"Trademark use" as referred to in Article 5 of Taiwan’s Trademark Act means the use of a trademark for marketing purposes in any of the following situations to enable the related consumers to recognize it as a source-identifier:
- Applying a trademark on goods or the packaging thereof.
- Possessing, displaying, selling, exporting, or importing the goods mentioned above.
- Applying a trademark on articles relating to services provided.
- Applying a trademark on commercial documents or advertisements relating to services provided.
The above uses include those conducted via digital audio/video, electronic media, the internet, or other media.
In general, when being asked to respond to a non-use cancellation action, the trademark holder has the burden to prove actual use of his trademark via a common type of transaction in the trade-network. However, since Taiwan’s Trademark Act does not expressly mandate whether the use of a trademark confines to the use of the trademark on the designated goods/services sold or offered in the territory of Taiwan, insofar as a trademark is designated for use upon “services”, so long as a trademark holder has advertised or propagated his branded service in Taiwan, the trademark shall be deemed to have been properly used irrespective of the fact that the service was offered in a foreign country. To this end, a divided opinion emerged as a result of a Judgment rendered by the Intellectual Property and Commercial Court (hereinafter referred to as the IPC Court) on January 28, 2021.
Tokyu Corporation is a Japan-based company which secured a trademark registration on May 1, 2016 for “東急” in respect of “advertising, department store, supermarket” etc. in Class 35. However, the validity of said registration was challenged by a third party filing a non-use cancellation action on February 10, 2020 for the reason that the trademark has kept unused for three consecutive years. As a defense the trademark holder submitted evidence, including brochures, flyer, coupons, etc. averring that when the trademark holder participated in some international tourism exhibitions held in Taiwan in-between November, 2018 and June 2019, quite a number of advertising materials were dispatched to potential customers to promote services offered by TOKYU Department Store.
Upon examination, the IP Office rendered a decision to the effect that the challenged trademark has been used on “department stores” only. In the opinion of the IP Office, although the trademark holder did not actually operate a department store in Taiwan, the brochures, flyers and coupons handed out in Taiwan were ample enough to prove that the trademark had been used on “department store” service.
Being dissatisfied with the decision, the cancellation petitioner pursued appeal, and obtained a Ruling in his favor.
Subsequently, when the trademark holder resorted to a remedial action by filing an administrative litigation with the IPC Court, the court concurred with the Board of Appeal’s opinion by vacating and remanding the IP Office’s decision for reconsideration.
The IPC Court held that Taiwan’s Trademark Act is of territorial nature. Accordingly, in an attempt to prove that a trademark has been used after or during its registration, the trademark holder or his authorized user ought to provide evidence attesting to the use of the trademark on the designated goods/services sold or offered in the territory of Taiwan. The IPC Court further indicated that the phrase “for marketing purpose” referred to in Article 5 of the Trademark Act, must eventually be for commercial transaction purpose, namely, there should have occurred the activities of sale or offering goods/services in Taiwan. In other words, “for marketing purpose” is not solely for consumers to have in mind an impression of a brand. Only if there is a practical transaction possibility subsequent to a marketing activity, shall the legislative purpose of the Trademark Act protecting local consumers from confusion or misleading, and maintaining fair competition in the Taiwan market be achieved. In addition, in the test of “trademark use”, substantial weight should be placed on whether a trademark has been used frequently or in a manner that yields economic significance. That is, use of a trademark could be established only if its marketing activities may eventually contribute to the creating of a market or adding of the market value of the trademark in Taiwan by actual business transaction. The IPC Court said that in the cases where a service is offered by a liaison or a distributor in Taiwan, allowing Taiwanese consumers to, for instance, book a restaurant or obtain a car rental service abroad in Taiwan, etc., part of the transaction could be considered to have occurred in Taiwan and the trademark shall be deemed to have been used. However, in this case, as the trademark holder only advertised in Taiwan its “department store” service offered in Japan, it seems rather difficult, if not impossible altogether, to recognize that the trademark has been used as a source-identifier on “department store” in Taiwan.
The point of view that the IPC Court expressed in this case would have a considerable influence on the trademark holders whose services are offered outside of Taiwan. This case is currently before the Supreme Administrative Court for trial. If the Supreme Administrative Court upholds the opinion of the IPC Court, a registered trademark, although having been advertised in Taiwan, may be vulnerable to non-use cancellation in the absence of actual business transaction.