Honda wins Top Model Motorcycles Design Patent Infringement Case

Newsletter Volume 1
March 1, 2005

By

Kasame Jai-ob-orm
Haruethai Sooksamarn
Tanawat Senapitaksa
Kasame & Associates

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Background
Around September 2001, Honda Giken Kogyo Kabushiki Kaisha or Honda Motor Co., Ltd. (Honda), learnt that a purchase and import of motorcycles from China into the Kingdom of Thailand were made and such motorcycles have identical characteristics with Honda’s design for motorcycles “WAVE” and might counterfeit or imitate Honda’s trademark which might infringe Honda’s intellectual property rights.

Investigation Stage
Therefore, Honda then contacted and appointed a lawyer to find the facts out for taking legal action against the violators. Upon having inspected the relevant information and facts, Honda’s lawyer initially found that an import of motorcycles into the Kingdom of Thailand from China was actually made. The lawyer then gathered all evidences and has them submitted to the police officers at Economic Crime Investigation Division (“ECID”) for filing a petition with the Central Intellectual Property and International Trade Court (“IP&IT Court”) for a search warrant on September 27, 2001. Honda’s lawyers then went along with the police officers bringing the search warrant to conduct a search for inspecting the imported motorcycles which at that time were kept at the bonded warehouse of Bangpoo Intermodal System Co., Ltd. (“BISCO”) pending for taking custom procedure before departure to Cambodia.

The lawyer and police officers reached the bonded warehouse on September 27, 2001 at around 1.00 pm to conduct a search to inspect the motorcycles, the officers of the bonded warehouse of BISCO and the custom officers allowed the search and guided the raid team.

At the search, the motorcycles imported from China packed in cardboard cartons in form of parted motorcycles were found. The handle bar was separated from the motorcycle body packed in the same carton. One carton contained parted motorcycle that could be embodied into one motorcycle. They are total 26 cartons that can be embodied into 26 motorcycles. When embodied the handle bar with the motorcycle body and compared the appearances of the motorcycles with the drawings appeared in the product design patent claims under Pat. No. 8569 issued to Honda, it was of the view that, the major elements are identical therewith or very similar thereto. The total 26 motorcycles branded “Dome” for “Well” model. Upon having inspected, Honda’s lawyer found that all mentioned motorcycles did not infringe Honda’s trademark rights but did infringe Honda’s design patent and consequently filed a complaint with the police officer to seize all motorcycles for further inspection. The complaint was initially based on the offence of importing into the Kingdom of products using Honda’s design patent. When inquired the officer at the bonded warehouse and inspected the documents, it disclosed that the person who imported the motorcycles is P.K.I. Import Export Co., Ltd. by importing the total 38 cartons or motorcycles on September 5, 2001 which had already been inspected under the custom procedure. In the morning of the same day, 12 motorcycles were departed to Cambodia. The rest 26 motorcycles were ready for departure but as they were seized and pending for custom procedure, they must be kept under the custody of BISCO.

The above-mentioned design patent under Pat. No. 8569 of Honda issued for motorcycle design to Honda Giken Kogyo Kabushiki Kaisha by Department of Intellectual Property claiming for the product design, i.e., the appearances of motorcycles as appeared in the drawings of the product submitted in form of photos of motorcycles.

Honda first applied for the mentioned design patent in Japan on August 8, 1996 under the Application No. 8-23934. Honda’s appointed patent agent had filed an application for product design patent in Thailand on January 16, 1997 under the Application No. 035262 and then filed an application for claiming the priority rights of the date of the basic application as the application date in Thailand on August 14, 1997. The Department of Intellectual Property accepted the application and proceeded to publish the design application in the Patent Gazette and issued into a patent on November 16, 1998. It is valid until January 15, 2007.

