【Trademarks】Analysis and Comparison of Taiwan and China Trademark Act Systems (II)
I. Introduction
In terms of ratio legis as shown in Part I of this article, we know that “first-to-file” is the major method to obtain trademark rights in both Taiwan and China. Hence, trademark applicants may not actually use a trademark to register it to the competent authorities. In this respect, as filing registration to the competent authorities is a way to obtaining trademark rights, does this imply that a trademark of any appearance can be apply for and obtain trademark registration? Does it also imply the following situations: (1) business partners acknowledging the business planning of applicants who have not register their brand trademarks have filed trademark registration first, or (2) people with bad intentions get the head start over others to register the trademark of unregistered goods/services already distributed in the market and attracted critical customer acclaim? Doubtlessly, lawmakers have designed protective mechanisms against trademark squatting in the overall planning. This article thus continues to make a general analysis and introduction of regulations corresponding to trademark registration and trademark squatting in both countries after “Analysis and Comparison of Taiwan and China Trademark Act Systems (I)”.
II. Regulations Corresponding to Trademark Registration and Trademark Squatting in China and Taiwan
- Basis of trademark dress in both countries
Article 8 of China’s Trademark Act stipulates: “Any signs, including words, graphs, letters, numerals, three-dimensional symbols, color combinations, sound or any combination thereof, that are capable of distinguishing the goods of a natural person, legal person or other organizations from those of others may be applied for registration as trademarks.” Also in accordance with Article 9 of the same act stipulates, “A trademark submitted for registration shall bear noticeable characteristics and be readily distinguishable, and it may not conflict with the legitimate rights obtained by others earlier.” Article 18 of Taiwan’s Trademark Act stipulates, “A trademark shall refer to any sign with distinctiveness, which may, in particular, consist of words, graphs, symbols, colors, three-dimensional shapes, motions, holograms, sounds, or any combination thereof. The term “distinctiveness” used in the preceding paragraph refers to the character of a sign capable of being recognized by relevant consumers as an indication of the source of goods or services and distinguishing goods or services of one undertaking from those of other undertakings.” With respect to the regulations in the trademark acts of both countries, there is no big difference regarding the appearances (signs) of trademark valid for registration between both countries. Basically, the definitions of trademark appearance in both acts have covered the trademarks commonly seen in the present society, including traditional two-dimensional trademarks, graphs, or three-dimensional trademarks, sound trademarks, and others following commercial development and technological advancement. Although it seems that applicants can apply for registration of trademarks in any appearances or their combinations. There are still the corresponding review mechanisms, and the details are hidden in the regulations. The bolded unlined parts of Articles 8 and 9 of China’s Trademark Act and Article 18 of Taiwan’s Trademark Act already state that not all words, graphs, and others can be used in trademark registration. These words, graphs, and others must enable consumers to identify them and to distinguish goods and services from different brand sources before they are valid for trademark registration. In other words, a trademark must be readily identifiable. Despite the diction difference in China and Taiwan, it refers to the same thing in English: distinctiveness. It aims to avoid abuses in trademark applications. Both countries have made many illustrative regulations regarding the criteria for distinctiveness review in their trademark acts, such as the specifications for distinctiveness and individual review criteria as stipulated in Article 11 of China’s Trademark Act and Article 29 of Taiwan’s Trademark Act.
