Sources of law

Taiwan is a civil law-based country, a jurisdiction governed by statutory law. The Patent Act, Enforcement Rules of the Patent Act, and Regulations of Patent Fees are the dominant sources of law relating to patents in patent prosecution and rights enforcement. In practice, the Taiwan Intellectual Property Office (TIPO) also offers applicants and patent right owners administrative rules, such as Guidelines for Patent Examination and Guidelines for Determining Patent Infringement, etc., for reference. 

Design patent applications

Taiwan adopts the first-to-file principle (Article 128, paragraph 1 of the Patent Act) and one application for one design rule (Article 129, paragraph 1 of the Patent Act). In order to obtain a Taiwan design patent, an application has to be filed with TIPO. The design patent will be granted after examination and if all the patentability requirements are met.

Subject matter of a design patent

According to Article 121 of the Patent Act, “design means the creation made in respect of the shape, pattern, color, or any combination thereof, of an article as a whole or in part by visual appeal. For computer generated icons (Icons) and graphic user interface (GUI) applied to an article, an application may also be filed pursuant to this Act for obtaining a design patent”. 

A design patent shall not be granted in respect of any of the following (Article 124 of the Patent Act): 

1. the shape of an article solely dictated by its function;

2. fine arts;

3. the layout of integrated circuits and electronic circuits; or

4. an article contrary to public order or morality.

Additionally, on November 1, 2020, TIPO promulgated the revised Design Patent Examination Guidelines: “The article of the design refers to any product that can be reproduced by a production process, including those made by industry or by hand, as well as the design of buildings, bridges or interior spaces”. Based on the above, an architecture design and an interior design can be the subject matter for a design patent in Taiwan.

Design patent application process 

Filing and substantive examination

As mentioned above, Taiwan adopts the first-to-file principle. A filing date is confirmed once the application form and specification including description and drawings are provided in full. Substantive examination is required. 

According to the statistics provided by TIPO in 2023, the average time period of receiving a first office action is 5.5 months. The average time period for a final patent decision is 6.6 months. Recently, the examination period has shortened.

Patent rights obtained after payment and publication

TIPO will publish the patent and issue the patent certificate after the patent certificate fee and the first-year annuity are paid, within three months upon receipt of the approval decision. Publication can be delayed by six months upon request. The patent right shall start from the publication date of the patent, and the term of invention patent shall expire after 15 years from the filing date (Article 135 of the Patent Act). 

Examination of design patents

Common reasons for refusal in the office action include, not in compliance with the one application for one design rule, not in compliance with the first-to-file principle, lack of novelty, lack of inventive step, etc. (paragraph 1 of Article 129, paragraph 1 of Article 128, paragraph 1 of Article 122, and paragraph 2 of Article 122 of the Patent Act).

If the design is already disclosed in exhibitions or online, the applicant can file the design patent application within six months of the disclosure date and claim that it shall be deemed as an exception to lack of novelty or inventive step (Article 122, paragraph 3 of the Patent Act).

According to the Guidelines for Patent Examination, criteria for determining novelty of a design patent is to view the “entire” design that was disclosed by the specification and drawings of the design patent filed, and determine whether the “appearance” that was disclosed by the patent filed and the “article” of the patent filed are identical or similar to the corresponding part of a single piece of prior art. The process should simulate the market consumption patterns when an ordinary consumer with general knowledge and cognitive ability is purchasing relevant products. The determination is based on the “entire” design instead of comparing partial features of the design of the product. Parts of the product that are easily distinguishable by the consumer should be considered during examination. Examiners will then consider other factors contributing to the visual appearance of the entire design patent that was filed, and decide objectively whether the design patent filed is identical or similar to prior art.

Additionally, criteria for determining the inventive step of a design patent are focused on whether the design patent filed can provide a notable visual effect compared to the prior art.

If there are unpatentable reasons or other parts that are not in accordance with the Patent Act, TIPO will issue an office action. If the applicant fails to overcome the office action, a refusal decision will be issued. If the applicant is dissatisfied with the refusal decision, they can submit a re-examination request within two months of receiving the refusal decision. In the case that the application is still rejected after re-examination, the applicant can file for administrative appeal and administrative litigation.

