Trademark holders beware - Trademark Act to change soon

Taiwan
On May 31 2011 the Legislative Yuan passed an amendment to the Trademark Act. The amended act includes 111 articles, compared to the 94 articles in the existing act, and can be considered the first major revision of the act since 2003. Since the amendment involves so many changes, the Taiwan Intellectual Property Office (TIPO) is planning to amend the corresponding legislation regarding the act's enforcement rules, examination criteria, application forms and computer systems. Once all these measures have been revised, the Executive Yuan will announce the date on which the amendment will become effective; this date is currently expected to be in July 2012.

This update outlines the key areas of change in the amended act:
  • Modes of trademark use - the various modes of trademark use are clarified with examples, rather than merely defined by general provisions.
  • Scope of protectable trademarks - to comply with international trends, the amendment specifies that all signs which are distinctive enough to identify the source of goods or services can be registered as trademarks. This extends protection to non-traditional trademarks such as scent marks, motion marks and holograms. This constitutes the first expansion of the act's scope since 2003, when non-traditional trademarks including single-colour marks, three-dimensional marks and sound marks were included.
  • Priority rights based on exhibition - the amendment stipulates that an applicant can apply for trademark registration based on exhibition priority rights within six months of the applicant's goods or services bearing the trademark being displayed at an international exhibition which is hosted or recognised by the Chinese government.
  • Joint ownership of a trademark - applications for joint ownership are already accepted in practice; this is now clearly stipulated in the act.
  • Disclaimer provisions - if a trademark contains a non-distinctive portion, such as a generic term or descriptive word, and if such portion is so obvious that no third party is likely to question the scope of the trademark rights, the TIPO will no longer ask the applicant to disclaim such portion.
  • Time limit for restricting goods or services, applying for division and making a disclaimer - under the existing act, the applicant or registrant can wait until the period of administrative remedies to restrict the designated goods or services, apply for division and make a disclaimer. Since repeated examination is a waste of administrative resources, the amendment stipulates that such applications must be filed before a trademark application is rejected or a trademark dispute is decided.
  • Reinstatement of rights - under the amendment, if an applicant inadvertently delays payment of a registration fee, such payment can be made within six months of the expiry of the period (although the registration fee will be doubled), provided that no third-party rights are affected. Such delayed payments must be made in a lump sum.
  • Exclusive and non-exclusive licences - to comply with the different types of licence contracts in practice, licensing is classified into exclusive and non-exclusive licences. The amendment prescribes that, unless otherwise provided for by the contract, in case of trademark infringement, the exclusive licensee can seek civil and criminal remedies in its name to the extent of the exclusive licence.
  • Proof of trademark use - when an invalidation or revocation action is filed on the basis of an earlier trademark filed or registered for the same or similar goods or services, if the trademark has been registered for three years or more, the applicant must provide evidence of use – or non-use with good cause – of the trademark within three years to support its invalidation or revocation action.
  • Acts regarded as infringement of trademark rights - an act is regarded as trademark infringement if it can be proved that it creates a likelihood that the distinctiveness or reputation of a well-known registered trademark will be diluted; the applicant need not wait until actual damage has occurred. This is to afford better protection to well-known trademarks. Anyone who manufactures, possesses, exhibits, sells, exports or imports labels, hang tags or packaging containers that have not been joined to the goods or services or articles in relation to services, knowing that such act is likely to infringe trademark rights, is deemed to have committed trademark infringement.
  • Border control measures - the amendment adds new provisions regarding border control measures by ex officio detention of infringing goods and provision of information about infringing goods. Under the amendment, Customs can detain goods ex officio and, without prejudice to the protection of the confidentiality of the detained goods, the rights holder can obtain, with the approval of Customs, the relevant information regarding the names and addresses of the importer or exporter, the recipient or shipper, and the number of suspected infringing goods. The amendment also adds new provisions regarding trademark holders' requests for samples of detained goods to confirm infringement. As it is difficult in practice to confirm infringement with respect to certain counterfeit goods, the amendment includes new provisions to permit the rights holders to ask for samples of the detained goods from Customs to confirm infringement by providing a bond.
Of all the provisions included in the amendment, perhaps the most noteworthy are those stipulating that, when an applicant files an invalidation or revocation action on the basis of an earlier trademark filed or registered in relation to the same or similar goods or services, if the trademark has been registered for three years or more, evidence of use in Taiwan must be submitted. As such provisions will make trademark protection more difficult, trademark holders should review the use status of their trademarks in Taiwan as soon as possible in order to reconsider their trademark protection strategy.

Jane Hui-Ching Chen, Lee and Li Attorneys at Law, Taipei

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