An Overview of Taiwan IP Laws
SAINT ISLAND INT'L PATENT & LAW OFFICES
** This article is an excerpt from an article published on Saint Island’s website
Types of Patents
There are three types of Taiwan patents: invention patents, utility model patents, and design patents. The respective patent terms are 20, 10, and 15 years, all calculated from the filing date of a patent application, while the patent rights are actionable from the issue date of the patent. An extension of patent term of a maximum of 5 years is possible for invention patents involving pharmaceuticals, agrichemicals, or manufacturing processes thereof to compensate for the regulatory delay caused by marketing authorization procedures.
As Taiwan is not a member of the PCT, it is not possible to file a national stage patent application in Taiwan of a PCT application. However, as Taiwan is a member of the WTO and hence subject to the rules of the Paris Convention incorporated into the TRIPs Agreement, any foreign applicant, whose country of origin is a WTO member or who has a domicile or a place of business within the territory of a WTO member jurisdiction, is entitled to claim priority in Taiwan based on his invention patent or utility model application (including a PCT application) first filed in any member country of the WTO within 12 months (or 6 months in case of a design application) of the filing date in Taiwan.
Further, the Taiwan Patent Law provides a 12-month grace period for an invention that was published in any printed publication other than a patent publication. As such, an applicant can file a patent application in Taiwan for his invention that has been published in a journal, periodical, or thesis within 12 months upon the publication thereof. Also, an applicant can file a patent application in Taiwan for an invention not yet publicly disclosed but having been filed in another country even after the above-mentioned 12-month priority period, as long as the foreign corresponding application has not yet been published at the time of the Taiwan filing.
i Invention and utility model
A creation of technical ideas fulfills the patentability requirements of an invention, if it is industrially applicable and not found to lack novelty and inventive step. The applicant of an invention patent application must file a substantive examination request within 3 years from the filing date; otherwise the application shall be deemed to be withdrawn. The Applicant can concurrently submit amendments when filing the request.
The same patentability requirements applying to an invention also apply to a utility model, while the eligible subject matter of a patentable utility model is limited to a shape or structure of an article, or a combination of articles. A utility model application in Taiwan is not subject to substantive examination as to novelty and inventive step. As long as the formality requirements of a utility model application are fulfilled, the application will mature into a registration within a timeframe of around 6 to 8 months. However, a utility model patent cannot afford presumption of validity. As such, before enforcing a utility model patent against an alleged infringer, the patentee is obligated to request the Taiwan's Intellectual Property Office (“TIPO”) to conduct substantive examination as to novelty and inventiveness of the utility model patent.
ii Design patents
A design patent is a novel and creative design of the shape, color or pattern, or any combination thereof, of an article as a whole or in part with visual appeal. Eligible subject matters of a design patent also include computer generated icons (Icons) and graphic user interface (GUI) applied to an article. A design application undergoes examination soon after the formalities are fulfilled, meaning there is no need to file a request for substantive examination. In general, the applicant may expect to receive a first examination report from the Examiner in about 4~6 months.
Recent Development of the Patent Law
i Amendments to the Patent Law in 2019
A Draft Amendment to Taiwan Patent Law was passed by Taiwan’s Legislature on April 16, 2019 and took effect on November 1, 2019. For a detailed introduction, please refer to our news letter. The most significant changes are:
(i) Extension of the Duration Term of Design Patents
According to the Amended Patent Law, the duration term of a design patent is extended from 12 years to 15 years. For a design patent which had not expired when the Amended Patent Law took effect, its duration term would be automatically extended to 15 years.
(ii) Relaxation of the Time Limit to File a Divisional Application after Issuance of the Notice of Allowance
The applicant is allowed to file a divisional application from an invention patent application or a utility model patent application within three months, in lieu of 30 days, from receipt of the Notice of Allowance.
ii A Patent Linkage System was Implemented from August 20, 2019
In January 2018, a patent linkage system was promulgated and introduced into the Pharmaceutical Affairs Act. After almost 19 months, the patent linkage system was effected from August 20, 2019. For a detailed introduction, please refer to our news letter.
(i) Patent Listing
According to the amended Pharmaceutical Affairs Act and related bylaws, to prevent Taiwan's FDA from granting regulatory authorization to a generic medicine, owner of a new drug approval has the right to file an application for recording information relating to a patent to be listed in a patent linkage system run by Taiwan's FDA.
The application must be filed within 45 days from the date the certificate of a new drug approval is received.
Only invention patents for compounds, compositions or formulations, as well as medical uses are allowed to be listed:
1. Compound: the active ingredient(s) of a drug;
2. Composition or formulation: the composition or formulation of the active ingredients of a drug; and
3. Medical use: the medical use(s) corresponding to all or part of the indication(s) on the certificate of drug approval.