Case studies of luxury brands under design patent protection 

Design patents are often used by luxury brands in IP protection strategies to prevent competitors from selling and manufacturing counterfeits on the market. Moreover, applicants should file design patents for protecting parts of the product to ensure that competitors cannot easily copy novel parts in their design and avoid infringement through modification of other minor product details on an otherwise substantially identical design. That is, the subject matter of the design patent filed should not only be the entire appearance of the product, but the applicant should also file partial design patents for novel parts of the product to obtain a comprehensive scope of protection.

Examples of entire designs

Publication Number: TWD185160S “Handbag”

The applicant claims the dotted lines disclosed in the figure are stitching lines. This is an example of the applicant using different kinds of lines to present the appearance of the product.

Publication Number: TWD228638S “Perfume Bottle”

This is an example of an entire design. The applicant uses solid lines to illustrate the cap and the body of the perfume bottle to ensure the whole appearance of the perfume bottle is protected.

Examples of partial designs

Partial designs are a unique or particular portion of a full product design that the applicant wishes to protect. 

Publication Number: TWD217287S “Lipstick”

The part bounded by the dotted lines shown in the figure is not claimed in the design patent application. The applicant only wishes to claim protection of the appearance of the red lipstick portion of the design.

Publication Number: TWD229160S “High Heels”

The part bounded by the dotted lines shown in the figure is not claimed in the design patent application. The applicant only wishes to claim protection of the appearance of the shoe part of the high heel.

Infringement

According to the Guidelines for Determining Patent Infringement (2016), published by TIPO, the determination process of design patent infringement is divided into two stages: the first is to determine the scope of claims, and the second is to compare and determine the confirmed scope of claims and the accused product.

Three-way comparison test

The three-way comparison test is an objective analysis method and an auxiliary analysis method for determining whether the accused product and the registered design are similar, but it is not the only analysis method.

The three-way comparison test is useful in determining whether the accused product and the registered design are similar when they are not plainly dissimilar. Based on the prior art designs, it analyzes the status of the prior art designs in the art to which the registered design belongs and the similarity degree among the three designs to determine whether the alleged infringed design and the registered design are similar or not.

If the difference between the alleged infringed design and the registered design is sufficiently distinct, it can be directly deemed that the overall appearance of the two designs is non-identical or dissimilar, and there is no need to include another prior art.

As shown in the above figure, the shorter the length of the arrow, the higher the similarity degree, and the longer the length of the arrow, the lower the similarity degree.

As a result of the three-way comparison test, the following conclusions can be drawn:

Similarity degree 1 < similarity degree 2 and similarity degree 3 (similarity degree 1 being the longest): non-infringement

Similarity degree 1 > similarity degree 2 and similarity degree 3 (similarity degree 1 being the shortest): infringement

Although there are fewer lawsuits relating to design patents compared to trademarks and copyright in the luxury brand industry, when determining whether a design patent is infringed it is only necessary to consider the similarities between the designs. In the determination of design patent infringement, it is not necessary to prove that the brand is well known or that a likelihood of confusion exists among consumers. Both of which are criteria for determining trademark infringements. Moreover, it is not necessary to prove originality of the work or access and substantial similarity of the work, which would constitute copyright infringement. Therefore, chance of success for the patent right owner is higher in determination of design patent infringement.

Sources of law

In civil law countries, like Taiwan, the rule of law is based on statutory law. In terms of trademark registration and the exercise of rights, there are provisions such as the Trademark Act and its affiliated Enforcement Rules of the Trademark Act and Fee-charging Standards of Trademark. In practice, TIPO has also formulated various directions related to registration examination, such as Examination Guidelines and Operation Directions, for the reference of applicants and rights holders.

In addition, as a member of the World Trade Organization (WTO), Taiwan is obligated to observe the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement. Therefore, even if Taiwan is limited by the international political situation and is not a signatory to international conventions and treaties such as the Paris Convention, Taiwan still complies with the Paris Convention according to the regulation of TRIPS and legislates relevant priority regulations in the Trademark Act.

Application and registration

The trademark system in Taiwan is based on the principle of registration for protection. The applicant files an application for registration with TIPO, and upon examination, TIPO will approve the trademark application. After the applicant pays the registration fees, TIPO will issue a registration certificate and publish the trademark registration on the same date. The rights holder will then obtain the trademark right from the date of the registration/publication.

