Swiss Apparel Company CONSITEX Successful In Cancelling Trademark That Features A Single Character “Z”

CONSITEX S.A. (“CONSITEX”), the famous Swiss apparel company that holds registered trademarks for “Z Ermenegildo Zegna” (Reg. No. 01162771), and “Z Zegna” (Reg. No. 01345481 and 01724735) in Taiwan, filed opposition against another registered trademark that features a single stylized “Z” (Reg. No. 01895119, hereafter “the opposed trademark”) before the Taiwan’s IP Office (“TIPO”) on April 30, 2018. On June 16, 2020, TIPO ruled in favor of CONSITEX, concluding that the opposed trademark shall be cancelled due to likelihood of confusion caused by its similarity with CONSITEX’s trademark.

The opposed trademark was filed on July 31, 2017, designated for use in goods under Class 18, including, among the others, wallets, leather bags, backpacks, school bags, waist bags, suitcases, handbags, shopping bags, briefcases, hiking bags, camping bags, key cases, cosmetic bags, travel bags, lunch bags, cosmetic cases, umbrellas, and trekking poles. 

TIPO sided with CONSITEX based on the following reasons:

1. Similarity

TIPO noted that both the opposed trademark and CONSITEX’s trademarks demonstrated character “Z”. In particular, TIPO found the opposed trademark “Z” similar with CONSITEX’s “Z Ermenegildo Zegna”, with the former featuring a stylized “Z” embedded in a pentagonal block, and the latter displaying a “Z” in gray as backdrop. An ordinary consumer would find the character “Z” in both trademarks the most impressive and appealing portions. Therefore, based on the comparison of overall visual appearance, perception, and pronunciation, CONSITEX’s “Z Ermenegildo Zegna” is found similar with the opposed trademark.

2. The designated goods 

As to the designated goods, CONSITEX’s cited trademarks are also applied for use in Class 18, covering goods such as backpacks, handbags, briefcases, suitcases, purses, wallets, key cases, briefcases, suitcases and travel bags, leather belts, umbrellas, cosmetic bags, shopping bags, etc. In comparison to the goods the opposed trademark is designated, TIPO opined that they share common or similar customer base, provide similar functions, and are supplied through similar or overlapping distribution network. Thus, the goods which the two trademarks are applied for are also similar.

3. The strength of CONSITEX's trademarks

CONSITEX’s “Z Ermenegildo Zegna” and “Z Zegna” are combinations of a single character “Z” and characters of “Ermenegildo Zegna” and “Zegna”, with no reference to the nature and function of their designated goods. Thus, CONSITEX’s “Z Ermenegildo Zegna” and “Z Zegna” are very distinctive and will be recognized as symbols that identify the source of products or services.

4. Other factors

TIPO further considered the supporting evidence submitted by CONSITEX, including records of its worldwide use of “Ermenegildo Zegna”, “EZ”, “Zegna”, “Z Zegna”, and “Z logo” across more than 50 countries with over 550 stores, as well as the opening of its flagship store in Taiwan’s most famous 101 Tower in 2012. Based on the voluminous trademark use evidence, TIPO determined that CONSITEX’s “Z Ermenegildo Zegna” and “Z Zegna” should already be well known trademarks for apparel products and the relevant accessories (such as purses) before the filing date of the opposed trademark. Hence, the relevant consumers shall be more familiar with CONSITEX’s “Z Ermenegildo Zegna” and “Z Zegna”. Furthermore, records show that in as early as 2015, CONSITEX already used highly similar image, i.e., stylized Z embedded in pentagonal block, in one of CONSITEX’s stores in Milan, Italy. Thus, it is likely that the applicant, who is also in the apparel business, knew of such use and then filed the opposed trademark with intent to imitate CONSITEX’s brand.

In view of the similarity of trademarks, the similarity of the designated goods, the high distinctiveness and global reputation of CONSITEX’s “Z Ermenegildo Zegna” and “Z Zegna”, and the lack of good faith, the opposed trademark “Z” is found similar with CONSITEX’s trademark and thus is likely to cause confusion among the general public. TIPO concluded that the opposed trademark shall be cancelled accordingly.

