Chinese (Mandarin) is the national language in Taiwan. To expand the market in Taiwan, many foreign companies will select the Chinese translation or transliteration of their foreign brands as locally used brands (trademarks) so that the consumers in Taiwan may identify more easily. However, in Chinese language, one character may have multiple pronunciations or meanings. Given this, one foreign trademark might have multiple alternative ways of Chinese translation or transliteration.
When comparing a foreign trademark with its Chinese translated or transliterated version on their own, there might not be similarity between the two under the traditional standard of trademark similarity. Accordingly, when the Chinese translated or transliterated version of a foreign trademark was applied or registered as a trademark in bad faith, it has been uncertain whether there is a likelihood of confusion under the current practice in Taiwan. In a recent administrative case regarding a trademark opposition, the Intellectual Property Court had addressed this issue and held in the instant case that if the applicant maliciously knew the likelihood of confusion and still applied for the Chinese translated or transliterated version of a foreign trademark, the application is considered to be filed in bad faith and should not be accepted.
The opponent of the trademark opposition is a French cosmetic company, while the registrant of the disputed trademark is the French company's distributor in Taiwan. Initially, the French company had decided the only Chinese translated version to be used for its foreign language trademark, and demanded the distributor that it should not apply any trademark or other intellectual property right related to the foreign language trademark. However, the distributor did not use the Chinese translation decided by the French company. Claiming that it had a need for marketing, the distributor created its own Chinese translation for the foreign language trademark and only used the Chinese translation it created during the distribution period. Subsequently, the French company wished to end the distribution relationship with the distributor and found out about that the distributor had registered its own Chinese translated version (hereinafter "trademark registration") of the foreign language trademark as a trademark.
The distributor argued that, the trademark registration in dispute was an independent creation and the pronunciation of the foreign language trademark owned by the French company was different from the registration. Therefore, the distributor claimed that there was no similarity between the trademark registration and the foreign language trademark.
The Intellectual Property Court, however, pointed out that the distributor and its related company constantly used the trademark registration along with the foreign language trademark. In addition, the distributor often added "French" in front of the trademark registration to represent the French company's product. Further, the Intellectual Property Court found out that the distributor filed and used the translation of the French company's Chinese name as the trademark registration. Given this, the Intellectual Property Court stated that the distributor obviously tried to cause confusion to the consumers in Taiwan. Therefore, the Intellectual Property held that the distributor did not apply for the trademark registration in good faith and the trademark registration should not be protected under Trademark Act.