In general, the information regarding a patent to be listed that need be submitted for recordation in the registration system includes: the patent number and expiry date of the patent, as well as the name of the patent owner, exclusive licensee and patent attorney.
(ii) Generic Drug Company's Declarations
A generic drug company must make one of the following declarations when filing an application for approval of a generic drug equivalent to a new drug:
1. The new drug has not been patented;
2. the patent for the new drug has already expired;
3. drug approval of the equivalent generic drug is not to be issued until the patent for the new drug has expired; and
4. the patent for the new drug is not infringed or is invalid.
If there is no existing patent dispute between a generic drug company and a brand drug company (as shown in the yellow area of the figure), a generic drug company will receive drug approval if declaring 1 or 2; and will receive drug approval upon expiry of a preceding brand name patent if declaring 3.
(iii) Interplay between the Patentee and the Generic Drug Company
If declaring 4, the generic drug company must notify the holder of the new drug approval, the patentee and the exclusive licensee of the patent (if any) of its declaration in writing and with grounds and evidence within 20 days from the day the generic drug company receives a notice from Taiwan FDA that the application for its generic drug has completed.
After receipt of the declaration from the generic drug company, the patentee or the exclusive licensee may file a lawsuit within a 45-day time limit and then notify Taiwan FDA that a lawsuit has been filed.
If a lawsuit is not filed within the time limit, Taiwan FDA will issue drug approval of the generic drug. If a lawsuit is filed, Taiwan FDA will stay issuance of drug approval of the generic drug for up to 12 months.
Should the court render a final and non-appealable judgment in favor of the patentee or the exclusive licensee within the stay period (up to 12 months), the generic drug company will receive drug approval only after the patent for the brand name drug expires. Otherwise, the generic drug company will receive drug approval of the generic drug and further obtain a 12-month market exclusivity, assuming it is the earliest of those that have duly completed the application forms for the generic drug equivalent to the brand name drug.
Taiwan follows the first-to-file principle. An applicant is not required to submit any evidence of use when filing a trademark application in Taiwan. Therefore, although an unregistered trademark holder may seek remedies based upon the Fair Trade Act if said mark has obtained a reputation in Taiwan, it is still highly recommended that trademark applications be filed at the earliest possible opportunity for the following reasons: (1) the threshold adopted by the Fair Trade Commission in recognizing the reputation of unregistered trademarks is very high and it is, therefore, quite difficult to seek remedies through filing a complaint with the Commission; and (2) since the commercial value of a trademark may increase with age, it is wise to register a mark early so that its reputation increases over time.
As Taiwan is not a signatory to the Madrid Agreement or the Madrid Protocol, it is not possible to extend an international registration to Taiwan. To obtain a trademark registration, it is necessary to file an independent national application. The duration of a trademark registration is 10 years calculated from the registration date, and is renewable every 10 years.
Trademarks that are eligible for registration include words, devices, symbols, color(s), sound, three-dimensional shaping of articles, motion, holograms, sounds, smells, trade dress and any combination of these. Multi-class applications are permitted in Taiwan and Nice Classification of Goods/Services (NCL) is basically adopted by the TIPO. In addition, the TIPO adopts the post-registration opposition system. Anyone may file an opposition against a trademark registration within 3 month from the registration date.
A trademark registered in Taiwan must be put to use within three years after its registration. Although the registrant need not voluntarily submit evidence of use on a periodical basis, once a non-use cancellation is filed against a registered trademark, the trademark holder bears the burden of submitting evidence of use to defend the validity of the registered mark.
Trademark infringement would be liable for civil liability and criminal penalties.
The Taiwan Copyright Law provides that original copyrightable works shall enjoy exclusive rights automatically upon their completion, with no form of registration required. The TIPO has ceased receiving copyright registration applications since 1998.
A copyrighted work is protected throughout the author's lifetime and 50 years after. Original copyrightable works of a foreign author being a national of a WTO member are also protected in Taiwan.
A copyright holder, when enforcing a copyright, bears the burden of proving the copyright ownership and sometimes even the creation time of the copyright, if such issue is being raised. For important copyrighted work, it is recommendable to obtain a copyright certificate issued by a copyright owners' organization so as to serve as prima facie evidence of the completion and ownership of the copyright. However, when a work's copyrightability is being challenged, only a court will have a final say over such dispute on a case-by-case basis.
In accordance with the Copyright Law, an infringement gives rise to civil and criminal liabilities; the latter may lead to a sentence of up to 5 years of imprisonment.
