Updated July 2021 - Proposed Major Changes to Taiwan Trademark Act: Introducing TTAB, Restructuring Dispute and Appeal Proceedings and Others

Date: 17 August 2021

By George J. H. Huang (Director, Attorney at Law and Patent Attorney)

The Taiwan Intellectual Property Office (Taiwan IPO) has announced a draft amendment to the Taiwan Trademark Act on 7 January, 2021, amending a total of 53 articles. Significant changes are made to the trial and appeal system for trademark applications, opposition and invalidation procedures, among others.

After receiving comments from the public and opinions from a public hearing, the Taiwan IPO published a second draft of amendment to the Taiwan Trademark Act on 1 July, 2021, which revised the first draft in detail. Below is a brief summary of the key amendments in the first draft and the second draft:

I. First Draft of the Draft Amendment to the Taiwan Trademark Act (Published on 7 January, 2021)

1. Introducing the Trademark Trial and Appeal Board (TTAB)

Under the current Trademark Act, trademark opposition, revocation and invalidation cases are handled by a dedicated team of experienced trademark examiners in the Taiwan IPO.

With reference to the trademark trial and appeal practices in Japan, U.S., and Korea, the amendment introduces a new Trademark Trial and Appeal Board (TTAB; the official English name is not yet announced) within the Taiwan IPO to independently handle trademark trial and appeal cases. (Articles 56-1 to 56-8 of the draft amendment)

2. Strengthening the Procedural Protection of Trademark Review, Revocation and Invalidation cases

Under the present law, trademark opposition and revocation requests are handled by a single trademark examiner, with the examination mostly conducted in written form.

The new law stipulates that such requests will then be reviewed by a panel of 3 to 5 examiners, which is believed to improve the examination of the disputed cases. (Articles 56-9 to 67 of the draft amendment)

3. Replacing the Petitions and Appeals Committee with Review by the TTAB

In current trademark practice, if an applicant seeks remedy after receiving rejection in the trademark application examination stage, one must file an administrative appeal with the Ministry of Economic Affairs, wherein the Petitions and Appeals Committee is responsible for examining the appeal.

The new law abandons administrative appeal system, and requires applicants to file for “review” which will be handled by the new TTAB. Applicants are no longer required to appeal to the Petitions and Appeals Committee if met with unsatisfying results from the TTAB review, but shall resort to direct appeals to the Intellectual Property and Commercial Court. (Articles 67-3 to 67-12 of the draft amendment)

4. Resolving Rejections of Trademark Applications and Trademark Disputes through Civil Litigation

This revision of the law abolishes the administrative appeal procedure, and an applicant shall directly appeal to the Intellectual Property and Commercial Court. The Supreme Court is required by the new law to hear an appeal from the Intellectual Property and Commercial Court.

In litigations reviewing trademark applications being rejected, the Taiwan IPO should still be the defendant. But for litigations involving disputes on trademark ownership, the parties to the dispute should be the plaintiff and defendant respectively. (Articles 67-3 to 67-12 of the draft amendment)

5. Abolishing Trademark Oppositions and Allowing Invalidations on Absolute Grounds to be Filed by “Any Party”

Under the current Trademark Act, the grounds and rules for both opposition and invalidation applications largely overlap.

To make the process simpler and more straightforward, the draft amendment proposes to abolish “applications for opposition” and all dispute cases will be classified into 2 types: “invalidation” and “revocation.” In an effort to merge opposition and invalidation procedures, the Taiwan IPO further categorizes grounds for refusal of registration in invalidation procedures to “absolute grounds” and “relative grounds” for refusal of registration, wherein “any party” may file an application for invalidation on absolute grounds. (Delete Articles 48 to 56 of the current Trademark Act)

Wisdom Comments

However, in the current trademark practice, “opposition” and “invalidation” procedures still differ in that while any party may file an opposition, one must prove to be a party of interest in order to file an invalidation.

Commonly used grounds for refusal of registration in opposition and invalidation applications include, “a likelihood of confusion exists between the trademark at issue and a previously registered mark or an earlier-filed application” (Article 30 I (10)), and “a likelihood of confusion and a dilution of reputation or distinctiveness exists between the trademark at issue and a well-known trademark” (Article 30 I (11)), which are listed by the Taiwan IPO as relative grounds for refusal of registration. Under the proposed draft amendment, the applicant for invalidation on relative grounds must prove that it is a party of interest, for example, the proprietor of the earlier registered trademark holder or of a well-known trademark.

Since the Taiwan IPO does not relax the restriction of applicants who can apply for invalidation on the most frequently used relative grounds for refusal, one who wishes to challenge the registered trademark shall take note of the new requirement as his rights may be limited.

In this regard, we suggest that trademark right holders should strengthen their trademark rights by regularly monitoring new trademark applications and make good use of the Third Party Observation in which anyone can submit arguments to stop a trademark application proceeding to registration by stating why the application should not be registered.

