Introduction: 

A trademark refers to any sign with distinctiveness that can be recognized by relevant consumers as an indication of the source of goods or services and distinguishes the goods or services of one undertaking from those of other undertakings. Acquiring trademark registration has long been a cornerstone of brand protection, providing exclusive rights that enable businesses to safeguard their identities in the marketplace. 

Highly creative trademarks are more likely to stand out in competitive environments. However, these trademarks may sometimes include elements that are non-distinctive. In Taiwan, when the applicants cannot convince the Intellectual Property Office that some elements in a trademark are able to indicate the source of goods or services for being inherently distinctive or having acquired distinctiveness, the applicants will need to disclaim the exclusive rights to those elements in order to obtain approvals for registration. In such cases, the applicants may wonder whether it is still worthy to proceed with acquiring registration for the trademark.

To address these concerns, this article explores recent judgments in Taiwan regarding how disclaimed elements of trademarks influence the assessment of similarity between trademarks. By delving into these cases, we aim to provide insights into the legal implications of disclaimed elements and their impact on brand protection strategies. 

Relevant Regulations in Taiwan

(1)    Trademark Act:

Article 29 of the Trademark Act stipulates,

I.    A trademark shall not be registered if it is devoid of distinctiveness in any of the following: 
II.    Subparagraph 1 or 3 of the preceding paragraph shall not apply if the trademark has been used by the applicant and has become, in trade, a sign capable of distinguishing the goods or services of the applicant.

III.    Where the reproduction of a trademark contains an element which is not distinctive, and where the inclusion of that element in the trademark could give rise to doubts as to the scope of the trademark rights, the applicant shall state that he/she disclaims any exclusive right to such element. Such trademark without disclaimer shall not be registered.

Accordingly, a disclaimer should be made if the reproduction of a trademark contains an element which is not distinctive, and the inclusion of that element could give rise to doubts as to the scope of the trademark rights. The term “non-distinctive element” refers to elements that would be deemed “a description of the quality, intended purpose, material, place of origin, or relevant characteristics of the designated goods or services,” “a generic mark or term for the designated goods or services” and “other signs which are devoid of any distinctiveness.”

(2)    Examination Guidelines on Disclaimers

Point 7.6 of the Examination Guidelines on Disclaimers stipulates,

“Determination of likelihood of confusion should be based on observation of entire trademarks. Whether a trademark is likely to cause confusion is determined from the consumers’ perspective. It is the entirety of a trademark, rather than the individual parts separately, that is presented to the relevant consumers. Therefore, determination of similarity between trademarks should be based on observation of the entire trademarks. When a trademark contains a non-distinctive element, regardless whether or not such element is disclaimed for exclusive right to use because it may likely give rise to doubts over the scope of trademark rights or whether or not such element is not disclaimed because no doubt is likely to occur, even though the disclaimed element of the trademark may not serve as the element that identifies the goods or services, it may still affect the determination of similarity between trademarks.”

Judgments

I.    Wu, Yi-Mien v. Taiwan Intellectual Property Office (Judgment 2021 Xin Shang Su Zi No. 27 of Intellectual Property and Commercial Court) [1]

(1)    Background

Wu, Yi-Mien (hereafter referred to as “the Plaintiff”) filed an application for the trademark “” designated for use on services in Class 35 on December 29, 2017. This trademark application was approved by the Taiwan Intellectual Property Office under trademark registration No. 1930281. The registrant of the trademark Reg. No. 1359638 “,” Wu, Yen-Chun (hereafter referred to as “the Intervener”), subsequently filed an opposition against the Plaintiff’s trademark. The Intervener argued that the registration of the Plaintiff’s trademark violated Subparagraphs 10 to 14 of Paragraph 1 of Article 30 under the Trademark Act and therefore should be revoked. 

The Plaintiff contended that that the main distinguishing part of its trademark was the wording “吳萬春香舖” (“Wu, Wan-Chun incense shop”) in the center. In contrast, the main distinguishing part of the Intervener’s trademark was the wording “台灣漢香” (“Taiwan Chinese incense”). The wording “府城吳萬春香行 since 1920” (“Fucheng Wu, Wan-Chun incense shop since 1920”) in the Intervener’s trademark was in a significantly smaller font and merely indicates the location, the business name, and the year of establishment. Such wording was considered descriptive and the exclusive rights to such wording had already been disclaimed. The two parties’ trademarks should not be considered similar trademarks as the compositions, concepts and pronunciations of both parties’ trademarks were obviously different.

In the Opposition Decision, the Taiwan Intellectual Property Office concluded that the two parties’ marks should be deemed similar [2]. This case has been brought to the Petitions and Appeals Committee and subsequently to the Intellectual Property and Commercial Court. Both the Petitions and Appeals Committee and the Intellectual Property and Commercial Court upheld the same opinion regarding the similarity of both parties’ trademarks. 