Source: 

https://twtmsearch.tipo.gov.tw/OS0/OS0401_SCN3.jsp?issueNo=XpJ13RyT4UUwwOVBTUndCOTZZd0lRTlBIemVjdz09&l6=zh_TW&isReadBulletinen_US=&isReadBulletinzh_TW=true

Taiwan’s IP Court found “foreal” not similar with the famous trademark “L’OREAL”

Lewei Nano Tech. Co. Ltd. (“Lewei”) filed application for its trademark “foreal & stylized characters of pure nano declaration” on July 28, 2017, designated for use in goods including “germicide; germicide for environmental sanitation; disinfection for environmental sanitation agent; fungicide for environmental sanitation; disinfectant for sanitation; drug for animals; wound dressings for animals; detergents for animals; disinfectants for animals; for animals bactericide; fish medicine; veterinary disinfectant; veterinary medicine; veterinary medicine; pigeon medicine; deodorant for clothes; deodorant for non-human body and animals; deodorant for clothes agent; deodorant for textiles; and antibacterial hand sanitizer.” Lewei’s application was granted on February 21, 2018 (Reg. No. 1894506, see below).

L’OREAL, S.A. (“L’OREAL”) filed opposition against Lewei’s aforesaid trademark on April 27, 2018, arguing Lewei’s trademark would cause confusion with L’OREAL’s registered word mark “L’OREAL” (see below) and its other trademarks presenting combination of “L’OREAL” and other Chinese characters (for example, Reg. No. 00388772, 01055435, 01055436, and 01284773, see below). L’OREAL requested that Lewei’s trademark shall be cancelled based on Articles 30.1.10, 30.1.11, and 30.1.12.

 

 

Taiwan’s IP Office (TIPO) denied L’OREAL’s request, finding no violation of Trademark Act. L’OREAL challenged TIPO’s determination to the Appeal Board, but the Appeal Board sided with TIPO. As such, L’OREAL further filed a complaint with Taiwan’s IP Court (“TIPC”), asking the court to vacate the determinations of TIPO and Appeal Board, and to rule that Lewei’s contested trademark shall be cancelled.

On June 18, 2020, TIPC rejected all L’OREAL’s claims and affirmed TIPO’s determination. The main reasons held by TIPC are as follows:

1.      The cited articles of Trademark Act:

A.      Article 30.1.10 of Trademark Act provides that “A trademark shall not be registered if it is 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.

B.      Article 30.1.11 of Trademark Act provides that “A trademark shall not be registered if it 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 well-known trademark or mark.”

C.      Article 30.1.12 of Trademark Act provides that “A trademark shall not be registered if it is 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.”

2.      With regard to Article 30.1.10 of Trademark Act:

A.      The degree of similarity is quite low:

Both Lewei’s trademark and L’OREAL’s trademarks demonstrate the same characters “oreal”, but the initial characters are different, where Lewei’s opposed trademark begins with “f--” while L’OREAL’s trademarks begin with “L”. In addition, L’OREAL is a French word, and its pronunciation in French is obviously different from that of Lewei’s “foreal” in English. Furthermore, the meaning of Lewei’s “foreal” in English is “for real”, which echo its statement “pure nano declaration”. The perception, pronunciation, and visual appearance of Lewei’s opposed trademark are all different from those of L’OREAL’s.

B.      Most of the designated goods of the opposed trademark are dissimilar with those of L’OREAL’s:

TIPC closely reviewed the designated goods, and found that except for antibacterial hand sanitizer, all the other goods designated by Lewei’s opposed trademark concern drug or dosage for animal or environmental use, which are distinguishable from L’OREAL’s. Thus, the designated goods of the opposed trademark are different from those of L’OREAL’s trademarks.

