How to unintentionally infringe on a trademark and how to avoid it

Recently we have received several questions from clients and seen news about companies that have found out that the logo they use is a trademark registered by someone else and then being accused of trademark infringement.

In Taiwan, Trademark infringement can lead to civil and criminal liability along with imprisonment of up to three years, fines of up to NTD 200,000 and civil damages based on actual damages, calculated based on;

the benefit to the defendant arising from the infringement; no more than 1,500 times the unit retail price of the infringing goods; or the equivalent amount of royalty that may be collected under licensing.

In some cases, the trademark is quite unique and people may not even realize that they are infringing on a registered trademark, for example, the following two checkered patterns are Taiwan trademarks registered by Burberry.

If you use these patterns on a product, you may infringe Burberry’s trademark right.

Another news article told the story of the owner of a pineapple cake shop who ordered paperweights in the shape of the Taipei 101 building from a factory in China planning to send them out as gifts to his customers. The customs officers found the paperweights and the shop owner was charged with trademark infringement by the prosecutor.

Another situation is using another’s registered trademark as part of your product name. The news this March reviewed a judicial decision of fines against a local cosmetic’s company for a total amount of 17 million. For the past decade, their product name contained another company’s trademark.

They claimed that they were not using the word as a trademark, just as a description of the product function. The word has been widely used in the cosmetic’s market by many other brands, yet their claim was not been supported in court. They are currently appealing the verdict.

Another case from my of our clients is that they got a legal letter from another trademark holder’s lawyer for a notice of trademark infringement because the side face of their product boxes are using their trademark. It turns out that the one who caused this problem is the designer who did not know that they are using another’s trademark; they thought just used an adjective that can enhance the product image on the box. With a very sincere apology and by reclaiming all the products from the market, we solved this problem peacefully; still, it cost money and time, which is totally avoidable with extra care and an awareness of trademarks.

How to avoid the problem like these cases?

Work closely with your trademark agent and set up a proper trademark plan as your first step into the market.

We always help our clients do trademark searches before they are planning to launch a new brand; if the search shows that someone already have a similar trademark then they have to come out with another name. A trademark search that cost a bit of time and little money is cheaper rather than paying for a lawyer, fines and reclaiming products.

If the trademark search result is positive and no one has that name registered, it is important to file a registration as soon as possible because once you launch the product, it means everyone can see it; the last things you want is someone hijacking your effort and steal your trademark from you by filing first.

With a bit of planning and a good trademark strategy, you can avoid headaches and spend your energy on building your brands and market share.