Inquiry Stage
During the inquiry stage, the police officer of ECID called the alleged offenders namely P.K.I. Import Export Co., Ltd. by Mr.Watcharapong Saetang, its representative, and Mr. Somchai Saetang, the company signatory director, for acknowledging of the offence and further inquiry. Both offenders denied the accusations and shown the inquiry officer the evidences regarding the publication for motorcycles of such model publicized in China and gave a testimony that Honda’s design patent is void since it is not a new product design; the design of motorcycle issued into patent to Honda was already produced and distributed in China; and it was publicized in the magazine before Honda applied for patent.

Public Prosecutor
When after the inquiry officer forwarded the case to the public prosecutor with an opinion of prosecution, the public prosecutor in charge of the case reviewed the evidences, i.e., the publication of motorcycles in China submitted to the inquiry officer by the three alleged offenders at the stage of inquiry inclined thereto and was of the view that Honda’s design patent is void since it was illegally issued; it was not a new product design. The public prosecutor therefore ordered not to prosecute the three offenders on October 8, 2002.

Due to the public prosecutor’s non-prosecution order as above mentioned, Honda’s lawyer submitted a letter to the Director General of Public Prosecutor requesting him to liberally reconsider the case. The Director General of Public Prosecutor then reviewed the case and ordered a final instruction of prosecution.

Court Stage
The public prosecutor then prepared a complaint and entered a charge before the IP&IT Court on September 8, 2003 accusing P.K.I. Import Export Co., Ltd. (defendant 1), Mr.Watcharapong Saetang (defendant 2) and Mr. Somchai Saetang (defendant 3) for the offences of jointly importing into the Kingdom of motorcycles using product design under the patent without authorization from the patentee. Then, Honda appointed Kasame & Associates to proceed with the criminal charge as a joint plaintiff. The relevant parties adduced the evidences to the Court. The joint-plaintiff also requested the Court to take evidence of the 26 exhibit motorcycles that were kept at the bonded warehouse of BISCO out of court. The IP&IT Court rendered a judgment on November 17, 2004 judging that the three defendants committed offences as prescribed in the complaint. The details of the decision and the judgment are as follows:

1. Complaint
The plaintiff charged that the three defendants jointly infringed the product design patent for motorcycles of Honda Giken Kogyo Kabushiki Kaisha, the injured person, by jointly importing of motorcycles using product design exactly the same as the patentee’s product design patent into the Kingdom without any authorization from the injured person. The plaintiff petitioned the Court to punish the three defendants under Section 3, 63, 77 quarter, 85 and 88 of the Patent Act and Section 83 and 33 of the Penal Code and to forfeit the seized goods.

The three defendants denied all accusations.
During the proceedings, Honda involved in the case as the joint plaintiff with the public prosecutor and the Court allowed thereto.

The issues of the case that must be decided are as follows:

1. Whether or not the exhibit motorcycles are the evidences that were legally taken ?

The search warrant petitioned by the injured person and the police officers to the Court stated the ground for issuing the search warrant that it was “for conducting a search and seizure of goods ‘motorcycles and spare parts for motorcycles’ bearing joint plaintiff’s trademark and else counterfeiting or imitating other person’s trademark already registered in the Kingdom….”.
The search found the exhibit motorcycles infringing the joint plaintiff’s design patent for motorcycles. Although it was an offence under the Patent Act B.E. 2522 but not an offence under the Trademark Act B.E. 2534 as stated in the search warrant, when the search was for inspecting and seizing motorcycles as stated in the search warrant for use in considering in the proceedings of inquiry, preliminary examination or trying a case under Section 69(1) and 98 of the Criminal Procedure Code, the search is lawful. Consequently, the seized exhibit motorcycles, therefore, are evidences that were legally taken and are admissible under Section 226.

2. Whether the joint plaintiff’s product design patent for motorcycles is an invalid product design patent or not?

The three defendants adduced that the joint plaintiff’s product design patent for motorcycles is not a new product design as it was a product design that was disclosed by photographs and furthermore the products were distributed in foreign country before the joint plaintiff has applied for product design patent for motorcycles in Thailand. The joint plaintiff’s patent, therefore, is not valid.

