The Supreme Administrative Court Adopts Stricter Standard of Proof for Trademark Use

A judgment recently rendered by Taiwan’s Supreme Administrative Court (SAC) held that, in the context of non-use cancellation actions, the registrant’s trademark use cannot be proved with evidence of use on goods/services “of the same nature.”   Angelina Corp. v. Seven Friends Corp., 108 Pan 133, SAC (March 2019).

A non-use cancellation action can be filed by any person against a trademark registration “where the trademark has not yet been put to use or such 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.” Article 63.1.2 of Taiwan’s Trademark Law. A registrant bears the burden of proving its registered trademark in dispute has been genuinely used on each of the challenged designated goods/services within three years from the date the cancellation action is filed.  For items of goods/services not supported by use evidence, the relevant part of registration shall be cancelled.  Partial cancellation is not uncommon.

However, a lenient probative principle was sometimes adopted by the IP Court in non-use cancellation actions.  Under this principle, a registrant’s burden of proof can be mitigated or even lifted when the mark at issue is proved to have been used on goods/services “of the same nature.”

For example, in Angelina v. Seven Friends, the registrant was only able to prove its registered mark had been used on “cakes” but failed to produce evidence of use with respect to the other designated goods in question, namely, “candied fruit, candy, biscuits, dry snacks, and bread.”  However, this evidentiary gap was bridged through the application of said spill-over principle. As the IP Court’s decision indicated, “these  items … should be deemed as of the same nature and highly related, as they are often put together for sale by food producers in Taiwan, and the production and marketing channels thereof are again the same or highly overlapping.” As such, trademark use with respect to “candied fruit, candy, biscuits, dry snacks, and bread” was affirmed by the IP Court in the absence of relevant use evidence.

Since the test of “the same nature” is quite similar to that of “relatedness” under the IP Court’s practice, it is usually argued that the said lenient probative principle could find support from the rule about the scope of trademark rights: the registrant has the right to exclude others from using the same or similar mark on the same or related goods/services, suppose likelihood of confusion exists. See Article 68 of Taiwan’s Trademark Act.  However, are the legal backdrops of Article 68 and Article 63.1.2 comparable to justify this analogy theory? 

The SAC’s answer is no.  In Article 68, the term “related goods/services” is aimed to define the prohibited zone for others’ use of an identical or similar mark, or, simply speaking, the range of infringing trademark use. This is something quite different from the issue of whether a mark has been used by the registrant or its licensee to safeguard the mark’s registration.  Further, the wording of Article 63.1.2 lends no textual support to the asserted analogy.  Should this analogy theory be upheld, “the freedom of others to use unregistered trademarks for commercial competition will be improperly restricted,” said the SAC. 

Instead, the SAC reiterated that, in a non-use cancellation action, a registrant’s trademark use can be proved only by evidence with respect to goods/services that are identical to those being challenged.  SAC elaborated:

In the test of identical goods/services, the examiner should consider the content, expertise, usage, function, and other features of the compared goods/services as of the time the mark is actually used. The examiner should also consider whether the compared goods/services are found identical by the general public in view of the relevant transaction habits in commerce. Nonetheless, a trademark can be deemed as being used with respect to a general group of goods/services (e.g. cosmetics) where use on specific goods/services (e.g. powder cakes) within said group has been established, but not vice versa.

In this case, “cake” is not identical with “candied fruit, candy, biscuits, dry snacks, or bread” by common sense and consumers can readily distinguish the two. We hence find the lower court’s holding unconvincing. The challenged trademark being used on the former cannot likewise be deemed as being used on the latter.

In view of Angelina, Registrants are recommended to conduct a comprehensive review on the evidence that has been preserved to prove the use status of their trademarks.  It should not be presumed that evidence of trademark use with respect to goods/services “of the same nature” can be accepted in future non-use cancellation actions.