The point at which a trademark owner is prohibited from asserting rights against another party in civil litigation is not when the revocation is applied.

【QUESTION】

According to the Intellectual Property Case Adjudication Act, when the IP Court finds grounds for revoking a trademark right, the trademark owner may no longer assert rights against other parties in trademark infringement civil litigation. However, when does this restriction on asserting rights against other parties begin?

【The Decision】

1.        Actual use of a trademark is required to maintain trademark rights. If a trademark owner has not continuously used the trademark for over three years after registration without a justifiable reason, grounds for revocation exist. However, a trademark registration that has been approved and published is not automatically extinguished. In other words, if the administrative action taken to acquire the trademark rights has not been revoked, canceled, or invalidated for other reasons, its effect continues. If, after trademark registration, there are grounds for revocation under Article 63, Paragraph 1, Subparagraph 2 of the Trademark Act, the trademark authority can, ex officio or upon application, revoke the registration. However, until the revocation administrative action is carried out, the original administrative action remains effective, and the trademark rights are not extinguished.

2.        When a party asserts or defends that there are grounds for the revocation or cancellation of intellectual property rights, the court shall independently determine whether the assertion or defense is justified. The provisions of the Civil Procedure Law, the Administrative Procedure Law, the Trademark Act, the Patent Law, the Plant Variety and Plant Seed Act, or other laws concerning the suspension of litigation proceedings shall not apply. In such cases, if the court finds grounds for revocation or cancellation, the intellectual property rights holder may not assert those rights against other parties in civil litigation, as explicitly stipulated in Article 16 of the former Intellectual Property Case Adjudication Act. The legislative rationale is to prevent the suspension of litigation provisions from delaying civil proceedings, thereby ensuring that intellectual property rights holders can obtain immediate protection. Moreover, disputes over the validity of intellectual property rights are private law matters, and civil judges in intellectual property courts possess the professional expertise to determine the validity of such rights without waiting for the results of administrative litigation. This approach allows disputes to be resolved in a single process and facilitates the prompt protection of litigants' rights. Therefore, the main focus of Article 16 of the former Intellectual Property Case Adjudication Act was that courts hearing intellectual property civil cases should independently assess whether the parties' claims or defenses regarding the revocation or cancellation of intellectual property rights are justified. However, this did not extend to the point of extinguishing the intellectual property rights themselves or restricting their exercise.

3.        According to Article 16, Paragraph 2 of the former Intellectual Property Case Adjudication Act, the court was required to "recognize" the grounds for revocation or cancellation. However, this did not imply that one could not assert rights simply because grounds for revocation existed. While a trademark may be subject to revocation due to non-use, the trademark right remains in effect until the administrative action granting the trademark is revoked. If the Intellectual Property Civil Court determines that a trademark has grounds for revocation, the point at which the trademark owner can no longer assert rights against others in that civil lawsuit corresponds to the moment the trademark is effectively revoked and the right can no longer be enforced. Therefore, the point at which the trademark owner can no longer assert rights against others should be after the court's determination, rather than when another party files the revocation application.

【Ching-I Lu’s comment】

1.        In trademark infringement civil litigation, the amount of compensation often depends on the duration of the infringement period. Generally, the longer the infringement period, the greater the compensation sought. Therefore, determining the starting point for calculating the infringement period is crucial not only to the amount of compensation sought but also to the likelihood of winning the case.

2.        The reasons for trademark cancellation differ between revocation and opposition or invalidation. Opposition or invalidation reviews address cases where a trademark was illegally registered due to existing grounds for refusal; therefore, following opposition or invalidation, the trademark is considered invalid from the outset. In contrast, revocation occurs when the trademark was valid at the time of registration but was subsequently used unlawfully by the trademark owner. This misuse prompts a third party or official authority to initiate revocation proceedings. Consequently, the effect of revocation is prospective, meaning the trademark is not deemed invalid from the outset. Whether a trademark is invalid from the outset or only prospectively affects the starting point of the infringement period in trademark infringement civil litigation.

3.        For the revocation of a trademark to have universal effect, it must undergo administrative procedures, including filing a revocation application with the Intellectual Property Office and obtaining a revocation order. A common point of contention is when the revocation order should take effect: upon issuance by the Intellectual Property Office or when the administrative court's judgment becomes final. In this case, the Supreme Court's ruling appears to indicate that the revocation takes effect when the Intellectual Property Office's revocation order becomes effective.

4.        Article 41 of the current Intellectual Property Case Adjudication Act (formerly Article 16) is a frequently invoked provision in trademark civil litigation. If the defendant successfully argues that the plaintiff's trademark should be revoked or canceled, they can effectively dismiss the plaintiff's claim. However, under this article, asserting that a plaintiff's trademark should be revoked or canceled in civil litigation does not actually eliminate the trademark; it only prevents the plaintiff from asserting rights against the defendant using that registered trademark in that specific case. Therefore, when exactly does the court's determination of trademark revocation take effect in such situations?

5.        This Supreme Court ruling clarifies that the aforementioned Intellectual Property Case Adjudication Act only requires the court to determine whether there are grounds for revocation or cancellation of the rights claimed by the parties. However, it does not specify the exact moment when the intellectual property rights are extinguished or when their enforcement is restricted.

6.        This Supreme Court judgment further clarifies that since the trademark right has not been extinguished before the administrative action granting the trademark becomes ineffective, based on consistent legal interpretation, the point at which the trademark owner can no longer assert rights against another party in a civil lawsuit should correspond to the situation where the trademark is revoked, and the right can no longer be enforced. Therefore, in civil trademark infringement lawsuits, when the court determines that there are grounds for revocation of the trademark right, the starting point for the trademark owner's inability to assert rights against the other party should be after the "intellectual property civil court's determination," not from the time the other party "applied for revocation." In this case, because the original court ruled that the plaintiff could not claim damages after the "time of application for revocation," the Supreme Court overturned the original judgment and remanded the case.