(2)    The Intellectual Property and Commercial Court’s opinion
 
The Plaintiff’s trademark consists of the larger and bolder Chinese characters “吳萬春” (“Wu, Wan-Chun”) in the center, the smaller Chinese characters “香鋪” (“incense shop”) on the left, the smaller wording “WU WAN CHUN” on the upper right, and the seal of “吳萬春” (Wu, Wan-Chun). This trademark clearly indicates and distinguishes the source as “吳萬春” (“Wu, Wan-Chun”) or “吳萬春香鋪” (“Wu, Wan-Chun incense shop”).

The Intervener’s trademark consists of a designed pattern and the Chinese characters “台灣漢香” (“Taiwan Chinese incense”), along with the wording “府城吳萬春香行 since 1920” (“Fucheng Wu, Wan-Chun incense shop since 1920”), for which the exclusive right has been disclaimed. When a registered trademark contains any element that is disclaimed for exclusive right to use, the trademark owner still has the right to use the entire trademark in connection with the designated goods or services, rather than only having the right to use certain elements of the trademark. Whether a trademark is likely to cause confusion to consumers still depends on the appearance of the entire trademark.

Although the wording “府城吳萬春香行 since 1920” (“Fucheng Wu, Wan-Chun incense shop since 1920”) in the Intervener’s trademark is in a significantly smaller font, the overall impression conveyed by the Intervener’s trademark clearly identifies the business entity as “吳萬春香行” (“Taiwan Chinese incense shop”) in Fucheng. This disclaimed element should be taken into consideration when assessing the similarity between the two parties’ marks. 

As both parties’ trademarks contain the similar wordings “香行” and “香鋪” (“incense shop”) and the same distinctive wording “吳萬春” (“Wu, Wan-Chun”), the overall appearances and meanings of both parties’ marks should be similar. 

If both parties’ trademarks are labeled on the same or similar goods or services, consumers with common knowledge and experience, who exercise a normal level of attention when shopping, may be confused about the two kinds of goods/services as coming from the same source or from different sources of related nature. Therefore, the coexistence of both parties’ trademarks may cause likelihood of confusion among consumers. 

II.    ADDCN TECHNOLOGY CO., LTD. v. TAIPEI FINANCIAL CENTER CORP. (Judgment 2020 Tai Shang Zi No. 1758 of Supreme Court) [3]

(1)    Background

TAIPEI FINANCIAL CENTER CORP. (hereafter referred to as “the Appellee”) acquired trademarks Reg. Nos. 00165568 “ ” (“Taipei 101”) and 00165569 “ ” on July 1, 2002 after disclaiming exclusive rights to the elements “台北” (“Taipei”) and “101,” and “TAIPEI” and “101,” respectively.

The Appellee initiated a civil lawsuit against ADDCN TECHNOLOGY CO., LTD. (hereafter referred to as “the Appellant”) before the Intellectual Property Court, claiming that their trademarks Reg. Nos. 00165568 “ ” (“Taipei 101”) and 00165569 “ ” are designed to convey the image and concept of the internationally renowned landmark Taipei 101. These trademarks are distinctive, and after being widely promoted and used over a long period of time, have become well-known to the public. The Appellant’s use of the trademark “” (“101 famous brand gallery”), which is similar to the Appellee’s trademarks, on retailing and wholesaling services on online auction and shopping platforms, which are identical or similar to the designated services of the Appellee’s trademarks, thus infringing the Appellee’s trademark rights. 

The Appellant claimed that since the exclusive right of the element “101” was disclaimed from the trademarks Reg. Nos. 00165568 “ ” (“Taipei 101”) and 00165569 “ ” the Appellee could neither claim rights over the element “101” nor claim that both parties’ trademarks are similar by taking the disclaimed element into consideration.

In the first-instance and the second-instance judgments made by the Intellectual Property Court, the trademarks of both parties were deemed highly similar [4][5]. This case has been appealed to the Supreme Court, which found the appeal meritless and denied the appeal. 

(2)    The Supreme Court’s opinion
 

1. The disclaimer system is an administrative measure that helps prevent possible disputes over trademark rights during examination procedures to grant trademark rights. Whether there is a disclaimer of exclusive right to use any part of a registered trademark is not the sole criterion for determining the distinctiveness of that part. 

 

2. For a trademark that has been approved and published for registration, even if it includes parts that are disclaimed, the trademark owner is entitled to use the entire trademark on the designated goods or services, rather than only the parts for which trademark rights are not disclaimed. Determination of likelihood of confusion should be based on the consumers’ perspective. It is the entirety of a trademark, rather than separate and individual parts, that is presented to the relevant consumers. Therefore, determination of similarity between trademarks should be based on observation of the entire trademark. Furthermore, the disclaimed element of the trademark may still affect determination of similarity between trademarks, especially if that element has been used by the trademark owner and has become, in trade, a sign capable of distinguishing the trademark owner’s goods or services, thereby acquiring distinctiveness.