C.      L’OREAL’s trademarks are more famous, but Lewei’s opposed trademark is registered out of good faith, and there is no actual confusion

TIPC agreed that L’OREAL’s trademarks are more famous, and that Lewei’s and L’OREAL’s goods are supplied through similar channels. However, there is no record showing actual confusion. Further, since Lewei’s opposed trademark is dissimilar and used in different kinds of goods, Lewei’s application probably was made out of good faith.

D.     In sum, although TIPC recognized that L’OREAL’s trademarks are more famous and the sales channels are overlapping, these factors are outweighed by the findings that Lewei’s trademark is not similar and is mainly used for dissimilar goods. Plus, there is no actual confusion, and Lewei’s application was made out of good faith. Hence, taking all the factors into consideration, TIPC concluded that Lewei’s trademark does not violate Article 30.1.10 of Trademark Act.

3.      With regard to Article 30.1.11 of Trademark Act

A.      L’OREAL’s trademarks are well-known, but there is no likelihood of confusion because Lewei’s opposed trademark is dissimilar and designated for use in different goods:

TIPC was aware of L’OREAL’s fame, but, as discussed above, the similarity between Lewei’s “foreal” and L’OREAL’s “L’OREAL” is so low that it is unlikely for the relevant consumers to be misled into believing that Lewei’s “foreal” is related to L’OREAL’s “L’OREAL”. Further, the designated goods are also dissimilar. Thus, TIPC found Lewei’s “foreal” not similar to L’OREAL’s well-known trademarks, and is not likely to cause confusion among the relevant public.

B.      L’OREAL could not raise trademark dilution because the records do not show the fame of L’OREAL’s trademarks have reached beyond the boundary of the designated goods and relevant consumers:

Although L’OREAL argued that allowing registration of “foreal” would dilute the distinctiveness of its famous “L’OREAL” trademarks, TIPC found this argument unpersuasive. TIPC explained that Article 30.1.11 actually contains two legal grounds. The first legal ground applies to situation where a trademark 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”. The second applies to situation where a well-known trademark is so famous that not only the consumers relevant to the designated goods or service, but the general public, are all well aware of the fame of the asserted trademark, and hence there is “likelihood of dilution of the distinctiveness of the well-known trademark”. In other words, for one to apply trademark dilution theory, there must be evidence showing the fame of the asserted trademark is recognized and known by not only the consumers relevant to the designated goods or service, but also the general public. In this case, TIPC found the submitted evidence sufficient to prove “L’OREAL” is well-known among the relevant consumers within the field of beauty and makeup products, but insufficient to prove “L’OREAL” has become well-known to the general public. Besides, there is no other evidence indicating the existence of Lewei’s “foreal” has caused harm to L’OREAL’s reputation or fame. Hence, Article 30.1.11 is not applicable.

4.      With regard to Article 30.1.12 of Trademark Act

A.      The purpose of Article 30.1.12 of Trademark Act:

Turning to Article 30.1.12 of Trademark Act, the main purpose of this article is to deter free riders and to address the loophole under the first-to-file system. More specifically, this article applies to situation where the applicant knows of the existence of an earlier used trademark due to prior business relationship, and files similar trademark application with the intent to imitate the earlier used trademark.

 

B.      L’OREAL as a trademark is put in use prior to the filing of Lewei’s “foreal”, but Lewei’s trademark is not similar, and there is no prior relationship between Lewei and L’OREAL:

Here, it is undisputed that L’OREAL as a trademark has been put in use prior to the filing of Lewei’s opposed trademark, but Lewei’s trademark, as analyzed above, is not similar with L’OREAL’s trademarks. Besides, Lewei’s business focuses on nano technology, which is substantially different from L’OREAL’s business. There is no other evidence showing Lewei ever entered into any form of business relationship with L’OREAL before its filing of “foreal”. As a result, it is unlikely that Lewei filed the opposed trademark with intent to imitate the fame and reputation of L’OREAL’s famous trademarks. As such, Lewei’s opposed trademark does not violate Article 30.1.12 of Trademark Act.

