Trademarks | |||||||
I. | The Principle of Exhaustion for Trademark Rights Is Applied Only When the Owner of Domestic and Foreign Trademarks Is the Same One | ||||||
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Plaintiff:INFINITY BEAUTY LTD. | |||||||
Defendant:OHWIN INC. (the owner of the trademark at issue) | |||||||
Plaintiff’s Claim: | |||||||
Before the Defendant can obtain any credible evidence proving that the products parallelly imported by the Plaintiff are not genuine, the Defendant is not entitled to claim its trademark rights against the products under the trademark “PHILIP B” ordered by Plaintiff from the official website of PHILIP B since January 07, 2016 nor forbid the Plaintiff to sell such products. | |||||||
IP Court’s Judgment: Dismissing the Plaintiff’s action | |||||||
IP Court’s viewpoints: | |||||||
1. |
According to Article 36.II of the Trademark Act, where goods have been put on the domestic or foreign market under a registered trademark by the proprietor or with his consent, the proprietor is not entitled to claim trademark rights on such goods. This is so-called “the Principle of Exhaustion” or “First Sales Doctrine”.
The Trademark Act in Taiwan adopts the Principle of International Exhaustion. It means that when a trademark owner or his/her licensee put a product protected by trademark rights on either the domestic or foreign market, the trademark rights for the given product end with the product’s first sale. This is because when the trademark owner sells the product firstly, he/she has received reasonable remuneration so the consent to the trademark use is given implicitly during each transaction of the product from the manufacturers to retailers and then to consumers. The purpose is to avoid the trademark owner from profiting repeatedly due to the same trademark rights although he/she does have the exclusive right of use for the trademark. |
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2. | In this case, the Plaintiff bought the products at issue from a U.S. company, Philip B, Inc. but not the Defendant. Thus, the Principle of Exhaustion shall not be applied because the trademark at issue is owned by the Defendant in Taiwan but not the U.S. company, Philip B, Inc. Since the Defendant is not the party firstly selling the products at issue nor received any remuneration, the Defendant’s trademark rights have not ended yet. Now that the Defendant does not conform to the trademark owner indicated in Article 36.II of the Trademark Act in Taiwan, the Principle of Exhaustion shall not be applied. Thus, the Defendant is still entitled to claim trademark rights against the Plaintiff. | ||||||
TIPO News on August 05, 2017
https://www.tipo.gov.tw/public/epaper/113/ePaper113_ep10560.htm
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II. | Reminders to the Trademarks Containing the Terms of the Nature, Quality or Place of Origin | ||||||
In May of 2017, TIPO (Taiwan Intellectual Property Office) held a propaganda to explain the key points of Trademark Act Article 30.1 (8) and the relevant regulations issued by Ministry of Health and Welfare. | |||||||
I |
Trademark Act Article 30.1 (8): A trademark shall not be registered if the mark is likely to mislead the public as to the nature, quality, or place of origin of the goods or services.
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(i) |
The terms of the nature, quality or place of origin contained in a trademark are likely to mislead the public to have wrong association.
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Examples: | |||||||
(a) | Misleading of the nature: A trademark contains the term “abalone” but the designated goods are “dried vegetables” | ||||||
(b) | Misleading of the quality: A trademark contains the term “Gold Prize” and designates the goods of “dried vegetables”. | ||||||
(c) | Misleading of the place of origin: A trademark contains the term “Ishikawa Rice” and designates the goods of “rice; plumule rice”. | ||||||
* ps. “Ishikawa” is a county in Japan. | |||||||
Appl. No. 105014070 for (SWISSMOBILITY & device) in class 18→ This mark was rejected because of the word “SWISS” which is likely to cause the misunderstanding of the place of origin. | |||||||
Appl. No. 105001697 for (POTATO CHIP INSTITUTE logo) in classes 29 and 30→This mark was rejected because of the term “POTATO CHIP INSTITUTE”. Since “POTATO CHIP INSTITUTE” is a name for an international association, this mark is likely to cause misunderstanding of the nature. | |||||||
(ii) | Even though the term of a name of place does not have direct relation to the designated goods, the regulations are still applicable due to the possible misleading. For example, a trademark contains the term “Attica” (i.e. a place in Greece) and designates the goods of “office desks”. Though “Attica” in Greece is not famous for manufacturing office desks, the use of a name of place would cause possible misunderstanding that the office desks under the trademark are from Attica. | ||||||
App. No. 105058972 for (Beypazari 貝伊帕莎) in class 32→ This mark was rejected because of the term “Beypazari” is a name of a city in Turkey. Thus, it is likely to cause the misunderstanding of the place of origin. | |||||||
(iii) | An organic certificate has to be submitted when filing if a trademark contains the term “organic”. In addition, the designated goods can only be the items that listed on the organic certificate. | ||||||
(iv) | A certificate proving that nanodiamond technology is applied during the manufacturing processes has to be submitted when a trademark contains the term “nanodiamond”. | ||||||
II | According to Statute for Control of Cosmetic Hygiene, Act Governing Food Safety and Sanitation, Pharmaceutical Affairs Act, the descriptions or terms shown on a trademark shall not imply, promote or advertise any medical efficacy and literal description or propaganda regarding the medical efficacy. Some examples regarding food, pharmaceuticals and cosmetics are listed below for reference. | ||||||
Appl. No. 105058044 for “”. in classes 05 and 30→ This mark was rejected because of the word “Slim”. | |||||||
Appl. No. 105060438 for “ ” in classes 05, 30 and 32 This mark was rejected because of the word “Slim”. | |||||||
(i) | In case the trademarks are allowed to be registered in the TIPO but violate the said regulations because of the terms “slim”, “to prove your eyesight”, “science of weight reducing”, a fine may be still imposed to the use of these marks by Ministry of Health and Welfare. | ||||||
(ii) | For a trademark containing the term “Health Food”, the applicant has to submit the Health (Functional) Food Certificate in Taiwan. Otherwise, it will violate Health Food Control Act and the criminal sanction will be imposed. |
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