The Supreme Administrative Court rendered the 105-Pan-283 Decision of June 2, 2016 (hereinafter, the “Decision”), holding that the trademark authority may cancel the trademark registration of a trademark holder only when it does not raise any objection when it is clearly aware or should have been aware that the licensee is subject to all of the circumstances under Article 63, Paragraph 1, Subparagraph 1 of the Trademark Law.
According to the facts underlying the Decision, the Appellant (Company A) registered the “DATA SUPREME & Design” trademark (the trademark at issue) and licensed the same to Company B for use. The Intervenor subsequently applied for the revocation of the trademark at issue, and a disposition which found the invalidation invalid was rendered. Dissatisfied, the Intervenor filed administrative appeal, and a decision was rendered by the Appellee to “set aside the original disposition and to have the original disposing agency to render a legally appropriate disposition.” Dissatisfied with the decision on the administrative appeal, the Appellant brought this administrative action.
Article 57, Paragraph 1, Subparagraph 1 and Paragraph 2 of the Trademark Law before amendment (identical with Article 63, Paragraph 1, Subparagraph 2 and Paragraph 2 of Article 63 of the current Trademark Law) provide: “After a trademark is registered, the trademark authority shall, ex officio or upon an application, revoke the registration of a trademark if such trademark is subject to any of the following circumstances: (1) where the trademark is altered by the proprietor or supplemented with additional notes whereby the trademark becomes identical with or similar, in composition, to another personÕs registered trademark designated for identical or similar goods or services, and hence there exists a likelihood of confusing relevant consumers”; and “this shall also apply if the trademark holder is obviously aware or should have been aware of any such act engaged by a licensee under Subparagraph 1 of the preceding paragraph but fails to raise any objection.” Since the legislative objective of Subparagraph 1 of Paragraph 1 of this article not only seeks to suppress unlawful and inappropriate use of registered trademarks but also to ensure fair market competition, rather than punish trademark holders or exclude trademark rights. Therefore, one of the criteria for revoking a trademark is confusion to relevant consumers under Subparagraph 1 of Paragraph 1 of this article. This is an indispensable criterion together with altering a trademark or supplementing it with additional notes. Therefore, if evidence only proves that a trademark holder is obviously aware or should have been aware of a licensee’s altering the trademark or supplementing it with additional notes without objecting to such practice but does not substantiate that the licensed trademark is likely to be confused with another trademark, Paragraph 2 is certainly not applicable as the basis for punishment.