Territorial Requirements for The Use of Trademarks in Taiwan
The Trademark Act gives trademark owners the obligation to use their trademarks after obtaining the trademark right. If the obligation is violated, the trademark right may be revoked. On another note, in addition to rights protection, when a prior used trademark is registered by a third party in bad faith, the registration of the improper trademark can be blocked if certain legal requirements are met. The above two conditions of "use" behaviors have different requirements for "regionality". The former must be used in the country of registration, and the latter is not limited to use in the country of registration. Please refer to our explanation as follows.
2. The use of trademarks for rights protection
A trademark is a sign to identify goods or services. It is only through the actual use of a trademark that consumers come to associate it with certain goods or services, thus demonstrating the value of the trademark through the fulfillment of its source-identifying, quality assurance and advertising functions. Since the Trademark Act is based on the territoriality principle, what the Trademark Act in Taiwan intends to protect is the use of a trademark which can make the goods or services be associated with consumers in the jurisdiction of Taiwan, and fulfill its source-identifying, quality assurance and advertising functions. The important factor is that the use of the trademark should be in the jurisdiction of Taiwan. If the use is not in Taiwan, the aforementioned function of a trademark cannot be fulfilled.
For example: A department store in Japan sends discount coupons at the Taipei International Travel Exhibition to encourage Taiwanese people to go to their department store for consumption when traveling in Japan. Although the act of sending discount coupons is within the territory of Taiwan, the transactions will entirely happen in Japan when the consumers use the discount coupons in Japan, and the economic activities served by the department store are not in Taiwan. So, it cannot be deemed that the trademark has been used on the services of "department store" in Taiwan. (No. 104 of the Administrative Judgment Case of the Intellectual Property Court in 2019)
Reference Article: Trademark Act, Article 63.1(2):
“The Registrar Office shall, ex officio or by request, revoke the registration of a trademark if such trademark is in any of the following: (2) where the trademark has not yet been put to use or such use has been suspended for a continuous period of not less than three years without proper reasons for non-use, unless the trademark has been put to use by a licensee.”
3. The prior use of trademark for preventing others from registration (to prevent the registration in bad faith)
The aforementioned rights protection is about whether the trademark owners’ rights can be maintained. In this paragraph, we are discussing whether a trademark owner can prevent others from registration of their trademark. The Taiwan Trademark Act adopts “first to register principle” and “territoriality principle”. A trademark must be registered in Taiwan to get the protection. However, in order to avoid the registration in bad faith, the Trademark Act also provides exceptions, which are stipulated in Article 30.1(12), for preventing a third party from the unfair registration of a trademark that is owned by a real right holder. When the trademark owner claims its right of prior use, the use of its trademark is not limited to the use in Taiwan. It is acceptable to provide evidence of prior use in other countries.
Reference Article: Trademark Act, Article 30.1(12):
“A trademark shall not be registered in any of the following:
(12) being identical with or similar to another person’s earlier used trademark and to be applied for goods or services identical with or similar to those for which the earlier used trademark is applied, where the applicant with the intent to imitate the earlier used trademark, being aware of the existence of the earlier used trademark due to contractual, regional, or business connections, or any other relationship with the proprietor of the earlier used trademark, files the application for registration, unless the proprietor of the said earlier used trademark consents to the application”.
The use of trademarks is very important to the stability and defense of rights. When a competitor raises a challenge toward an unused trademark (a trademark revocation), the trademark owner must submit evidence of use in Taiwan in order to effectively maintain the trademark right. On another note, when it is discovered that a trademark is registered unfairly by a third party, the trademark owner can provide evidence of use to prevent the trademark from being registered in bad faith. In this condition, there is no limit to the countries where the trademark is used. The use either in Taiwan or abroad is acceptable. There are so many countries in the world that is impossible to obtain registration one by one. Multinational corporations should make good use of the Trademark Act. Article 30.1 (12) so as to avoid damage to the trademark rights and interests.
In order to prevent one’s trademark from being registered in bad faith by others, we are pleased to always provide free and professional monitoring services for the trademarks which are registered through our firm.