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Trademark on Unfinished Products Not Trademark Use



Failure to put a registered trademark to use or failure to use a registered trademark for over three consecutive years after registration without proper reasons constitutes grounds for revocation (cancellation) under Subparagraph 2 of Paragraph 1 of Article 63 of the Trademark Act.  However, non-use of a trademark is a passive fact that will be very difficult to prove by a third party.  Therefore, in a trademark revocation case, the burden of proof will shift to the proprietor of the trademark as long as reasonable suspicion of such non-use can be established by the petitioner.  According to Paragraph 2 of Article 65 of the Trademark Act, a proprietor of the trademark is obliged to prove use of its registered trademark once a notice of revocation is served upon it.
 
Whether the use of the trademark on unfinished products during the manufacturing process will be deemed as a trademark use as stipulated under the Trademark Act is a controversial issue. The Intellectual Property Court took negative opinions in 2016 in a trademark revocation administrative suit.
 
The IP Court pointed out that "use of a trademark" means any of the following act, in the course of trade, where such trademark is capable of being recognized by relevant consumers as a trademark: (1) to apply a trademark to goods or packaging or containers thereof; (2) to possess, display, sell, export, or import the goods referred to in the preceding subparagraph; (3) to apply a trademark to articles relating to the provision of services; or (4) to apply a trademark to commercial documents or advertisements relating to goods or services. The use shall also apply to acts performed by digital audio-visual means, through electronic media, on the Internet, or through other media (Article 5 of the Trademark Act). The term "use of trademark" must at least satisfy the following two requirements: (1) the user must have the subjective intention of using the trademark in the course of trade; and (2) objectively, the use of which must be able to make relevant consumers recognize the trademark as such.
 
The ways to use include applying a trademark to goods or packaging or containers thereof; possessing, displaying, selling, exporting, or importing the goods referred to in the preceding subparagraph; applying a trademark to articles relating to the provision of services; applying a trademark to commercial documents or advertisements relating to goods or services; or applying a trademark by digital audio-visual means, through electronic media, on the Internet, or through other media. The evidence of use of a registered trademark provided by the proprietor shall comply with the general practice of trade. (Paragraph 3 of Article 57 applies mutatis mutandis to Article 67 of the Trademark Act).
 
The IP Court specifically held that the use of the trademark logo on the unfinished products should not be deemed a trademark use as stipulated under the Trademark Act since the products are not finished or circulated in the markets.

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