Types of trademarks

According to Article 18 of the Trademark Act, “a trademark shall refer to any sign with distinctiveness, which may, in particular, consist of words, devices, symbols, colors, three-dimensional shapes, motions, holograms, sounds, or any combination thereof”. The objects protected by the Trademark Act include traditional trademarks (two-dimensional trademarks), certification marks, collective membership marks, collective trademarks, as well as any other non-traditional trademarks capable of identifying the source of goods or services, including but not limited to colors, three-dimensional shapes, sounds, motions, holograms, smells, touches, tastes, positional trademarks, and other types.

Trademark application and registration process

The trademark application process in Taiwan can be roughly divided into the following procedures:

1. Application, formality examination, and substantive examination

Trademark protection in Taiwan adopts the first-to-file principle (Article 22 of the Trademark Act), therefore, the determination of the filing date is crucial in practice. 

Generally, it takes six to eight months from the filing of the application to the issuance of the first office action by TIPO. 

2. Registration and renewal

A trademark that has been approved for registration and the registration fees have been paid within two months from the date of receipt of the approval decision shall be published and the trademark certificate shall be issued.

The trademark rights holder shall acquire the trademark right from the registration date, and the duration of the trademark right is 10 years.

Trademark renewal must be filed within six months prior to the expiry date, and the trademark must be renewed every 10 years.

Trademark examination

Normal process: formality examination and substantive examination

After a trademark application is filed, TIPO conducts a formality examination to determine whether all required documents are in place and if the specification of goods/services is distinctive.

Once the formality requirements are met, the trademark application subsequently proceeds to the substantive examination stage. Common reasons for disapproval at this phase include: a lack of distinctiveness (see below for more information, “Office action of distinctiveness”) or a likelihood of confusion for relevant consumers with earlier trademarks applied or registered by third parties. With respect to the latter, TIPO has published the Examination Guidelines on Likelihood of Confusion, which set out what constitutes a likelihood of confusion. In principle, both the similarity of the trademarks and goods or services are requirements. However, the ultimate criterion is whether relevant consumers are likely to be confused about the source of the goods/services.

Advance notice of reasons for disapproval

If an application is refused registration due to reasons for disapproval during the substantive examination stage, TIPO will issue an “Advance Notice of Reasons for Disapproval”, which requests the applicant to respond within an appointed period. In the case where the applicant is a foreigner, a two-month period for response will be granted (extendable).

Decision of rejection

In the absence of a response from the applicant or if such response fails to overcome the reason for disapproval, the examiner will issue a Decision of Rejection. If the applicant is dissatisfied with the outcome, they may file an administrative appeal against the administrative action within 30 days after the date the Decision of Rejection is served.

Fast-track examination

Guided by TIPO, effective from May 1, 2021, any new trademark application filed electronically that satisfies designated requirements shall automatically be subject to fast-track examination. Currently, the first action for a non-fast-tracked trademark application would take around six to eight months. Under the fast-track examination system, the examination period is reduced by about 45 to 60 days, which would be around four to six months from the application date.

Accelerated examination

The Accelerated Trademark Examination mechanism was introduced into the existing system starting May 1, 2024, along with related regulations. After an application is filed, an applicant may request accelerated examination by submitting reasons, evidence and additional official fees. It would take only two months for the first action to be issued under the accelerated examination once the acceleration request is accepted.

Registered trademarks of luxury brands

Apart from protecting word marks and graphic logos, it is also common for luxury brands to include well-known patterns and three-dimensional trademarks.

Pattern marks

Well-known product patterns of luxury brands, especially those on boutique bags, often fall victim to counterfeiters. Securing trademark rights at an earlier stage not only benefits enforcement but also opens up the opportunity to apply for Custom detention when counterfeit goods attempt to cross the border.

Nevertheless, it is typical for pattern trademarks to face an office action challenging their inherent distinctiveness. To overcome such office action, gathering evidence of acquired distinctiveness based on prior use of the trademark beforehand constitutes a major part of the process.

Exemplary cases:

(Trademark Holder: GOYARD ST-HONORE, Reg. No. 02120406): Obtained registration by proving acquired distinctiveness.

(Trademark Holder: BURBERRY LIMITED, Reg. No. 02249449): Obtained registration by proving acquired distinctiveness.

Three-dimensional trademarks

Without comprehensive protection of intellectual property (IP) rights, high-end clothing boutiques and shoes made by luxury brands may face the risk of copycats plagiarizing their design. Therefore, it is vital to seek protection even for the design itself. In Taiwan, it is possible to file a trademark application for the three-dimensional shape of a product design. However, similar to pattern marks, it is common for TIPO to issue an office action questioning the lack of inherent distinctiveness of a non-traditional trademark application. Collecting evidence of acquired distinctiveness based on prior use of the trademark in advance will help the applicant overcome such office actions.