Based on the forgoing reasons, TIPC sided with TIPO’s determination, and rejected L’OREAL’s claims.

Source:

https://law.judicial.gov.tw/FJUD/data.aspx?ty=JD&id=IPCA,109%2c%e8%a1%8c%e5%95%86%e8%a8%b4%2c2%2c20200618%2c2

“adiader” is found similar with “adidas” by Taiwan’s IP Office

On June 20, 2020, Taiwan’s IP Office (TIPO) denied trademark application for “adiader”, finding such mark similar with the registered trademark “adidas”.

Per Article 30.1.10 of Taiwan’s Trademark Act, a trademark shall not be registered if such mark is “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, a Mr. Wu, filed trademark application for “adiader” on December 13, 2019 (Application No. 108081998, see below), and designated for use in goods under Class 25, including, among other things, shoes, slippers, boots, sneaker, ski boots, baby shoes, etc.

TIPO found Mr. Wu’s application similar with the registered trademarks “adidas” held by ADIDAS AG (Reg. No. 00054345 and 00054342, see below), and should be rejected based on Article 30.1.10.

More specifically, TIPO reasoned that:

1.      The rejected trademark, “adiader”, shows similar sequence and structure of characters “adi-d-” as presented in the cited trademarks “adidas.” Besides, the first three characters of “adiader” are the same as those of the registered “adidas”. Although “adiader” ends with “er” while “adidas” ends with “s”, such difference is minor and ordinary consumers would still find the two marks similar with each other.

2.      The rejected trademark is applied for goods such as shoes, slippers, boots, sneaker, ski boots, and baby shoes. The cited trademarks, similarly, are applied for use in various kinds of shoes, boots, sport clothing, and training outfit. Thus, the rejected trademark and the cited trademarks are applied for use in similar goods, or, in goods that are often used together by ordinary consumers, or are sold in similar channels.

3.       As to distinctiveness, the cited trademarks “adidas” are highly distinctive because it is not related to the nature or function of its designated goods. In view of such high degree of distinctiveness, it is more likely for consumers to be misled when there exists certain degree of similarity.

4.      Although Mr. Wu argued that the spelling and pronunciation of “adiader” and “adidas” are different, TIPO found such arguments unpersuasive. As mentioned above, the overall appearances of “adiader” and “adidas” are similar, with only minor differences in the last two characters (i.e., “er” v. “as”). More importantly, when deciding whether to purchase, the consumers would not make detailed comparison between the two trademarks. Rather, the decision usually is based on consumer’s general impression. Thus, there still is likelihood that consumers will be confused and misled due to the similarity of these two trademarks and the goods for which these trademarks are applied.

In view of the above, TIPO denied Mr. Wu’s application for “adiader” accordingly.

Source:

https://twtmsearch.tipo.gov.tw/OS0/OS0401_SCN3.jsp?issueNo=XpJ13RyT4R0JlSUJiQmpnWG8wVysrbGdxcU1tQT09&l6=zh_TW&isReadBulletinen_US=&isReadBulletinzh_TW=true

Taiwan's IP Office Sided With DC Comics' “WONDER WOMAN” In Trademark Opposition Proceeding Against “WONDER KiDS”

On June 16, 2020, Taiwan’s IP Office (TIPO) determined that “WONDER KiDS” is similar with “WONDER WOMAN” of DC Comics (“DC”), and thus shall be cancelled based on Article 30.1.10 of Trademark Act.

The cancelled trademark, “WONDER KiDS” (Reg. No. 01926900, see below), was filed by Vertex Sports Company (“Vertex Sports”) on February 2, 2018, and granted by TIPO on July 16, 2018, designated for goods such as toys, flying discs, sports equipment, baseballs, rackets, sports chest protectors, sports hand guards, dumbbells, stationary exercise bikes, swimming float, fishing equipment, etc.

DC filed opposition against Vertex Sports on October 15, 2018, arguing that “WONDER KiDS” may cause confusion with its famous “WONDER WOMAN” trademarks (Reg. No. 01852625, see below), designated for goods in, among the others, toy cars, fly discs, swimming float, baseball, basketball, and sports equipment.

