Daniel Wellington Fights Against Squatters Part II: How Renowned Brands Protect its Trademark Before Registration

Date: 24 November 2023

【Volume 123】

In the previous part, we introduced the case facts of the “Daniel Wellington" trademark dispute and the opinions of the Intellectual Property and Commercial Court. In the following part, we will continue to discuss the opinions of the Supreme Administrative Court during the second instance, and provide our suggested strategies for dealing with the squatters.

Opinions of the Supreme Administrative Court (The Second Instance)

The applicable circumstances according to Article 30 I(12) of the Trademark Act
(1) Article 30 I(12) of the Trademark Act protects trademarks that have not been registered in Taiwan but have been used domestically or abroad. This is an exception to the first-to-file principle and territoriality of trademarks. Further, if the earlier used trademark has already been registered in Taiwan, it cannot be considered as a trademark squatting case and this provision does not apply.

(2) To further elaborate, the conflicting mark 1 “DANIEL WELLINGTON” had been registered in Taiwan before the application date of the conflicted mark “DW”; thus, this provision was not applicable. However, although the original trial court determined that the conflicted mark violated this provision with regard to the conflicting mark 1, which was inappropriate, it did not affect the conclusion of the original judgment.
The original trial court determined that the judgment of the conflicted mark violating the aforementioned provision in relation to the conflicting marks 2 and 3 was not erroneous
(1) The conflicting marks 2 and 3 were registered in the United States but not in Taiwan. In addition, the evidence submitted by DW Company demonstrated that the conflicting marks 2 and 3 had been used for watch products before the application date of the conflicted mark.

(2) The original judgment explained how the plaintiff, due to business or other relationships, was aware of DW company’s earlier use of the conflicting marks 2 and 3, and demonstrated that the conflicted mark was filed with the intent of imitation and without DW company’s consent.

(3) The original judgment stated that the conflicted mark and the conflicting marks 2 and 3 all conveyed the impression of “DW” to the consumers. The plaintiff claimed that the conflicting marks 2 and 3 use an inverted English letter “ ”, which does not constitute similarity with the conflicted mark “DW”. In spite of that, the original trial court cited the evidence provided by DW Company to prove that upon seeing the conflicting marks 2 and 3, relevant consumers would still pronounce it as the letter “D”, making it identical in pronunciation to the conflicted mark. Comparing the conflicted and conflicting trademarks, they are similar in appearance and conception, and should be considered as similar trademarks.

In summary, the original judgment did not violate any regulation. Therefore, the plaintiff’s claim to declare the original judgment is erroneous should be rejected.

Wisdom Suggested Strategies

To effectively promote and advertise brands and products, brand owners often expose their brands through social media, newspapers and magazines when the brand name is first finalized or when specific products are ready to be mass-produced and launched. This ensures that the new brands or products can break into the market with sufficient popularity and purchase interest. However, with the prevalence of the Internet and social media nowadays, relevant advertisements and promotions, while being viewed by potential consumers, may also be exploited by unscrupulous operators who take advantage of their familiarity with local market and intellectual property regulations to pre-sell products or even squat on the brand trademarks. To cope with such situations, our firm offers the following suggestions for foreign brand owners who intend to enter the Taiwan market.

Consciously preserve as much proof of use as possible
The key factor in the success of claiming trademark squatting of DW trademarks lies in the sufficient and solid proof of use provided by DW Company. Whether it be newspaper or magazine reports, sales stores, sales figures, or information about watch wholesalers, usage by the plaintiff in Taiwan, and trademark registration information in the United States, all fully support the fact that DW Company has first used the conflicting trademarks and that the plaintiff is aware of the existence of these trademarks and had intention to imitate. From this case, it can be observed that a considerable quantity of proof of use is necessary to increase the credibility with the IPO or even the court. Therefore, it is advisable to start collecting proof of use in Taiwan early to accumulate a substantial amount of evidence, such as promotions in paper and electronic media, endorsements by celebrities, records of pop-up stores, collaborations with stores, annual sales figures, etc.
Identification of “First to Use” evidence
It is worth noting that the evidence of “first to use” according to Article 30 I(12) of the Taiwan Trademark Act is not limited to occurrences in Taiwan, but can also include proof of use abroad. However, to more effectively prove that the trademark squatter has access to the trademark and thus has the opportunity to imitate it, it is still advisable to collect proof of use in Taiwan as much as possible, or other evidence proving that the squatter has a specific relationship with the brand owner and can be aware of the earlier used trademark.
Evidence of knowledge that the squatters are aware of the conflicting mark
As mentioned above, according to the Taiwan Trademark Act, knowledge of the existence of others’ trademarks may include legally indicated reasons, such as contracts, geographical relationships, business dealings, etc. However, it can also be cited as “other relationships” which are not explicitly defined in the law. In practice, the most common example is that both sides do not have business dealings but both operate in competitive or related industries in Taiwan. It should be noted that if only a proof of limited use is presented, or if it is only proved that both parties are competitors operating in neighboring areas, the court may still find that the other party may not be aware of the relevant facts¹.
Continuous trademark monitoring
According to the trademark regulations in Taiwan, the timeframe for filing the opposition for the trademark squatting is only three months after the registration date, and the timeframe for filing the invalidation is typically within five years after the registration date.

Furthermore, although the Taiwan Trademark Act provides provisions on anti-squatting (Article 30 I(12)), it can only be used as a last resort for the trademark owner before obtaining the trademark registration. In fact, even if the owner has obtained the trademark registration, it is still advisable to track the application trends of similar trademarks with continuous monitoring and to preserve as much proof of use as possible.

In addition, as the Supreme Administrative Court stated in its judgment, the provision of anti-squatting in the Trademark Act serves as an exception to the first-to-file principle and territoriality of trademark. Therefore, the most fundamental solution is to file the application as soon as possible, enabling comprehensive protection for all actual and potential use of the trademark and protecting the owner’s mindfully managed brand.

Keywords: Trademarks Case Studies Likelihood of Confusion Infringement Taiwan

[1] Taiwan Intellectual Property and Commercial Court 2022 XingShangSuZi No. 13 Administrative Judgment and Taiwan Intellectual Property and Commercial Court 2022 XingShangSuZi No. 62 Administrative Judgment.