Preface

In a “constitutional state”, the acts of administrative/governmental agencies are confined by the law. The purpose of said principle is to protect the people’s trust in administrative acts as said acts have to be predictable in a certain extent. According to Art. 6 of the Administrative Procedures Act in Taiwan, no differential treatment is permitted for administrative acts without a good cause. In principle, as long as the elements and/or circumstances of two cases are identical, administrative organizations will have to issue same decisions. To provide actual justice, the aforesaid sameness refers to the “substantial sameness” rather than the “formal sameness”.

Nonetheless, similar to the concept of “equity” in a common law system, the administrative organizations may use their discretion and even establish the criteria necessary among different cases if the law makes such allowance for them. When conducting such discretion, so long as a certain amount of the elements between the two cases are different and said elements are considered to be vital ones, the administrative organizations will be allowed to examine said elements as well as the whole later case and make its decision according to its discretion and the law.

In the following judgment, the Intellectual Property Court revealed two elements that caused the Taiwan Intellectual Property Officials to have to re-examine the existing opposition, which is an example of exceptions under Art. 6 of the Administrative Procedures Act.

Facts
The Plaintiff, Kito (Thailand) Co., Ltd., filed a trademark application for the mark “” at the Taiwan Intellectual Property Office (TIPO) (hereinafter referred to as the Defendant) for trademark registration under Application No. 98000566 on January 8, 2009. Afterwards, the Defendant issued an Objection Decision against said application on July 29, 2010. The Plaintiff therefore lodged an administrative litigation at the Intellectual Property Court (hereinafter referred to as the Court) after its Petition action was turned down by the TIPO.

The Plaintiff claimed that the subject mark and the cited mark ““ are not similar and even if the two marks are similar in a very little extent, said similarity will not cause relevant consumers to be confused. Besides, the Objection Decision made by the Defendant seems based on Art. 6 of the Administrative Procedures Act, which is inappropriate since the Defendant ignored the use evidence and the actual circumstances of the current case, whereby the Objection Decision shall be overturned and the aforementioned trademark application should be approved.

The Court considered various factors involved in determination of likelihood of confusion among consumers, especially Defendant’s citation of a precedent case where a previous trademark registration by Plaintiff’s distributor was cancelled by Defendant due to the cited trademark. The Court entered a judgment in favor of the Plaintiff and indicated that the Objection Decision should be overturned, but rejected the Plaintiff’s claim regarding the approval of the trademark application No. 98000566. The Court decided that the aforementioned trademark application should be re-examined by the TIPO.

Judgment Outlines

I.Rules for administrative organizations when making its discretionary assessments
Under current practices in Taiwan, if the law leaves discretion to the administrative organizations in charge, the administrative organizations will therefore be able to decide the standards for its determination over the issue concerned. The discretionary basis issued by the administrative organizations according to their authority bestowed by law, generally, only takes effect among the administrative organizations’ internal operations. Nonetheless, by the principle of equality in the R.O.C. Constitution, the aforesaid basis will also bring up an external effect which restrains the administrative organizations to render inconsistent actions later. Hence, unless the exception exists, the administrative organizations will always be subjected to the aforementioned discretionary basis when making their decisions.

However, before examining whether the aforesaid principle and exception shall be applied to such case, the administrative organizations in charge need to examine the whole elements and circumstances of such case before making its decision. Examination should include reviewing both parties’ writs, claims, evidence and any other relevant documents, which may affect its decision.

The Taiwan Intellectual Property Office (TIPO) (hereinafter referred to as the Defendant) made an Objection Decision against the trademark application No. 98000566 “ ” because of its decision made in another similar case, the opposition against trademark Reg. No. 1287757 “ ” according to Art. 23-I-13 of the Trademark Act. Nonetheless, the Court indicated that the Defendant failed to review other vital facts in this case as follows.