(Trademark Holder: VALENTINO S.P.A., Reg. No. 02310344): Obtained registration by proving acquired distinctiveness.

(Trademark Holder: FENDI S.R.L., Reg. No. 02283173): Obtained registration by proving acquired distinctiveness.

Office actions based on distinctiveness

As mentioned above, the well-known product patterns and three-dimensional shapes of luxury brands may still face an office action related to distinctiveness during trademark application. In such cases, there are two main solutions to overcome the office action:

Claiming the inherent distinctiveness of the trademark

If the trademark meets one of the following three circumstances, it will be recognized as having a lack of distinctiveness (Article 29, paragraph 1, subparagraphs 1–3 of the Trademark Act):

1. Consisting exclusively of a description of the quality, intended purpose, material, place of origin, or relevant characteristics of the designated goods or services.
2. Consisting exclusively of the generic mark or term for the designated goods or services.
3. Consisting exclusively of other signs which are devoid of any distinctiveness.

Therefore, to claim inherent distinctiveness, the applicants should convince the examiners that the trademark does not fall under the above circumstances.

Claiming the acquired distinctiveness of the trademark

If the trademark meets one of the above (a) or (c) circumstances of lack of distinctiveness, but has been used by the applicant and obtained the acquired distinctiveness, it shall still be registered (Article 29, paragraph 2 of the Trademark Act).

Regarding the examination of whether a trademark meets the requirements of acquired distinctiveness, TIPO has formulated the Examination Guidelines on Distinctiveness of Trademarks to provide guidance. According to these examination guidelines, the applicants can submit the following evidence to claim acquired distinctiveness:

• Evidence of actual use of the trademark.
• Advertising volume related to the trademark.
• Proof of promotional campaign (e.g. issued by the advertising agency or media agency).
• Trademark registration certificates issued by trademark offices in different countries, which can prove the words are distinctive (i.e., such words are accepted and not disclaimed). 
• Invoices, receipts, delivery orders and other documents containing the trademark (preferable if the document is issued by another entity, e.g., suppliers, customers, distributors).

According to Article 5 of the Examination Guidelines on Distinctiveness of Trademarks, the determination of distinctiveness acquired through use is based on recognition by Taiwan local consumers. Therefore, the evidence provided by the applicant should mainly be materials relating to domestic use.

Infringement

If the registered trademark (or similar trademark) of another party is used without consent on goods or services identical or similar to those for which the registered one is designated, and hence there exists a likelihood of confusion among relevant consumers, it constitutes trademark infringement (Article 68 of the Trademark Act). Knowingly using a trademark that is identical or similar to another party’s well-known trademark, and hence results in trademark dilution of others’ well-known trademark, is also deemed trademark infringement (Article 70, paragraph 1 of the Trademark Act).

Further, the trademark system in Taiwan adopts the principle of first-to-file: the first person to register a trademark will be granted the exclusive rights, which is in stark contrast to the first-to-use approach adopted by the United States. If the brand names of the luxury goods, as well as the well-known patterns and three-dimensional shapes of clothing and leather goods are registered trademarks, the brand owner can claim trademark rights based on the above provisions.

Nowadays, it is common to see “bootleg” products on social media, inspired by pop culture and luxury brand logos, and adapted using creative ideas or other elements. When the brand rights holders try to preserve their rights, infringers often use parody as a defense. In this regard, in recent years, the judicial practices of Taiwanese courts have stated that a parody should be an entertaining imitation of a well-known trademark and involve humor, satire, or critical thinking that is distinct from the original work. Also, the public interests in preventing consumer confusion and protecting the right of free expression of imitators should be considered in balance. 

Case Study: LOUIS VUITTON MALLETIER v. LG H&H TAIWAN Co., Ltd. Taiwan Intellectual Property Court 2019 Minshangshangzi No.5 Decision)

The defendant, LG H&H TAIWAN’s use of the mark was similar to the plaintiff Louis Vuitton’s registered trademark and its actual use, leading to confusion. The court determined that trademark infringement was constituted and that the defendant’s action also violated the Copyright Act and the Fair Trade Act.

