Sponsorship may lead to trademarks becoming associated with unrelated industries.

According to the Trademark Act, a mark that is identical, or similar, to a well-known trademark can be precluded from registration if there is a likelihood of confusion, or if there is a likelihood of dilution of the distinctiveness or reputation of the well-known trademark.

In practice, the Taiwan Intellectual Property Office (TIPO) has a very strict standard for affirming trademark dilution when there is an attempt to exclude others from use, or registration, of a mark associated with a good or service that is dissimilar to a good or service related to a well-known mark. Therefore, whether there is a likelihood of confusion becomes a core issue under consideration by an examiner when the holder of a well-known trademark exercises his or her exclusive right against identical or similar marks in an unrelated business field.

How far the scope of protection of a well-known trademark can extend to an area where a similar trademark is being used will depend on how well a right holder can prove that the well-known trademark is associated with the irrelevant business at issue. In a recent decision for a trademark invalidation case, the petitioner Red Bull AG, based on its energy drink brand ‘Red Bull and double bull device’, successfully persuaded the TIPO to revoke the trademark ‘Corrida and two bulls device’ registered in Class 4 for industrial oils, lubricants and motor oils-related goods.

In this case, the Red Bull mark’s extremely well-known status in energy drinks does not automatically grant it an extension of protection to the field of industrial oils that are typically used in motor vehicles. However, the petitioner presented abundant evidence showing Red Bull’s strong involvement in motorsports, particularly in Formula 1 car racing and motorcycle racing. Red Bull is a frequent participant in Formula 1 racing through sponsorship, media advertising and even by the holding of international sport events itself, and therefore the Red Bull trademarks are regularly found at event locations, and on professional apparel and equipment for car and motorcycle racers.

Given the petitioner’s aggressive promotion of the Red Bull trademarks through Formula 1 motorsports and racing events, a connection between the petitioner’s marks and the motor industry was found to be present and, indeed, robust. The TIPO in the decision therefore affirmed that, to consumers of motor industry products and services, the Red Bull double bull device trademarks have been closely associated with motor-related events. Since the adversary’s designated goods are related to the motor industry, there exists an overlap of consumers for the goods and services related to the two parties’ marks.

In other words, according to the decision by the TIPO, consumers are likely to confuse the two parties’ marks as having an affiliation, licence, franchise or other similar relationship.

Two years ago, the IP Court made a similar judgment in favour of the mobile communication service provider Orange Brand Services Limited. In that case the trademark at issue was registered in tire pressure monitoring products for automobiles. Despite the irrelevancy of the parties’ industries involved, the mobile communication service provider successfully linked its Orange brand with the motor industry through its funding and sponsoring of Formula 1 and other motorsport events. Based on the overall evidence, the court confirmed the connection and association between the well-known brand and the motor industry.

Moreover, the IP court reasoned that since there exists the likelihood of confusion among the parties’ overlapping consumers, the trademark at issue was revoked.

The TIPO’s decision on the Red Bull trademark invalidation case mirrors the IP Court’s decision. However, for owners of well-known trademarks who would like to expand the protection of their marks to unrelated industries, sponsorship of events associated with those industries may not always be a successful tactic. The Red Bull and Orange trademarks obtained much media exposure and attention during international motorsport events. The companies spent significant sums over long periods to sponsor Formula 1 or their favourite racing team.

While they still promoted their core businesses, these two companies successfully expanded the fame of their marks to consumers of motor industry products and services. Therefore, we believe that such an ability to expand the protection of a company’s mark to an unrelated industry depends on the degree of actual involvement of the trademark in the particular industry.