Court findings in an original trial are binding for all parties involved and a later trial on the matter should base its decisions on previous findings. (Taiwan)

Frank Sun

The Supreme Administrative Court rendered the 109-Pan-89 Decision of February 21, 2020 (hereinafter, the “Decision”), holding that if a cancellation suit is dismissed by a final substantive court decision which finds the disposition sought to be cancelled is not illegal, both parties shall be bound, and a court that tries this matter later shall also base its decision on such final decision.

According to the facts under this Decision, Company A, the predecessor of the Appellant, previously registered with the forerunner of the Appellee (the Intellectual Property Office of the Ministry of Economic Affairs) the “OO” trademark and designated it for use on the goods under Class 43 in the Table of Classification of Goods and Services under Article 24 of the Enforcement Rules of the Trademark Law effective at that time.  The trademark (hereinafter, the “Trademark at Issue”) was registered after the Appellee granted an approval following its review.  The Appellant’s forerunner applied for the renewal of registration, and an announcement was made after the Appellee granted an approval.  The Intervenor filed an invalidation against the Trademark at Issue based on a registered trademark (hereinafter, the “Asserted Trademark”) on the ground that the Trademark at Issue violated Article 37, Subparagraphs 7 and 12 of the Trademark Law effective at the time of the renewal registration and Article 23, Paragraph 1, Subparagraphs 12 and 13 of the Trademark Law effective at the time of invalidation application.  After the Appellee’s review, a decision on trademark invalidation was issued to “reject the invalidation” (hereinafter, the “Previous Disposition”).  Dissatisfied, the Intervenor filed an administrative appeal.  As a result, the Ministry of Economic Affairs rendered a decision on administrative appeal to cancel the Previous Disposition.  Dissatisfied, the Appellant’s predecessor brought an administrative action.  Later, the Intellectual Property Court (hereinafter, the “Original Trial Court”) rendered an administrative decision to dismiss the action, and the Supreme Administrative Court rejected its appeal by a final decision.  The Appellee subsequently rendered another disposition (hereinafter, the “Original Disposition”), finding the registration of the Trademark at Issue under the decision on trademark invalidation should be cancelled, based on the gist of the decision on administrative appeal.  Dissatisfied, the Appellant’s predecessor filed an administrative appeal.  After the administrative appeal was rejected, the Trademark at Issue was assigned to the Appellant.  The Appellant brought an administrative action with the Original Trial Court, seeking to set aside the decision on administrative appeal and the Original Disposition.  After the administrative action was rejected by the Original Trial Court, the Appellant was still dissatisfied and appealed.

According to the Decision, Article 213 of the Administrative Procedure Law provides that if the subject matter of litigation is decided by a final decision, the decision shall have res judicata effect. Therefore, after the object of litigation is decided by a final decision, a party’s assertion shall not run counter to the gist of the final decision, and a court’s decision also should not go against the gist of the final decision.  The subject matter of a cancellation suit to cancel an administrative disposition is that the administrative disposition is illegal, and the plaintiff asserts that his rights are violated as a result.  If the court has rendered a substantive final decision in a cancellation suit, finding that the disposition is not illegal and rejecting the plaintiff’s complaint, the parties shall be bound by such decision, and a court that subsequently tries such matter shall also render a decision based on the final decision and shall not make a determination that runs counter to the contents of the final decision.  This is known as the res judicata effect of a cancellation suit decision.

It was further indicated in the Decision that the renewal registration of the Trademark at Issue violated Article 37, Subparagraph 7 of the Trademark Law effective at the time of renewal registration and Article 30, Paragraph 1, Subparagraph 11 of the current Trademark Law.  The Ministry of Economic Affairs also rendered a decision on administrative appeal to make a determination.  The Appellant’s predecessor was dissatisfied and brought an administrative action to cancel the decision on administrative appeal.  The Original Trial Court also rendered a decision to reject the action on the ground that the decision on administrative appeal was not illegal, and this matter became final after the appeal was rejected by the Supreme Administrative Court.  Although the decision on administrative appeal did not elect to change the disposition and the disposition was remanded to the Appellee to render another disposition, still a substantive determination was made in the decision on administrative appeal.  The Appellant’s cancellation suit brought out of dissatisfaction with the decision on administrative appeal was also met with a final decision that upheld the legality of the decision on administrative appeal, not to mention that the right of the Appellant’s predecessor was not impaired, the legal relationship concerning the subject matter of the litigation was the res judicata.   Although the Appellant was not a party to the final decision, still since it was the successor of the party, it was also subject to the res judicata effect of the final decision in accordance with Article 214 of the Administrative Procedure Law.  Therefore, the parties and the Supreme Administrative Court shall be both bound by res judicata.  The decision on administrative appeal did not violate the law by upholding the Original Disposition that cancelled the registration of the Trademark at Issue on such basis.  Therefore, the Original Trial Court’s rejection of the Appellant’s complaint was not inappropriate.  Since the gist of the appeal was unacceptable, its request to reverse the original decision was certainly groundless and the appeal should be rejected.