Most machine, device or instrument manufacturers and sellers would mostly have much concern about the status quo of sale of their consumable spare parts in aftermarket, since it may not only affect their trademark rights and commercial interests but also may disparage the reputation long established on their trademarks. On the other hand, if there is not a likelihood of confusion or misidentification in aftermarket, or if there has been arisen no infringement of other rights, such as patent or copyright, to restrain third parties from advertising or displaying for sale their spare parts for a branded compatible machine, device or instrument might not necessarily be easy.
In June of this year, the Intellectual Property and Commercial Court (hereinafter referred to as IPC Court) rendered a criminal judgment finding that the defendant’s sale of consumable spare parts in aftermarket does not constitute a trademark infringement.
The complainant in this case is the holder of the trademark “Omron” and its Chinese version mark “歐姆龍” designated for use on medical analysis instruments, medical devices, medical instruments, etc. Without a consent from the trademark holder, the defendant placed an advertisement on the website of an e-commerce store named “Shopee” for selling their medical consumable patches which are compatible to a low-frequency therapeutic device under the wording "Omron 歐姆龍 Alternative Patches” for unspecified people to browse and purchase. The prosecutor indicted the defendant based upon the latter paragraph of Article 97 of the Trademark Act for illegally displaying and selling, in electronic media or online platforms, counterfeit goods. After the district court rendered a decision to acquit the defendant, expectedly, the prosecutor, not being satisfied with such a non-guilty judgment, filed an appeal with the IPC Court.
The legal issue in this lawsuit is whether or not the defendant’s use of the trademark “歐姆龍” registered by another person constitutes “fair use” defined in Article 36.1.1 of the Trademark Act. According to said provision, a registered trademark is not infringed provided that the use thereof is not intended as a trademark use and is in accordance with honest practices in industrial or commercial matters for the purpose of providing information about a commodity or service. Such fair use of a trademark includes: descriptive fair use and nominative fair use. The so-called "nominative fair use" permits use of another’s trademark to refer to the trademark holder’s goods and services. A person’s use of a trademark in this method is generally meant to use another person’s trademark to indicate the function, as well as the source of the goods or services of the another person, to thereby indicate the quality, nature, characteristics, intended use, etc. of said person’s goods or services.
During the trial proceedings, the IPC Court noticed that the defendant displayed photographs of disputed replacement patches on the website of Shopee. Although the replacement patches per se did not bear the "歐姆龍" or "OMRON" trademark, in the explanatory texts next to the photographs, such wordings as "Omron 歐姆龍 Alternative Patches” were depicted. Moreover, apart from the wordings “our own brand” shown on the website, there were descriptions regarding the difference between the alternative patches and the patches under the "歐姆龍" or "OMRON" trademark from the original factory. An indication that “[t]he shape of the patches sold by the defendant matches that of the OMRON low-frequency therapeutic device” was also shown in the advertisement. It is evident that "歐姆龍" or "Omron" was only used by the defendant to describe that the patch being sold is compatible with the OMRON low-frequency therapy device produced by the the trademark owner and can replace the original factory patches. In addition, the price difference between the patches sold by the defendant and those generally sold by the original factory is 12 times.
The IPC Court thus came to a conclusion that the text description and price difference are sufficient to indicate that, while the alternative patches sold by the defendant can replace the original factory patches, lay consumers are capable of recognizing that the two kinds of patches are from different, unassociated sources of origin. In other words, consumers would not be led to assume that the disputed patches and the original factory patches are from the same party or from different but related parties which have, for instance, signed business or franchising contracts, or under the same enterprise.
Based on the above analysis, the IPC Court held that the defendant did not use the trademark of others to indicate that the disputed goods are from the original factory. Instead, the the trademark owner's trademark "歐姆龍” was used to manifest that the disputed goods could be consumers’ another choice. Obviously, such use is an indicative fair use and should not be restrained by the trademark rights of the "歐姆龍" or "OMRON" trademark.
“Fair use” is one of the common defense maneuvers adopted by the defendant in a trademark infringement lawsuit. From the above case, we learnt about whether a party’s displaying for sale or selling of consumable spare parts compatible with a device from the original factory constitutes trademark infringement. That is, if it is clearly indicated that the spare parts are not those from the original factory, and if consumers would not be led to believe that the sold spare parts are from the original factory, such displaying for sale or selling could be considered to be within the definition of “fair use” and does not constitute trademark infringement.