JAW-HWA INTERNATIONAL PATENT & TRADEMARK & LAW OFFICES

Whether issuing a warning letter without presenting a technical evaluation report for a utility model patent shall be regarded as improper exercise of patent right?

[ December 2018 ] >Back

Patent

I.	Whether issuing a warning letter without presenting a technical evaluation report for a utility model patent shall be regarded as improper exercise of patent right?

	Case at issue:
	The plaintiff claimed that the defendant sent a lawyer's letter on January 12, 2017 which alleged that a type of sandwich machine (hereinafter as "the product at issue") sold by the plaintiff on the online stores infringes the defendant's patent right of a utility model patent (hereinafter as “the patent at issue”), and the defendant has issued warning letters to the plaintiff's sales channels, requesting them to remove the product at issue. However, the defendant indiscriminately issued patent infringement warning letters without obtaining a technical evaluation report for the utility model patent, which violates Article 116 of the Patent Act. The defendant’s conduct causes various sales channels to remove and return the products at issue to the plaintiff, which leads to great damage to the business reputation and huge losses for the plaintiff. The plaintiff also alleged that the defendant sent a warning notice to the plaintiff without attaching a patent infringement analysis report. It can be seen that the defendant deliberately evaded the plaintiff’s review of the result of the patent infringement analysis. The defendant’s conduct of issuing warning letters should be regarded as the abuse of patent rights and thus violates the Patent Act, the Fair Trade Act and the Civil Code. The defendant shall be liable for all damage as a result.

	IP Court’s viewpoints:
	1.	Article 116 of the Patent Act provides that “When exercising a utility model patent, the patentee shall not make a warning without presenting the technical evaluation report of utility model patent”. Only formality examination will be conducted for a utility model patent. That is, the utility model patent is granted without the substantive examination of the patentability requirements. In order to prevent the patentee from abusively issuing warning letters, it is necessary for the patentee to present the technical evaluation report for a utility model patent as a reference for objective judgment when issuing warning letters. However, the technical evaluation report is not a precondition for bringing a legal action based on a utility model patent. To further emphasize the importance of the technical evaluation report in the exercise of patent rights of a utility model patent, if the patentee does not present the utility model patent technical evaluation report, no warning shall be issued. Thus, the utility model patent technical evaluation report shall be one of the requirements for the exercise of the patentee's right of a utility model patent. The defendant sent a lawyer's letter to the plaintiff and warning letters to the online sales channels without presenting the utility model patent technical evaluation report, which doubtlessly constitutes a violation of Article 116 of the Patent Act.

	2.	Whether the conduct of issuing warning letters without presenting the utility model patent technical evaluation report duly constitutes the tortious acts according to the Civil Code or the unfair competition according to the Fair Trade Act? There is no relevant provision in Article 116 of the Patent Act related to the legal effect of the violation of Article 116 of the Patent Act. It can be explained that the recipient of the warning letter can duly challenge the validity of the warning letter if the patentee does not present the technical evaluation report of utility model patent when the patentee exercises his rights. However, the conduct of issuing warning letters without presenting the utility model patent technical evaluation report does not have the legal effect of duly constitution of the tortious acts according to the Civil Code or the unfair competition according to the Fair Trade Act. Further examination will still be required as to whether the elements required to establish the tortious acts are satisfied. In the present case, the court judged that though the defendant did not present a utility model patent technical evaluation report when exercising the patent right, the defendant has attached a patent infringement analysis report in the warning letters issued to the online sales channels of the plaintiff. Also, when the defendant sent a lawyer's letter, although he did not present a new technical report on patents, he had already requested a law firm to conduct a patent infringement analysis report, which judged that the product at issue falls within the scope of the claim of the patent at issue. Thus, the defendant’s conduct of issuing a lawyer's letter is in accordance with the guidance of the conduct of warning letters enacted by the Fair Trade Commission, and thus is a proper conduct in connection with the exercise of rights according to Article 45 of the Fair Trade Act. The defendant’s issuance of warning letters is legal and valid exercise of the patent right, and the defendant has fulfilled his duty of care before the issuance of the warning letters. Thus, there is no misuse of patent right. In summary, the court has judged that the defendant has fulfilled his duty of care and his conduct is a legal exercise of the patent right. There is no misuse of patent right and the defendant has not committed intentional or negligent tortious act or unfair competition in violation of the Fair Trade Act, thereby the Court dismissed the plaintiff’s request.

