The Taiwan Intellectual Property Office (TIPO) accepts any registration application for those marks that have distinctiveness. A trademark may consist of words, devices, symbols, colours, three-dimensional shapes, motions, holograms, sounds or any combination thereof. After the application has been allowed, there is a statutory period for opposition. If there is no opposition, the applicant may get registration and obtain the trademark rights. Thereafter, however, there are still invalidation or revocation proceedings that can be instituted at the TIPO to challenge the registration. Administrative or civil litigation may be pursued through the Intellectual Property Court (the IP Court). Criminal litigation may be undertaken at any district court and an appeal may be made to the IP Court. The owner of a registered trademark may submit an application to the Customs Administration (Customs) for retention of articles suspected of infringing the owner’s trademark rights.
According to the TIPO, the statistics for applications, allowance, rejection and registration of trademarks are as follows:
- 2014: 75,933 applications, 67,433 allowances, 7,639 rejections and 66,257 registrations;
- 2015: 78,523 applications, 64,225 allowances, 7,768 rejections and 62,993 registrations;
- 2016: 79,300 applications, 71,396 allowances, 9,275 rejections and 68,177 registrations; and
- 2017: 83,802 applications, 76,449 allowances, 8,709 rejections and 74,226 registrations.
One may infer from the above statistics that the numbers of applications and registrations have been steadily increasing year on year from 2014 to 2017 despite the economic climate.
According to the Department of Statistics of the Taiwan Judicial Yuan, the statistics for civil cases decided through the first instance of the IP Court are as follows:
- 2014: 49 trademark civil cases, of which 30 cases (61 per cent) were either withdrawn or dismissed, 19 cases (39 per cent) were won, partly won or partly dismissed, settled, or mediated;
- 2015: 52 trademark civil cases, of which 24 cases (46 per cent) were either withdrawn or dismissed, 28 cases (54 per cent) were won, partly won or partly dismissed, settled, or mediated;
- 2016: 48 trademark civil cases, of which 26 cases (54 per cent) were either withdrawn or dismissed, 22 cases (46 per cent) were won, partly won or partly dismissed, settled, or mediated; and
- 2017: 47 trademark civil cases, of which 22 cases (47 per cent) were either withdrawn or dismissed, 25 cases (53 per cent) were won, partly won or partly dismissed, settled, or mediated.
One may infer from the above statistics that the rate of favourable results for trademark civil cases is comparable to that of the unfavourable results.
II LEGAL FRAMEWORK
The most significant domestic legislation related to trademarks includes the Trademark Act and the Fair Trade Act.
Because of its special relationship with Mainland China, Taiwan can only be a member of a few international organisations, such as the World Trade Organization (WTO), and accordingly it has ratified the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights 1994. Nevertheless, to harmonise with international trademark practices, Taiwan has basically adopted the registration application procedure and standard classification rules for goods or services with reference to the Singapore Treaty on the Law of Trademarks, and the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks.
The TIPO is responsible for trademark applications, examinations, oppositions, registrations, maintenance, cancellations and revocations.
The Appeal Review Committee of the Ministry of Economic Affairs is responsible for any appeal regarding dispositions made by the TIPO.
The Department of Commerce of the Ministry of Economic Affairs is responsible for company name applications, verifications and registrations.
The Taiwan Network Information Center, a public interest group, is responsible for domain name applications, examinations, registrations, maintenance and dispute resolution.
The Fair Trade Commission is responsible for petitions or complaints about redressing the conduct of infringing unregistered famous trademarks.
The IP Court is responsible for administrative proceedings regarding dispositions made by the TIPO and the Appeal Review Committee, civil proceedings regarding infringements of registered trademarks, and criminal proceedings regarding appeals against the judgments made by district courts.
iii Substantive law
The following pieces of legislation constitute the substantive trademark law in Taiwan:
- registered trademarks (including collective or certification marks) are governed by the Trademark Act;
- unregistered well-known marks are governed by the Fair Trade Act, and registered well-known marks are governed by the Trademark Act;
- company names are governed by the Fair Trade Act and Company Act;
- trade names or business names are governed by the Fair Trade Act and the Business Registration Act;
- geographical indications can be protected by applying for registration for certification marks under the Trademark Act, and misleading geographical indications cannot be protected and the use of them may violate the Fair Trade Act; and
- the legal owners of domain names can find protection under the Domain Name Dispute Resolution Rules governed by the Taiwan Network Information Center. According to the Rules, petitioners may file their written petitions at either the Science and Technology Law Institute or the Taipei Bar Association to request the transfer or cancellation of domain names. In addition, legal owners of domain names can directly file a lawsuit at the IP Court or at the district courts.
