If a foreign hotel brand does not have a local operational branch providing services in Taiwan, is its registered trademark in Taiwan liable to revocation (also called cancellation) for non-use?

In a recent judgment, the Intellectual Property and Commercial Court (“IP Court”) recognized that consumers in Taiwan can receive marketing information from foreign hotel brands through travel agencies or booking websites and can make reservations in Taiwan for accommodations abroad. This business model involves transactions completed within the territory of Taiwan. Consumers in Taiwan can engage in transactions for the services represented by the trademark. The trademark thus has economic significance in establishing or creating a market or channel in Taiwan for the services. This constitutes genuine use of the trademark.

1. Case Background

The trademark owner in the present case is Crown Melbourne Limited, a renowned general entertainment service (including accommodation and catering) provider whose facilities are primarily located in Australia. It does not have any branch providing services in Taiwan.

The “CROWN” trademark registered by Crown Melbourne in Taiwan was the subject of a third-party request for revocation on the grounds of non-use. The Taiwan Intellectual Property Office (TIPO) examined the case and revoked the “CROWN” mark.

On administrative appeal, the Ministry of Economic Affairs (MOEA) voided the TIPO disposition, affirming the use of the “CROWN” mark in Taiwan. The revocation applicant disagreed with the MOEA decision and filed an administrative litigation action with the IP Court.

2. Points of Dispute

The main point of dispute revolved around whether Crown Melbourne’s mode of operation—whereby it does not provide services directly in Taiwan, but rather consumers from Taiwan travel to Australia to receive services—constitutes use in Taiwan for the purpose of maintaining trademark rights.

The TIPO held that according to the territoriality principle of trademark, emphasis is placed on whether a trademark is used in a regular and economically significant manner, thereby creating or maintaining a market for its goods or services within the territory of trademark ownership. It found that because Crown Melbourne does not operate business in Taiwan and has not generated any economically valuable market, it failed to establish genuine trademark use (TIPO Revocation Decision No. Zhong-Tai-Fei-L01090197).

However, the MOEA’s Petitions and Appeals Committee held a different view, recognizing that Crown Melbourne markets its services in Taiwan through local travel agencies and booking websites, and that consumers in Taiwan book services provided by the Crown brand. Therefore, the trademark has economic significance in establishing a market in Taiwan for its services, thereby constituting its genuine use in accordance with the territoriality principle (MOEA Administrative Appeal Decision No. Jing-Su-11217300370).

3. Court Judgment and Opinion

The IP Court upheld the administrative appeal decision and affirmed that Crown Melbourne has used the “CROWN” trademark in Taiwan (IP Court Judgement No. 112-Xing-Shang-Su-14). The IP Court found that although Crown Melbourne does not operate business in Taiwan, it has a cooperative relationship with Taiwanese travel agencies, and these agencies market the Crown hotels in Australia to consumers in Taiwan through marketing materials targeting them. Furthermore, the court recognized that consumers in Taiwan book and stay at the Crown hotels in Australia through booking websites. The display of “Crown Towers Melbourne” on these websites is sufficient for consumers in Taiwan to identify the “CROWN” trademark and associate it with hotel services provided by Crown Melbourne.

The IP Court also indicated that although Crown Melbourne did not establish service locations or operate hotel services in Taiwan, consumers can pre-book their services in Taiwan through Taiwanese travel agencies that cooperate with Crown Melbourne or through Taiwanese booking websites, and then enjoy the services abroad. Therefore, part of the transaction for the services provided by Crown Melbourne is completed in Taiwan. As consumers can engage in transactions in Taiwan for services represented by the “CROWN” trademark, the trademark has economic significance in establishing or creating a market or channel in Taiwan for the services, constituting genuine trademark use.

4. Analysis and Observations

From the various decisions and court judgment in this case, we can observe that in practice, “genuine trademark use in Taiwan” is evaluated with reference to the territoriality principle of trademark. The main consideration appears to be whether the relevant marketing activities (or other activities of use) have “economic significance in establishing or creating a market or channel in Taiwan.” This case study illustrates that the lack of an operational branch in Taiwan does not preclude the creation of economic significance in Taiwan. If part of the transaction (such as the booking of services or payment of deposit) occurs in Taiwan, such use of trademark constitutes genuine use for purposes of maintaining the trademark’s registration in Taiwan.

In fact, services related to international travel inherently possess the characteristic of cross-border services. For example, Taiwan’s renowned Grand Hotel has not established branches abroad, yet it still has the need to register trademarks in other countries to market the hotel services it provides in Taiwan. If its trademark registrations were revoked due to the lack of overseas branches, that would obviously impede its commercial operations. Viewed in this light, the judgment of the IP Court in this case is indeed commendable.

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This is a translation of the original article in Chinese, which can be found here. Written by Gary Kuo, Yi-Kai Chen, and Natalie Lee. Translated by Catherine Chen.

If you have any questions about trademark regulations or require any additional information, please feel free to contact us through gkuo@winklerpartners.com, ychen@winklerpartners.com, nlee@winklerpartners.com or cachen@winklerpartners.com.