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According to Article 30-I-(3) of the Trademark Act, when a person uses a trademark identical or similar to another's trademark on the same or similar goods or services in good faith before the date of application for registration of the latter, such use is not subject to said another person's trademark rights. However, this applies to the goods or services on which the trademark is originally used only, as set forth in the proviso of the provision. According to 30-I-(3) of the Trademark Act, a bona-fide prior user may continue using the trademark on the original goods or services.
Under current practice, disputes usually arise as to whether the prior use of a trademark in good faith has any territorial limitation and whether the scale of production or sale in connection thereto can be expanded. For instance, if the prior use of a trademark in good faith occurs in Taipei, can such use be extended to other places? If the use originally happens in only one store, can the use be extended to other stores?
The Intellectual Property Court held in 2010 that since the phrase "original production or sale scale" was deleted from Article 30-I-(3) of the Trademark Act before the amendment when it underwent the second reading at the Legislative Yuan, the phrase "applies only to the goods or services on which the trademark is originally used" sets no restriction on the scale of production or sale. The dispute here is what the "scale of production or sale" actually means. Does it mean limitations to the number of stores or to geographic locations? In other words, can a prior user increase the number of stores that provide relevant goods or services or open branch stores in different geographic locations?
In practice, some consider that the deletion of "scale of production or sale" during the second reading of the amendment is meant to lessen the limitation on the number of stores, not to geo-graphic locations. Therefore, if a newly-opened branch store is far away from the original one, use of the relevant trademark should not be deemed fair use in good faith.
In respect of this issue, the Intellectual Property Court stated in its 2010 Judgment that since the phrase "applicable to the original scale of production or sale" was deleted during the process of legislation, the phrase "applies only to the goods or services on which the trademark is originally used" can hardly be further interpreted as limitations to the scale of production or sale. In other words, deletion of "applicable to the original scale of production or sale" means that fair use is not to be restricted to the original scale of production or sale, so "applies only to the goods or services on which the trademark is originally used" specified in the Trademark Act after the amendment should be interpreted as imposing no restriction on geographic location or business scale. Therefore, according to the principle of nullum crimen, nulla poena sine lege, the provision should never be interpreted in a broad sense to restrict the rights of a bona-fide prior user and expand the applicability of criminal laws.