TIPO sided with DC on June 16, 2020, ruling that “WONDER KiDS” shall be cancelled due to likelihood of confusion caused by its similarity with “WONDER WOMAN.” TIPO’s reasons are as follows:

1.    The cited trademark “WONDER WOMAN” and the main portion of the challenged trademark “WONDER KiDS” are both made up of two ordinary characters, with difference in that the former ends with “Woman”, while the latter ends with “kids”. Additionally, in day-to-day Chinese, “woman” and “kids“ are common words that sometimes are used together, so “woman“ and “kids” are associated with each other. Accordingly, there is medium degree of similarity between Vertex Sports’ “WONDER KiDS” and DC’s “WONDER WOMAN”.

2.    Both “WONDER KiDS” and “WONDER WOMAN” are used in similar goods, such as toy, sport gears, and swimming gears. These goods serve similar function and are usually sold through similar channels, with overlapping customers base. Thus, the two trademarks are used in similar goods.

3.    “WONDER WOMAN” has acquired considerable distinctiveness through the continuous marketing and promotion by DC, including the worldwide popular superhero movies “Batman v. Superman Dawn of Justice” and the blockbuster “Wonder Woman.” Besides, since the meaning of “WONDER WOMAN” has no relation with the nature and function of the designated goods, consumers would consider it distinctive and use it to identify the source of products.

4.    “WONDER WOMAN” as a trademark has been registered in multiple countries, including EU, Canada, Australia, China, Japan, and Brazil, and gained popularity in local market through marketing campaigns and diversified merchandising, such as licensed superhero figures, toys, apparels, etc. In comparison, the records of use submitted by Vertex Sports did not show sufficient media exposure, viewership, and long time of use. As such, TIPO found consumers would be more familiar with “WONDER WOMAN.”

5.    In addition to the similar characters “WONDER KiDS”, VERTEX SPORTS seemingly used a stylized “W” as the backdrop of its challenged trademark. Upon further examination, such stylized “W” demonstrated similar visual effect of a bird’s wings as DC demonstrated in its famous “W” icon for “WONDER WOMAN.” In view of the similarity between “WONDER WOMAN” and “WONDER KiDS”, and the adoption of similar stylized “W” characters, TIPO found VERTEX SPORTS did not file application out of good faith.

Based on the above, TIPO determined that VERTEX SPORTS’s “WONDER KiDS” is similar with DC’s “WONDER WOMAN”, and may cause confusion among the relevant consumers. Thus, the challenged “WONDER KiDS” shall be cancelled accordingly.

Source:

https://twtmsearch.tipo.gov.tw/OS0/OS0401_SCN3.jsp?issueNo=XpJ13RyT4SW9JMHNmVll3SkVEVDh2YmlZR3N5dz09&l6=zh_TW&isReadBulletinen_US=&isReadBulletinzh_TW=true

Huawei’s Trademark Applications For “Kirin” Were Denied By Taiwan’s IP Office

On June 7, 2018, Huawei Technologies Co., Ltd. (“Huawei”) filed two trademark applications for “Kirin” (see below), designated for use in goods under Class 9, including semiconductor, wafer, silicon chip, integrated circuit, printed circuit, etc. On June 12, 2020, Taiwan’s IP Office (“IPO”) found both applications similar with senior trademarks registered by Japan’s Kirin Holdings Kabushiki Kaisha (“Kirin Holdings”), and denied Huawei’s both applications.

(Application No.: 107036008)

(Application No.: 107036007)

The senior trademarks cited by IPO are registered by Kirin Holdings (see below), which are also designated for use in goods under Class 9, including, among the others, silicon chip, and integrated circuit.

(Reg. No.: 01292244 )

(Reg. No.: 01667670)

IPO’s decision is based the following reasons:

1.    Article 30.1.10 of Trademark Act provides that a trademark shall not be registered if such trademark is 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.

