I.Article 39 Paragraph 1 stipulates that “a registered trademark may be licensed by the proprietor, exclusively or non-exclusively, for all or some of the designated goods or services for which it is registered and for a particular locality.” Article 39 Paragraph 2 stipulates that “a license referred to in the preceding paragraph shall have no locus standi against any third party unless it is entered in the Register by the Registrar Office.” This phrase “have locus standi against any third party if it is entered in the Register” means that since the exercise of rights would result in conflicts and confrontation, registration thus becomes the standard to determine the attribution of rights. For trademark rights, various legal acts and assignments, such as repeated transfers of rights, transfer and trust, trust and pledge, transfer and license, or trust and license, may all have the problem of locus standi against a third party.

Consequently, Article 39 Paragraphs 1 and 2 of the Trademark Act are to protect the third party in a transaction, instead of protecting the tortfeasors. The phrase “have no locus standi against any third party unless it is entered in the Register by the Registrar Office” stipulates in Article 39 Paragraph 2 means that this rule would apply if the parties have disputes about transferring, creating a trust of, licensing, or creating a pledge of the trademark right; it doesn’t mean that any third party is protected.

II.In addition, Article 23 Paragraph 1 Subparagraph 14 of the Trademark Act before amendment provided that “a trademark application shall be rejected if the proposed trademark is identical or similar to a trademark that has been used previously by another person on the identical or similar goods or services, and the applicant thereof is aware of the existence of the said trademark through contractual, geographical, or business connections, or any other relationship with the said person.” The trademark application system in our country is a first–to-file system rather than a first-to-use system. Therefore, basically the trademark which has been used previously but unregistered is not protected. However, since the purpose and value of the existence of a trademark are to be used, some articles in the Trademark Act contain the concepts of the first-to-use system in order to avoid the problems resulting from rigidity. That is, unregistered trademarks, if having being previously used either domestically or abroad, are still protected to some degree. The articles above are exceptions to the first-to-file system and the territoriality principle of trademark rights. The purpose of these articles is to prevent a plagiarist from registering the trademark first, to maintain fair competition in the market, and to facilitate orderly development of industries and commerce.

So it doesn’t matter whether “a trademark that has been previously used,” as stipulated in Article 23 Paragraph 1 Subparagraph 14 of the Trademark Act before amendment, is well-known or not, is domestic or foreign, and is registered or not. This subparagraph is applied as long as the prior used trademark is preemptively registered due to the applicant’s awareness of the existence of the said trademark through contractual, geographical, or business connections, or any other relationship with the said person. Although the plaintiff claims that this subparagraph shall be limited to the situation where the prior used trademark has been registered, not every trademark system in the world adopts the first-to-file principle. For instance, the United States also adopts the first-to-use principle.

If the prior used trademark stipulated in this subparagraph is only limited to the trademark that has been registered, then this subparagraph would not apply when the trademark from countries adopting the first-to-use principle is preemptively registered by a domestic trademark owner. This apparently violates the legislative purpose. As a result, the plaintiff’s claim does not conform to the purpose of Article 23 Paragraph 1 Subparagraph 14 of the Trademark Act before amendment and is thus groundless.

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