APAA e-Newsletter (Issue No. 35, June 2023)

Amendment to Taiwan Trademark Act Passed Third Reading: Enhancing Protection of Trademark Applicants and Trademark Rights Holders

Dannie Kuan YuHan, Wideband IP Office (Taiwan)

The Legislative Yuan passed the amendment to the Trademark Act on May 9, 2023. This amendment modifies 12 articles and adds 2 new articles to the Trademark Act. The amendment includes the establishment of an acceleration mechanism for the examination of trademark applications, simplification of the procedure for trademark proprietors to determine infringement upon receiving notification from customs, clarification of eligible applicants and the concept of fair use in certain circumstances when using others’ trademarks, and the establishment of a system for managing trademark agents. A detailed introduction is provided below.

Acceleration Mechanism: In response to the increasing number of trademark applications and limited manpower for examination, a provision for accelerating the examination process has been introduced. When immediate acquisition of rights is needed, such as in cases of infringement litigation or when the goods are already on the market, applicants can provide relevant facts and reasons, pay an acceleration examination fee (6,000 NTD), and request the trademark authority to expedite the examination. This mechanism aims to meet the immediate needs of domestic industries in obtaining registered trademarks promptly (Trademark Act, Articles 19, 94, and 104).

Simplification of Infringement Determination by Trademark Proprietors: The current provision requires trademark proprietors to personally visit customs for infringement determination within a specified period upon receiving notification. However, under the practices of customs in countries such as the United States, Japan, Germany, and South Korea, personal presence is not required for infringement determination. Additionally, advancements in technology allow infringement situations to be determined through photo evidence. Therefore, the amendment allows trademark proprietors to make preliminary determinations using photo evidence provided by the customs platform and visit customs only when necessary for infringement determination (Trademark Act, Article 75).

Clarification of Eligible Applicants: According to Judicial Yuan Interpretation No. 486, unincorporated groups, although lacking legal personality, are still protected under the Trademark Act. The amendment expands the eligible applicants for trademark registration beyond natural persons and legal persons. It includes non-legal-person entities (such as partnerships formed by specialized professionals like certified public accountants, lawyers, or architects), associations registered under the Civil Associations Act, and businesses registered under the Business Registration Act (sole proprietorships or partnerships). This expansion aligns with the practical need for transactions conducted under business or group names. Also, the clarification of eligible applicants would facilitate the management and maintenance of registered trademarks by applicants (Trademark Act, Articles 19, paragraph 3, and 99).

Clear Definition of Nominative Fair Use: The current Trademark Act already regulates “descriptive fair use” in Article 36. The amendment further introduces the concept of “nominative fair use” and defines its applicable circumstances and the results of such use. Nominative fair use refers to use of someone else’s trademark to indicate the goods or services of that person (the trademark proprietor) and not as one’s own trademark. For example, an advertising sign offering mobile phone and communication repair services can use various mobile phone trademarks to indicate the brands of the phones being serviced, without raising concerns of infringement (Trademark Act, Article 36).

Establishment of a System for Managing Trademark Agents: The amendment also introduces provisions on the qualification requirements to become a trademark agent. This is aimed at ensuring that trademark agents possess adequate practical experience in trademark matters and possess relevant expertise in trademark law. The goal is to maintain the quality of services provided by trademark agents and enhance information transparency for the convenience of the public (Trademark Act, Articles 6 and 12).

In addition to the aforementioned amendments, the revised Trademark Act includes several other noteworthy changes.

One notable change is the addition of Article 30, Paragraph 4, which stipulates that if a trademark design incorporates functional elements and these are not depicted using dashed lines, the trademark shall not be eligible for registration.

Additionally, the amendment provides further clarification to Article 30, Paragraph 1, Subparagraph 14 of the current law. It specifies that trademarks that are “identical or similar to” the names of famous legal entities, business names, or other organizations, and likely to cause confusion among the relevant public, shall not be registered.

Regarding the exhaustion principle outlined in Article 36, Paragraph 2 of the current law, it states that the principle does not apply when there are legitimate reasons to prevent the goods from being altered, damaged, or for other justifiable reasons. The amendment further specifies that the exhaustion principle does not apply when it is necessary to prevent the goods from being “improperly processed or altered” by others.

These amendment contents will further protect the rights of trademark applicants (such as the acceleration mechanism and the establishment of a system for managing trademark agents) and align judicial and practical judgments (such as the inclusion of nominative fair use and the simplification of infringement determination procedures). The implementation of these amendments will facilitate the implementation of trademark strategies for businesses and improve overall administrative efficiency.