of Three-Dimensional Trademark Requires Proof of Acquired Distinctiveness

When you see a delicate glass cup with the shape of a cutty Shiba Inu inside, would you consider the cup a trademark? Well, Taiwan’s Intellectual Property Office (“IPO”) said: ”No.”

In a trademark application filed by Redliuli Limited (“Redliuli”), IPO was asked to determine whether Redliuli’s 3D trademark (Application No. 108034910), a glass container with an artistic design of a Shiba Inu inside (as shown below), designated for use in goods like cup, wine glass, liquid container, etc., would meet the requirement of distinctiveness for trademark registration.

In the end, IPO denied Redliuli’s application, because:

1.     According to Article 18.2 and 29.1.3 of Trademark Law, trademark must be distinctive, and a mark merely consisting of non-distinctive elements shall not be registered. As such, three-dimensional shape, like other word, color, or symbol, must be distinctive in order to be qualified for trademark registration.

2.     However, it is relatively more difficult for one to register three-dimensional trademark, especially when the three-dimensional trademark refers to the shape of a product or product package. It is because consumers tend to view the shape of product or product package decorative or functional. For example, in a case where, as here, a design of a Shiba Inu is used inside a glass bottle, consumers are more likely to perceive such a design as a decorative feature, instead of a sign that identify the source of specific goods or service. Thus, for a three-dimensional mark featuring the shape of a product or product package to be registered as trademark, the applicant has to prove said mark has acquired secondary meaning.

3.     In this case, Redliuli argued that its 3D trademark features a high quality cup, involving artistic skills and aesthetic element. Therefore, ordinary consumers would pay higher attention, and are likely to view such a design, i.e., a glass cup with the shape of a Shiba Inu inside, a symbol that identify the source of specific goods. However, IPO disagreed, and ruled that simply because a product demonstrates impressive quality or requires unique skills to manufacture does not necessarily make the product become distinctive. Redliuli still needs to produce relevant evidence, such as records of trademark use, to prove its 3D trademark has acquired secondary meaning.

4.     Since Redliuli produced little evidence showing its sales revenue and the volume of its trademark use, the IPO found the records insufficient to prove that Redliuli’s 3D trademark has acquired secondary meaning. Hence, Redliuli’s application was denied by the IPO.

Source: https://twtmsearch.tipo.gov.tw/OS0/OS0401_SCN3.jsp?issueNo=XpJ13RyT4RnBlNGR1eDY5eHJkNUY5RktQTWY1UT09&l6=zh_TW&isReadBulletinen_US=&isReadBulletinzh_TW=true

Well...Taiwan’s IP Office Also Knows the Bonsai Bucket Bag

In Taiwan, for a mark to be protectable under Trademark Act, such a mark must be granted by and registered with Taiwan’s Intellectual Property Office. As such, if a foreign brand does not act quickly enough, sometimes it may find its trademark already being registered by someone else in Taiwan, which makes the brand be in a disadvantageous position.

This is what “could” have happened to “Simon Miller”, the Los Angeles-based fashion brand that is well-known for its Bonsai Bucket Bag in 2016 (https://www.whowhatwear.com/emma-watson-simon-miller-bag). Although it had become famous and gained considerable popularity in the fashion industry, “Simon Miller” did not file trademark registration in Taiwan. On December 21, 2017, a trademark application was filed by a third party, seeking trademark registration for the word mark “Simon Miller” (See below) in Taiwan, designated for goods such as bag, purse, backpack, suitcase, shopping bag, etc.

                                                        Application No. 106081347

Good for Simon Miller and bad for the unknown applicant, there is legal ground for Taiwan’s Intellectual Property Office (“IPO”) to protect the foreign brand and deter suspicious free-rider. Article 30.1.12 of Trademark Act provides that a trademark registration shall not be granted if such trademark “being identical with or similar to another person’s earlier used trademark and to be applied for goods or services identical with or similar to those for which the earlier used trademark is applied, where the applicant with the intent to imitate the earlier used trademark, being aware of the existence of the earlier used trademark due to contractual, regional, or business connections, or any other relationship with the proprietor of the earlier used trademark, files the application for registration, unless the proprietor of the said earlier used trademark consents to the application.”

Here, Taiwan’s IPO found the trademark application subject to Article 30.1.12, because:

1.     Before the trademark application was filed, “Simon Miller” as a trademark had already been widely used in products like the Bonsai Bag and the Lunch Bag, which were all highly successful and well-known in the relevant markets, including Taiwan.

2.     “Simon Miller” is not a common or ordinary word in Taiwan. However, the applicant sought to trademark exactly the same word, and intended to use in similar goods such as shopping bag, purse, hand bag, etc. Such similarity could not be explained as “pure coincidence.” Rather, such application is made based on attempt to exploit the earlier used trademark with intent to imitate.

Based on the totality of circumstance, the IPO denied the application accordingly. Clearly, for foreign brand that find its trademark registered by bad-faith imitator, Article 30.1.12 of Trademark Act is a feasible avenue. Of course, instead of seeking ex post remedy when finding one’s trademark already taken by someone else, filing trademark application as soon as possible should always be the better way to protect one’s brand in Taiwan.

Source: https://twtmsearch.tipo.gov.tw/OS0/OS0401_SCN3.jsp?issueNo=XpJ13RyT4RnBlNGR1eDY5eHF4Um9yc1NaeW9BQT09&l6=zh_TW&isReadBulletinen_US=&isReadBulletinzh_TW=true