The Court viewed that the evidences adduced by the three defendants stating only the amounts of motorcycles produced by a company in the year B.E. 2540 (AD1997) but not stating the year of manufacturing of the motorcycles and not stating the year of publishing and publicizing of the mentioned document. The evidence that stated the year of publishing of the document in AD 2002 (B.E. 2545) to which it was given a testimony by the defendant 2 to the joint plaintiff’s cross-examination that it was in the year B.E. 2545. It therefore cannot be admissible that there was a dissemination of the mentioned document before the joint plaintiff has applied for motorcycles product design patent.

The three defendants adduced that the motorcycles identical with the motorcycles design under the joint plaintiff’s design patent were already manufactured before the joint plaintiff applied for design patent to which the defendant 2 gave a testimony thereto that Hongdou Group Co., Ltd. had produced the motorcycles identical with the product design under the joint plaintiff’s design patent for motorcycles since AD 1994 and Hongdou Group Co., Ltd. already ratified that they produced motorcycles CTM100-8B in AD 1995. The defendant 2 testified that the mentioned motorcycles identical with the pictures as in Evidence Jor.20/2 marked in blue color. The Court viewed that it appeared in the bottom of the pictures as 110-8B and the content appeared in the picture as CHITUMA 110, the mentioned numerals, therefore, are not for the model CTM 100-8B ratified by Hongdou Group Co., Ltd. Therefore, it is not admissible that the motorcycles as appeared in the Evidence Jor.20/2 marked in blue are motorcycles CTM100-8B ratified by Hongdou Group Co., Ltd. that they produced in AD 1995. The defendant’s testimony, therefore, is not admissible that the exhibit motorcycles are the same model to CTM 100-8B. It, therefore, is not admissible that the exhibit motorcycles were produced in AD 1995 (B.E. 2538).

Furthermore, the three defendants had no other evidences to show that Suzuki Thailand Co., Ltd. had manufactured motorcycles the same as the product design under the joint plaintiff’s design patent for motorcycles before the joint plaintiff has applied for design patent or not. The three defendants’ evidences therefore are not sufficient to admit that there was a dissemination and production of motorcycles identical with the product design under the joint plaintiff’s design patent for motorcycles before the joint plaintiff has applied for patent on January 16, 1997. It therefore is not deemed that the joint plaintiff’s product design patent for motorcycles under No. 8569 is a void product design patent for motorcycles under Section 64 of the Patent Act B.E. 2522.

3. Whether or not the exhibit motorcycles are identical with the product design under the joint plaintiff’s design patent for motorcycles?

Taken into the account of the appearances of the exhibit motorcycles as appeared in the photos and those from the inspection of the exhibit motorcycles kept at the bonded warehouse of BISCO comparing with the appearances of the product design as to the claims under the joint plaintiff’s motorcycle design patent, i.e., the photos of the motorcycles and the exhibit motorcycles, the Court is of the view that the motorcycles have the essential elements identical with the product design as appeared in the drawings under the joint plaintiff’s product design patent for motorcycles. The differences in the details of sizes of the parts and the differences in its brake systems, exhaust pipes and choke up cylinder as adduced by the defendants are tiny details but not essential elements of the product design under the joint plaintiff’s design patent for motorcycles. Such differences, therefore, are the differences of non-essential elements. Consequently, it is not deemed that the exhibit motorcycles are different from the product design under the joint plaintiff’s design patent for motorcycles. As such, the exhibit motorcycles are identical with the product design under the joint plaintiff’s design patent for motorcycles.

4. Whether or not the import of the exhibit motorcycles for exporting to the Kingdom of Cambodia is deemed an import into the Kingdom (of Thailand) of motorcycles using the product design identical with the product design under the Joint plaintiff’s design patent for motorcycles under no. 8569 under Section 63 of the Patent Act B.E. 2522 ?

