Jack Ellis

A recent judgment handed down by the Taiwan IP Court has highlighted how rights holders must act quickly if they believe their trademarks are being infringed – or risk losing their ability to claim compensation.

In the case in question, the defendant had begun to use the plaintiff’s trademark on physical signage and online in 2005. The plaintiff initiated invalidation and revocation actions against the defendant’s application four years later, following up by filing infringement litigation in 2015.

Article 69(3) of Taiwan’s Trademark Act states that “the rights to raise a claim for compensation… become extinguished if not exercised within two years from the date on which the proprietor became aware of the damage and of the party liable for such damages. This right shall also become extinguished if it is not exercised within ten years from the time of the infringement.” The IP Court ruled that the defendant in this case had committed a single act of infringement beginning in 2005, and therefore rejected the plaintiff’s request for compensation as the claim timeframe stipulated in Article 69(3) had already passed.

The court’s decision was based on its finding that the defendant’s use of the mark on signs and on a website, which remained unchanged for the entire decade, constituted a single, continuous act of infringement. This sets the situation apart from one where multiple such acts are committed over a period of time; for example, selling infringing goods, where each sale represents a separate act of infringement.

“As types of trademark use vary, it is traditionally difficult to determine exactly when a trademark owner became aware of the damage and thus when to mark the beginning of this extinctive prescription,” Yulan Kuo, senior partner at Taipei-based Formosa Transnational, writes in an IAM update in reference to Article 69(3). This is the case “especially where the trademark at issue has been used to sell a service rather than goods,” he adds.

Since the court could find no evidence showing that the defendant had committed a second act of infringement in this case, the existing infringement was considered an extension of the defendant’s initial act. As such, the court decided that the plaintiff had been aware of the infringement at least since it filed its invalidation and revocation actions in 2009, and it had therefore deferred seeking compensation for a period of six years before filing infringement litigation in 2015.

While the IP Court’s decision in this case is a first-instance judgment that could yet go through an appeals process, “it puts all trademark owners considering making a demand for trademark infringement compensation on notice,” says Kuo. “They should initiate litigation for compensation as soon as possible once they become aware that a third party is using their mark on its signage or web page to promote its service. A trademark owner should not assume that there is no extinctive prescription in cases where the infringement exists continually and is ongoing.”

Though a relatively small jurisdiction compared to some its neighbours, Taiwan is nevertheless a key higher-income market for many brand owners. Recent filing statistics underline this; 2016 was the Taiwan IP Office’s busiest year in terms of trademarks since 2011, with applications, registrations and rejections all spiking and significant growth in submissions coming from mainland China.

Comments

Please log in or register to leave a comment.

There are no comments on this article

Share this article