Supreme Administrative Court holds that well-known marks must be known among general customers in order to claim dilution

The Taiwan Supreme Administrative Court initially rejected the view held by the Taiwan Intellectual Property Office (TIPO) and the Intellectual Property Court (IPC) that the owner of a well-known trademark must prove that its mark is known among general consumers, rather than only relevant consumers in the particular field, in order to claim that there is a likelihood of dilution of the distinctiveness or reputation of their mark. The court held that such a distinction places a restriction on the rights holder that the Trademark Law does not impose, as although Article 31 of the Enforcement Rules of the Trademark Law indicates that the definition of a ‘well-known mark’ means that it must be commonly recognised among the relevant consumers, this is the only one definition of a ‘well-known mark’ under the law.

However, the Supreme Administrative Court’s attitude has now changed. The court agreed that well-known marks must be known among general customers in order to claim dilution.

Facts

The Supreme Administrative Court recently held a joint meeting to discuss whether the owners of well-known trademarks that seek protection against dilution must show that their marks enjoy a particularly strong reputation and are known among general customers. The meeting concluded that the answer to this question is yes. However, according to this latest opinion of the court, there are two types of protection for well-known trademarks in Taiwan:

• Where a trademark is well known among related consumers in a particular field, third parties may be prohibited from filing identical or similar marks for identical or similar goods or services, even if the well-known mark has not been registered in Taiwan. However, this prohibits third parties only from filing; if the owner of the well-known mark wishes to claim trademark rights against third-party use of a mark, then it must obtain registration in Taiwan first.
• Where a trademark is well known among general consumers, third parties may be prohibited from filing identical or similar marks for any goods or services. In this situation, the definition of a ‘well-known trademark’ under Article 31 of the Enforcement Rules of the Trademark Law is not applied. 

The Supreme Administrative Court now agrees that this distinction between the two types of well-known mark:

• meets the legislative purposes;
• can balance the rights of consumers and trademark owners; and
• maintains fair competition in the market.

Decision

A Taiwanese telecoms company, which provides cloud platform services under the brand Chunghwa cloud, filed an opposition against the registration of the Chunghwa security cloud SENSE DIGITAL mark and device, which was owned by another Taiwanese company and used on goods covering “electronic bulletin boards and DNA chips”, claiming that there was a likelihood of dilution. The IPC held that the disputed trademark and device should be cancelled on the grounds that:

• the trademarks were similar;
• Chunghwa cloud’s trademark is well known; and
• electronic bulletin boards and DNA chips may be used through cloud platform services.

As a result, there was a likelihood of dilution of the distinctiveness of the Chunghwa cloud mark. However, the Supreme Administrative Court questioned the IPC’s decision, asserting that the question of whether Chunghwa cloud is well known among general customers needed further judgment. Further, the Supreme Administrative Court asserted that a high degree of similarity with a well-known mark is required in order to successfully claim a likelihood of dilution. Since the IPC held that the trademarks were only similar, this was not sufficient.

Comment

Owners of well-known marks wishing to assert their rights across multiple goods and services must submit evidence to prove a high level of reputation in order to succeed with a dilution claim in Taiwan. Rights holders should consult experienced trademark lawyers in advance to confirm the qualifying evidence to be used before taking legal action.