Trademark squatting occurs to the two Chinese character “鼎旺” mark held by local well-known hot pot store

　A trademark dispute arose out of a well-known spicy hot pot store located in Taipei City, Ding Wang Spicy Hot Pot (Chinese store name: 鼎旺麻辣鍋; hereinafter “Ding Wang”), founded by an individual, Lin.  Lin’s nephew, Cao, successfully registered the two Chinese characters, “鼎旺” as a trademark on March 23, 2015 (hereinafter the “mark in dispute”), which came to the knowledge of Lin’s daughter, Chen, who later filed an opposition to the mark in dispute on the ground of prior use to seek cancellation of the registration of the mark in dispute.  Chen’s opposition was sustained.  Out of his dissatisfaction with the opposition decision, Cao filed a lawsuit, which was further brought to the Supreme Administrative Court and was ultimately determined against Cao on the ground that Cao squatted the mark in dispute.  

　Cao made the following arguments.  His aunt, namely the founder of Ding Wang, Lin, opened a diner for selling spicy hot pot in 1992, and Cao’s mother invested TWD1.5 million to the diner in 1996.  With his mother’s investment put in the store, both Lin and Cao’s mother agreed to their partnership for the business of the store called “Ding Wang Spicy Hot Pot” (Chinese store name: 鼎旺麻辣鴛鴦火鍋).  Subsequently in March 2015, Lin denied the partnership with Cao’s mother and this dispute was brought to court, which dispute ended up in a successfully settlement by and between Lin and Cao’s mother.  The settlement agreement and relevant news reports all made it clear that the alleged partnership between Lin and Cao’s mother had indeed existed.  As such, based on the partnership between his mother and his aunt, Cao regarded part of the store name, the two Chinese characters, “鼎旺” as a property under the partnership mutually owned by Lin and Cao’s mother, and in this regard, Cao has sufficient basis to use the two Chinese characters as business symbol; therefore, Cao does not squat or imitate the mark in dispute.  

　The appellee, Taiwan IPO defended itself by pointing out Cao’s knowledge about the existence of the cited mark owned by Lin before the application date of the mark in dispute because (1) Chen and her mother, Lin, had already used the cited mark for their hot pot store in the similar trade before application of the mark in dispute, and (2) Cao had once worked at Ding Wang and subsequently opened another hot pot store on his own (Chinese store name: 老鼎旺川味鍋物店 ), and thus (3) Cao would have the knowledge about the cited mark due to business transactions and the competition in the same trade.  

　According to the Supreme Administrative Court’s holding, the principle of “first to register”, rather than that of “first to use” is dominant in the trademark legal regime of Taiwan.  In principle, an earlier used but unregistered mark is not eligible for protection as a trademark, except when it is to fulfill the purposes of combating trademark squatting and preventing unfair competition in the way of plagiarizing any other person’s trademark(s).  Hence, for making up for the possible loopholes and deficiencies in trademark legal regime, prior users are eligible to seek remedy when they encounter trademark squatting.  In this case, the mark in dispute Cao registered is totally identical to the cited mark owned and used by Lin for her store in their respective appearance, pronunciation, and concept, and is also used for the service of providing spicy hot pot.  Moreover, Cao had once worked in Ding Wang and thus had business connections with Ding Wang.  The foregoing substantiates that Cao had already been aware of the cited mark owned by Lin before filing the application for the mark in dispute but he still intended to imitate it and further sought to have the mark in dispute registered as a trademark.  Cao’s foregoing act falls into the unregistrable ground as defined by subparagraph12 of paragraph 1 of Article 30 of the Trademark Act.  Therefore, Taiwan IPO does not contravene the laws by deciding to cancel the registration of the mark in dispute.  (February 2020) 

/CCS