Regarding the issue of whether an agent, who was previously authorized by a product's original manufacturer to obtain the trademark rights in Taiwan, may assert trademark infringement claims against third parties who import such manufacturer’s products into Taiwan after such agent's agency relationship is terminated, the Intellectual Property and Commercial Court (hereinafter the "IP Court") expressed its position in the (114) Min-Shang-Shang-Yi-Zi No. 2 Civil Judgment on May 29, 2026.

 

In the present case, the Appellant, Company A (the plaintiff in the first instance), is the registered owner of the Disputed Trademark in Taiwan. The Disputed Trademark was originally used by Company C, the Czech original manufacturer. Company D serves as the exclusive Asian general agent for the brand and, with the consent of Company C, obtained the trademark rights for the Disputed Trademark in Taiwan. Company D appointed Company A as the general agent in Taiwan, and both parties executed a trademark exclusive license and service mark assignment agreement, whereby the Disputed Trademark was consensually transferred to Company A. During the period of the cooperation, Company A continuously procured goods from the original manufacturer, Company C, for sale in Taiwan. Eventually, the agency relationship between the parties was terminated for certain reasons; however, the trademark rights to the Disputed Trademark remain vested in Company A.

 

Subsequently, the Appellant Company A discovered that Appellee B (the defendant in the first instance) used the Disputed Trademark on the Shopee online platform without the Appellant's consent or authorization, and Appellee B sold products made by Company C bearing the Disputed Trademark (hereinafter the “Disputed Products”). The Appellant claims that such conduct is likely to cause confusion or misidentification among relevant consumers, thereby constituting acts of trademark infringement under Article 68, Paragraph 1, Subparagraphs 2 and 3 of the Trademark Act. Accordingly, pursuant to Article 69, Paragraph 3 of the same Act, Company A sought damages from Appellee B. The IP Court of first instance dismissed the plaintiff’s claim in the IP Court (113) Ming-Shang-Su-Zi No. 47 Civil Judgment. Dissatisfied with such ruling, Company A filed an appeal.

 

The IP Court in the second instance recognized that an economic or legal licensing and agency relationship once existed between Company A and Company C. The Appellant, Company A, asserted that it had, between July and September 2020, imported goods from Company C and completed customs clearance for such goods, and subsequently ceased acting as an agent for importing any products from Company C, having instead established its own trademark goodwill through self-production and direct sales. However, the IP Court referenced the Supreme Court (113) Tai-Shang-Zi No. 882 Civil Ruling. Such ruling indicates that the concept of with consent under Article 36, Paragraph 2 of the Trademark Act is not limited to the trademark owner’s explicit approval. Although trademarks registered in different countries constitute distinct trademark rights under the territoriality principle of trademark, if such rights fundamentally originate from the same proprietor and are connected through licensing or distribution agreements, relationships with affiliated or group companies, holding and subsidiary relationships, exclusive sales arrangements, acts of marketing under a unified global trademark image, or joint trademark marketing strategies, such marketing approaches are likely to cause consumer confusion. In such cases, the trademark owner is deemed to be aware of and to have consented to these practices. Furthermore, such entities typically have the capacity to control the quality of legitimate trademarked goods and the status of trademark use, thereby ensuring proper trademark usage and safeguarding the goodwill of the trademark owner in the importing country. Such circumstances fall within the scope of consent as prescribed by Article 36, Paragraph 2 of the Trademark Act. Thus, the IP Court held that these circumstances do not sever the essential source of the exclusive rights associated with the Disputed Trademark, which originate from the rights holder, namely Company C. Therefore, the IP Court concluded that the argument raised by the Appellant Company A is untenable.

 

Furthermore, the IP Court determined that the Appellee B’s use of the Disputed Trademark on the Shopee online platform constitutes a fair use under Article 36, Paragraph 1, Subparagraph 1 of the Trademark Act. The Disputed Trademark originally appeared on the product bottle in very small font. Moreover, the Appellee B did not deliberately emphasize the trademark. The marking by the Appellee B was intended solely to convey and indicate that the product originated from Company C. Viewed in its entirety, such practice aligns with the principles of good faith customary in commercial transactions. Therefore, such practice should not be subject to the trademark rights associated with the Disputed Trademark.

 

In fact, during the same period, the Appellant Company A not only initiated litigation against the Appellee B in the present case but also filed lawsuits against several other Shopee sellers (the IP Court (113) Ming-Shang-Su-Zi No. 48 Civil Judgment and its appeal (114) Min-Shang-Shang-Yi-Zi No. 5 Civil Judgment; and the IP Court (113) Ming-Shang-Su-Zi No. 56 Civil Judgment and its appeal (114) Min-Shang-Shang-Yi-Zi No. 4 Civil Judgment). However, such cases were dismissed by the IP Court based on the same rationale.

 

This present case involves a Taiwanese company that obtained consent from a foreign original manufacturer to acquire the trademark right in Taiwan. Although the agency relationship between the parties has been terminated, or the Taiwanese company no longer imports products from the foreign manufacturer, the principle of international exhaustion of trademark rights shall still apply to goods manufactured by the foreign original manufacturer and sold in Taiwan through parallel imports by third parties from overseas. Thus, the trademark owner in Taiwan shall not be permitted to assert trademark infringement claims against such third party. This ruling by the IP Court aims to balance the trademark owner's rights with the free circulation of goods.