SAINT ISLAND INTELLECTUAL PROPERTY GROUP

Under Taiwan’s Copyright Act, fair use is a statutory exemption for an alleged copyright infringer to avoid liability. To determine if fair use is applicable, a court normally will look into the following factors: (1) The purposes and nature of the exploitation, including whether such exploitation is of a commercial nature or is for nonprofit educational purposes; (2) The nature of the copyrighted work; (3) The amount and substantiality of the portion exploited in relation to the copyrighted work as a whole; (4) Effect of the exploitation on the copyrighted work's current and potential market value.”  In practice, whether a defendant’s use constitutes fair use has always been controversial.  A recent decision rendered by the Intellectual Property and Commercial Court (IPC Court) may provide more insight on the interpretation and applicability of this doctrine (See 113-Ming-Chu-Su-Zi No. 60).

In this case, the copyright dispute arose from the Defendant’s use of the Plaintiff’s product image.  The Defendant’s sister purchased the Plaintiff’s product, an electric toothbrush, but found that she has no use thereof.  Intending to resell said product through Shopee, the Defendant took a photo of the product itself and its packaging, and uploaded said image to the Defendant’s Shopee account.  The Plaintiff asserted that the Defendant’s reproduction and upload constitute unauthorized use of the Plaintiff’s copyright over the product package (See below).  The Defendant argued that he did so with the intention to demonstrate that the resale product is genuine and authentic.

The IPC Court ruled in the Defendant’s favor on fair use, finding that:

1. Firstly, the photo taken by the Defendant consists of tooth graphics and the Chinese characters “牙寶貝”.  The tooth graphics featured elements of humanization like eyebrow, eyes, mouth, hands, and feet, which render the work original and protectable as artwork under Copyright Act.
    
2. Secondly, the IPC Court looked into the purpose of Plaintiff’s copyrighted work, and found its purpose is to help consumers or users know more about Plaintiff’s product, i.e., how to use Plaintiff’s electric toothbrush. In this respect, the IPC Court considered the Defendant’s act is aligned with the aforesaid purpose, because by reproducing the copyrighted image on Shopee, the Defendant did help the customer to evaluate the source and authenticity of the product it intended to resell. Besides, the Defendant did not alter the content of the uploaded image in any way that may cause confusion, and only sold one set of the product.  Under such circumstances, the IPC Court did not consider Defendant’s exploitation would substantially impact the market value of Plaintiff’s copyrighted work.
    
3. Further, the IPC Court took into account that current policy favors environment protection and prevention of fraud.  When reselling a genuine and authentic product that consumers no longer need via the Internet, properly disclosing the copyrighted materials related to the source of the product, in the Court’s opinion, would be helpful for accomplishing the aforesaid policy.  Permitting such use is aligned with the legislative goal to protect the interest of the copyright holder, promoting culture, and furthering public interest.  Therefore, the IPC Court determined that the Defendant’s use constituted fair use per Article 65 of Copyright Act.

Although the Defendant’s use involves commercial exploitation, and the Defendant has 100% reproduced the Plaintiff’s copyrighted work, which are usually unfavorable for fair use defense, the IPC Court seemingly focused more on the facts that the nature of the Plaintiff’s copyright is to help buyers understand its product, that the Defendant’s use has no substantial impact on the Plaintiff’s copyright, and that such use is in line with trending policy of environmental protection and prevention of fraud.  Such approach may suggest that the IPC Court adopts a flexible framework for analyzing fair use.  It is also worth noting how such framework will be applied by the IPC Court when weighing the factors for fair use in other cases involving different nature of copyrighted work and context of use.