TIPS® Taiwan Intellectual Property Special Motorola Was Sued by Taiwan DBTEL in China
China Intellectual Property News reported on July 5, 2002 that Motorola was sued by Shanghai DBTEL, a subsidiary of Taiwan DBTEL Incorporated. DBTEL is the biggest manufacturer of mobile phones in Taiwan, contracted to manufacture for Motorola, Siemens, Philips, and Alcatel on ODM basis.
In 1998, Motorola entered into a “Manufacture Agreement” with DBTEL for manufacturing, inter alia, Motorola T189 cellular phones. DBTEL claimed that T 189 model was co-developed by the Taiwan and Shanghai R&D groups of DBTEL. The corresponding intellectual property rights belong to DBTEL, who has filed patent application for the appearance of the T189 model and the patent was granted then. In April 2002, Motorola terminated DBTEL’s manufacturing of T189, and released a new cellular phone model -- C289, manufactured and sold by Motorola. DBTEL found that the appearance design of C 289 is similar to that of T189. The integrated circuit layout of C289 is very similar to that of T189 too. DBTEL alleged that Motorola has infringed DBTEL’s design patent and rights on the integrated circuit layout. Motorola claimed that, pursuant to the Manufacture Agreement,
Motorola owns the intellectual properties arising from the Agreement, in particular the whole intellectual property rights on the design of cellular phones.
The crux of this case is “who owns what in the Manufacture Agreement.” To avoid this kind of legal dispute, it should take extra caution in stipulating licensing or manufacturing agreement (i.e., OEM or ODM), especial those provisions of IP ownership. “Likelihood of Confusion” Shall Be Determined based on Standard of Domestic Consumer
A Czech company, on March 15, 1997, applied to register “Budejovicky Budvar” as a trademark, used on clothes, boots, socks, neckties, sport shirts, jackets, coats, and etc. in Class 25. The application was approved by the then competent authority in charge of trademark matters, the National Bureau of Standard (NBS). The registration was subsequently opposed by the trademark owner of series of “BUDWEISER” marks, alleging that “Budejovicky Budvar” was confusingly similar to its famous mark “BUDWEISER.” The NSB dismissed the opposition and administrative appeal and litigation followed. On June 17, 2002, the Supreme Administrative Court issued Pan-955 Judgement, ruling that there was no error in the original decision; therefore, the appeal is dismissed and the decision is final.
The trademark at issue consists of foreign characters of “Budejovicky” and “Budvar,” while the appellant’s marks are “BUDWEISER Label,” “BUD,” “BUD LIGHT,” and ect. The appellant alleged that “Budejovicky Budvar” is in Czech, while, translating into English, it means BUDWEISER BUDVAR, and BUDVAR means “brew.” Therefore, it is claimed that the trademark at issue is similar to BUDWEISER marks in the concept. Given that BUDWEISER marks is worldwide famous, it would easily mislead the consumer to believe that the trademark at issue were from the same origin or belonged to the same series of marks, and therefore cause the likelihood of confusion and mis-purchase. However, the Supreme Administrative Court held another view. The Court Pointed out that, the determination of whether 2 marks are confusingly similar should be based on the perception of local people. The ability to understand a particular foreign language varies from country to country. As Czech is not a language commonly known by the public in Taiwan, it can not be said that the meanings of “Budejovicky Budvar” would be associated with that of “BUDWEISER.” Furthermore, although the marks all contain “BUD,” the overall appearances of the marks are apparently different.
In sum, the Supreme Administrative Court held that the marks of the parties are different in appearance, as well as in pronunciation, and therefore, give different impressions to the consumers. There is no likelihood of confusion. Therefore, the appeal is groundless and should be dismissed.
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