Local biotechnology company ordered to pay TWD2.5 million for trademark infringement

The operator of Chu Lu Ranch in Taitung, Taiwan (Chinese: 初鹿牧場) , Chao Neng Biotechnology Co., Ltd. (transliteration of the Chinese company name, 超能生化科技股份有限公司; hereinafter “Chao Neng”) sued the operator of Nan Chuan Chu Lu Milk Tea Shop (Chinese: 南傳初鹿鮮奶茶坊; hereinafter “Nan Chuan Shop”), Jia Zhou Health Biotechnology Co. (transliteration of the Chinese company name, 加州健康生技有限公司; hereinafter “Jia Zhou”) over copyright and trademark infringement.  The Taiwan IP Court rendered a judgment against Jia Zhou to the effect that Jia Zhou should pay TWD2.5 million in damages to Chao Neng and should be enjoined from using on Jia Zhou’s products and product packaging Chu Lu Ranch’s copyrighted devices and mark and from providing its franchise stores with such devices and mark for use and also that Jia Zhou should remove and destroy relevant advertising articles and also recall relevant products from the market.  

According to Chao Neng, Nan Chuan Shop has ordered with Chao Neng the products of Chu Lu Ranch for sale since April 2009 and also provided with their franchise stores with Chu Lu Ranch’s copyrighted devices and trademark for use.  In July 2013, Chao Neng found that Nan Chuan Shop used Greening Milk (from Chiayi County) for their custom-made tea drinks products and also used Chu Lu Ranch’s copyrighted device consisting of the dairy herd in large pastures (hereinafter “Chu Lu Ranch’s device”) on their milk product and milk crispy cake products.  Also, Nan Chuan Shop used a mark similar to Chu Lu Ranch’s dairy head device on their own milk steamed bread products.  Moreover, Nan Chuan Shop stick Chu Lu Ranch’s labeling to their own products, and also intentionally list their products under the column of Chu Lu Ranch’s products in leaflets and price lists.  By doing so, Jia Zhou has caused consumers to mistakenly believe that their products come from Chu Lu Ranch, and thus exceeded the scope of due authorization and infringed upon Chao Neng’s copyright and trademark right. 

Jia Zhou defended itself by saying that Chu Lu Ranch’s device and trademark were used in Nan Chuan Shop to indicate that Chu Lu Ranch’s products are commercially available in their stores and to promote these products, but not used as trademark.  In addition, Jia Zhou argued that they used Chu Lu Ranch’s device and trademark out of bona fide intention and for fair use and such use is based on Chao Neng’s consent, and therefore, Chao Neng’s right is not impaired because of such use.  Jia Zhou also denied the infringement alleged against it by indicating that the dairy head device used on Nan Chuan Shop’s milk steamed bread product is registered under different categories with that of Chu Lu Ranch, and that Chu Lu Ranch’s labeling was used not as a trademark but as internal use for date indication. 

The IP Court sustained Chao Neng’s allegation based on the pictures of Nan Chuan Shop’s franchise stores, pictures showing relevant franchise stores’ infringement, press release issued in July 2014 and relevant discs, the pictures of Nan Chuan Shop’s products.  In addition, on the grounds that Nan Chuan Shop’s products carried Chu Lu Ranch’s labeling in an apparent way and that these products’ packaging also bore a dairy head device similar to that of Chu Lu Ranch and also carried the two Chinese characters “初鹿”, the IP Court decided that the foregoing use of Chu Lu Ranch’s labeling, device, and mark could cause the likelihood of consumers confusion and thus rendered a judgment in favor of Chao Neng.  (May 2016) 

/CCS