It will not constitute an infringement of trademark rights before a license thereof is formally terminated.
A trademark license is a kind of continuous contract. When the duration of license is set in a license contract, once the duration is expired, the license is terminated. On the contrary, if there is no duration set for the license, it will be a kind of non-fixed term contract. For the non-fixed term contract, there is no principle norm about how to express the intention of termination and its legal effect. However, since the termination of a non-fixed term license contract is to express the intention of termination happened in the future, if there is no clause for termination stipulated in the license contract, the termination shall not be exercised except as otherwise expressly provided in laws.
When a licensee fails to carry out the obligation, and the trademark right holder would like to terminate the license contract one-sidedly, Article 254 of the Civil Code should be analogous to be applied. That is the trademark right holder shall fix a reasonable period and notify the licensee to perform within that period. If the licensee does not perform within that period, the trademark right holder may rescind the contract.
Civil Code
|
Article 254 |
When a party to a contract is in default, the other party may fix a reasonable period and notify him to perform within that period. If the party in default does not perform within that period, the other party may rescind the contract. |
In the criminal case No.4 from the IP Court in 2013, Company A and Company B constituted a non-fixed term license contract for the trademark rights. Company A issued a Legal Attest Letter to Company B to express its intention of terminating the license contract without reaching a mutual agreement of termination with Company B in advance nor having a legal matter or a clause provided in the contract to terminate the contract. According to the explanation in the preceding paragraph, such a Legal Attest Letter cannot make the license contract be formally terminated. Now that the license contract is not terminated, the licensee’s acts of continuously using the licensed trademark on products should not be deemed as violating any articles of the Trademark Act.
Source: TIPO Newsletter No.85 issued on July 05, 2013
http://www.tipo.gov.tw/public/epaper/113/ePaper113_ep7464.htm
Delivered by: JAW-HWA INTERNATIONAL PATENT & TRADEMARK & LAWOFFICES
TAIPEI, TAIWAN
http://www.jaw-hwa.com.tw
