Local Company Pays to Yamaha Motor Co., Ltd. TWD300,000 in Damages over Trademark Infringement

Yamaha Motor Co., Ltd. (hereinafter “Yamaha Motor”) sued a local enterprise, 基隆市山葉發動機企業社 (Translation: Keelung Yamaha Motor Enterprise; hereinafter the “local company”) over trademark infringement, while the local company contended that they were established under the assistance and guidance from Yamaha Motor Taiwan Co., Ltd. (hereinafter “Yamaha Motor Taiwan”) and have obtained Yamaha Motor Taiwan’s tacit approval and thus there is no occurrence of the alleged infringement.  The Taiwan IP Court held that the local company used to be the local distributor of Yamaha Motor Taiwan and should have stopped using the two Chinese characters “山葉” (“Yamaha” in English) as part of its corporate name after conclusion of their distributorship, and therefore, the local company infringes upon Yamaha Motor’s trademark rights and violates the 2nd subparagraph of the 1st paragraph of Article 20 of the pre-amended Fair Trade Act.  The local company is ordered to change their corporate name and pay to Yamaha Motor and Yamaha Motor Taiwan each TWD150,000 in damages. 

Yamaha Motor has been incorporated for more than sixty years since 1995 to be engaged in developing, manufacturing, and selling motorcycles and has been a renowned enterprise in local and international market.  Also, Yamaha Motor has been holding registrations for “山葉” and “YAMAHA” marks with specification thereof covering cars and motorcycles and components thereof.  Everyone from the industry and general consumers know about the “山葉” and “YAMAHA” marks and they amount to well-known trademarks.

Moreover, established in 1986, Yamaha Motor Taiwan is an affiliate of Yamaha Motor in Taiwan and has obtained Yamaha Motor’s license to use the “山葉” and “YAMAHA” marks and has also been engaged in making, selling, and repairing motorcycles and components thereof for many years.  Their motorcycles and parts/components have been well-received by the industry and consumers. 

However, without due authorization, the local company uses the two Chinese characters “山葉” of Yamaha Motor’s “山葉” mark and of Yamaha Motor Taiwan’s corporate name and registers the two Chinese characters “山葉” as part of its corporate name “山葉發動機企業社” to do the same business of selling and repairing motorcycles.  Obviously, by the foregoing acts, the local company tries to take a free ride on Yamaha Motor’s well-known trademarks and further to confuse consumers and form a mistaken understanding that the local company is Yamaha Motor Taiwan’s downstream repair service provider.  Thus, Yamaha Motor filed the lawsuit to request the local company to change their corporate name and claim damages in the amount of TWD350,000 to Yamaha Motor and Yamaha Motor Taiwan each.

The local company refuted Yamaha Motor’s allegations by saying that they joined the system of Yamaha Motor Taiwan in 2009 and Yamaha Motor Taiwan has granted to them the license for using the “YAMAHA” mark and relevant signboards.  Also, the local company had once dispatched personnel to participate in the technical research seminar held by Yamaha Motor Taiwan and received a certificate of F1 quality technology service provider awarded by the general manager of Yamaha Motor Taiwan.  That is to say, the local company’s use of the corporate name “山葉發動機企業社” is based on Yamaha Motor Taiwan’s prior consent.  Further, the local company argued that they do not have to change their corporate name because they have voluntarily request for suspension of business with the Keelung City Government even if they indeed infringes upon Yamaha Motor’s trademark right. 

According to the contract signed by and between the local company and Yamaha Motor Taiwan, the local company shall stop using the two Chinese characters “山葉” as a specific part of their corporate name after June 1, 2012 when the contract terminated without renewal.  The local company apparently had infringed upon Yamaha Motor’s trademark for two years for their continued use of the two Chinese characters “山葉” as a specific part of their corporate name until September 1, 2014 andthus causes loss to Yamaha Motor.  By so doing, the local company violated the 2nd subparagraph of the 1st paragraph of Article 20 of the pre-amended Fair Trade Act.  Furthermore, suspension of business is not a reason for being free from changing the infringing corporate name because the local company can resume business at any time.  Based on the foregoing, the Taiwan IP Court ruled that the local company should change their corporate name and pay damages to Yamaha Motor and Yamaha Motor Taiwan each TWD150,000.  (September 2015)
/CCS