TIPS^®  Taiwan Intellectual Property Special

Court Decision against Using Another Person's Trademark as Corporate Name

Taipei District Court in early July rendered a judgment which prohibits a securities company from using other company's trademark as its corporate name pursuant to the Fair Trade Law ("FTL").

A computer motherboard manufacturer, ASUSTeK Computer Inc. ("ASUS"), filed a lawsuit last year against a securities company (which used ASUS's Chinese corporate name and trademark "Hwa-Sheu" as its corporate name) requesting the securities company to eliminate and/or cease infringement upon ASUS's trademark, and claiming the damages of good will in the amount of NT$65,980,000 (about US$2,061,875). ASUS indicated in its complaint that ever since ASUS incorporated and registered its Chinese and English trademarks in 1990, both its Chinese and English names and trademarks had been known to every securities company in Taiwan because it's stock value was once the highest among all kind of stocks. Moreover, ASUS is the largest motherboard manufacturer in Taiwan and one of the three largest motherboard manufacturers of the world. Therefore, ASUS's Chinese company name and trademark have certain symbolic meaning under the FTL.

The Taipei District Court held that the defendant, knowing that ASUS's Chinese trademark enjoys high prestige in Taiwan, was taking advantage of the reputation of ASUS by using the same Chinese name. The defendant's exploitation of ASUS's trademark as its company name, although not a trademark infringement, has a likelihood of confusion that there might be some connection between the securities company and ASUS. Moreover, the defendant's use might cause the dilution of ASUS's trademark. Therefore, the Court ordered the defendant to change its registered company name since the defendant's behavior obviously constituted free-riding, which is an unfair competition prohibited by the FTL. As to ASUS's claim of damage of good will, the Court overruled such claim since ASUS failed to demonstrate the existence and the amount of the damage.

This is only a district court judgement. The defendant may appeal. However, the above judgement directed the attention from the industry and the practitioners as a landmark case.