Supreme Administrative Court adopts strict standard in defining use of trademark

The value of a trademark depends on how the trademark owner uses it in relation to the identified goods or services, as the trademark owner has the exclusive right to such use. Further, the trademark owner is entitled to act against a third party’s unauthorised use of a trademark on or in connection with the same or similar goods or services where such use is likely to cause confusion, result in deception or cause mistakes as to the source of the goods or services. The term ‘use’ has two different meanings as it applies to different subjects, and has multiple purposes. However, Article 5 of the Trademark Law has a unified definition and lists the general requirements for use of a trademark.

According to Article 5, 'use' of a trademark means to:

  • apply a trademark to goods or packaging or containers thereof;
  • possess, display, sell, export or import the goods referred to in the preceding subparagraph;
  • apply a trademark to articles relating to the provision of services; or
  • apply a trademark to commercial documents or advertisements relating to goods or services.

Although Article 5 is intended to define 'use' of a trademark, it fails to distinguish between the difference in use in the course of trade by the trademark owner and use as infringement by a third party. Nonetheless, most judicial opinions cite the Article 5 definition for both types of use.

The Supreme Administrative Court recently held in a trademark revocation case that the right of the trademark owner to use its trademark differs from when the owner claims that a third party’s use infringes its trademark right. Therefore, the facts recognised by the civil judgment in a trademark infringement case have no binding effect on a revocation case. The court further explained that:

The right of a trademark owner to use its trademark refers to such use that will cause consumers to make a connection between the trademark and the goods and/or services. Alternatively, use by a third party in infringement refers to use that may cause concerns of a likelihood of confusion, misidentification, or misleading regarding the goods and/or services.

In justifying whether a trademark was actually used for the purposes of a revocation case, the Supreme Administrative Court reasoned that the trademark owner must use the trademarks with the goods or services as registered, which differs from infringing use, as the infringement will expand to similar goods or services.

Further, the Supreme Administrative Court asserted that the Notice of Use of Registered Trademarks published by the Taiwan Intellectual Property Office (TIPO) mistakenly uses the term ‘similar goods’ when listing examples to demonstrate how to ascertain whether the goods or services in use correspond with the registered goods or services.

However, as the TIPO accepts some broad terms as identifications for goods and services, such as ‘cosmetics’, the Supreme Administrative Court has no objection if a trademark is registered for use on or with cosmetics and the owner provides use evidence for ‘foundation’, as such use should be deemed to be use of the trademark on or with cosmetics. In contrast, the court will not accept that use on or with cosmetics constitutes use of a trademark registered for use on or with foundation.

Based on the Supreme Administrative Court’s decision, while the first to register principle applies to Taiwan, such that the trademark owner does not need to use his or her trademark before obtaining a registration, the court emphasised that the function of a trademark and the purpose of registration of the trademark is to actually use the trademark. Trademark owners should therefore carefully review whether trademarks are used properly in Taiwan.

This is an Insight article, written by a selected partner as part of IAM's co-published content. Read more on Insight

Unlock unlimited access to all IAM content