In the Event that a Trademark Owner Applies for Advice Protection with Customs, after Registration of Genuine and Counterfeit Goods in the Database, Can Parties Other Than the Trademark Owner Request Revocation or Removal of Said Registration?

11/30/2023

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Article 75, paragraph 1 of the Taiwan Trademark Act ("Act") stipulates "When Customs, in the performance of their duties, find that imported or exported goods show signs of infringement on trademark rights, they shall notify the trademark owner and the importer or exporter."  In order to implement this protection, Article 2 of the Regulations for the Implementation of Measures for the Protection of Trademark Rights by Customs ("Regulations"), authorized by Article 78, paragraph 2 of the Act, stipulates "When the trademark owner believes there is a likelihood of trademark infringement on imported or exported goods, they may submit relevant documents to Customs to apply for advice protection.  The advice protection referred to in the preceding paragraph means a system by which the trademark owner, during the term of the trademark right, submits relevant information of protection to Customs, and the information is registered in the intellectual property database."  The first paragraph of Article 3 of the Regulations stipulates "When the trademark owner applies for advice protection, each application shall be based on one trademark registration number, and shall submit an application form along with the following information to Customs: 1. Text description sufficient for Customs to identify the characteristics of genuine goods and infringing goods.  2. Image electronic files sufficient for Customs to identify the characteristics of genuine goods and infringing goods (such as genuine goods, counterfeit goods, photos for comparison of genuine and counterfeit goods, or catalogs, etc.), and the content of the images shall be the designated items of goods registered for use.  3. Trademark certificate.  4. Contact information."  The aforementioned advice protection measures enable Customs to more effectively detect infringing goods and ensure the rights of the trademark owner.  Nonetheless, the question remains whether, when goods of a third party are identified by the trademark owner as infringing and registered in the aforementioned Customs intellectual property database, the third party can contest the registration with the administrative court and seek administrative relief.  In this regard, Supreme Administrative Court Judgment, 2022 Shang Zi No. 475 rendered on 5 October 2023 clearly expresses a negative response. 

The original instance determined the following facts.  The third party (Company A), a trademark owner, filed an application for advice protection with Customs Administration (defendant) for the disputed trademark.  The Administration approved said application via letter (hereinafter the "disputed letter"), and registered photos of products and packaging thereof of the plaintiff (Company B), submitted by Company A, as counterfeit identification in the intellectual property database.  Company B contended that there was no infringement on the trademark, and appealed to the Ministry of Finance.  However, the appeal was considered a case not entertained by the Ministry.  Company B then implemented litigation with the Taipei High Administrative Court, which was subsequently transferred to the Intellectual Property and Commercial Court, requiring the defendant to revoke the disputed letter and the appeal decision (the first part of the statement), or remove the registration (the second part of the statement).  The original instance acknowledged that the disputed letter was an administrative disposition, but ruled that Company B lacked the standing to sue for revocation, nor did they have right of claim under public law, thereby rendering administrative judgment 2021 Hsing Ta Su Zi No.1, on 11 May 2022, dismissing the plaintiff's claims. 

Company B appealed the judgment, but the Supreme Administrative Court upheld the same in 2022 Shan Zi No. 475.  Reasoning for the decision follows. 

Regarding the first part of the statement:

1. The subject of the procedure of a litigation of revocation must be an administrative disposition, or the filing of the litigation is non-compliant with procedural requirements and therefore illegal, cannot be corrected, and shall be dismissed by ruling.  Here, "administrative disposition" refers to the unilateral exercise of public power by an administrative agency, to regulate specific events in public law and thereby directly produce legal effect.  Actual actions taken by the administrative agency constitute administrative measures seeking to generate factual effect, rather than directly produce legal effect.  Due to the lack of any regulatory aspect thereto, they are not considered administrative dispositions and cannot be subject to litigation of revocation.
2. Customs' acceptance of the advice protection seeks to allow trademark owners to provide information, such that Customs can register the same in its internal intellectual property database as a reference supporting performance of operations thereof.  Determination of whether imported or exported goods involve a "clear risk of trademark infringement," still remains with Customs based on the actual circumstance of each case, and is not bound by protection information provided by the trademark owner.  Therefore, Customs' acceptance of the advice protection and registration of the information provided by trademark owners in its internal intellectual property database involves informative characterization, resulting in factual rather than legal effect.  Since the aforementioned actions produce no direct legal effects externally, and remain administrative actions without no intention to produce legal effect, the actions are not administrative disposition.
3. Accordingly, the appellant's litigation of revocation against the disputed letter constitutes filing without meeting other requirements, wherein deficits thereof cannot be corrected.  The claims should be dismissed by ruling.  While the original instance considered the disputed letter to be an administrative disposition based on the appellant’s lack of qualifications, and correspondingly dismissing the appellant's claim by rendering a judgment, since the conclusion to dismiss the appellant's litigation is the same, the said part should be upheld. 

Regarding the second part of the statement:

1. Article 8, Paragraph 1 of the Administrative Litigation Act provides "Between the people and the central or local authorities, for payment of property governed by public law or request for performance other than administrative disposition, litigation demanding performance may be undertaken.  The same applies to actions arising out of contracts governed by public law."  Accordingly, the administrative court can be petitioned to issue judgment removing consequences of illegal administrative action, in order to restore the pre- infringement state.  This is the right to request removal of consequences under public law.  The right to request the removal of consequences can be used as a general right of claim for litigation demanding performance under public law, which must meets the following requirements: (1) the administrative action of the defendant authority is illegal, or legal at the time but subsequently became illegal due to changes in the law; (2) the administrative action directly infringes on the rights of the people; (3) infringement continues, and there is a possibility of removing and restoring to the state before administrative action, and (4) the infringee is not significantly at fault for damage.
2. Registration by the Appellee is in compliance with the conditions outlined in Article 3, Paragraph 1 of the Regulations, so no illegality exists.
3. Customs' registration by which the relevant information of protection is registered in the intellectual property database is merely a reference for internal operations.  While the trademark owner lists Company B's products as counterfeit as protection data, this simply means that, when Company B imports or exports the product in the future, risk to be considered as infringement of trademark rights after Customs refers to information of protection being increased, whereby it is difficult to argue that disputed registration has already directly infringed on the rights or legal interests of the Appellee.  Furthermore, Customs' handling and abolition of seizure, in accordance with Articles 72 and 73 of the Trademark Law, is not related to whether the trademark owner has applied for advice protection with the Customs (Note: Articles 72 and 73 of the Trademark Law do not stipulate a condition requiring the trademark owner to apply for protection with the Customs).  Therefore, the Customs' acceptance of the advice protection is not a previous stage act of seizure, which means it will not directly result in the appellant's goods being seized in the future.  Therefore, it is difficult to argue that the disputed registration has directly infringed on the appellant's rights.
4. The disputed registration is not illegal, nor does it directly infringe on the rights of the Appellee.  Therefore, the claim fails to meet the requirements of the right to request removal of consequences, and the second part of the statement of the Appellee to request removal of the disputed registration is unfounded.

Whether this interpretation of the Supreme Administrative Court acheives stable interpretation in practice remains to be observed.