According to Taiwan's Trademark Act, if a registered trademark is not used without justifiable reasons or if its use is continuously suspended for more than three years, there will be a risk of the trademark registration being canceled. When a registered trademark faces cancellation due to non-use, the trademark owner may submit to the IP Office the evidence of use from the past three years in defense. Such evidence should be sufficient to demonstrate genuine use of the trademark and the use of the trademark should conform to the general business transaction habit. It is further regulated in the "Notes Regarding Use of a Registered Trademark" published by the IP Office that: (1) the use of a trademark must be for marketing purposes from the subjective perspective of the user; (2) the use of the trademark must be objectively sufficient to allow relevant consumers to recognize it as a trademark; and (3) there must be actual acts of using the trademark. Additionally, based on the territoriality principle of trademark registration, the use and exclusive effect of a trademark right are confined to the territory of Taiwan. Therefore, after registration of a trademark, the primary consideration to determine whether trademark has been used hinges upon whether the registered trademark is used upon the designated goods or services in Taiwan.
Regarding the determination of whether a registered trademark has been used within the territory of Taiwan, especially in cases where a trademark is designated for use on services but the trademark owner only offers services abroad, a recent Ruling rendered by the Intellectual Property and Commercial Court (hereinafter referred to as the IPCC) can serve as a reference. (IPCC, 2023 Xing Shang Su Zi No. 14, judgment date: March 29, 2024)
The trademark owner of Trademark Registration No. 00104570 for "CROWN," designated for use on services such as hotels and restaurants in Class 42, is an Australian company which offers hotel or restaurant services in countries except for Taiwan. Thus, a non-use cancellation action was filed against said registration. The petitioner claimed that the trademark owner had only used the trademark abroad, nor had any authorized third party used the trademark in Taiwan. After the IP Office rendered a decision to cancel the trademark registration, the trademark owner filed an appeal and further submitted evidence of use in defense, including the following:
1. a copy of a collaboration agreement signed between the trademark owner and a Taiwanese travel agency for the provision of hotel accommodation and other services to Taiwanese travelers visiting Australia; and a copy of the Taiwanese travel agency's webpage featuring a description of an Australian tour, including "specially enjoy a buffet at CROWN PLAZA or JUPITER hotel to satisfy your taste buds!"
2. evidence proving that Taiwanese consumers booked and stayed at the Crown Towers Melbourne, a hotel owned by the trademark owner, through the bookings on the "Tripadvisor" and "ezTravel" websites, and left reviews and comments thereon.
The Board held a different opinion from the IP Office. Dissatisfied with the appellate decision, the cancellation petitioner filed an administrative lawsuit with the Intellectual Property and Commercial Court. The Court found that the submitted evidence fully demonstrated that the trademark owner had marketed and promoted its "CROWN" hotel services in Australia through Taiwanese travel agencies and booking websites, encouraging Taiwanese consumers to travel to Australia to enjoy these services. Although the trademark owner did not establish service venues or operate hotels in Taiwan, Taiwanese consumers were able to book these services through the cooperating local travel agencies or booking websites before traveling abroad. The court concluded that part of the business transaction process for the trademark owner’s hotel services was accomplished in Taiwan. As such, Taiwanese consumers could be involved in the business transactions for the services represented by the trademark “CROWN” in Taiwan, and the trademark played an economic significance in creating or establishing a market or distribution channel for its services in Taiwan. The court thus determined that the use of the “CROWN” trademark on hotel services constituted genuine use under the Trademark Act, upheld the decision rendered by the Board of Appeals, and dismissed the administrative litigation filed by the cancellation petitioner.
It is noteworthy that during the review of this cancellation action, the Board of Appeals made a comparison between this case and the administrative litigation case concerning a non-use cancellation action against the "TOKYU" trademark upon which the service was also offered exclusively abroad1. To be more specific, the "TOKYU" trademark was designated for use upon services such as department stores, but the trademark owner did not operate or offer those services in Taiwan. The Board of Appeals held that as the "TOKYU" trademark owner did not offer department store services in Taiwan, it was unable to provide evidence proving that consumers in Taiwan could access or enjoy the department store services offered under the trademark “TOKYU,” which means that not any part of the transaction process occurred in Taiwan. In contrast, in the present case involving the "CROWN" trademark designated for use upon hotel services, consumers could first book the services in Taiwan through several cooperating local travel agencies or booking websites before traveling abroad. Therefore, the circumstances surrounding the two cases are different, and the “TOKYU” case could not be directly applied as a precedent in this case.
From the court’s judgments rendered on the non-use cancellation actions against the "TOKYU" trademark and the "CROWN" trademark, respectively, we realized that when a service mark owner offers his services exclusively abroad, he must have evidence showing that a part of his service transaction process is accomplished in Taiwan to establish use. Such evidence is necessary to demonstrate that the registered trademark has economic significance in creating or establishing a market or distribution channel for its services in Taiwan, in alignment with the principle of trademark territoriality. If there is merely marketing material directed at Taiwanese consumers without the actual provision of services or part of the transaction taking place within Taiwan, it cannot be considered as genuine use of the trademark.
1 For reference to the court's judgment on the "TOKYU" trademark cancellation case, i.e. Intellectual Property Court Case 2020 Xing Shang Su Zi No. 104), you may consult an article posted on our firm's
website at https://www.saint-island.com.tw/En/Knowledge/Knowledge_Info.aspx?IT=Know_1_3&CID=599&ID=2143