Louis Vuitton’s trademark registration and the actual use design in Taiwan	Contested product and the design used by LG H&H

Sources of law

Countries using a civil law system, such as Taiwan, deem written codes as the basis of ruling by law. In terms of regulating copyright, the Copyright Act and accompanying administrative orders such as Regulations Governing Implementation of ISP Civil Liability Exemption, and Regulations Governing Plate Rights Registration are provided. 

Types of copyright 

Copyright includes the moral rights and economic rights subsisting in a completed work (Article 3, paragraph 1, subparagraph 3 of the Copyright Act).

In terms of economic rights, among other things, authors have the exclusive right to reproduce, publicly broadcast, publicly transmit, adapt, and distribute their works (Articles 22, 24, 26-1, 28, 28-1 of the Copyright Act).

In terms of moral rights, the author of a work shall enjoy the right to publicly release the work, and has the right to prohibit others from distorting, mutilating, modifying, or otherwise changing the content, form, or name of the work, thereby damaging the author’s reputation (paragraph 1 of Article 15 and Article 17 of the Copyright Act).

Start and extinction of copyright

The copyright system in Taiwan adopts “creation protectionism” (Article 10 of the Copyright Act). A work becomes protected by the Copyright Act upon completion thereof without the requirement of further registration or record, provided that the work complies with the requirements of copyright protection. Therefore, TIPO, the Ministry of Economic Affairs and other government units do not provide official registration or record proceedings. However, those who need to may register or record their works in some non-governmental organizations to ease the burden of proof in the future. 

In principle, the economic rights endure for the life of the author and 50 years after the author’s death, while in principle the protection of moral rights of an author who has died or been extinguished shall be deemed to be the same as when the author was living or in existence (paragraph 1 of Article 30 and Article 18 of the Copyright Act).

Types of works protected by the Copyright Act

Works protected by the copyright act are those created by the author with human spirit civilization inputs, i.e., those meeting the following two requirements: 

• Originality: works completed by the author originally and independently.
• Creativity: works exhibiting the personality or uniqueness of the author. 

In principle, the pattern designs of luxury brands belong to artistic works. However, the appearance designs of bags, e.g., shape of handle, compartment(s), shrinking or stretching on both sides and so on, are considered as being only for the practical functions of being easily carried and storing items, in the opinions of recent practice, and without demonstration of art skills or expression of belief or emotion. Therefore, the appearance designs of bags do not belong to artistic works.

Case Study: Celine Société Anonyme & Givenchy Société Anonyme v. 2R International Co., Ltd. (Taiwan Intellectual Property Court 2018 Minzhushangzi No. 15 Civil Judgement)

The design of the handbag served commercial utility purposes and is distinct from the purely artistic creations or crafts protected by the Copyright Act. The main goal of a handbag design is to allow the product to fully achieve its intended features or to ensure its function. Even though the handbag designs have been in long-term use, they serve practical and functional purposes and do not belong in the category of “artistic works”.

“Celine Luggage” sold by Celine (plaintiff)	Handbag sold by 2R International Co., Ltd. (Taiwan) (defendant)
“Givenchy Pandora” sold by Givenchy (plaintiff)	Handbag sold by 2R International Co., Ltd. (defendant)

Case Study 2: Wu, Jia-You v. WEI-EN Ltd. (Taiwan Intellectual Property and Commercial Court 2021 Minzhusuzi No. 115 Civil Judgement)

Whether a work belongs to artistic works depends on whether it demonstrates art skills. The designs of practical functions are those for ensuring the function of products, not those mainly for expressing belief with art skills. If products with practical functions were allowed to be protected by copyright, thereby resulting in long-term monopoly, it would significantly impact the interests of competitors in the industry and lead to unfairness. The overall shaping and design of the bags sold by the plaintiff were mainly for practical functions of being easily carried and storing items, not for expressing belief or emotion with art skills, and therefore did not belong to artistic works.

Infringement

Since authors have the exclusive right to reproduce and adapt their works, plagiarizing their works without the authors’ consent and fair use constitutes copyright infringement.

Given that luxury brands offer various original designs and their designs are applied to a wide range of products such as watches, clothing, leather goods, etc., it is quite challenging for a brand to obtain the design patents and trademark rights for all types of designs. Therefore, rights holders in the luxury industry often claim infringement of copyright to preserve their rights.

Sources of law

In Taiwan, there is no specific regulation protecting trade dress.