2.    In terms of similarity with the cited trademarks, IPO found the characters (i.e., “Kirin”) shown in Huawei’s applications are highly similar with those shown in Kirin Holding’s registered trademarks, with minor difference in capitalization.

3.    With respect to the similarity of goods, IPO found the designated goods of Huawei’s applications, such as integrated circuit, printed circuit, and silicon chip, are related to or associated with those of Kirin Holding’s registered trademarks in terms of their function, usage, or source of materials.

4.    Additionally, since ”Kirin” constitutes the main portion of both Huawei’s applications and Kirin Holding’s registered trademarks, an ordinary consumer would easily recognize it and use it to identify the source of goods. Added to that, “Kirin” is highly distinctive when used for goods such as semiconductor, because such a word is not related to the nature or function of these designated products. Thus, it will be more likely to cause confusion among the relevant consumers if there is any similarity with Kirin Holding’s highly distinctive “Kirin” trademarks.

5.    Huawei argues that in fact, Kirin Holding’s cited trademarks are not used in goods such as semiconductor or silicon chip, for Kirin Holding’s business scope is limited to manufacturing and selling beverages and drinks only. However, IPO reasons that while Kirin Holding’s cited trademarks may be subject to non-use invalidation for not being put in use for goods in Class 9, such trademarks are still valid and binding upon IPO until they are invalidated.

In view of the above, IPO ruled that Huawei’s applications shall be rejected accordingly.

On another note, Huawei allegedly has been in talk with Kirin Holding for agreement of trademark coexistence. It remains to be seen if Huawei would appeal to buy more time for reaching consensus with Kirin Holdings.

Source:

For application no.: 107036008

https://twtmsearch.tipo.gov.tw/OS0/OS0401_SCN3.jsp?issueNo=XpJ13RyT4R2tLU0VlS0RFUEZ1VmZrR3hjRHlxZz09&l6=zh_TW&isReadBulletinen_US=&isReadBulletinzh_TW=true

For application no.:  107036007

https://twtmsearch.tipo.gov.tw/OS0/OS0401_SCN3.jsp?issueNo=XpJ13RyT4R2tLU0VlS0RFUEh3QWhFSi80VjBHQT09&l6=zh_TW&isReadBulletinen_US=&isReadBulletinzh_TW=true

Taiwan’s IP Office Rejected HYUNDAI’s Trademark Application for “eGV80”

For its new electric SUV lineup, HYUNDAI MOTOR COMPANY (“HYUNDAI”) filed trademark application for “eGV80” on September 25, 2019 (application no. 108063273, see below), designated for goods in Class 12, including automobile, truck, electric car, hybrid electric vehicle, sports car, sport utility vehicle, and hydrogen fuel cell electric car.

However, Taiwan’s IP Office (“IPO”) denied HYUNDAI’s application, finding “eGV80” not distinctive.

According to Article 29.1.3 of Trademark Act, a trademark that consists of signs that are devoid of any distinctiveness shall not be registered. In this regard, a sign consisting of character and number usually will be perceived as standard, model name, or specification of product or service. For example, when seeing “4WD” used on cars, consumers would think of 4-Wheel Drive. When seeing “MP3” used on music player, consumers would know it refers to “MPEG Audio Layer-3”. When seeing “512MB” used on memory card, consumers would understand it means the memory capacity.

Here, IPO found HYUNDAI’s application “eGV80” consisting of “eGV” and “80”, which is pure combination of character and number. Such combination, when used for automobile, truck, electric car, hybrid electric vehicle, sports car, sport utility vehicle, and hydrogen fuel cell electric car, will be understood as the standard or model name of the vehicle, rather than distinctive sign indicating the source of goods or service provided. Thus, IPO found HYUNDAI’s application shall be denied in accordance with Article 29.1.3 of Trademark Act.

