By Jessie Lee & Tim Tsai, Managing Partner & Associate of Formosan Brothers, Attorneys-at-Law

With the progression of COVID-19, masks have become a must-have when people go out or even something that adds to one’s style. In response to such a trend, manufacturers have offered a diversity of mask designs. Some even market their masks using specific color names such as “Hermès orange,” “Tiffany blue,” or “Cartier red,” and such masks are often sought after by the consumers. However, the names “Hermès orange,” “Tiffany blue,” and “Cartier red” all involve well-known boutique brand names and trademarks. Does the use of well-known brand names or trademarks in product descriptions involve trademark infringement? The U.S. and Taiwan courts have recently opined regarding similar issues.

Opinions of the U.S. Court

Costco, an American warehouse club retailer, once in its sale of diamond rings not of the Tiffany brand, marked such rings with the wording of “Tiffany setting,” “Tiffany set,” “Tiffany style,” or simply the word “Tiffany.” Tiffany & Co, the famous jewelry producer who owns 97 trademarks related to the name “Tiffany,” then filed an action with the U.S. District Court of the Southern District of New York accusing Costco of trademark infringement for using the word “Tiffany.”

Costco responded that “Tiffany” is not simply a brand name, but it could also be used to describe a certain style of pronged diamond rings. Costco’s use of the word “Tiffany” was only meant to describe such a style, not using it as a trademark, and therefore it did not constitute trademark infringement.

The U.S. District Court of the Southern District of New York ruled in favor of Tiffany and ordered Costco to pay Tiffany a compensation of approximately USD21,000,000. However, this ruling was vacated on August 17, 2020 by the U.S. Court of Appeals for the Second Circuit and remanded it back to the district court.

The U.S. Court of Appeals for the Second Circuit holds that it is questionable whether consumers would confuse the diamond rings so labeled by Costco with rings from Tiffany. The holding even agrees that Costco’s use of the word was only to describe the style of the diamond ring and did not intend to use the word “Tiffany” as a trademark. In particular, Costco has provided much evidence showing that, since the 1800s, the word “Tiffany” has been used in thousands of ads, dictionary, exhibitions, and other public documents to describe a style of a diamond ring. In addition, in its sale of the diamond rings, Costco did not describe them as of the “Tiffany” brand, did not use Tiffany’s classic blue color for the packaging, and issued receipts, certificates, and other sale documents to the consumers under Costco’s name. With the knowledge of the diamond ring consumers, it is unlikely for the consumers to confuse and mistake Costco's diamond rings with rings from Tiffany. Hence, it is understandable that the word “Tiffany” was used only to describe the style of a diamond ring.

As such, the Court of Appeals for the Second Circuit vacated the ruling of the lower court and remanded the case back to the district court for more investigations.

Opinions of the Taiwan Court

Circumstances similar to the aforesaid case recently occurred in Taiwan as well.

Company X is the owner of the “QQBOW” trademark. Company X found that Company Y used the title of “The Superfly Dept. Korean online 102002 QQBOW style turtleneck woven inner piece + two colors woolen suspender dress suit” for its product on Company Y’s webpage on Shopee, and hashtagged “#Korean online” and “#QQBOW” in the product description. Company X then filed a complaint with Taiwan Intellectual Property Court against Company Y for infringement of its “QQBOW” trademark.

Company Y’s response was similar to Costco’s in the aforementioned U.S. case. It indicated that the use of “QQBOW style” in its product title was only to describe the specifications and style of the product. The hashtag was only an indicator on the webpage so that it will be easier for consumers to locate the webpage. Therefore, Company Y did not use the word “QQBOW” as a trademark.

The first and second instance judgments were rendered in 2019 and 2020 respectively, by Taiwan Intellectual Property Court (docket number: 108 Ming-Shang-Su-Zi No. 12 and 109 Ming-Shang-Shang-Zi No. 2). Both held that Company Y’s act was meant to convey that the product it was selling had the same style as what Company X’s Facebook fan page was selling, and the hashtag was meant for consumers to link its post with posts having the same hashtag on the same platform. Such a hashtag does not link the post to Company X’s Facebook fan page or other platforms. As such, the court held that Company Y’s act did not constitute trademark use, was not under the scope of trademark right, and hence did not constitute trademark infringement.

Whether the aforementioned U.S. case and Taiwan case will become final or mainstream opinion is yet unknown. However, from the aforementioned cases, one can see that whether using the name or trademark of other brands constitute trademark infringement depends on the specific usage of such brand name or trademark. If there is relevant evidence to prove that such an act was only meant to describe a style, there seems to be room for claiming non-infringement of trademark.

Specifically, “Did the user intentionally emphasize the name of other brands?” “How was the product packaged and labeled?” “Under what name was the receipt or business document made?” “Whether such a brand or name also mean another style or whether there are other meanings?” The court might consider the aforesaid factors when assessing whether such an act constitutes trademark infringement, and the users should also be cautious of these factors. In practice, some users, in addition to paying attention to their way of using the brand name or trademark, also note in writing that their product or service is not related to the trademark holder to further reduce infringement risks.

(This article was published in the Experts Commentary Column of the Commercial Times.  https://view.ctee.com.tw/legal/24187.html )

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