Taiwan Trademark Act of 2021 Unveiled

TIPO announced a draft amendment to the Trademark Act on January 7. Almost identical to the draft Patent Act amendments which were released less than 10 days earlier, the amendment to the Trademark Act is aimed at overhauling the regime for the dispute resolution system in the area of remedies. A total of 53 articles will be revised, including 9 which will be modified, 33 added, and 11 deleted. There will also be an establishment of a new organization to specifically handle matters related to trademark review and disputes, following a series of complementary regulations.

Establishment of a new division within TIPO

        TIPO drew inspiration from peer offices such as the TTAB of the USPTO and the TAD of the JPO in their establishment of an internal division called the “Trademark Review and Dispute Adjudication Board (“TRDAB”; the tentative English name until the official English name is announced) which holds an exclusive jurisdiction in resolving trademark rejections and other relevant issues. Specifically, its trademark review function will serve as the second review of (1) rejected trademark application after the first examination and (2) TIPO’s other decisions for procedural matters such as invalid priority claims, assignment, licensing, pledges, renewal or abandonment. On the other hand, dispute adjudication functions include (1) invalidation and (2) cancellation. (Art. 56-1)

        The TRDAB procedure for reviewing disputes will bring a major change to both the invalidation and cancellation mechanisms. Oral arguments before TRDAB will be a standard proceeding for contentious matters. As a result, TIPO will be deprived of the power to cancel a registered trademark at its discretion (Art. 63). Under the draft amendments, the actionable grounds for examiners to proactively initiate trademark invalidation will also be materially limited to absolute grounds of refusal, such as violation of public order and morality. (Art. 57(2))  

Procedural Rules in TRDAB

        TRDAB will adjudicate each case by a panel of three (3) or five (5) examiners, one of whom will preside and be served by a senior examiner or divisional chief. The panel will then come to a decision after a majority vote. (Art. 56-2) Furthermore, there will be new procedural measures such as oral proceedings, a case preparation stage, timely advice of interim opinion by the panel during a review, and pre-notification to close the review.

Legal remedies beyond TIPO

Under the amendments, in instances in which a party is not satisfied with the decision rendered by TRDAB, that party may directly file a lawsuit to the Intellectual Property and Commercial Court (IPCC)[1], which means that an administrative appeal in the Ministry of Economic Affairs will also be removed. Furthermore, a lawsuit against the TRDAC decision brought to the IPCC will be conducted in accordance with civil litigation procedural rules rather those governing administrative litigation.

        Since a trademark dispute will be resolved under civil litigation procedures at the IPCC under the draft amendments, this dispute resolution will become an adversary proceeding so that the two parties are invalidation/cancellation challenger and the trademark owner (Art. 67-9(2)). Therefore, the parties at the TRDAB stage and the litigation stage will be identical, which is an intended legal reform to the current administrative litigation regime where TIPO plays an adversary in a suit.

A notable change in the area of evidence submission is that evidence not previously submitted to PRDAB can no longer be presented to the IPCC (Art. 67-10). This rule enables TRDAB to become a quasi-first instance court and also upholds the doctrine of equality of arms.

Removal of Opposition

        Opposition is one of the three currently available mechanisms to challenge a registration. It allows “anyone” to oppose a registration within three months from publication on absolute and relative grounds of refusal, such as lack of distinctiveness. These actionable grounds are the same as those for invalidation, which is now only available to an “interested party” and TIPO itself. By investigating into the accumulated cases, about 97% of oppositions were in fact raised by said interested parties on the relative grounds of refusal. That entails that opposition has been largely been absorbed by invalidation. Therefore, the draft amendments will merge the two mechanisms by leaving out opposition and then allowing essentially any interested party to invalidate a registration under the grounds of “relative facts of refusal.”