Frank Liu
I. THE DEVELOPMENT OF TAIWAN’S TRADEMARK PRACTICE IN YEAR 2009
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New Examination Guidelines on Distinctiveness of Trade Marks Effective as of January
1, 2009
The Taiwan Intellectual Property Office (TIPO) promulgated on January 1, 2009 new
“Examination Guidelines on Distinctiveness of Trade Marks.”
According to the new guidelines, fanciful, arbitrary, and suggestive trademarks are all considered to be capable of performing an origin-identifying function and are eligible for registration. Descriptive marks are protectible only upon a showing of secondary meaning. As for trademarks consisting of a generic term/symbol, they are in no event registrable.
The TIPO has also developed a “spectrum of distinctiveness” by citing in the new guidelines several examples as follows:
1. Trademarks Formed by One or More Letters (Alphabets)
A trademark formed by one single letter is no event registrable. As for a trademark formed by two or more letters, it could be allowed for registration if it is neither descriptive of the goods/services designated thereby nor a generic term.
Examples of registrable marks include “SR” (in respect of preparations for making herbal beverages) and “SYM” (in respect of motorcycles and parts thereof).
Examples of unregistrable marks include “XXL” (in respect of knee guards and wrist guards).
2. Alphanumeric Trademarks
A trademark formed by letters in combination with numerals is not eligible for protection unless it has been proven by physical evidence that the mark is not an indication referring to any product model number.
Examples of registrable marks include “SK II” (in respect of cosmetics).
Examples of unregistrable marks include “LU-933” (in respect of fabric cutting machines) and “KX-3” (in respect of paint spraying guns).
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3. Numerical Trademarks
A trademark merely formed by numerals is generally deemed destitute of distinctiveness and is protectible only if the numerals have been stylized to an extent that is sufficient to serve as a source-identifier.
Example of registrable marks include “ ” (in respect of non-alcoholic beverages).
Examples of unregistrable marks include “315” (in respect of mixed cereal powder) and
“ ” (in respect of bags).
4. Trademarks Comprising a Company Name
A trademark formed by a full company name like “ABC Co., Ltd.” is generally considered as unregistrable. If a company name forms a part of a trademark, and the trademark is distinctive in its entirety, the mark may be protected after the exclusive right to use the company name is disclaimed apart from the mark. However, if a company name is proven by a preponderance of evidence that it has been used in the format of a trademark to thus establish a secondary meaning, the company name shall be registrable.
5. Trademarks Consisting of a Domain Name
A trademark formed by a domain name is generally regarded as unregistrable. A trademark comprising a domain name is eligible for protection upon a showing of secondary meaning without the necessity to disclaim the exclusive right to use the indistinctive component; the use materials acceptable could be the relevant webpages on which the mark comprising the domain name is displayed in a prominent manner that enables consumers to recognize it as a source-identifier. If a domain name is highly stylized and conveys an impression different from an ordinary domain name, it will be eligible for protection upon disclaiming the exclusive right to use the indistinctive component.
Examples of registrable marks include “ ” (in respect of publication editing and interior design) and “ ” (in respect of electronic books, PDA, and electronic dictionaries), both with “.com.tw” disclaimed.
6. Trademarks in the form of a Slogan
Slogans, except for highly innovative ones, are generally regarded as inherently unregistrable. They are protectible only upon a showing of secondary meaning.
1.2 “Wholesale Services” is now acceptable in Class 35
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According to an announcement in the April 16, 2009 issue of the Trademark Gazette,
“wholesale services” has become acceptable in Class 35, which should be defined as, for instance, “retailing and wholesaling of food, beverages, clothing, computers, etc.”
1.3. On February 4, 2009, the TIPO publicized on its official website a list of recognized well-known marks selected by a commissioned team based upon the Rulings rendered by the local courts, the Fair Trade Commission, the Taiwan Network Information Center, and the TIPO in the past five years. More than 3,500 selected cases were reviewed, and about 970 trade marks were recognized as well-known marks. The TIPO also plans to update the list from time to time.
II. CASE REVIEW
2.1 Intel Corporation Successfully Enjoined Others from Using “Intel” as a Company Name
The “dilution doctrine”, which aims to prohibit the blurring or tarnishing of the image of well-known trademarks through unauthorized appropriation by others, was incorporated into the Taiwan Trademark Act in May 2003. Since then, a person shall be held liable for trademark infringement if he/she knowingly uses, without consent, a trademark identical with or similar to another’s well-known registered trademark or the word(s) contained therein as his/her company name, trade name, domain name, or as an indicia of origin of goods/services, thereby diluting the distinctiveness of the well-known trademark.
A classic case example that provides judicial interpretation of “dilution” in connection with a distinctive and well-known trademark is Intel Corporation vs. Intel-Trans Co., Ltd.
In said case, a Taiwanese company, Intel-Trans Co., Ltd., adopted the famous mark
“Intel” as a part of its company name. Intel Corporation hence filed a lawsuit against
Intel-Trans Co., Ltd. on the grounds that such adoption has diluted the distinctiveness of its famous mark “Intel”, claiming that Intel-Trans Co., Ltd., a company engaged in international trading and shipping, should cease using “Intel”, a well-known registered trademark, as a specific part of its English company name. When the case was remanded by the Supreme Court 1 to the IP Court for reconsideration, the IP Court held in its adjudication that the well-known registered mark “Intel” should be protected against dilution, and rendered its opinion on the following three issues addressed by the
Supreme Court: 2
1 The Supreme Court Ruling on Case No. 97-Tai-Appeal-1619 (July 31, 2008).
2 The IP Court Ruling on Case No. 97-Civil-Trademark-Appeal-Re-exam-1.1 (November 13, 2008).
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a. Is a well-known registered mark subject to protection against an infringing act conducted prior to 2003 when the then applicable Trademark Act did not provide a course of action against dilution?
