Red Bull Wins the Fight against Fly Bull

published on 3 Nov 2015

The Taiwan Intellectual Property Court rendered a judgment on May 18, 2015, which is the second instance, affirming that a series of Red Bull trademarks are well-known, and their fame also extend to industries of oils, greases, lubricants, services for automobile repair, cleaning, and maintenance, etc. Trademark distinctiveness may be diluted, resulting in trademark infringement, by use of the term or the device at dispute, regardless of the term or device being registered or not. The defendant's conduct also violated the Fair Trade Act, which protects the order of trade from unfair competition. The Taiwan Intellectual Property Court granted Red Bull’s injunction claims and also awarded damages in an amount of NT$1,050,000, approximately US$32,000.

Plaintiff Red Bull AG (Red Bull) filed a civil action against Defendant Ding Oil, a Taiwanese automobile lubricant supplier, for the Defendant’s use of five (5) terms and devices that are similar to Red Bull’s series of registered trademarks.  Red Bull stated with evidence that, as a world leading energy beverage supplier, it has been constantly marketing a great amount of advertisements to outreach its brand and products in order to enhance its visibility to worldwide consumers since 1987, including those in Taiwan. Additionally, Red Bull also demonstrated that it has been holding or sponsoring activities in various other fields beyond its existing consumers to build up its positive brand image in other business fields.

Red Bull made three major claims in the complaint:

1. Injunction refraining Ding Oil from continuing using any marks identical or similar to Red Bull’s registered trademarks (See appended Table 1 below);

2. Injunction refraining Ding oil from continuing using the terms and devices actually used (See appended Table 3 below); and

3. Damage, compensating Red Bull’s economic losses resulted from Ding Oil’s acts of infringement.

Red Bull did not win in full in the first instance. The court granted Red Bull’s first claim, however the second claim was partially denied. The court then determined that the term “FLY BULL” (No. 3-4 in Table 3) and a flying bull device (No. 3-5 in Table 3) were not similar to Red Bull’s marks. Meanwhile, the court was silent on whether the silver-blue package for automobile oil was an infringing use. Most importantly, the court denied the claim for damages. The court did not find Ding Oil being either willful or negligent in the alleged infringing act because Ding Oil had registered and used its own trademarks (See appended Table 2 below). The court had found that Ding Oil’s use of its own trademarks were not infringing and not in bad faith.

Red Bull was not satisfied with the first instance judgment, and then brought the case to the appellate level of the IP Court. In its action, what were in fact challenged were the five (5) marks actually used by the Ding Oil (see Table 3), which the first instance court however failed to address.

Secondly, by comparing the term “Fly Bull” (No. 3-4 in Table 3) and the plaintiff's registered mark “Red Bull,” the immediate image conveyed to the consumers is that the two terms are extremely similar to each other, especially as the attractive portion of both terms is “Bull.” The similarity between Red Bull's trademarks and Ding Oil's flying bull device was also confirmed by a panel decision of the WIPO Center for Domain Name Dispute Resolution. Meanwhile, Red Bull’s trademarks are used not only in beverages but also in sports car racing and extreme games. Using “Fly Bull” in products highly associated with sports cars, in the perspective of the related consumers, may potentially dilute or reduce the distinctiveness of Red Bull’s well-known trademarks.

Moreover, Red Bull argued that Ding Oil’s flying bull device (No. 3-5 in Table 3) may also cause confusion to consumers because of its general image and impression given to the consumers is strongly similar to Red Bull’s. The Flying Bull device was used in petroleum products, which typically are less expensive goods. Related consumers for petroleum products generally have lower degree of attention that they should be less likely to have the ability identifying the nuance difference. Since Red Bull is also well-known to consumers relevant to sports car racing, Ding Oil’s use of flying bull device therefore also dilutes the distinctiveness of Red Bull’s well-known trademarks.

In the appellate level, the court reversed the former judgment and granted all of Red Bull’s claims. The court affirmed that Red Bull’s business operation has been extended to various kinds of business fields. The court further found that the Flying Bull device in the color red, the term “Fly Bull,” and the silver-blue package are all similar or identical to Red Bull’s trademarks. As such, the court ruled that Ding Oil’s continued use of afore-listed terms or devices on products of automobile oil, greases, or lubricants has violated the Trademark Act. Moreover, Ding Oil's act is sufficient to affect the order of trade, which is deemed deceptive or obviously unfair, and therefore has further violated Article 25 of the Fair Trade Act.

For violation of Article 70(1), Article 68(1), and Article 68(3) of the Trademark Act and Article 25 of the Fair Trade Act, Ding Oil was ordered to refrain from using any marks, terms, or devices similar or identical to Red Bull’s registered trademarks and shall be liable for damage in sum of NT$1,050,000 to Red Bull, based on the calculation of the unit price of oil NT$700 multiplies by the statutory maximum 1,500 times.

Commentary

Trademark infringement has undergone a multi-faceted evolution thanks to the awareness of protections and enforcement of trademarks. Traditional types of trademark infringement such as a straightforward copy of a mark are slipping away from the main stream. Instead of copying others by easily identified similarity, more and more trademark infringement cases involve partial imitation of other's marks, imitation of the overall image of business representations, and such imitation are usually deemed not similar under the traditional similarity analysis. Even worse, some are used in an unrelated business other than businesses of the trademark owners. To cope with such a development, the Trademark Act, which defines infringement mainly by trademark similarity, seems insufficient to ease the pain of the rightful owners. Unfair competition law therefore becomes more important.

The court in this case summarized the three main types of infringement against a well-known trademark: (1) Dilution of the distinctiveness of a well-known trademark; (2) Reduction of the goodwill of a well-known trademark; and (3) Unfair gain by free-riding on the distinctiveness or goodwill of a well-known trademark. The third type is governed by Article 25 of the Fair Trade Act, which provides that “no [entities] shall otherwise have any deceptive or obviously unfair conduct that is able to affect trading order.” “Deceptive[ness]” refers to that the entity engages in a transaction with a counter-party by actively deceiving or passively concealing critical information regarding the transaction so that the counter-party acts erroneously; whereas “obvious unfair[ness]” refers to the nature of competition or commercial transactions that is conducted in any obviously unfair means. Under the rationale, Ding Oil’s use of a series of terms and device has potentially induced the consumers to wrongfully acknowledge that Ding Oil relates to Red Bull either in a business association or collaboration. Court’s application of the Fair Trade Act is an encouragement for well-known trademark holders. As the type of infringement becomes more than just an identical or similar mark, the role of Fair Trade Act is expected to fill the loophole of trademark protection.

For any questions relating to this topic, please contact us at cjchen@tsailee.com.tw