TIPS^®  Taiwan Intellectual Property Special

Patent Annuity Reduction

In order to encourage natural persons, schools, and small and medium business entities to maintain and practice their patents, the newly amended patent law allows such parties to apply for patent annuity reduction under certain circumstances. Therefore, the Patent Annuity Reduction Rules were amended accordingly. The Amendment is summarized as follows:

1. The application for the annuity reduction should be made in writing.

2. Qualifications: The schools qualified for the reduction are the duly organized public or private schools or any foreign school recognized by the Ministry of Education. The medium and small entities qualified for the reductions are those entities as defined in the Medium and Small Entity Standards.

3. The reduced amount is NT 800 (about US$ 25) each year for the first three years, NT 1200 (about US$ 35) each year for the 4th to 6th years. The reduced amount is about 30% of the original annuity.

4. The application of the reduction may be made each year at the time of the annuity payment. If the patentee intends to pay the annuity fees for 3 or 6 years at the same time, it may also apply for the reduction for 3 or 6 years, respectively, at the time of such payment.

5. If the reduced annuity is made during the grace period, the amount of the annuity should be double. The calculation is made based on the amount after the reduction.

6. If the patentee becomes qualified for the reduction after the annuity payment is made in advance, the patentee may apply for reduction for those annuities that have not become due. If the patentee becomes disqualified after the (reduced) annuity payment is made in advance, the patentee should pay the difference in the fee for those annuities that have not become due.

The Amendment to the Patent Annuity Reduction Rules were promulgated on January 14, 2004 and will take effect at the same time as the New Patent Law, i.e. July 1, 2004.