Trademark

Introduction to Amendment of Trademark Act (4)
The latest overhaul of the Taiwan Trademark Act was in 2003. The Amendment to the Trademark Act (hereinafter “the Amendment”) heavily references the Singapore Treaty on the Law of Trademarks (“STLT”) administered by the World Intellectual Property Organization (“WIPO”) to further harmonize with the existing international trademark law and its practice. In previous issues of this newsletter (the “TIPS”) we discussed several key points of the Amendment; other main points we have not yet covered are summarized as follows:

• Accept exhibition priority claim – In compliance with Article 11 of the Paris Convention per TRIPS Agreement, prior right protection shall be granted to trademarks of goods and services that are exhibited at government-held or officially recognized international exhibitions, and applications for which are filed in Taiwan within 6 months after the exhibition date of the trademarked goods and services. The exhibition date will be deemed as the priority date of the marks.

• Allow co-ownership of a trademark right – Although co-ownership of a mark has been accepted in current practice when filing a trademark application, the Amendment officially provides its legal basis by specifying that one trademark may be owned by more than two proprietors either in the form of ownership in common or that of a joint-ownership. The rights and responsibilities of co-ownership should apply mutatis mutandis relevant provisions stipulated in the Civil Code. Should a joint-ownership be agreed upon by all parties, to protect the trademark as an indication of origin and quality for its goods or services, no partial disposal of the mark would be allowed unless having consent from all joint-owners, or unless the partial transfer or disposal of the mark is due to legal enforcement or by inheritance. Furthermore, consent from all joint-owners is also required for the restriction or division of designated goods and services for the co-owned trademark.

• Allow non-substantial alteration of the trademark specimen – In reference to the Council Regulation on the Community Trade Mark, later alteration of a trademark specimen that has been filed for registration may be allowed if the alteration is merely to delete the descriptive, misleading or non-distinctive wordings or marks, i.e. ®.

• Abolish the two-installment payment option for registration fees – The current law allows registration fees be paid in two installments to weed out the unwanted trademarks after registration. However, the intended goal cannot be met due to lack of utilization of the two-installment option. The abolishment will ease proprietors’ burden in managing trademark portfolios.

• Provide a 6-months grace period for reinstatement of the trademark right – In the event that an approved trademark loses its right for registration due to inadvertent non-compliance of the due date for registration payment, the trademark right may be reinstated by paying double the overdue fees within 6 months from the due date. However, exception exists if within such a period an identical or confusingly similar trademark is filed, approved or registered, the mark that has lost its right will then no longer be allowed reinstatement.

• Clarify the types of fair use of trademarks to include both descriptive and indicative use – This exempts users from infringement liability when using others’ trademarks for comparative advertising, repair and maintenance services, as well as using others’ trademarks as a compatible indication to one’s own products.

• Specify that the principle of international exhaustion of trademark right is adopted – Parallel importation of genuine goods has long been permitted under the judicial practice in Taiwan. The Amendment clarifies the adoption of the principle of international exhaustion to cease further doubts, both on a legal basis and in practice. Trademark right holders may claim its right only to prevent the trademarked goods from deterioration or damage after those goods are circulated in the marketplace.
• Identify exlcusive license from non-exclusive license – In reference to the STLT, an exclusive licensee has the right to exclude the trademark right holder and any third party from using the registered trademark, as well as to take action on their own behalf for the enforcement of the trademark right unless it is agreed otherwise. Should the trademark right holder grant an exclusive license to another person after a non-exclusive license for the same trademark has been recorded with the competent authority, the latter exclusive license would not affect the prior non-exclusive license recordation.

• Require evidence of use from the opposing marks for initiating trademark invalidation or cancellation proceedings – The application for an invalidation or cancellation proceeding will not be accepted if the applicant does not submit evidence of use of the opposing marks within three years prior to the date that the invalidation or cancellation is filed. If the invalidation ground is based on trademark similarity, and if more than one opposing trademark is cited but the applicant submits evidence of use for one opposing mark only, the substantive review of the invalidation will be based solely on that opposing mark, disregarding the other citations.

In December 2010 the Amendment was approved by the Executive Yuan and is to be submitted to the Legislative Yuan for final review and three readings.