Trademark News Letter
No.3 issued in January 2024
Avail International Trademark
Attorney at Law
Ching-I Lu
attorney at law |
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Tips for Trademark in Taiwan |
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What will happen to trademark cases after the implementation of the New Intellectual Property Case Adjudication Act?
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On August 30, 2023, the New Intellectual Property Case Adjudication Act came into effect. Although numerous clauses focus on patents and trade secrets cases, certain significant amendments still have an impact on the enforcement of trademark cases. Those amendments are summarized as follows:
Mandatory Legal Representation in Trademark Civil Litigation
In the following situation, the parties are required to appoint an attorney as their advocate in a trademark civil litigation.
- In the court of first instance, when the value of the claim exceeds NTD1,500,000 currently. Additionally, if the claim to stop the infringer's trademark use is requested, appointing an attorney as their advocate is also mandatory since the value of the claim will be deemed as NTD1,650,000 per Article 77-12 of the Code of Civil Procedure.
- At the court of the second instance.
- At the court of the third instance.
- Proceeding for Retrial.
Additionally, before the action has been initiated, in a motion for preservation of evidence or injunction, the petitioner shall also appoint an attorney as its advocate.
Special Exclusive jurisdiction
The Intellectual Property Court is the exclusive jurisdiction for the first instance of a trademark civil case. However, a court could also obtain jurisdiction through consensual jurisdiction and responding jurisdiction.
Notification of litigation
If the trademark rights are exclusively authorized, and the trademark owner or exclusive licensee has a civil lawsuit with a third party regarding the trademark rights and interests of the exclusive authorization, the trademark owner or exclusive licensee shall notify the other so that the other party can intervene in the action.
Notification between IP Court and TIPO
When a party claims or defends that trademark right shall be canceled or revoked, the IP Court shall decide based on the merit of the case. As the party is permitted to simultaneously file opposition, invalidation, or revocation applications before TIPO to cancel that trademark, the decision made by the IP Court and TIPO may be discrepant. Thus, the new clause requests the IP Court notify TIPO when a party claims or defends that trademark right shall be canceled or revoked. TIPO can also request the court provide necessary documents or files.
Retrial Restriction in Trademark Civil Case
When a party claims or defends that trademark right shall be canceled or revoked before the Court, and the judgment finally indicates that the trademark is valid, but afterward TIPO decides the trademark is invalid. The new clause stipulates that in this situation, the party cannot file a retrial per Article 496-1-11 of the Code of Civil Procedure.
However, this clause is only applied to a civil case rather than a criminal case. Based on the protection of the right to personal freedom in Article 8 of the Constitution, it should be allowed to apply for a retrial in the interests of the person sentenced under Article 420 of the Criminal Procedure Law.
A foreign company intending to file civil litigation against trademark infringement in Taiwan should pay special attention to the above new regulations. Otherwise, the initiation of the action may probably be rejected procedurally.
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Latest Trademark Practice Insights
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Malicious squatting of Australian trademarks may constitute a tort under the latter paragraph of Article 184 (Ⅰ) of the Civil Code
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The Decision
In this case, the appellee knew clearly that the appellant’s disputed Taiwan trademark existed, but still applied to register its Australian trademark which was highly similar to the disputed Taiwan trademark. The appellee also linked the website of A&B Company, of which he is the representative, to the appellant’s website. This resulted in unfair competition for the appellant within Taiwan’s market and infringed on the appellant’s right to manage its property. Therefore, although the appellee can exercise the Australian trademark rights in the Australian territory if the appellee exercised this trademark right in Taiwan, it may constitute unfair competition for the appellant and infringe on the rights of the appellant’s disputed Taiwan trademark. The appellee's previous behavior infringed on the appellant's rights in a way that was done intentionally in a manner against the rules of morals. (IP COURT 112 mingong shan geng2 zi No.1)
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Ching-I Lu's comment
- In this case, Appellee has repeatedly purchased shock absorbers from the appellant since 1994. Due to business dealings, he knew the appellant’s Taiwan trademark very well.
- The appellant (plaintiff) originally requested that the Appellee (defendant) should abandon the Australian trademark in the first instance. Although the first instance judgment ruled to reject the plaintiff's lawsuit, the second instance changed the verdict and ruled that the defendant should abandon the Australian trademark.
- Thus, we wonder if a defendant maliciously squats the plaintiff's domestic and foreign trademarks, can the plaintiff request the defendant to abandon the trademark, or ask the defendant to compensate the plaintiff for the expenses incurred by the opposing defendant's trademark registration in various countries?
- In the past, in the other case,102 mingon sue zi No. 5, the defendant maliciously registered the plaintiff’s “PFAFF” trademark in Taiwan and 17 other countries around the world. The plaintiff has to pay a considerable amount to oppose and cancel those trademarks in each country. In that case, the judgment ruled that the defendant should abandon the trademarks registered in Taiwan and other countries, and should compensate the plaintiff for the fees incurred in opposing trademarks in various countries. The main reasons are as follows:
- The act of squatting someone else's trademarks goes against the integrity of the business and general social ethics, which constitutes the latter paragraph of Article 184 Ⅰ of the Civil Code.
- This squatting action does not exemplify an unfair competition behavior under the Fair Trade Act, but it can be recognized as "deceptive or obvious unfair conduct that can affect trading order" stipulated in Article 25 of the Fair Trade Act.
Since the first instance judgment becomes final, it is impossible to get a glimpse of the opinions of the Supreme Court.
