Non-profit trademark use upheld by Taiwan Supreme Court

The Supreme Administrative Court (SAC) has held that the term ‘for marketing purposes’ should be interpreted as having the same meaning as ‘in the course of trade’ provided in Article 16.1 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs). Therefore, the SAC ruled that trademark use is not to be achieved through activities of a ‘paid or for-profit’ nature.

In Taiwan, “trademark use”, as provided in Article 5 of the Trademark Law, is the use of a trademark for marketing purposes in any of the following ways so as to enable the relevant consumers to recognise it as a source identifier.

  • Applying a trademark on goods or the packaging thereof, or possessing, displaying, selling, exporting or importing such goods.
  • Applying a trademark on articles relating to services provided.
  • Applying a trademark on commercial documents or advertisements relating to goods or services provided.

These uses can be conducted by digital audio or video, electronic media, the Internet or other media.

The aforementioned case pertains to a dispute between two dental associations that both used the acronym APAID.

The registrant’s mark was registered on 1 September 2013 for multiple Class 41 services. Soon afterwards it was challenged by the opposer, which asserted that it had been using a similar mark in the same or relevant services since 2009. It further claimed that in view of the nature of the two businesses and their geographical proximity, the registrant must have been aware of the opposer’s mark and the registrant’s mark was filed only in an attempt to squat on it.

In May 2015 the Taiwan Intellectual Property Office rendered a decision holding that, in view of the prior use evidence submitted by the opposer the opposed mark would be revoked partially in respect of conflicting services, including editing, publication, search, subscription and translation services for books, magazines and periodicals.

After the registrant exhausted all available pre-suit remedies, the case was reviewed by the IP & Commercial Court (IPC Court), followed by the SAC’s appellate review board. Following two rounds of appeals spanning almost five years, the issue of non-profit use of trademark took centre stage. However, before coming to the SAC’s seminal opinion, it is worth examining how the IPC Court addressed the question: does non-profit use qualify as trademark use?

According to the IPC Court’s findings, the opposer is a professional organisation founded in 2008, aiming to improve, promote and provide education, research, training and international academic exchanges in the field of oral implantology. These services are provided mainly through eponymous APAID annual congresses open to members and the public alike. However, being a non-profit organisation, the opposer did not prove that these services involve for-profit business activities, a requirement that the IPC Court held to be inherent in the test of marking purposes. As such, it was held that the opposer’s prior use did not qualify as trademark use defined in Article 5 of the Trademark Law.

Yet the SAC had a different view. First it found that the term ‘for marketing purposes’ stipulated in Article 5 should be interpreted to have the same meaning as the term ‘in the course of trade’ provided in Article 16.1 of TRIPs. Within the definition of marketing purposes in Taiwan’s Trademark Law, trademark use is not evaluated based on whether the marketing activities are paid or unpaid. Nor does the law imply that the so-called marketing activities are restricted to for-profit business activities.

Second, while it is indicated in the legislative notes that “the purpose of Article 5 is to regulate trademark use activities of the commercial nature”, the word ‘commercial’ should not be interpreted as indicating that trademark use is conditioned on for-profit activities.

The SAC’s insight is undoubtedly great news for non-profit organisations seeking trademark protection in Taiwan. Moreover, in a dictum in this decision, the SAC reminded all parties (including the IP Office) that numerous non-profits have been allowed to trademark their names in respect of a wide range of services and goods.

The unexpressed concerns are unmistakable. If non-profit use is non-trademark use, then these non-profits (including the registrant) will all be at risk of seeing their trademarks cancelled due to non-use — something that the IP Office would not wish to occur. Whether the SAC’s decision will lead to an update of the IP Office’s bylaw on the interpretation of Article 5 is worth observing, although a complete solution to the non-profit use issue might be realised only in the next overhaul of the Trademark Law itself.

This is an Insight article, written by a selected partner as part of WTR's co-published content. Read more on Insight

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