The IP Court was of the opinion that even though the company name Intel-Trans
Co., Ltd. was recorded with the Company Register prior to 2003, using another party’s well-known trademark as a company name and thereby diluting the distinctiveness of the trademark shall be deemed an act of infringement; it is inconsequential whether or not the dilution doctrine has been clearly embraced in the Trademark Act. b. Are English company names within the reach of the “company name” referred to in the Trademark Act?
The IP Court held that it is inappropriate for the TIPO to interpret the “company name” referred to in the Trademark Act as being restricted to the Chinese company names recorded with the Commercial Registry and that if such an interpretation should be deemed tenable, it would inevitably encourage the act of capitalizing on consumers’ association of English company names with well-known marks, which is likely to not only cause damages to trademark owners but also to cause ensuing transnational disputes. c. To what extent must a well-known trademark be diluted in order to warrant protection under the dilution doctrine?
In an attempt to prove that the distinctiveness of the mark “Intel” had been diluted,
Intel Corporation submitted to the IP Court a market survey showing that among
50 interviewees, two considered the mark “Intel” to be owned by Intel-Trans Co.,
Ltd., and five believed that Intel-Trans Co., Ltd. was in some way associated with
Intel Corporation. Although Intel-Trans Co., Ltd. argued that the result of such market survey showed a low likelihood of confusion, the IP Court held that the dilution had indeed occurred, even with such a few instances of actual confusion.
2.2 Trademark Owners’ Cessation of Business Operation Could Be Telltale Sign of Non-Use of Trademarks
In Taiwan, a registered trademark will be vulnerable to non-use cancellation if, without justifiable cause, the mark is not used for three years, or if use of the mark is discontinued for a term in excess of three successive years after a period of use.
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While the “trademark use” referred to in the Trademark Act should be for marketing purposes and conforming to the commercial transaction habits, advertisements, sales/marketing materials may generally serve as proper evidence of use.
In a recent non-use cancellation action against a registered trademark in respect of
“installation, repair and maintenance services” in Taiwan, the trademark owner submitted some evidential materials in defense of the validity of its registration, including flyers and commercial receipts.
To be specific, a non-use cancellation was filed against the mark “ 富士 FUJI” owned by a Taiwanese company, Fuji Elevator Co., Ltd., in respect of “installation, repair, and maintenance services in connection with elevators, escalators, lifters, vehicle lifters, mechanical parking equipment” in Class 37. The TIPO, after reviewing the evidential materials submitted by the trademark owner, dismissed the non-use cancellation on the grounds that the challenged mark has been put to proper use in Taiwan. However, when the case was brought up to the IP Court, the IP Court revoked the decision of the
TIPO with the following finding: 3
The materials lodged by the trademark owner are not sufficient to attest to the actual use status of the mark pending further verification of the authenticity of the materials.
In addition, since no official record had showed that the owner having any taxes or purchased any labor/health insurance for its employees during the three years prior to the filing of the non-use cancellation action, it is reasonable to conclude that the owner had not been doing any business, let alone providing installation, repair and maintenance services under the registered mark. As such, the evidential materials submitted by the owner might not be authentic.
The IP Court’s decision reveals that in determining whether or not a registered trademark has been put to proper use, the trademark owner’s business operation status could be crucial in the test of the authenticity of the lodged evidence of use.
2.3 Use of a Trademark on Freebies does not Necessarily Constitute Trademark Use
Ho Tai Development Co., Ltd. (Ho Tai) is the local distributor of air conditioners under the brand name “DAIKIN” owned by a Japanese company “Daikin Industries, Ltd.”
Besides investing money on advertising “DAIKIN” air conditioners in Taiwan, Ho Tai adopted an incentive bonus program by giving away “ ” sumo dolls as freebies.
3 The IP Court Ruling on Case No. 97-Administrative-Trademark-Appeal-14 (December 31, 2008).
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Ho Tai filed an application for a sound mark in respect of “dolls and toys”, among others, in Class 28. During the prosecution, the TIPO rejected the sound mark for registration on the grounds that the mark, carrying a 30-second melody as the background jingle of a TV commercial, is incapable of enabling the average commodity purchasers to recognize it as a source-identifier of Ho Tai’s dolls or toys, and hence is devoid of distinctiveness. In response, Ho Tai submitted evidential materials, including the sample “ ” sumo doll, relevant information from the Internet and its website, advertising clips, and advertising expenditures, etc., to prove that its sound mark has been put to use extensively on the “ ” sumo doll (and other toys) and has obtained secondary meaning accordingly. The TIPO opined that the materials submitted by Ho
Tai were all relating to the promotion of the “DAIKIN” air conditioners, not the “ ” sumo doll which was simply a giveaway, and that therefore such use does not fall within the definition of “trademark use” referred to in the Trademark Act. In conclusion, the
TIPO held that the sound mark did not acquire secondary meaning through extensive and long-term use. When the case was brought up to the IP Court, the IP Court upheld the TIPO’s Decision to formally reject the sound mark for registration 4 .
III. STATISTICS
Trademark applications (multi-classes) in 2008
Domestic : 45,876 (77%)
Foreign : 13,692 (33%)
Total : 59,568
Trademark registrations (multi-classes) in 2008
Domestic : 37,220 (75%)
Foreign : 12,375 (25%)
Total : 49,500
4 The IP Court Ruling on Case No. 98-Administrative-Trademark-Appeal-74 (August 6, 2009).
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