1.The trademark holder of the trademark Reg. No. 1287757, Semond Co., Ltd., is the Plaintiff’s distributor. It is reasonable that a distributor will not make the same extent of effort as the manufacturer (the Plaintiff) does to protect its trademark. Besides, in fact, the distributor did not appeal against the Opposition Decision.

2.In addition, the Plaintiff claims that its distributor filed the trademark “ ” for registration at the TIPO without its approval and it even did not have the chance to attend the opposition procedure against said registration as well. The Plaintiff claims that because of such absence of attending the aforementioned procedures, its substantial and procedural rights are not taken into consideration. The Court accepts this point.

3.Although the Defendant cited the former case as one of the reasons to support its reasoning of the decisionmaking, according to the record, the Defendant did not review the relevant documents/ evidence of said former case, which therefore cannot prove that the Defendant did actually examine both cases substantially and hence whether trademark application No. 98000566 “ ” is able to be approved shall be re-examined.

Concerning the abovementioned points, the Court indicated that such grounds and circumstances shall be sufficient to constitute an exception for the discretionary basis principle.

II.Criteria for determination of similarity of trademarks and likelihood of confusion
According to the submitted evidence, the subject mark is mainly used on non-expensive and mass-manufactured “footwear” products and the cited mark is used on high-priced “clothing” products. Generally, consumers who purchase high-priced clothing products are of high incomes and social position. In order to reach a matched look, such consumers are not likely to purchase non-expensive and mass-manufactured footwear products to match with their clothing. Moreover, for the purposes of satisfying the requirements of the high incomes and social positions of consumers, relevant businesses will generally choose high-priced footwear products as their accessories stock accordingly. Although both footwear and clothing products are to be worn on the body, since the market places are different and the consumers and manufacturers are not likely to overlap, the extent of similarity between the two products will still be considered not high, which is inconsistent with the handbook of the Classification of Goods and Services issued by the TIPO.

Tai E’s Comments

I.Rules for administrative organizations when making its discretion.
The Court holds its opinions in favor of the Plaintiff’s claim in the referenced judgment regarding the possibility that different efforts will be made by a distributor and a manufacturer to protect the same trademark. It should be considered as a positive opinion since the Court emphasizes the substantial differences between the parties in spite of the same title they held, namely trademark holder/applicant. Furthermore, with regard to the Plaintiff’s right in a lawsuit, the Court’s decision also takes care of both the substantial and procedural rights belonging to the Plaintiff, which also offers fair justice to the Plaintiff.

II.Criteria for determination of similarity of trademarks and likelihood of confusion
Under current practices in Taiwan, in determination of the similarity between two marks, the designated goods thereof is one of the important elements. Generally, both “footwear” and “clothing” goods are classified in similar subcategories, whereby they are deemed as similar/identical goods according to the handbook of the Classification of Goods and Services. However, the aforesaid determination cannot be always applied. The Intellectual Property Office has to examine all of the claims and evidence brought up by applicants, e.g. the actual designated goods/services of the marks and the actual circumstances in the Taiwanese market, and make its decision for the issue concerned.

In this case, although the designated goods of both marks are in similar subcategories and both are for being worn on the body, said sameness shall not be deemed as the only factor to determine whether the goods are similar. Relatively, to offer the parties real justice, the Court took the shopping habits of the consumers and the consumers’ social positions into account, which is also a significant point of view.

To conclude, although the referenced judgment has not been chosen to be a legal precedent yet, the holdings it took not only cover the parties’ substantial and procedural rights, but also cover the essential factors in the case, which indeed put the aforementioned principles and goals into practice.

Subject Mark                                                           
(Appl. No. 98000566)                                           
                                     

Cited Mark
(Reg. No. 01017621)

(Author: Molly YU graduated from the Fu Jen University for her financial law degree in 2006 and obtained the Master’s degree for International and Comparative Law from Southern Methodist University Dedman School of Law in U.S. in 2009. She previously worked at Tai E.)