Date: 16 March, 2023

【Volume 106】

According to the "Examination Guidelines on Distinctiveness of Trademarks" issued by the Taiwan Intellectual Property Office (“IPO”), trademarks are divided into two categories: trademarks that have inherent distinctiveness and those that do not. Among them, the most challenging task is to differentiate between “suggestive trademarks”, which have inherent distinctiveness, and “descriptive trademarks”, which do not. This is because if the “suggestion” of the trademark is too direct, there is a high likelihood that it will be determined as a descriptive mark. Therefore, the differentiation between “suggestive signs” and “descriptive signs” is of great significance. The aforementioned guidelines provide four factors for examination: level of imagination that consumers must exercise definition in dictionaries, use in newspapers, magazines, or on the Internet, and the need for competitors to use. However, with today's rapidly developing internet and disseminating information, it is unquestionable whether partial internet usage may affect the determination of distinctiveness.

In view of the societal change, the recent rulings on two trademarks made by the Intellectual Property and Commercial Court (“IP Court”), 2022 Xingshangsuzi No. 32 Administrative Judgement and 2022 Xingshangsuzi No. 52 Administrative Judgment, completely overturned the verdict of the IPO and the Ministry of Economic Affairs (“MOEA”). The rulings explicitly indicated that the determination of the distinctiveness of a trademark should be made from the perspective of the relevant public. Relating opinions and judgment of the cases also highlighted the importance of citing evidence which should be attended to.

Case Fact

The well-known New Zealand dairy company, the a2 Milk Company Limited (hereinafter referred to as “a2 Milk” or “plaintiff”), produces a2 milk from hand-picked cows, which only produces A2-β casein similar in structure to the casein found in human breast milk, making it easier for human body to absorb. a2 Milk filed two applications, “a2” and “ATWO” (hereinafter referred to as “disputed trademarks”), with the IPO in 2017 to 2018 and were granted registration in April and June 2019, respectively.

However, a Taiwan dairy company “PURE MILK CO., LTD. (慕渴股份有限公司)” and a multinational corporation “Nestlé S.A. (雀巢製品股份有限公司)” immediately filed oppositions against disputed trademarks respectively in 2019. The IPO ruled that several dairy product-related goods and services designated in “a2” trademark were to be revoked, and the registration of the “ATWO” trademark was completely revoked.

a2 Milk subsequently filed an administrative appeal with the MOEA, but its Administrative Appeal Review Committee upheld the original decision made by the IPO. Dissatisfied, a2 Milk then filed an administrative lawsuit with the IP Court. In the judgments made in November and December 2022, the IP Court fully overturned the views of the IPO and MOEA and deemed that the marks are distinctive. The IP Court also withdrew the original disposition and the appeal decision.

	Disputed Trademark 1	Disputed Trademark 2
Trademark Specimen
Registration No.	01991254	01983232
Designated Goods and Services	Class 5 Powdered milk for babies…etc. Class 29 milk beverages, milk predominating…etc. And also in Classes 32, 35, 41, 43	Class 5 Powdered milk for babies…etc. Class 29 milk beverages, milk predominating…etc.

Opinions of the Taiwan Intellectual Property Office

1. Disputed trademarks having no inherent distinctiveness

   Although both the disputed trademarks 1 and 2 are not existing English phrases, based on the evidence presented by the opponents, “a2 milk” products were mentioned, which can be recognized by relevant consumers that “A2” has the meaning of a dairy product containing a special form of casein within; the disputed phrase “a2” can be regarded as descriptive terms for milk related goods and services.

2. Disputed trademarks having no acquired distinctiveness
   

   Although a2 Milk had presented evidence of its global physical store numbers and sales revenue statistics, it was still not enough to prove that the trademarks had acquired distinctiveness.

Opinions of the Taiwan Intellectual and Commercial Court

1. The perspective of the Taiwanese general public should be used as the basis of determining whether a trademark has inherent distinctiveness

   (1) The distinctiveness of a trademark relates to how it denotes the source of goods/ services, where “relevant consumers” shall mean consumers in Taiwan.

   (2) Through investigation, part of the evidence used in the original disposition was written in Simplified Chinese or obtained from foreign research papers, which were not from Taiwan nor easily accessible information for the public. Therefore, the forementioned information should not be considered as the evidence to prove the disputed trademarks are not inherently distinctive.

2. The disputed trademarks are inherently distinctive, and are “Suggestive Trademarks”
   

   (1) Based on the evidence, it is noticeable that “milk containing A2β casein” can be presented in various ways in business. Therefore, both the disputed trademarks 1 and 2 are not frequently used or necessary terms for competitors to denote this type of milk products.

   (2) The court found that while the evidence used in the original disposition was an article introducing “A2 milk” written by a Taiwanese consumer, according to the content of the article, that consumer did not understand the meaning of “A2 milk” by the registration date of the disputed trademarks. Thus, the article clearly cannot prove that Taiwanese consumers are able to recognize the disputed term “a2” represents “A2 milk”

   (3) In conclusion, both the disputed trademarks 1 and 2 are not existing terms, phrases, or objects, and consumers would not necessarily recognize them as “a type of milk”. Moreover, the use of the term “A2-β casein” and the disputed trademarks 1 and 2 are not entirely the same. Without being familiar with the casein components of milk, consumers have to go through layers of reasoning to realize that the disputed trademarks 1 and 2 represent “milk containing A2β casein”. (“ATWO” ⇒ “A2” ⇒ “A2-β-casein” ⇒ “A2-β-casein milk without A1-casein” ⇒ “A2 milk”) Therefore, the disputed trademarks are “suggestive trademarks”.

Keywords:  Trademarks Case Studies Distinctiveness Taiwan