	Source: https://www.tipo.gov.tw/dl.asp?fileName=81021712569.pdf

Trademarks

Preliminary Opinions on Amendments to Trademark Act in Taiwan

It has been 6 years since last amendment to the Trademark Act in 2012 in Taiwan. In order to respond to the public reaction to the examination practice, enhance the exercise of trademark rights and the quality of trademark examination as well as take into account the trends of trademark law amendments in other major countries, the Taiwan Intellectual Property Office (hereinafter ”the TIPO”) has collected reference materials from the other major countries, domestic and foreign judgments and doctrines to conduct research and analysis on whether and how to proceed with the amendments to the Trademark Act, the Enforcement rules of the Trademark Act and/or the Examination Guidelines. Now, it is initially summarized as two themes of amendments: "Trademark examination" and "Trademark Protection". And, TIPO has invited experts and scholars to several seminars for studying over some issues under the two themes.

After sufficient study and analysis, should it appear the necessity of amendments to the Trademark Act, the Enforcement rules thereof and/or the Examination Guidelines, the TIPO will start to draft the amended articles for public review and discussion next year.

Here is a brief introduction of the issues having been brought up in the seminars and the relevant practices in Taiwan at present for reference. We will introduce more in our future newsletters when there is a development on the amendments from the TIPO.