III REGISTRATION OF MARKS
i Inherent registrability
The TIPO accepts any registration application for a mark having distinctiveness. A trademark may consist of words, devices, symbols, colours, three-dimensional shapes, motions, holograms, sounds or any combination thereof.
The registration procedure is summarised as follows: (1) the applicant submits the application to the TIPO; (2) the TIPO formally examines the application; (3) if the TIPO provides an official response (known as an ‘office action’) objecting to the registration, the applicant must file a written response or submit evidence to overcome the objection; and (4) if the trademark application is allowed, the trademark will be published in the Trademark Gazette. If there are no oppositions within three months of the date of publication, the trademark registration certificate will be issued.
For filing a single trademark application, the service fee is generally NT$10,000 for the first class and NT$6,000 per class for subsequent classes. To claim priority, the service charge is about NT$2,000. For belated filing of the required documents, the service fee is NT$1,500. For filing a single trademark application so far as the goods in any of Classes 1 to 34 are concerned, the official fee will be NT$3,000 for under 20 items of the designated goods for each class, with a NT$300 discount for e-filing. For any item above 20 for each class, the official fee will be NT$200 per item. So far as the services in any of Classes 35 to 45 are concerned, the official fee will be fixed at NT$3,000 per class, except in cases designated as having a ‘retail’ connection, for which the basic item number is five and the excess official fee thereafter is NT$500 per item.
Official correspondence fees
After submitting the application, the fee for serving notice that the application has been allowed is NT$2,000, although there are various other possible responses, the fees for which vary from NT$8,000 to NT$20,000 at each instance.
For the first phase registration, the official fee will be a multiple of NT$1,000 based on the number (1 to 45) of the designated classes even though this registration is a single multiple-class registration. The service fee rendered for paying the registration fees and forwarding the Certificate of Trademark is therefore NT$6,000 for the first class and NT$3,600 per class from the second class, or classes, onwards.
The disbursement is generally around NT$2,000.
There is no standard examination period for an application. The examiner might issue an office action shortly after the filing date, but it is equally legal for him or her to issue the office action as much as one year after the filing date. The TIPO will only take action automatically to notify the examiner to speed up the examination 18 months after the filing date. Nevertheless, a range of eight months to one year is a fairly accurate prediction.
Upon receiving notice that the application has been allowed, the registration fees must be paid within two months to obtain the certificate of registration and secure its publication in the Trademark Gazette. In addition, following publication. There is a three-month period in which to register oppositions.
ii Prior rights
A trademark shall not be registered if it is identical or similar to another person’s earlier-used trademark and if it is to be applied to goods or services identical or similar to those to which the earlier-used trademark is applied; and if the applicant is aware of the existence of the earlier-used trademark because of contractual, regional or business connections or any other relationship with the owner of the earlier-used trademark, and files the application for registration with intent to imitate the earlier-used trademark. This rule, however, does not apply if the owner of the earlier-used trademark consents to the registration application.
A registered trademark shall not entitle the proprietor to prohibit a third party from using bona fide an identical or similar trademark on goods or services identical with or similar to those for which the registered trademark is protected if the third party had already been a user prior to the filing date of the registered trademark, but the third party’s use should be limited to the original goods or services used by the third party. In addition, the owner of the registered trademark is entitled to request the party who uses the trademark to add an appropriate and distinguishing indication.
iii Inter partes proceedings
Anyone may file an opposition to the registration of a trademark with the TIPO within three months of the day following the date of publication of the registration. The petitioner can file the opposition when the mark is (1) descriptive, (2) generic, (3) functional, (4) contrary to public policy or morality, (5) likely to mislead the public as to the nature, quality or place of origin of the goods or services, (6) identical or similar to a geographical indication for wines or spirits, and designated goods that are identical or similar to wines or spirits under the geographical indication, (7) likely to cause confusion, (8) likely to cause confusion and dilution of the distinctiveness or reputation of a well-known trademark or mark, or (9) the applicant intends to imitate an earlier-used trademark.
An interested party may file for cancellation with the TIPO, or a trademark examiner may submit a proposal to the TIPO for cancellation, of a trademark registration on the basis of, at least, the grounds set out in Article 57(1) of the Trademark Act, which are almost the same as the grounds for filing an opposition.