Lastly, it is worth mentioning that HYUNDAI’s applications for its “eGV70” (application no. 108063276) and “eG80” (application no. 108063278) were also denied by IPO based on similar legal basis (i.e., Article 29.1.3). We shall see if HYUNDAI would challenge IPO’s rejections and appeal to the Petitions and Appeals Committee of Ministry of Economic Affairs.

Source: https://twtmsearch.tipo.gov.tw/OS0/OS0401_SCN3.jsp?issueNo=XpJ13RyT4ME1FRmdBZjFTSXJLaDlDWXd0YXZGZz09&l6=zh_TW&isReadBulletinen_US=&isReadBulletinzh_TW=true (eGV80)

https://twtmsearch.tipo.gov.tw/OS0/OS0401_SCN3.jsp?issueNo=XpJ13RyT4ME1FRmdBZjFTSXJ4TWNIODg4Uk1Wdz09&l6=zh_TW&isReadBulletinen_US=&isReadBulletinzh_TW=true (eGV70)

https://twtmsearch.tipo.gov.tw/OS0/OS0401_SCN3.jsp?issueNo=XpJ13RyT4ME1FRmdBZjFTSW8wanBUR3FwQ2FoZz09&l6=zh_TW&isReadBulletinen_US=&isReadBulletinzh_TW=true(eG80)

UMC and its high-ranking employees were found guilty for infringing Micron’s Trade Secret

Factual Background:

United Microelectronics Corporation (UMC) and Fujian Jinhua Integrated Circuit Co. (JHICC) entered into technology cooperation agreement in January, 2016, where JHICC would provide funding up to US$ 300 million for UMC to research and develop DRAM-related technology. The result of UMC’s development would be co-owned by UMC and JHICC, and the developed technology would be transferred to JHICC for mass production. JHICC allegedly paid UMC US$ 400 million during the development process.

The defendants, Mr. Ho and Mr. Wang, were ex-employees of Micron Taiwan. Both of them came into possession of Micron’s trade secret when they worked for Micron Taiwan.

Mr. Ho, through the internal system, acquired trade secret related to manufacture of DRAM from Micron’s internal server, and then reproduced and stored the same in his personal hard drive. When Mr. Ho resigned from Micron Taiwan on October 15, 2015, Mr. Ho did not delete the trade secret he acquired. Rather, Mr. Ho took Micron’s trade secret with him and joined UMC on November 5, 2015. For his new work at UMC, Mr. Ho reproduced and stored Micron’s trade secret in the laptop UMC assigned to him.

Similarly, when still working for Micron Taiwan, Mr. Wang accessed and acquired trade secret related to manufacture of DRAM. Mr. Wang later on reproduced and stored the acquired trade secret in his personal hard drive, laptop, and then uploaded the same to his Google Drive account in April, 2016. In addition, when Mr. Wang joined UMC, Mr. Wang accessed Micron’s trade secret he stored in his Google Drive through his personal cell phone and laptop assigned to him by UMC, and downloaded the same to his smartphone, laptop, and portal hard drive. During the period of July and August of 2016, in order to facilitate UMC’s research and development of DRAM project with JHICC, Mr. Wang, under instructions of UMC’s Mr. Rong, downloaded Micron’s trade secret and provided Micron’s process parameters and relevant data to UMC’s engineers for subsequent test and design. Based on the information provided by Mr. Wang, UMC was able to save considerable time and cost in developing and designing the manufacture process.

Micron’s Trade Secret:

The confidential information allegedly misappropriated by Mr. Wang and Mr. Ho was related to Micron’s design rules, manufacture process, formula, circuit design, packaging design, chemical composition, model name of equipment for each process phase, and debugging data. This information was confidential in nature, and not publicly accessible for the relevant industries. In addition, the misappropriated information could not be easily acquired. It needs long term investment of cost and labor to research and develop. Thus, businesses that possess this information could be in a more advantageous position than those that do not. With the misappropriated information, businesses like UMC could save costs by expediting its research and testing. Thus, the misappropriated information is eligible for trade secret protection per Taiwan’s Trade Secret Act.

