The profit earned by the infringer as a result of trademark infringement is calculated based on the infringing company’s revenue over 10 years

【QUESTION】

The plaintiff had business dealings with the defendant since 2015, but filed a lawsuit in 2023, alleging that the defendant illegally used the plaintiff's trademark as a distinctive company name. Has the plaintiff's right to claim damages been extinguished by the statute of limitations? How should the amount of damages be calculated?

【The Decision】

Although the appellant argues that it had a cooperative relationship with the appellee and that the appellee knew the name of the appellant's company in 2015, the appellee filed this lawsuit in 2023, which is already beyond the statute of limitations. Regarding the subjective condition of "knowing" in the phrase "from the time the claimant knows of the damage," if a single harmful act causes subsequent harm to others, and the harm is indivisible (accumulated in nature) or constitutes a continuation of an infringement, then the statute of limitations should be calculated from the time the victim becomes aware that the extent of the harm has been established (i.e., the harm has become apparent) or when the unlawful act has ceased. However, if the tortious act of the perpetrator is continuous (the harm is ongoing) and the resulting damage is also continuous, and if each unlawful act and the resulting damage are actually independent and distinguishable from one another (quantitatively divisible), then the victim's right to claim damages should be calculated based on whether the victim was aware of each continuous independent act and the corresponding starting point of the statute of limitations (see the Supreme Court's Civil Judgment 94 Taishan No. 148).

The appellant company continues to use "萬事達(MasterCard)" as a distinctive element of its company name and as a mark identifying the source of its services. The appellee's claim that the appellant company infringed the disputed trademark remains ongoing and continues to occur. Therefore, the appellee's right to claim damages for the infringement has not been extinguished by the statute of limitations, and the appellant's statute of limitations defense is inadmissible.

【Ching-I Lu’s Comment】

1.     In trademark infringement cases, infringers often argue that the statute of limitations for the right holder's claim for damages has expired. This is because, by its nature, the infringer's use of the right holder's trademark typically continues over a period of time, unlike a car accident, which is a momentary event and usually does not involve subsequent occurrences.

2.     The defendant changed its name to the disputed company name on September 9, 2014, and has been using it continuously since then. Although the plaintiff filed the lawsuit in 2023, this judgment finds that the defendant's use of "萬事達(MasterCard)" as a distinctive part of its company name has persisted from 2014 to the present and has not ceased. Therefore, the infringement is ongoing. Consequently, the plaintiff's right to claim damages for infringement has not been extinguished by the statute of limitations.

3.     Article 69, Paragraph 4 of the Trademark Act stipulates: "The right to claim damages under the preceding paragraph shall be extinguished if it is not exercised within two years from the date the claimant becomes aware of the damage and the person liable for compensation; the same applies if more than ten years have passed since the infringing act."

Therefore, in calculating the amount of damages, the court determined the defendant's total gross profit over the nearly ten-year period from September 9, 2014 (the date of the defendant's company name change registration) to February 21, 2024 (the date of the conclusion of the oral arguments). The court concluded that this profit falls under the category of profits earned by the infringer as a result of trademark infringement, as defined in Article 71, Paragraph 1, Subparagraph 2 of the Trademark Act.