Anyone may file for a revocation of a registration of a trademark with the TIPO, (1) where the trademark has been altered by the proprietor such that it is different from its original registration and supplementary notes, and whereby the trademark is identical or similar to another person’s registered trademark in relation to goods or services that are identical or similar to those for which another person’s registered trademark is designated, and hence there is a likelihood of confusion for relevant consumers; (2) where the trademark has not yet been put to use or this 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) where no appropriate and distinguishing indication has been added (unless the indication is subsequently added before the disposition of revocation rendered by the TIPO, eliminating any likelihood of confusion); (4) where the trademark has become a generic mark or term, or common shape for the designated goods or services; or (5) where, in consequence of the actual use of the trademark, the trademark is likely to mislead the public as to the nature, quality or place of origin of the goods or services.
The applicant may first appeal the refusal decision to the Appeal Review Committee of the Ministry of Economic Affairs. If the applicant is dissatisfied with the Committee’s decision, it may further appeal to the IP Court, where there are two possible outcomes. If the applicant is dissatisfied with the IP Court’s decision, it may appeal the matter further to the Supreme Administrative Court to pursue a final decision.
IV CIVIL LITIGATION
It can be assumed that the judges presiding over the IP Court are competent and knowledgeable in the area of IP. Accordingly, a trademark owner normally institutes infringement proceedings before the IP Court (see Article 3(1), Intellectual Property Court Organization Act). Nevertheless, a common court (i.e., a district court) may also try a trademark infringement case if the trademark owner (as plaintiff) and the alleged infringer (as defendant) designate a common court as exercising jurisdiction, by a written agreement (see Article 24, Code of Civil Procedure).
Courts having jurisdiction to hear trademark infringement matters are specifically as follows:
- first instance: the IP Court (see Article 3(1), Intellectual Property Court Organization Act) or a mutually agreed district court (see Article 24, Code of Civil Procedure);
- second instance: the IP Court (see Article 3(1), Intellectual Property Court Organization Act), no matter whether the court of first instance is the IP Court or a district court; and
- third instance: Supreme Court (see Article 20, Intellectual Property Case Adjudication Act).
ii Pre-action conduct
There are no special pretrial formalities with respect to civil proceedings on trademark matters. If, however, the price or value of the subject matter is less than NT$500,000 (e.g., the claimed damages are less than NT$500,000), the court will institute a mediation proceeding before commencing litigation (see Article 403(1)(xi), Code of Civil Procedure). Formal demand letters or warning letters are popular although not required.
iii Causes of action
Causes of action regarding trademarks, company names, trade or business names, domain names and other trade dresses include primarily the following categories:
- violations of the Trademark Act (e.g., infringement of registered trademarks – see Article 69);
- violations of the Company Act (e.g., Articles 10, 18 and 19);
- violations of the Business Registration Act (e.g., Articles 28 and 29); and
- violations of the Fair Trade Act (e.g., Articles 22 and 29).
iv Conduct of proceedings
Civil proceedings generally proceed as follows.
The first instance generally includes the following procedures: initiation of litigation, preparation for oral argument (finished ordinarily with two court appearances), oral argument (finished ordinarily with one court appearance) and judgment. Both factual and legal examinations will be conducted in the first instance. That is, the court will examine any legal, factual or evidentiary issues during the preparation for oral argument and oral argument proceedings. In the first instance, the parties need not be represented by a litigation agent who has to be a lawyer in principle (see Article 68, Code of Civil Procedure). For court fees, the losing party is responsible for paying the court fees of the first instance (see Article 78, Code of Civil Procedure). As to attorney fees, the parties are responsible for paying their own attorney fees. Specifically, the losing party is not required to reimburse the prevailing party for attorney fees. The time frame for the first instance is from about six to 12 months.
Second instance (first appeal)
The second instance generally includes the following procedures: filing of appeal, preparation for oral argument (finished ordinarily with two court appearances), oral argument (finished ordinarily with one court appearance) and judgment. Both factual and legal examination will be conducted in the second instance. The appellate court, however, will not examine additional or new means of attack or defence (including laws, facts and evidence) presented by the parties during the preparation for oral argument and oral argument proceedings in principle, while many exceptions exist (see Article 447(1), Code of Civil Procedure). That is, the second instance adopts the system of successive examination rather than the system of repetitive examination. In the second instance, the parties need not be represented by a litigation agent who has to be a lawyer in principle (see Article 68, Code of Civil Procedure). For court fees, the losing party is responsible for paying the court fees of the first and second instance (see Article 78, Code of Civil Procedure). As to attorney fees, the parties are responsible for paying their own attorney fees. Specifically, the losing party is not required to reimburse the prevailing party for attorney fees. The time frame for the second instance is from about six to 12 months.