It is viewed that, when considered the inbound consignment document as in Evidence Jor.10, there were imported 38 motorcycles including the exhibit motorcycles and were kept at the bonded warehouse of BISCO and thereafter 12 motorcycles were delivered to the Kingdom of Cambodia as appeared in the outbound consignment document, it shown that there was an import of the exhibit motorcycles into the Kingdom. Furthermore, Mr. Suriya Suk-anand, the General Director of the Legal Affairs of Custom Department, the witness of the defendant, gave a testimony that bringing the goods for keeping in the bonded warehouse is deemed an import into the Kingdom. Therefore, it deemed that there was an import of the exhibit motorcycles into the Kingdom.

Moreover, according to the photographs of the exhibit under the criminal case and the inspection of the exhibit at the bonded warehouse, the exhibit motorcycles were imported in form of pasted motorcycles packed in cartons but some parts were separated and according to the adduces made by the plaintiff, joint plaintiff and the three defendants, the parted motorcycles in each carton can be embodied into one motorcycle. It can be seen that, the purpose of having them separated into parts was for the convenience in packaging and transportation but was not a purpose of import of separate parts. The import of the exhibit motorcycles, therefore, is an import of motorcycles in form of entire body.

As the facts can be concluded that it was an import into the Kingdom of the motorcycles that are identical with the product design under the joint plaintiff’s design patent, it must be deemed that it caused damage to the joint plaintiff’s design patent right who has the exclusive right as the patentee in importing of motorcycles under the design patent. The import into the Kingdom regardless of whether it is an import for selling in the Kingdom or not is an exclusive right of the patentee.

5. Whether or not the three defendants committed offences according to the complaints?

Defendant 1 - when it concluded that the defendant 1 is a juristic person engaging in the business of import and export, it is believed that the defendant 1 imported and exported the exhibit motorcycles with awareness that the exhibit motorcycles used the product design identical with the motorcycle product design under the joint plaintiff’s design patent for motorcycles. The defendant 1’s act, therefore, is an offence as described in the complaint.

Defendant 2 – is an authorized director representing the defendant 1 and is the one who operated the import of the exhibit motorcycles. The defendant 2, therefore, must be punished as described in the complaint.

Defendant 3 - defendant 3 gave a testimony to the cross examination of the joint plaintiff’s attorney that the transportation for exporting of 12 motorcycles was transported by a truck no.89-0685 Bangkok owned by the defendant 3. The defendant 3 was aware that the transported motorcycles are those of 12 motorcycles from the total numbers of 38 motorcycles and the rest 26 exhibit motorcycles were ready to delivery. It therefore must be deemed that defendant 3 who was the director of the defendant 1 was an agent of the defendant 1 who was aware or allowed the import into the Kingdom of the exhibit motorcycles. The defendant 3, therefore, must be punished as to the complaint the same as the defendant 2 under Section 88 of the Patent Act B.E. 2522.

2. Judgment
It is judged that the defendant 1 committed offences under Section 85 including Section 63 of the Patent Act B.E. 2522, the defendants 2 and 3 committed offences under Section 85 including Section 63, 88. Upon having considered the circumstances of the case, the nature of the offences was not harmful and the numbers of the exhibits were not high, and it did not disclose that the three defendants had ever committed offences, it is judged to convict each defendant for Baht 50,000 fine. Failure to pay the fine, Section 29 of the Penal Code shall be applied to the defendant 1 and Section 29, 30 of the Penal Code must be applied to the defendants 2 and 3. It is judged to forfeit the exhibit 26 motorcycles.

The defendants failed to file an appeal with the Supreme Court by the due date. The case therefore is final.

Remarks The product design for motorcycles in this case is for motorcycles “WAVE” which gained a very high sale volume in Thailand and neighboring countries. Therefore, Honda cannot loose this case. If so, it might cause serious affect to Honda’s business.