 

3. If the disclaimed element of a trademark later becomes the main distinguishing part of a well-known trademark, then, when determining the similarity between trademarks based on an observation of the entire trademarks, this main distinguishing part should also be considered, regardless of whether the trademark owner has obtained registration for that element. This shows alignment with the objectives of providing enhanced protection for well-known trademarks as stipulated by our Trademark Act, various countries’ laws, and international treaties.

When observing the Appellant’s trademark “” (“101 famous brand gallery”), the Chinese characters “名品會” (“famous brand gallery”) merely convey the idea of assorted famous brands, and the prominently displayed number “” is more noticeable and serves as the main distinguishing feature of the Appellant’s trademark for consumers to recognize the source of the goods or services.

The Appellant’s trademark and the Appellee’s trademarks share the same element “101” with slight differences in fonts. Both parties’ trademarks are extremely similar in their overall appearances and concepts. Although there were disclaimers for the element “101” in the Appellee’s trademarks, the disclaimed element had already become the main distinguishing feature of the Appellee’s trademarks. Comparison of the both parties’ marks in their entireties should not affected by the aforesaid disclaimers. The Appellant’s trademark having “” as the main distinguishing feature is very similar to the Appellee’s trademarks. 

Conclusion

In summary, the judgments in both cases highlight the complexities of trademark rights and the significance of the overall impression conveyed by trademarks. In the former case, the court upheld that despite disclaimed elements, the similar overall impressions conveyed by both parties’ trademarks could possibly lead to consumer confusion. Similarly, in the latter case, the Supreme Court emphasized that even disclaimed parts of a trademark may still contribute to determination of similarity between trademarks, especially if the disclaimed parts have acquired distinctiveness through use in the marketplace. Both cases illustrate the delicate balance between protecting trademark owners and fair trade in the marketplace.

Author’s comments and suggestions

Returning to the initial question whether obtaining registration for a trademark is still worthwhile if the exclusive right to its most important element is requested to be disclaimed, the answer is an unequivocal “YES!”

A registered trademark provides essential legal protection and exclusive rights to use the mark in connection with specific goods or services. While a disclaimer may limit certain exclusive claims, it doesn’t undermine the overall value of the trademark. 

As demonstrated in the aforementioned cases, even disclaimed elements can contribute to the overall impression of a trademark and significantly impact consumer perception. If someone files for or uses a trademark that is confusingly similar to a registered trademark, even though an element thereof has been disclaimed, such a trademark may be subject to refusal or deemed infringing.

Thus, obtaining registration for a trademark—even with a disclaimer on its most important element—remains worthwhile, as such trademark registration enhances legal standing in disputes and can deter potential infringements.

For instance, if Taipei Financial Center Corp. had relinquished the registrations for its trademarks “台北 101” (“Taipei 101”) and “TAIPEI 101” upon being requested to enter disclaimers on the elements “台北” (“Taipei”), “Taipei” and “101,” when facing another person’s use of the trademark “101名品會” (“101 famous brand gallery”), they would not have been able to claim trademark infringement against such use and their trademarks would not have been reconfirmed as well-known trademarks in court rulings.

To maximize brand protection, applicants are recommended to take strategical approaches to obtain trademark registrations, including conducting thorough searches to identify potential conflicts and understanding the implications of disclaimers on trademark distinctiveness. Additionally, instead of relinquishing a trademark application when being requested to add disclaimers on certain elements, the applicant is suggested to proceed with the trademark registration by agreeing to the inclusion of these disclaimers. 

After the trademark is registered, the trademark owner is advised to extensively use and promote the mark to strengthen the brand impression, thus potentially transforming disclaimed elements into recognized features over time. Should the disclaimed elements acquire distinctiveness through use and be capable of indicating the source of goods or services on their own, a new trademark application may be filed to obtain comprehensive protection.

References:
[1] Judgment 2021 Xin Shang Su Zi No. 27 of Intellectual Property and Commercial Court (智慧財產及商業法院110年度行商訴字第27號行政判決)
[2] Opposition Decision Zhong Tai Yi Zi No. G01070712 issued by the Taiwan Intellectual Property Office (智慧財產局中台異字第G01070712號異議審定)
[3] Judgment 2020 Tai Shang Zi No. 1758 of Supreme Court (最高法院109年度台上字第1758號民事判決)
[4] Judgment 2017 Ming Shang Su Zi No. 32 of Intellectual Property Court (智慧財產法院106年度民商訴字第32號民事判決)
[5] Judgment 2018 Ming Shang Shan Zi No. 9 of Intellectual Property Court (智慧財產法院 107年度民商上字第9號民事判決)