UCC Holdings Co. Ltd. v. Ministry of Economic Affairs
SAC, Pan Zi, NO. 48,2012,
IP Court, Xingshang gengyi Zi, No. 1, 2012

Taiwan’s Trademark Act has protected well-known trademarks from dilution since 2003. A trademark shall not be registered if it is identical or similar to the well-known trademark or mark of another person, and is likely to cause confusion or misidentification by the relevant public, or is likely to dilute the distinctiveness or the reputation of the well-known trademark or mark. Trademark Act §30(1)(11).[1]

Thus to receive protection against dilution, a trademark must be well-known (zhuming). Although the Act itself does not define “well-known”, the Ministry of Economic Affairs has defined the term “well-known” in the Enforcement Rules to the Trademark Act as referring to a mark that “proven by sufficient evidence, is commonly known by the relevant enterprises or consumers.”[2]
Nonetheless, in some cases Taiwan’s Intellectual Property Court (“the IP Court”) has effectively upheld an extra element to the test for dilution by holding that to receive dilution protection a mark must be a “highly well-known trademark” (gaodu zhuming), which is recognized by or well-known to the general public and not just by the relevant enterprises or consumers. This “highly well-known test” came from TIPO’s (Taiwan Intellectual Property Office) Examination Guidelines for the Protection of Well-known Trademarks of 2007. In a recent case, though, Taiwan’s Supreme Administrative Court (“SAC”) has rejected this view and adopted a more expansive standard whereby a mark may receive dilution protection if it is either commonly known to the general public or the relevant consumers or enterprises.

The case involves the UCC trademark registered by UCC Holdings Co., Ltd., (“UCC Holdings”) a leading Japanese coffee company. UCC Holdings owns a number of registrations for the well-known UCC mark “” that designates use on coffee and related goods and services in classes 7, 8, 11, 16, 20, 21, 22, 24, 25, 29, and 55. Peakwheel & Co., Ltd. (“Peakwheel”) applied to register the UCC mark “” in connection with bicycles and bicycle parts in international class 12. UCC Holdings opposed the registration of Peakwheel’s UCC mark on the grounds that it created a likelihood of confusion or dilution of the distinctiveness of UCC Holdings’s well-known UCC mark. The TIPO approved the opposition on the grounds that Peakwheel’s registration of the UCC mark was likely to dilute the distinctiveness of UCC Holdings’s highly well-known UCC mark, but the Ministry of Economic Affairs (“the MOEA”) vacated that decision on the grounds that UCC Holdings’s UCC mark was not highly well-known, and thus UCC Holdings could not claim protection against dilution. The IP Court upheld the MOEA’s decision that the registration of Peakwheel’s UCC mark did not create a likelihood of confusion or dilute the distinctiveness of UCC Holdings’s UCC mark. UCC Holdings appealed to the SAC and the SAC vacated the IP Court’s judgment in UCC Holdings Co. Ltd. v. Ministry of Economic Affairs, holding that the IP Court had erred in providing in limiting its protection against dilution only to “highly well-known” marks.

In its reasoning, the SAC explained that while determining whether dilution of distinctiveness or reputation exists, the court should examine the similarity between the conflicting marks, the comprehensiveness of the use of the well-known mark, the degree of inherent or acquired distinctiveness, the degree to which the mark is well-known and other factors.

The SAC found that the marks at issues were highly similar. The IP Court had found that UCC Holdings’s UCC mark was well-known to the relevant businesses and consumers but that it was not “highly well-known” by the general public. The SAC ruled that the IP Court has no legal basis on which to create a new category in which a well-known mark must be “highly well-known” before it is entitled to the anti-dilution protections contained in the Trademark Act. The SAC found that the record showed that UCC Holdings had used its marks extensively with coffee, cream powder, paper, stove, water heater products and its fame was upheld by 12 TIPO invalidations and one court judgment since 1996.[3] The SAC also questioned the IP Court’s finding of fact that the well-known UCC mark was not in fact “highly well-known” by the general public, but stated that this was not the appropriate standard to apply.