- Remedy for trademark squatting in both countries
If malicious trademark squatting is discovered, does this imply that business planning or branded goods/services are down the drain? Although a trademark has been registered by a third party and passed the distinctiveness review, the lawmakers of both countries have considered this situation and designed corresponding protective mechanisms by law. So, let’s put down the worries. Article 7 of China’s Trademark Act stipulates, “The principle of good faith shall be upheld in the application for trademark registration and in the use of trademarks.” Article 44 of the same act stipulates, “A registered trademark shall be declared invalid by the trademark office if it is in violation of Article 4, Article 10, Article 11, Article 12, or the fourth paragraph of Article 19 hereof, or its registration is obtained by fraudulent or other illegitimate means. Other entities or individuals may request the Trademark Review and Adjudication Board to declare the aforesaid registered trademark invalid.” The above articles of China’s Trademark Act are the remedy clause for “malicious trademark squatting”, and Article 7 can be considered as an overriding principle with an extreme overriding effect in its diction. Article 44 clearly stipulates registration obtained by fraudulent or other illegitimate means. Apparently, “illegitimate means” also cover malicious trademark squatting, and either businesses or individuals can apply to the competent authorities for invalidating the trademark in dispute. Additionally, Article 30, paragraph 1, subparagraph 12 of Taiwan’s Trademark Act stipulates, “A trademark shall not be registered if being identical with or similar to another person’s earlier used trademark and to be applied for goods or services identical with or similar to those for which the earlier used trademark is applied, where the applicant with the intent to imitate the earlier used trademark, being aware of the existence of the earlier used trademark due to contractual, regional, or business connections, or any other relationship with the proprietor of the earlier used trademark, files the application for registration, unless the proprietor of the said earlier used trademark consents to the application.” This is how “malicious trademark squatting” is blended with the key terms in Taiwan’s Trademark Act. Compared to China’s Trademark Act, however, the relationships between the squatter and the claimant of a trademark must be specified in order to request for invalidation of a registered trademark according to Taiwan’s Trademark Act. This means that the burden of proof lies on the claimant, because such proof is the basis of objection and determination of malicious trademark squatting. In fact, there is more to regulate malicious trademark squatting in the trademark acts of both countries, including “applications made in bad faith for trademark registrations which are not intended for use shall be rejected” as stipulated in Article 4 of China’s Trademark Act and protection for well-known trademarks as stipulated in Article 13 of China’s Trademark Act, which is similar to Article 30, paragraph 1, subparagraph 11 of Taiwan’s Trademark Act. Due to the space limit, only more common examples are described.
III. Discussion
The regulations regarding trademark registration and trademark squatting of both countries show that “not intended for use” and “malicious trademark squatting” are the focus of both China and Taiwan. They aim to emphasize and ensure the major function of trademarks: trademarks are used to distinguish the source. As the competent authorities are too busy that negligence is unavoidable, people with bad intentions will take this advantage to commit trademark squatting. Hence, both countries have designed the remedy mechanisms to oversee trademark squatting together with the general public. Apart from preventing rampant trademark squatting, this also urge proprietors of brand trademarks actually used in commercial marketing and promotion to pay attention to trademark squatting in order to prevent it.
IV. Conclusion
Currently, trademark squatting is still common in both countries. Although proprietors may have the chance to invalidate squatted trademarks through legal remedy as described in this article, the cost may be higher than planning and applying for brand trademark registration in advance. In addition to being a corporate intellectual property, a trademark is an identifier that a firm or individual spends lots of time and money to market and promote for consumers to acknowledge it and distinguish it from other brands. Hence, firms and individuals are advised to make advance planning for trademark registration and deployment so as to prevent trademark squatting. In addition to commercial damage, more litigation issues may follow suit.
The regulations regarding trademark registration and trademark squatting of both countries show that “not intended for use” and “malicious trademark squatting” are the focus of both China and Taiwan. They aim to emphasize and ensure the major function of trademarks: trademarks are used to distinguish the source. As the competent authorities are too busy that negligence is unavoidable, people with bad intentions will take this advantage to commit trademark squatting. Hence, both countries have designed the remedy mechanisms to oversee trademark squatting together with the general public. Apart from preventing rampant trademark squatting, this also urge proprietors of brand trademarks actually used in commercial marketing and promotion to pay attention to trademark squatting in order to prevent it.
IV. Conclusion
Currently, trademark squatting is still common in both countries. Although proprietors may have the chance to invalidate squatted trademarks through legal remedy as described in this article, the cost may be higher than planning and applying for brand trademark registration in advance. In addition to being a corporate intellectual property, a trademark is an identifier that a firm or individual spends lots of time and money to market and promote for consumers to acknowledge it and distinguish it from other brands. Hence, firms and individuals are advised to make advance planning for trademark registration and deployment so as to prevent trademark squatting. In addition to commercial damage, more litigation issues may follow suit.