	Subjects	Current Practices
Issue 1	Whether it is required to bring in the Accelerated Examination Procedure to expedite the examination of a trademark application;	It takes the examiners of TIPO 5.1 months on average from the filing date to issue the first official notice, and 7 months on average to complete the examination for a trademark application according to the official statistics.
Issue 2	The necessity to expressly provide for the third-party observations	The TIPO accepts a third party to submit his/her opinions for reference during the examination of a trademark application. However, such third party’s opinions are for reference only so the examiner will not keep the third party informed of the examination decision nor give him/her a chance to further pose his/her opinion via a written statement.
Issue 3	The retention or abolition of the Disclaimer System	The disclaimer system was adopted from 1991. Where a trademark contains an element which is not distinctive, the applicant shall state that he/she disclaims any exclusive right to such element only where the inclusion of that element in the trademark could give rise to doubts as to the scope of the trademark rights.
Issue 4	Whether it is required to make a remark in the registration when the non-distinctive portion of a trademark has acquired the secondary meaning.	Where a trademark is consisting of a distinctive element and a non-distinctive element, when the non-distinctive element in the trademark could give rise to doubts as to the scope of the trademark rights, it is required to disclaim the non-distinctive element from the trademark. When a trademark consists of only a non-distinctive element but has been used by the applicant and has become, in trade, a sign capable of distinguishing the goods or services of the applicant, it is approved to registration with a remark. But, where a trademark is consisting of a distinctive element and a non-distinctive element, and the non-distinctive element acquires the secondary meaning, none of the current regulations is made to deal with this matter.
Issue 5	Should the degree of famousness of a well-known trademark claimed based on the front and rear sections of Article 30 I (11) be distinguished? Article 30 A trademark shall not be registered in any of the following: (11) being identical with or similar to another person’s well-known trademark or mark, and hence there exists a likelihood of confusion on the relevant public or a likelihood of dilution of the distinctiveness or reputation of the said well-known trademark or mark, unless the proprietor of the said well-known trademark or mark consents to the application;	According to the first joint conference held by the Supreme Administrative Court in November 2016, it has determined that the degree of famousness of a well-known trademark claimed based on the front and rear sections of Article 30 (I) 11 is distinguished. Now, the TIPO is considering whether such determination should be stipulated in the Act.
Issue 6	The feasibility to consolidate Article 30 I (13), (14) and (15). Article 30 A trademark shall not be registered in any of the following: (13) containing another person’s portrait or well-known name, stage name, pseudonym, or alternative name, unless the said person consents to the application; (14) containing the name of a well-known juridical person, business or any group, and hence there exists a likelihood of confusion on the relevant public, unless the said juridical person, business or group consents to the application; or (15) being an infringement of another person’s copyright, patent right, or any other right, where a final judgment of the court has been rendered, unless the said person consents to the application.	The three subparagraphs under Paragraph 1 of Article 30 are about the situation where a trademark is in conflict with a well-known name, a well-known juridical person, business or any group and copyright, patent right, or any other right. The TIPO usually has a difficulty to proceed with the examination before the proprietor can submit relevant evidence or a final judgment of the court has been rendered to prove his/her rights. Moreover, the Subparagraph (15) is hardly applicable because it can be applied only when a final judgment of the court has been rendered.
Issue 7	Whether Article 57 II should be adopted in an opposition procedure? Article 57 II A person who file an invalidation with the Registrar Office against a trademark registration on the grounds that such registration falls under Subparagraph 10 of Paragraph 1 of Article 30 shall furnish proof that, during the period of three years preceding the date of request for invalidation, the earlier trademark has been used in connection with the goods or services in respect of which it is registered and which he/she cites as justification for his/her request, or that there are proper reasons for non-use, provided the earlier trademark has at that date been registered for not less than three years.	At present, it is not required for an Opponent to submit proof that the earlier trademark cited as the basis for opposition has been used in connection with the relevant goods or services during the period of three years preceding the date of request for opposition.
Issue 8	When shall the right of a registered trademark become extinguished after it is revoked?	Under the current practice, a trademark right will become extinguished when the revocation decision made by the TIPO is finalized and affirmed. The effective date is undefined and unclear.
Issue 9	Is it feasible to accept a non-legal group to be named as an applicant of a trademark application? If so, how the ownership of intellectual property rights should be defined when a trademark is registered in the name of a non-legal group?	Under the current practice, a trademark application cannot be filed solely in the name of a non-legal group. The legal representative of the non-legal group should be listed together with the non-legal group as the applicant.
Issue 10	Whether it is feasible to explicitly stipulate the types of trademark use which will infringe the trademark rights in the sections of “Infringement Remedies” and “Penal Provisions” of Trademark Act?	“Use of trademark” is currently defined in the General Provisions of Trademark Act instead of in the sections of “Infringement Remedies” and “Penal Provisions” of Trademark Act.
Issue 11	Should the territory as well as production and sales scale of bona fide use of a trademark prior to the filing date of a similar or identical registered trademark be limited? And, whether such bona fide use of a trademark can be succeeded, assigned or licensed?	Under the current Trademark Act, besides confining bona fide use of a trademark to the original goods or services, an appropriate and distinguishing indication should be added to the goods or services. There is no mention about the limitation of territory nor production and sales scope in Trademark Act.
Issue 12	How to define “the person with the proprietor’s consent” in Article 36 II? Article 36 II Where goods have been put on the domestic or foreign market under a registered trademark by the proprietor or with his consent, the proprietor is not entitled to claim trademark rights on such goods, unless such claim is to prevent the condition of the goods been changed or impaired after they have been put on the market or there exist other legitimate reasons.	From the wording of current Article 36 II, “the person with the proprietor’s consent” is undefined. Therefore, it is hard to construe that the person with the proprietor’s consent includes distributor or affiliates.
Issue 13	Should Internet Service Provider (ISP) be released from the obligation to a trademark infringement caused by utilizing the services ISP provides?	Under the current practice, it is possible that the trademark proprietor may claim compensation from ISP based on Article 185 I of Civil Code. Article 185 I If several persons have wrongfully damaged the rights of another jointly, they are jointly liable for the injury arising therefrom. The same rule shall be applied even if which one has actually caused the injury cannot be sure.
Issue 14	The feasibility to introduce a mechanism to manage trademark professional services, and establish the trademark attorney system	Taiwan Intellectual Property Association (TIPA) implements the certification systems of personal capacity about intellectual property and assists enterprises and intellectual property practitioners to meet the needs for professionals. After having held the examination for patent professional services for several years, the examination for trademark professional services was initiated in 2017. However, the compulsory force may not be sufficient because there is not an association for trademark professionals as the Patent Attorney Association nor relevant norms to regulate the trademark professionals like the Patent Attorney Act, etc.

Source: https://www.tipo.gov.tw/ct.asp?xItem=675342&ctNode=7054&mp=1

IP FAQs

I.	Is there any reduction of official fees for filing a patent application in Taiwan?

	Ans. 1
	(1)	For an invention patent application filed with specification in languages other than English, if the title of the invention and abstract, the name of the applicant, and the name of the inventor are provided with English translations, the official filing fee can be reduced by NT$800. This deduction cannot be applied to design patent applications or utility model patent applications.

	(2)	The official filing fee can be reduced by NT$600 if a patent application is filed through TIPO’s electronic filing system. This is applied all invention, utility model and design patent applications.

II.	What is the associated cost for entering national phase in Taiwan for a PCT application?

	Ans. 2
	(1)	We regret to inform you that Taiwan is NOT a member of PCT, so a PCT application cannot enter the national phase in Taiwan through the PCT route and it needs to be filed independently in Taiwan before losing novelty.

	(2)	It is available to file a patent application in Taiwan independently by claiming the priority date of a PCT application within 12 months from the filing date of the PCT application, but the PCT application must be the earliest corresponding prior application.

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