Maliciously squatting trademark owner constitutes an abuse of right

The Decision

The Supreme Court (111 tashang 16) held in 2022 that this trademark infringement lawsuit violates the principle of good faith and constitutes an abuse of rights, which is an important defense method. The IP court ignored this and did not explain the reasons why it was not taken. This decision issued by the IP court thus violated the stipulation.

That’s because the IP court has determined the fact that the plaintiff had been aware of the original trademark manufacturer’s mark but still applied the disputed similar mark maliciously. And the defendant is the licensee of this original trademark manufacturer.

The comment of Ching-I Lu

This case is quite controversial.

The IP court determined that the plaintiff’s disputed trademark was maliciously squatted based on a distribution relationship with a foreign manufacturer several years ago. However, when the plaintiff filed this infringement lawsuit, the disputed trademark exceeded five years invalidation deadline to cancel. Since the defendant could not prove that the foreign original manufacturer's trademark was well-known, it is impossible to claim that the plaintiff's trademark should be invalided in this lawsuit.

Actually, if the case is still within the five-year invalidation period, the plaintiff’s disputed trademark may be invalided due to a violation of Article 30-1-12 of the Trademark Act. In such a situation, the contention of this case arises spontaneously.

Can a trademark that has been identified as malicious squatted still claim trademark infringement against the legal licensee of the original manufacturer?

Theoretically, although it is a malicious squatting registration, the disputed trademark exists effectively because the five-year invalidation period has passed and there is no legal basis for canceling it. Even if the original manufacturer itself comes to Taiwan to use it, it can constitute a trademark infringement. No mention that the defendant, in this case, is only the licensee of the original manufacturer.

However, is it reasonable to allow a malicious squatting trademark owner to claim trademark infringement against legitimate licensees? The Supreme Court obviously disagrees with this. So in the judgment of this case, it pointed out this issue.