In addition the SAC held that when using same or similar marks on different goods or services dilutes association with the sources of specific goods or services on which the well-known mark is used, there is a likelihood of diluting the distinctiveness of the well-known mark and that the anti-dilution provisions of the Trademark Act should apply.

The SAC emphasized that the application of the Trademark Act’s anti-dilution provisions does not require the owner of well-known marks to use it on several different services or goods in order to claim protection against dilution. Even if the junior mark is used with completely different and irrelevant goods or services from/to those with well-known mark, the anti-dilution protections should still apply. The lower court also misconstrued the law by implying that UCC Holdings should have demonstrated a connection between its UCC trademark and bicycle products. The SAC found that UCC Holdings had registered the UCC mark for use with food, apparel, stationary, utensils, kitchenware and facilities of bathroom and air conditioning as well as different services including food stores, restaurants, hotels and cafes. Thus, the SAC also questioned the finding of the lower court that UCC Holdings showed no likelihood of using the well-known mark with bicycle goods.

The SAC found that the combination of letters in “UCC” is uncommon and that the mark was inherently distinctive. UCC Holdings had long marketed and protected the trademark, and it had acquired high distinctiveness as a result as well. For these reasons, the SAC vacated the IP Court’s judgment and remanded the case back to the IP Court.

The IP Court delivered its latest judgment on July 2012 and upheld the TIPO’s original decision approving UCC Holding’s opposition and revoking the registration of Peakwheel’s UCC mark. It concluded that the conflicting marks are highly similar and that UCC Holdings’s UCC trademark was well known. If Peakwheel were to use and market the junior mark for a period of time in the future, the UCC mark will indicate more than one source of goods to the consumers. Thus, Peakwheel’s registration of UCC mark will dilute the distinctiveness of UCC Holdings’s UCC trademark. Interestingly, the IP Court also found that Peakwheel’s registration of the UCC mark in connection with bicycle products would dilute the potential distinctiveness of UCC Holdings’s UCC trademark and affect the possibility that UCC Holdings might use its trademark in the vehicle market. The IP Court therefore held that there is a likelihood of dilution of the distinctiveness of UCC Holdings’s well-known UCC mark and the registration of Peakwheel’s UCC mark was properly revoked. However, the use of the very same mark on bicycle goods does not create any negative associations, and thus the dilution by tarnishing was not found.

As dilution of well-known marks remains a relatively new issue in Taiwan, the SAC’s clear rejection of “highly well-known test” affords some clarification on the level of protection provided to well-known mark owners. If a mark is well-known as provided by the Enforcement Rules, it deserves protection both from likelihood of confusion and that of dilution by blurring and tarnishment.
We note, however, the UCC case is not final yet, and the Ministry and Peakwheel may appeal the most recent IP Court decision to the SAC again. It is worth noting that the IP Court specifies in its dicta that even if the highly well-known test had been applied, the UCC trademark would still be highly well-known to the general public. Future judgments will reveal whether this dicta is merely a response to SAC’s doubts about whether UCC Holdings’s UCC mark is highly well-known or somehow reflects the reluctance of the IP Court to follow the SAC’s holding on this issue.

Endnote

The UCC Case History

[1] 相同或近似於他人著名商標或標章，有致相關公眾混淆誤認之虞，或有減損著名商標或標章之識別性或信譽之虞者。
[2] 本法所稱著名，指有客觀證據足以認定已廣為相關事業或消費者所普遍認知者。
[3] UCC Holdings had submitted history of the company, sales figures from NT$2-300 million per year from 2002 to 2007, the record of UCC Holdings’s products entering into Taiwan’s market since 1985, records of promotions in all kinds of event and mass media, and its successful opposition records in TIPO, appeal decisions from the MOEA and court judgments from the IP Court.