Third instance (second appeal)
The third instance generally includes the following procedures: filing of appeal, written review and judgment. Only legal examination will be conducted in the third instance. That is, the appellate court will only examine any legal issues during the written review proceedings. In the third instance, the appellant must be represented by a litigation agent, unless the appellant, one of its specific relatives or a member of its staff is a lawyer (see Article 466 bis (1), Code of Civil Procedure); however, the appellee need not be represented by a litigation agent who has to be a lawyer in principle (see Article 68, Code of Civil Procedure). For court fees, the losing party is responsible for paying the court fees of the first, second and third instance (see Article 78, Code of Civil Procedure). As to attorney fees, the parties are responsible for paying their own attorney fees in theory, and only a small part thereof is bearable by the losing party (see Articles 77-25(2) and 466 quater (1)). Specifically, the losing party is not required to reimburse the prevailing party for attorney fees or need only reimburse the prevailing party for a small part of the attorney fees. The time frame for the third instance is from about one to two years.
Remedies existing for the trademark owner are as follows.
For owners of registered trademarks
- To stop the infringement: to demand a person who infringes on the trademark rights to stop the infringement (see Article 69(1), Trademark Act);
- prevention of infringement: to demand a person who is likely to infringe on its trademark rights to prevent the infringement (see Article 69(1), Trademark Act);
- destruction of infringing articles: to demand a person who infringes on its trademark rights to destroy the infringing articles and the materials or implements used in infringing on the trademark rights (see Article 69(2), Trademark Act); and
- damages: to demand that a person who infringes on its trademark rights intentionally or negligently pay damages (see Articles 69(3) and 71, Trademark Act).
For owners of unregistered well-known trademarks
- To stop the infringement: to demand a person who infringes on its trademark rights to stop the infringement (see Article 29, Fair Trade Act);
- prevention of infringement: to demand a person who is likely to infringe on its trademark rights to prevent the infringement (see Article 29, Fair Trade Act);
- damages: to demand that a person who infringes on its trademark rights pay damages (see Articles 30 and 31(2), Fair Trade Act);
- punitive damages: to demand that a person who infringes on its trademark rights intentionally pay punitive damages of up to three times the proven amount of damage (see Article 31(1), Fair Trade Act); and
- publication of the judgment: to demand that a person who infringes on its trademark rights publish the content of the judgment in a newspaper at the infringer’s expense (see Article 33, Fair Trade Act).
V OTHER ENFORCEMENT PROCEEDINGS
Trademark infringement constitutes a criminal offence in Taiwan (see Articles 95 to 97, Trademark Act). A criminal procedure for a trademark infringement offence is typically as follows:
- The trademark owner files a complaint with a judicial police officer.
- The judicial police officer sends the result of his or her investigation to a public prosecutor.
- The public prosecutor indicts the alleged infringer in a public prosecution before a district court.
- The district court hands down a guilty judgment.
- The accused (alleged infringer) appeals to the IP Court.
- The IP Court dismisses the appeal of the accused.
- The accused appeals to the Supreme Court.
- The Supreme Court dismisses the appeal of the accused.
In addition, our legal system provides for Customs seizure of counterfeit goods, but not for Customs seizure of parallel imports. The reason is that import or export of counterfeit goods is illegal anyway under Taiwanese trademark law, but parallel imports are legal because of international exhaustion of trademark rights under Taiwanese trademark law (see Article 36(2), Trademark Act). A Customs seizure procedure for counterfeit goods is typically as follows:
- Customs find that the imported or exported articles are obviously likely to be counterfeit (infringing articles).
- Customs gives notice to the trademark owner or its representative or agent in Taiwan and requires it to travel to the Customs office for identification, generally within 24 hours. Customs gives notice to the importer or exporter at the same time and requires its provision of relevant evidence of non-infringement.
- The trademark owner identifies the articles as counterfeit and provides relevant evidence of infringement.
- The importer or exporter provides relevant evidence of non-infringement.
- The trademark owner files an application for seizure of the articles with Customs.
- Customs seizes the articles.
- The trademark owner brings a trademark infringement action before the IP Court and gives notice to Customs.
