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Newsletter Taiwan (January 2024)

Jaw-Hwa International Patent & Trademark & Law Offices Taiwan


Trademark

 

I.            Case Study: Identification of Trademark Evidence of Use: A Discussion Based on the “USA PRO and Device” Trademark Revocation Case in Taiwan

               

1.           Introduction:

              After obtaining a trademark registration, the trademark owner is obligated to use the mark within three years. In cases where a revocation is filed due to non-use within three years, the burden of proof lies with the trademark owner. Understanding how to present evidence to ensure the maintenance of registration for designated goods/services is crucial. This article analyzes the Court's recognition approach to evidence based on the Administrative Judgment in Case No. 18 of the Year 112 (2023) issued by the Intellectual Property and Commercial Court on December 29, 2023.

               

2.           Background Facts:

              A company, USA PRO IP LIMITED, manufactures women's yoga apparel and related yoga accessories. They obtained trademark registration number 01888275 in Taiwan in 2017 for the trademark and the designated goods below. On January 12, 2021, a third party applied for the revocation against the registration on the grounds of non-use for three years.

Trademark:

Designated goods:

Class 18: Sports bags, etc.

Class 25: Sports clothing, etc.

Class 27: Yoga mats, etc.

Class 28: Yoga balls, etc.

               

3.           Summary of Case Proceedings:

              (1)         TIPO (Intellectual Property Office in Taiwan):

                            The TIPO determined that the trademark represented in the evidence, ""

and the registered trademark "" lacked identical features (specifically, the unused left-side colored line illustration). As a result, the registration for all goods was revoked.

              (2)         Ministry of Economic Affairs:

                            After filing an appeal, the Ministry of Economic Affairs acknowledged that the "left-side colored line illustration" was merely an accessory (non-primary) element and did not substantially alter the primary identifying features. Consequently, it was deemed identical to the disputed trademark, leading to the preservation of the registration for certain goods in Class 25, such as sports clothing.

              (3)         Intellectual Property and Commercial Court (hereinafter referred to as the Court):

                            The trademark owner proceeded to file an administrative lawsuit, and after court proceedings, the Court preserved the registration for a broader range of goods, including those in Class 25 (sports clothing), Class 27 (yoga mats), and Class 28 (yoga balls).

                             

4.           To maintain a trademark registration, it is necessary to continuously use it in the market and the following criteria must be met:

              (1)         The trademark logo as used:

                            From a strict standpoint, the trademark logo as used must be identical to the trademark as registered. If any inconsistency exists, it is subject to an official determination regarding its identical nature (the trademark owner bears the risk of the interpretation of identity).

              (2)         The trademark as registered in this case is as follows:

                           

              (3)         The trademarks as used by the registrant are as follows:

                            and

The size, proportions, font, or arrangement of the design have been altered, presenting a significantly different overall impression and lacking identical features.

              (4)         The registrant also uses the trademark as follows:

                           

A. The Court and the Ministry of Economic Affairs acknowledged that the "left-side colored line illustration""is merely an accessory (non-primary) part, and even without the use of "", it does not affect consumer perception, demonstrating identical features.

                            B. In contrast, the TIPO held an opposing view, considering the "left-side colored line illustration" as the primary part. Since the trademark owner did not use it, it lacks identical features

                             

              (5)         To avoid the risk of an interpretation of non-identity about the actual use of the trademark, the best practice is to use the trademark as registered without alterations or omitting any part of the design. If there is a new design, it is advisable to file a new application for enhanced protection.

                             

              (6)         In terms of the designated goods in this case, the trademark specifies four classes of   products (Class 18: Sports bags, etc., Class 25: Sports clothing, etc., Class 27: Yoga mats, etc., Class 28: Yoga balls, etc.). According to strict standards, the trademark owner must submit evidence of use for each item of goods to retain the registration for all designated goods. If evidence is provided only for some of the goods, the official authority will determine which goods can be preserved.

                             

II            Examining the Scope of Protection for Trademark Dilution Theory From The Supreme Administrative Court’s 2022 Dazi No. 1 Decision

               

              There are two types of trademarks- a normal one or a well-known one. Among well-known trademarks, there are two prongs of fame- fame in a specific group to which the goods or services are designed, or national-wide fame. According to the Taiwan Trademark Act §30I, an application for registration of a mark will be denied if: the mark applied is identical with (or similar to) another’s well-known trademark, and there is a likelihood of confusion among the relevant public, or there is a likelihood of dilution of the distinctiveness or reputation of the well-known trademark. The question is, how famous a mark shall be to claim the dilution protection?

 

In Nov. 2016, a conference held by judges in the Supreme Administrative Court determined that a trademark must be a household name to claim the dilution protection, which is also called a “general public theory.” The rationale for the general public theory is that: protection against confusion is to protect consumers, while protection against dilution is to protect the uniqueness of a trademark itself. Thus, any anti-dilution legislation should be carefully and narrowly crafted. Dilution should be used as an extraordinary remedy, which requires a significant showing of fame. Therefore, niche-fame trademarks are excluded from the dilution protection.

 

However, the Supreme Administrative Court overruled the abovementioned determination by a decision made in 2022, in which a niche market theory is applied. The rationale for the decision is as follows: based on the "same term, same definition" principle, the definitions of “well-known trademark” in §30I should be consistent. It is unreasonable that the first paragraph of §30I (protection from likelihood of confusion) includes niche-fame trademarks and the second paragraph (protection from dilution) excludes niche-fame trademarks, while both use the same word “well-known trademark”.

 

In the U.S., there were once disagreements among federal courts on this issue before TDRA was enacted in 2006, which expressly excludes niche-fame trademarks from dilution protection. The U.S. Court of Appeals for the Federal Circuit (C.A.F.C.) had debated the general public theory and niche-fame theory for a decade. However, even the court that accepted the niche-fame theory noticed and emphasized the danger and concerns of that theory.

 

In conclusion, most of the decisions that adopted the niche-fame theory did not deal with typical trademark dilution cases. These decisions only added a cause of action on the layer of the cause of action based on confusion arrived from traditional trademark law.

 

On the other hand, the rationale to support the general public theory is strong under the prevention of unjust competition theory. Traditional trademark infringement law is a part of the broader law of unfair competition that has its sources in English common law, and was largely codified in the Trademark Act. When drawing the line of protection of trademarks, we must always take a delicate balance among the consumers’ interests, fair competition in the market, and the property rights of the trademark owner. The most powerful criticism of the niche-fame theory is that the scope of injunction will, under the theory, reach the markets that its fame or goodwill can never reach.

 

Taiwan Trademark Act, however, borrowed half of TDRA and half of FTDA. It requires a showing of the likelihood of dilution, and protects not only household names, but also niche-fame trademarks. It lessens the burden of proof of fame and simultaneously widens the scope of protection. It is strange because even the Taiwan legislators recognized that the dilution theory is an exception of the trademark law and should be used carefully as an extraordinary remedy, not as an alternative to traditional infringement theory, i.e., the likelihood of confusion. But the law itself seems to fail to square what the legislators intended.

 

In conclusion, the Supreme Administrative Court once tried to limit the scope of protection of dilution theory, and the 2022 Dazi No. 1 Decision overruled this effort. The consequences and effects of this decision, and the Intellectual Property Court’s opinion on this decision, are worthy of concern in the future.

Jaw-Hwa International Patent & Trademark & Law Offices



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