- Before this case was remanded, the Supreme Court 111 Taishan zi No. 2080 judgment held that: “The original instance confirmed that appellant's use of the trademark will enjoy certain economic benefits. The marks Appellee obtained are highly similar to the appellant's trademark, and the Appellee’s web page was an inappropriate link to the webpage created by the appellant. The operating instructions for shock absorbers on the website plagiarized the content of the appellant's webpage. Therefore, can it be said that what the Appellee did does not constitute a tort or is not likely to infringe the rights of the appellant? The original trial did not review the case in detail but made an unfavorable outcome to the appellant, which is still debatable."
- It seems that the Supreme Court also agrees that maliciously squatting can constitute a tort. However, even if it constitutes a tort, can the plaintiff request the defendant to abandon the trademark rights registered in foreign countries? The issue is still unresolved in this opinion of the Supreme Court.
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A trademark only famous but not used in Taiwan still applies unfair competition law
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The Decision
The appellant repeatedly claimed during the original trial: Its” 咪哒miniK” trademarks identified in mini KTV goods/services have been recognized by TIPO that the reputation established in mainland China has reached to Taiwan, and became well-known in Taiwan. Is it still not enough to judge that the appellant’s trademarks such as “咪哒miniK” are not only famous in mainland China but also famous in Taiwan?
The issue is relevant to the determination of whether civil liability for compensation under the Fair Trade Act can apply to this case. It is an important method of attack. The original judgment that was unfavorable to the appellant was hasty and unprepared.
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Ching-I Lu's comments
- This case involves disputes related to product appearance counterfeiting. In recent years, in Taiwan’s judicial practice, there have been many judgments determined that product appearance counterfeiting constitutes “stealing the results of other people's efforts”, and therefore Article 25 of the Fair Trade Act applies.
- The main dispute in this case is that the right holder (plaintiff) has never sold goods or services in Taiwan. However, its mainland trademark has been determined by TIPO in the opposition case that its reputation has reached Taiwan and become famous. The issue is that a trademark has never been used in Taiwan, is the Fair Trade Act still applicable?
- In the field of trademark legal area such as the examination on trademark opposition or invalidation applications, "even if a trademark is not used in Taiwan, but there is objective evidence showing that the reputation established by this mark reached to Taiwan, the trademark can still be recognized as famous." This standard for identifying famous trademarks has been practiced for many years.
- The second-instance judgment in this case was criticized by the Supreme Court for finding that the plaintiff’s trademark was not famous.
- The opinion “
The issue is relevant to the determination of whether civil liability for compensation under the Fair Trade Act can apply to this case.” held by the Supreme Court, in this case, seems to affirm that even though the right holder has never entered the Taiwan market, as long as it is “famous”, the Fair Trade Law may be applicable.
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Failing to defend at TIPO’s revocation stage will be no loss of rights
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The Decision
Before issuing a revocation decision, TIPO shall notify the trademark owner of the application for revocation by others and specify a certain period for the trademark owner to defend (Article 65 of the Trademark Act). This is because the revocation of trademark registration is an administrative action that restricts or deprives the trademark owner of rights. Before making such administrative action that infringes on rights and interests, TIPO should implement due legal procedures and allow the trademark owners to state their opinions and defend themselves.
Article 65(Ⅱ) of the Trademark Act stipulates: “… If the notice of defense has been served, the trademark owner shall prove the fact of its use; if the trademark owner fails to defend before the deadline, the registration should be revoked." This is because only the trademark owner knows the truth about whether the trademark is actually used, the trademark owner should bear the burden of proof for the positive fact of use. However, if the trademark owner fails to file a defense, TIPO will have no positive evidence for review, which will make it difficult to proceed with the revocation procedure. Therefore, TIPO is empowered to revoke the registration without conducting an investigation.
Thus, the purpose of these articles is to protect the procedural interests of the trademark owner, impose the burden of proof on the trademark owner, and grant TIPO to revoke the registration without conducting an investigation rather than to restrict the time for trademark owners to submit use evidence.
Accordingly, if a trademark owner fails to file a rebuttal before the deadline indicated by TIPO, and his registration is revoked by TIPO under Article 65(Ⅱ) of the Trademark Act, he may still submit use evidence to prove his trademark use during the MOEA appeal and administrative litigation stages.
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Ching-I Lu’s comments
- In practice, to initiate the revocation procedure, the revocation applicant must first provide specific evidence and make a preliminary showing of the fact that the trademark owner has not used the trademark for three years, but only a "preliminary showing" is required. Whether the trademark is used or not, the burden of proof lies with the trademark owner.
- Therefore, once the revocation procedure is initiated, the trademark owner’s response is crucial. If no response is submitted, the trademark right will be revoked. This is very different from the situation in opposition cases. In opposition cases, even if the trademark owner fails to respond, TIPO will still consider all the evidence in the files and decide whether to cancel the disputed trademark. In practice, it can still be seen that even if the opposed party does not defend, however, TIPO still made a decision favorable to the opposed party. Moreover, even if the case goes to court, the judgment will not necessarily be in favor of the opponent just because the opposed party does not participate in the proceedings. However, if the opposed party does not express its opinion, the probability of the trademark being canceled is proportionally higher.
- As to how the revocation applicant makes a " preliminary showing "of the fact that the disputed trademark has not been used within three years, in practice, it is usually done with an investigation report. If the trademark owner company has been dissolved for more than three years, the company record for dissolution can also be the "preliminary showing". In this situation, it may also be possible to directly request the examiner ex officio to revoke the trademark.
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Before establishing this firm in 2022, Ching-I Lu practiced in the Trademark Department of a leading law firm, which is also top three firms in Taiwan, for more than 15 years.
She specializes in trademark matters, including litigation and prosecution. Ching-I Lu ever represented many leading companies in the world to retrieve their famous trademarks in Taiwan.
Ching-I Lu was invited to be the first Secretary-General of the Taiwan Trademark Association from 2020 to 2022.
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