Court adjusted level of fame required for a well-known trademark to block registration of another mark under Dilution Ground

A mark applied for registration that is identical or similar to a well-known trademark is not registrable[1]. That being said, it has long been a matter of some debate as to whether the trademark enjoys knowledge or recognition beyond the relevant sector—to the extent that it becomes widely known among the relevant public—in order to deter another identical or similar mark from registration because it is likely to dilute the distinctiveness or good will of the well-known trademark[2]. In the past, the judicial practice has been anchoring a benchmark to requiring that a trademark must have widespread fame beyond its sector or in the general public before it can be recognized as “well-known”. However, the Grand Chambers of the Supreme Administrative Court (GCSAC) released a unified interpretation in March 2023 to demand that a well-known trademark may fend off another identical or similar mark’s registration so long as it has attained fame in its own business sector.[3]

An application for trademark registration shall be rejected if, among other grounds, the mark applied for registration is identical or similar to another well-known trademark, thus creating the likelihood of confusion or likelihood of diluting the distinctiveness or reputation of the well-known trademark. Said grounds for confusion and dilution are statutorily prescribed in Article 30(1)(11)(P1) and Article 30(1)(11)(P2) of the Trademark Act, respectively. More specifically, a norm was established in the Supreme Administrative Court’s 1^st Joint Conference Resolution of the Presiding Judges in November 2016 (“Resolution”) which set out different levels of fame for activating a rejection. In order to protect related individuals from wrongfully identifying the genuine source of goods or services, a rejection on the grounds of confusion is raised as long as the well-known trademark is famous among relevant consumers (“petite fame”). By contrast, a rejection on the grounds of dilution would not be raised until a trademark enjoyed fame among general consumers as, in this case, the scope of protection is not limited to the specific class of the business of the well-known trademark (“grand fame”).

Ever since it was established, the norm of the Resolution regarding the different benchmarks had been honored and followed in subsequent cases[4]. Several years later, however, it faced a challenge.

Yunix International Corp. applied—under the title of another entity—for a series of word marks of “GIOVANNI VALENTINO” on class 24 for fabrics, tissues and textiles, among other things; it was granted registration as No. 1920292 in February 2018. The Italian company Valentino S.p.A. filed for opposition against the ‘292 registration. Taiwan IP Office decided to deny Valentino’s opposition request for the two marks not being similar. Valentino sued TIPO, with the case being taken to the IPC Court; the Court dismissed Valentino’s case[5]. Being unwilling to back down, Valentino appealed. In light of inconsistency between the legal interpretations in the trial decision and those of the Resolution, the appellate panel judges petitioned for a uniform opinion from the Grand Chamber of the Supreme Administrative Court.

The Grand Chamber began by upholding the statutes. Article 31 of the Enforcement Rules of the Trademark Act defines the term “well-known” as the circumstance in which there is objective proof of a sign’s capability of being commonly recognized by the relevant enterprises or consumers. As the Grand Chamber emphasized, Article 31’s definition applies throughout the entire Trademark Act since a fundamental legal methodology teaches that a term shall persist in a unitary definition in one law instrument. That is, as per the plain language of the Enforcement Rules of the Trademark Act, there should not be any conflicting definitions of “well-known” in different sections of the Trademark Act where the term “well-known” appears in the absence of being otherwise prescribed.

The Grand Chamber further surveyed the legislative history. Tracing back to the then bill to introduce the aforementioned confusion clause and dilution clause, there was no implication to additionally establish the conflicting levels of fame between the two clauses. On the contrary, the bill’s statement of purpose clearly illustrates that the element requiring “similarity or identity to another trademark” commonly stipulated in both clauses should be considered in conjunction with the knowledge of relevant consumers. Hence, even the legislation reveals the consistency of the definition of “well-known”.

International law was also scrutinized. According to WIPO, each member state may—although this is not mandatory—determine that a well-known mark be familiar to the public at large.[6] It is left to the member state to choose which level is more appropriate for its own system. A uniformly lower threshold of fame for triggering rejection on the grounds of dilution was not contradictory to WIPO’s conclusion.

Trademark infringement by likelihood of confusion or dilution would lead to the same conclusion, that of no different well-known levels being required. According to Article 70(2) of the Trademark Act, a trademark is infringed in the event of “knowingly using words contained in another person’s well-known registered trademark as the name of a company, business, group or domain or any other name that identifies a business entity, and hence there exists a likelihood of confusion among relevant consumers or a likelihood of dilution of the distinctiveness or reputation of said well-known trademark.” A well-known trademark would be infringed as long as it is well known to the relevant consumers, supposing other elements are met. To exercise the dilution clause, it would be unjustifiable for the level to be higher at the stage of deterring a competing registration than at the stage of enforcing against another’s unauthorized use of a trademark.

In accordance with the above, the Grand Chamber concluded that a well-known trademark in the dilution clause refers to one that in light of evidence can be sufficiently identified as being widely recognizable by relevant businesses or consumers rather than the general public at large. As for whether there exists the likelihood of dilution, it would require another assessment to comprehensively and integratively evaluate several factors; these factors include—but are not limited to—the level of fame of the well-known trademark, the degree of similarity of the two marks, the extent to which the well-known trademark is used in other goods or services, the level of inherent or acquired distinctiveness of the well-known trademark, and whether the applicant has an intent to others to associate its mark with the well-known trademark.

The adjudication was made in March 2023; it is generally believed to favor the established well-known trademark owner or licensee, since the threshold for deterring another similar mark’s registration is lowered.

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