Recent Development of the Copyright Law
A draft amendment to the Copyright Law proposed by Legislators with the aim of combating setup boxes related infringements was passed on April 16, 2019. A new Article 87(1)(8) is now introduced to the Copyright Law, which reads:
“One who intends to facilitate the public to access publicly broadcast or transmitted contents that infringe on copyrights, and knowingly (a) offers the public a software that collects IP addresses of the said infringing contents, (b) instructs or assists the public to use, or presets path for the public to access the said software, or (c) manufactures, imports, or sells an equipment or device containing the said software, shall be deemed as infringing copyrights, suppose he or she receives benefits from such conduct” (the writer’s translation).
The infringer may be punishable by an imprisonment up to two years and/or a fine up to NT$500,000.
IV TRADE SECRETS
The Taiwan Trade Secret Law affords protection to any method, know-how, process, formula, program, design or any other form of information that may be used in the course of production, sales or operations, provided that it meets the following requirements: (1) it is not known to persons generally involved in this type of information; (2) its economic value, actual or potential, is dependent upon its secretive nature; and (3) its holder has taken reasonable measures to maintain its secrecy.
In view of the increasing international corporate espionage and the theft of company trade secrets by former employees, the new Trade Secret Law, implemented on February 1, 2013, has introduced criminal liability and fines for offenders.
Recent Development of the Trade Secret Law
A new amendment to the Trade Secret Law is now under deliberation in the aim of enhancing protection to non-Taiwanese trade secret owners.
1. According to the amendment, a foreign juristic person shall have the same right as a Taiwanese entity to bring a civil lawsuit, a criminal complaint (with a prosecutors’ office) or a private prosecution (with a district court), even if the foreign juristic person has yet to be recognized by Taiwan’s Ministry of Economic Affairs. This rule also applies to juristic persons incorporated in Mainland China, Hong Kong or Macau.
2. Another aim of the proposed amendment is to relax the strict reciprocity principle in terms of protection to non-Taiwanese trade mark owners. Under the amendment, a foreign national shall also be accorded protection if Taiwan and the foreign national’s home country have acceded to an multilateral international treaty for trade secrets protection, e.g. the TRIPS Agreement.
Taiwan's IP Court
Civil litigations on IP disputes are tried at the Taiwan's IP Court, unless the parties have previously consented to the jurisdiction of a district court or the defendant does not raise an objection to a district court’s jurisdiction where an IP litigation is filed.
To assist the judges in handling the technical aspect of a patent litigation and other technology-related disputes, the IP Court has set up a panel of Technical Examination Officers (TEOs), most of whom used to work as senior patent examiners with specialized skills in various technological fields. While a party may move the court to permit an expert to testify on relevant issues, such motion is totally subject to the discretion of the judge. Aside from providing necessary technical assistance, including preparing written reports to the judge, the TEOs may attend court hearings and interrogate the parties, witnesses and experts.
The IP Court is noted for its expeditious proceeding; a first-instance proceeding for a patent infringement suit may be concluded within a year.
Structure of Trial
The proceeding of an infringement lawsuit may be divided into three stages. In the first stage, the IP Court holds one or two hearings to assess the value of the plaintiff's asserted legal claims so as to determine if additional court fees should be submitted.
In the second stage, the judge will give the parties a chance to specify their respective disputed and non-disputed issues in the lawsuit. For instance, the plaintiff may assert that a wording of a patent claim is in dispute and needs to be construed; or, in a trademark case, the defendant may argue that the mark at issue should be cancelled due to non-use for three years without a justifiable cause.
Also in the second stage, the judge will ask the parties to identify any and all the corresponding evidence in support of their arguments, such as expert, employee, or equipment required for proving infringement. As a rule of thumb, it will be the plaintiff's burden to prove that the asserted IP right is infringed and the claimed damages were thereby incurred. On the other hand, since a patent or registered trademark is presumed to be valid in a civil lawsuit, a defendant challenging such presumption shall bear the burden of rebuttal. Upon expiration of the prescribed time for the parties to raise a new dispute, argument and evidence, the judge will close the preparatory proceeding and set a date for an oral argument proceeding, which is the third and final stage of an infringement lawsuit.
In the third stage, the judge will hear the oral arguments of the parties and review the merit of the case based on the evidence submitted in the prior proceedings. In principle, the parties will be bound by any stipulation rendered in the preparatory proceeding, and evidence not presented by the end of the preparatory proceeding will not be allowed to be introduced at the third stage.
A first-instance judgment on a civil lawsuit is appealable to the second instance panel of the IP Court, and further to the Supreme Court if appellate requirements are met (e.g., the value of the asserted claims exceeds a threshold at approximately US$50,000).
A panel of three judges will be established to review the appeal (while only one judge is assigned for the first instance level), and the appellate panel may review the appeal independently without giving deference to the findings of the first instance level. However, this does not mean a party is free to introduce whatever evidence it wishes to submit. Generally speaking, an evidence not presented in the first instance level is precluded from entering the appellate proceeding.
The above contents are intended as general discussion of the subject matter only and shall not be deemed as legal advice to any particular case or issue.