The Offenses Committed by Mr. Ho, Mr. Wang, and Mr. Rong:

Under the Trade Secret Act, the use of trade secret at least includes perusing, reviewing, compiling, and editing the content of trade secret. Here, both Mr. Ho and Mr. Wang had signed agreement with Micron Taiwan, premising not to disclose, misappropriate, or help third party acquire Micron’s confidential information after the expiration of their employment. However, after resigning from Micron Taiwan, Mr. Ho and Mr. Wang took trade secret they acquired to UMC, and perused, used, and reproduced the same for the interest of UMC. Further, Mr. Wang disclosed Micron’s process parameters to UMC’s manager Mr. Rong. As such, Mr. Ho’s unauthorized use and Mr. Wang’s misappropriation and disclosure all constitute violation of Trade Secret Act.

Mr. Rong is UMC’s high-ranking manager, in charge of leading Mr. Ho’s and Mr. Wang’s work performance, and implementing UMC’s joint development project with JHICC. As the supervisor of Mr. Ho and Mr. Wang, Mr. Rong not only failed to make sure they complied with duty of confidentiality, but also turned a blind eye on their misuse of Micron’s trade secret. Additionally, UMC’s general manager, Mr. Chen, also violated UMC’s security protocol by unlocking the USB port of the laptop assigned to Mr. Ho, so that Mr. Ho could access the confidential information he took from Micron by inserting his personal USB stick to the laptop. As such, both Mr. Rong and Mr. Chen failed to take the necessary measure to prevent the misappropriation and misuse of Micron’s trade secret.

Lastly, the district court judge found that part of Mr. Ho's salary came from JHICC, and that Mr. Wang and Mr. Rong were all aware of the fact that their use of Micron’s trade secret was for UMC’s development project with JHICC, and that the result of their research would be transmitted to Mainland China for mass production. Thus, they all infringed Micron’s trade secret with the criminal intent to use said trade secret in Mainland China.

The Penalty:

In view of the above, it is ruled that:

Mr. Ho is guilty for violating Paragraph 1 of Article 13-2 of Trade Secret Act, and shall be subject to imprisonment up to 5 years and 6 months, as well as a fine of NT$ 5 million.

Mr. Wang is guilty for violating Paragraph 1 of Article 13-2 of Trade Secret Act, and shall be subject to imprisonment up to 4 years and 6 months, as well as a fine of NT$ 4 million.

Mr. Rong should be subject to imprisonment up to 6 years and 6 months, as well as a fine of NT$ 6 million.

UMC should be subject to a fine of NT$ 100 million in view of the offenses committed by its employees.

The Cited Articles of Trade Secret Act:

Article 13-1 

Any person committing an act falling under any of the following circumstances for the purpose of an illicit gain for himself/herself or for a third person, or inflicting a loss on the holder of a trade secret shall be sentenced to a maximum of 5 years imprisonment or short-term imprisonment, in addition thereto, a fine between NT$1 million and NT$10 million may be imposed:
1. Acquiring a trade secret by an act of theft, embezzlement, fraud, threat, unauthorized reproduction, or other wrongful means, or using or disclosing a trade secret so acquired.
2. Committing an unauthorized reproduction, usage, or disclosure of a trade secret known or possessed.

Article 13-2

Any person committing a crime prescribed in the first paragraph of the preceding article for the purpose of using the trade secret in foreign jurisdictions, mainland China, Hong Kong, or Macau shall be sentenced to imprisonment between 1 year and 10 years, in addition thereto, a fine between NT$3 million and NT$50 million may be imposed.

Article 13-4

Where the representative of a juristic person, the agent, employee or any other staff of a juristic person or natural person commits any of the crimes prescribed in Article 13-1 or 13-2 in the course of business, not only the actor, but the juristic person or the natural person shall be punished with the fine prescribed in the Article. However, if the representative of a juristic person or natural person has done his/her utmost to prevent a crime from being committed, the juristic person or natural person shall not be punished.

Source:

https://www.judicial.gov.tw/tw/cp-1888-230692-b054f-1.html