II. Second Draft of the Draft Amendment to the Taiwan Trademark Act (Published on 1 July, 2021)

1. Introducing recusal of TTAB examiners

The first draft of the amendment stipulates that 3 to 5 examiners from the competent trademark authority (i.e. Taiwan IPO) shall be selected for TTAB review and dispute trials.

The second draft further regulates that an examiner of a review trial shall recuse himself if he has previously examined the application at its application stage. (Article 56-2 of the draft amendment)

2. Enabling Amendment within a Specified Period for TTAB Review and Dispute Trials

The first draft has listed several circumstances under which review and dispute trials are inadmissible.

The second draft further provides that the Taiwan IPO shall issue a notice of amendment to review and dispute trials within a specified period where applicable. (Article 56-7 of the draft amendment)

3. Adjusting Regulations with Regards to Advocates in Review or Dispute Lawsuits

The second draft allows any party as an advocate to a court proceeding “with the permission of the presiding judge.” (Article 67-4 of the draft amendment)

4. Stipulating that the Taiwan IPO Shall be the Defendant in Trademark Review Lawsuits

As a review trial by the TTAB is equivalent to an administrative appeal, if one is met with an unsatisfying rejected trademark review decision and seeks remedy, he shall initiate an appeal to the Intellectual Property and Commercial Court with the Taiwan IPO as the defendant. (Article 67-5 of the draft amendment)

5. Allowing the Participant of TTAB Trials to Initiate Court Proceedings

The second draft allows the participant of TTAB review or dispute trials to initiate court proceedings if met with unsatisfactory trial decisions. (Articles 67-5 and 67-8 of the draft amendment)

Wisdom Comments

Participants in review or dispute cases are usually actual right holders or their licensees. Up until now, however, participants of cases such as revocation and invalidation are not the actual interested parties involved, and are unable to seek remedy when dissatisfied with the Taiwan IPO’s decisions. The new draft amendment allows the interested parties to speak up for themselves, and ensures conflicts be resolved through review or dispute proceedings.

Although there may be concerns that such relaxation may lead to abuse of the litigation system, we view this change as beneficial considering its effects on trademark rights protection. Once the new Act is in force, the participants in such cases will be more likely to be the actual parties whose interest is involved, and they can more actively claim their rights or seek further remedy. The relevant trademark laws and well-rounded remedy procedures in place will help attract more multinational companies to tap into the Taiwan market and bring economic progress.

6. Introducing Restrictions on the Production of Evidence and Grounds for Producing New Evidence

The second draft provides that if the party involved or the participant has not produced a piece of evidence in the invalidation or revocation procedures, the evidence may not be produced at litigation. However, this shall not apply in cases where the Taiwan IPO acts against the law, the facts are apparent at the court, or if the court shall conduct investigation ex officio. (Article 67-9 of the draft amendment)

Wisdom Comments

Past Trademark Acts and the first draft amendment have no regulation regarding the production of new evidence. For this reason, the parties may produce new evidence as the case advances along different stages of administrative procedures or court proceedings, which lead to significant delays in litigations.

To pick up the pace of future dispute court proceedings, reference is made to Article 447 of the Code of Civil Procedure, where it stipulates that grounds and evidence that are not produced at the TTAB trial stage but produced only at the court proceeding shall be rejected. Thus, the parties should present their evidence in the TTAB trials, and shall not present new evidence at litigation, which is a rather unbeneficial change to involved parties.

Nonetheless, the newest court decisions in Taiwan demonstrate that as both parties have the duty to resolve the dispute as quickly as possible, the Taiwan IPO hopes to improve the efficiency of court proceedings by placing restrictions on the production of new evidence. If this amendment goes into force, the parties shall pay more attention to the time of presenting evidence, collect evidence as early as possible, and make an effort to store data electronically.

7. Amendments to Transitional Provisions

The first draft originally stipulates that with respect to cases that have been decided or ordered finally and bindingly, and was remanded by administrative appeal or litigation, the amended Trademark Act shall govern.

The second draft of the same article is changed to: with respect to cases that have been decided or ordered finally and bindingly, and was remanded by administrative appeal or litigation, the Trademark Act before the implementation of amended Act shall govern. The original Act shall govern after the case is remanded because these cases did not adopt the new TTAB review and dispute trials or the new civil litigation system. (Article 109-2 of the draft amendment)

III. Differences between the First and Second Draft Amendment

The above shows that while the second draft is largely based on the first draft and has further provided more details, it has also introduced new articles such as those stipulating who may initiate proceedings, and restrictions on producing evidence.

The proposed Trademark Act amendment integrates the trademark remedy systems of Japan, U.S., and Germany, among others, in hopes of strengthening the trial procedures of the Taiwan IPO and optimizing the remedy procedures of trademarks. With the new laws in place, we expect to see a more efficient and innovative future for Taiwan trademark practice.

 

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