A Liberal Atmosphere Under the New Trademark Act

Taiwan’s newly amended Trademark Act entered into force on July 1, 2012, a year after the promulgation date. The new act seems to promote a liberal and welcoming atmosphere for brand owners who would like to conduct business in Taiwan.

In line with international trends, the new Trademark Act, among other things, enlarges the scope of protectable subject matter to allow all forms of sensory signs that are distinctive enough to identify goods or services from others to be registered as a trademark. Some forms of non-traditional symbols are exemplified in the trademark law, such as colours, three-dimensional shapes, motions, holograms and sound, but such examples are not exhaustive.

Under the recently published Examination Guidelines for Non-traditional Trademarks, a position mark that highlights a certain drawing, colour or three-dimensional symbol on a particular position of a product or location of a service provider may also be registered. Designs or decorations of a business location and product packaging are categorised as the same type as a three-dimensional shape, and will be examined under the same distinctiveness standard for trademarks. In addition, scent, taste and texture that bring a certain sensation to consumers are also taken into consideration under the guidelines.

As in most areas of the world where such non-traditional trademarks are allowed, the biggest challenge for both trademark owners and competent authorities is how to define a non-traditional trademark and grant an adequate scope of exclusive right to it, particularly if a sign is, for example, sensible only through smell, touch and/or taste, in which case the manner in which the sign is perceived varies from person to person. To clearly and precisely define a non-traditional mark in an objective, long-lasting and comprehensive way is an essential aspect to identifying the right scope, so as to differentiate the mark from other similar ones and to enforce that trademark once a registration is granted. Brand owners who are interested in adopting non-traditional trademarks to identify their business or product should contribute their views to help competent authorities articulate a practicable standard for better protection of their creative assets.

The Taiwan Intellectual Property Office (TIPO’s) liberal view of the emerging relationship between trademark, design patent and copyright protection is also made evident in the guidelines. While patent rights protect technical and functional innovations, design patents protect creations of shape, pattern and colours, or their combination, in an article. Design patents are never technical or functional but instead are creations with visual appeal. As such, non-traditional trademark protection can possibly overlap with design patent protection, especially for a three-dimensional shape. However, a patented shape of a product may not automatically enable consumers to recognise the shape as an identifier to distinguish the product from others in the related market, which is the ultimate purpose of a trademark.

In view of the different protective purposes and requirements between design patents and trademarks, TIPO welcomes any design patent that has acquired its distinctiveness as a trademark through use to be registered under the Trademark Act. In the same manner, any creation may be eligible for both trademark and copyright protection, as long as the creation is able to meet the requirements under both the Trademark and the Copyright acts.

According to statistics from TIPO, trademark applications filed in the first quarter of 2012 increased by 7.51 percent over the same period of the previous year. A breakdown of this measure reveals that applications filed by ROC (Taiwanese) nationals increased 5.73 percent, while those filed by foreigner applicants increased 12.98 percent. Among the top three filing countries, Japan reclaimed the top spot, followed by the US and China. The latter accounted for a significant growth of 47.67 percent over the same period of 2011. It is interesting to note that the growth rates of foreign filings outpaced the growth rate of domestic filings. We believe a good trademark law will stimulate more business investment and innovation in the marketplace for the years to come.