VI RECENT AND PENDING CASES
On 27 June 2019, the IP Court decided an important case, Jhu, Jyun-Wei v. Disney Enterprises, Inc., finding in Disney’s favour. In this case, Jhu, Jyun-Wei argued that Disney Enterprises, Inc. (Disney) applied to TIPO for, and eventually received, registration of the trademark and device ‘Disney小公主蘇菲亞’ (disputed trademark), infringing the trademark rights that Jhu, Jyun-Wei had obtained for the trademark ‘蘇菲亞 Sophia’ (cited trademark). The IP Court found as follows:
- The trademarks of both parties are highly similar. The size of the English word ‘Disney’ in the disputed trademark is relatively small and placed in the crown image, which makes it difficult for consumers to recognise. The most prominent parts of the two trademarks are the Chinese characters ‘蘇菲亞’. After comparing the two trademarks in their entirety, it can be found that they are similar trademarks. If the goods sold using the two trademarks have common or related features, it is easy for relevant consumers to mistake them as coming from the same source based on general social awareness and market transaction practices.
- The designated goods of both parties’ trademarks are identical or highly similar.
- The trademarks of both parties have certain distinctiveness. The cited trademark and the disputed trademark are not related to the designated goods so they both have a certain distinctiveness.
- The relevant consumers are more familiar with the disputed trademark. As ‘Disney小公主蘇菲亞’ is a programme on the Disney Channel, the relevant consumers should be more familiar with the disputed trademark than with the cited trademark.
- Disney did not apply for registration of the disputed trademark in good faith. Jhu, Jyun-Wei even negotiated with Disney and suggested that they enlarge the English word ‘Disney’ in the disputed trademark and reduce the Chinese characters ‘蘇菲亞’ therein to avoid confusion of the relevant consumers. Disney, however, refused to do so. Therefore, Disney did not apply for registration of the disputed trademark in good faith.
- Jhu, Jyun-Wei applied for registration of the cited trademark first. Taiwan trademark laws adopt the first-to-file principle. Under this principle, even though the owner of the later-registered trademark does not intend to exploit the reputation of the owner of the earlier-registered trademark, if the later-registered trademark has affected the relevant consumers’ ability to identify the source of the goods or services of the earlier-registered trademark, and the two trademarks are in conflict with each other, in order to avoid the later-registered trademark owner using its market dominance and infringing the value and development opportunity of the owner of the earlier-registered trademark, the earlier-registered trademark shall be protected. In this case, even though Disney did not intend to exploit Jhu, Jyun-Wei’s reputation, in order to avoid Disney using its market dominance and infringing Jhu, Jyun-Wei’s value and development opportunity, the cited trademark shall be protected according to the first-to-file principle.
In view of the above, the opposition decision of the TIPO and the administrative appeal decision of the Ministry of Economic Affairs should be revoked, and the TIPO should revoke the registration of the disputed trademark.
The impression conveyed to consumers by a design’s criss-cross pattern depends on the different design patterns, colours, words or other components combined with the pattern, and affects the result of determining whether or not a trademark is registrable. Considering that examination of trademark applications should not be rigid and indiscriminate, and therefore cause excessive restrictions on the design and selection of trademarks by market practitioners, on 30 July 2019, the TIPO promulgated the Examination Principles on Trademarks containing Criss-cross Patterns, which is designed to avoid discrepancies in determination standards during examination of trademark cases, and to make examination standards clearer to follow. However, the Examination Principles do not apply to criss-cross patterns composed of lines and graphics of unequal lengths, or with special designs in their margins.
The Examination Principles symbolise that criss-cross patterns are often used to represent and describe ‘healthcare’, ‘first aid’ and other similar concepts, so as to convey the characteristics of the goods or services provided to the relevant consumers. From the relevant consumers’ perspective, where a trademark is designated to be used for goods related to drugs or medical devices, or services related to retail or wholesale of drugs or medical devices, if the trademark pattern contains a criss-cross pattern, it might only convey that the goods or services using the trademark have medical efficiency or they are related to healthcare or first aid. In this case, the trademark is a descriptive mark and lacks distinctiveness. Criss-cross patterns have become a generic pattern in the medical industry so there is no need to disclaim such a pattern. In addition to conveying the meaning of healthcare or first aid, criss-cross patterns may also convey different meanings in combination with different words or patterns. Therefore, it is still necessary to consider the overall impression presented by the trademark in the specific case and the factors that may exist between the trademark and the designated goods or services to determine whether trademark registration can be obtained or not.
1 Yu-Li Tsai and Lu-Fa Tsai are partners at Deep & Far Attorneys-at-Law.