Possible ways to protect trade dress

In practice, protection for trade dress comes from various regulations, depending on its category.

For instance, trade dress that has been registered as a design patent or a trademark is protected by the Patent Act or Trademark Act. For well-known trade dress that has not been granted trademark rights, protection may be sought under the Fair Trade Act.

In the case of luxury brands, whereas designs of bags and clothes can hardly be considered as works protected by the Copyright Act, interior designs such as the layout of luxury brand shops or coffee shops may be considered architectural works and are protected under the Copyright Act. Alternatively, creators of these interior designs may consider applying for design patents with TIPO.

Information on right of publicity is covered above in Section 3.

Sources of law

In Taiwan, the Trade Secrets Act is enacted to protect trade secrets. For judicial cases involving trade secrets, Taiwan also enacted the “Regulation Governing Court’s Handling of Dossier Inspection and Non-Public Trials in Trade Secrets Case” to ensure the secretive nature of trade secrets could be maintained.

Types of trade secrets

The term “trade secrets” as used in this Act shall mean any method, technique, process, formula, program, design, or other information that may be used in the course of production, sales or operations, and that also meets the following requirements (Article 2 of the Trade Secrets Act):

(a) it is not known to persons generally involved in the information of this type;

(b) it has economic value, actual or potential, due to its secretive nature; and

(c) its owner has taken reasonable measures to maintain its secrecy.

Trade secrets of luxury brands

One of the essential elements of trade secrets is its secretive nature, however, upscale luxury branded products are usually of high quality and with high popularity, which makes it difficult to keep their trade secrets. 

However, in terms of luxury marketing, each brand operates its business in its own way; in particular, when targeting consumers with the potential for luxury consumption, they usually hold related operating information. Some of this information, such as customers’ dressing styles, consumer preferences, etc., which could not be gathered from public sources and could not be obtained without considerable efforts and money to select and organize data, could be protected by the Trade Secrets Act.

Information on moral rights is covered above in Section 3.

Licensing

Licensing is where the owner of IP rights allows a third party to use and acquire profits from the intangible property.

Licensing 

Licensable subject

According to relevant laws of Taiwan, the rights to apply for patent, patent rights, trademark rights, economic rights, and trade secrets are licensable to any third party.

Exclusive license and non-exclusive license

Regarding the license of patent rights, trademark rights and economic rights, the “exclusive license” is legislated in Taiwanese law (Article 62 of the Patent Act; Paragraph 1 of Article 39 of the Trademark Act)

The licensing is monopolistic, which excludes the rights holder from exercising rights over the property. Only the exclusive licensee is allowed to exercise rights, sub-license to a third party, and perform litigious acts in its own name where the rights are infringed (paragraph 3 of Article 62, paragraph 1 of Article 63, and paragraph 1-4 of Article 96 of the Patent Act; paragraph 5-6 of Article 39 and paragraph 1 of Article 40 of the Trademark Act; paragraph 4 of Article 37 of the Copyright Act).

Non-exclusive license

Relative to the above-mentioned exclusive license, this sort of license will not prevent the person entitled/the rights holder from exercising the rights (paragraph 3 of Article 63 of the Patent Act; paragraph 40 of the Trademark Act; paragraph 3 of Article 37 of the Copyright Act). In short, the licensee obtains exercising rights through licensing without excluding others from exploitation. Therefore, the non-exclusive licensee cannot perform litigious acts in its own name where the right is infringed.

It is noteworthy that, due to the characteristics of trade secrets, exclusive-license regulations of trade secrets are absent. In other words, the licensee for the use of the trade secret shall not sub-license the licensed trade secret without the consent of the trade secret owner.

Effectiveness and recordation

Effectiveness of licensing 

According to the regulations of the Patent Act and Trademark Act, transference of rights (e.g., assignment, licensing) adopts “registration antagonism”, which means transference of rights shall have no locus standi against any third party unless it is recorded with TIPO (paragraph 1 of Article 62 and paragraph 3 of Article 63 of the Patent Act; paragraph 2 of Article 39 and paragraph 3 of Article 40 of the Trademark Act). However, the recordation is merely for meeting the requirement of locus standi, not for the effectiveness of the licensing contract. As for the licensing of copyright and trade secrets, there is no official recordation system provided for both.

Furthermore, written form is not a formal requirement of the licensing of IP rights. Instead, licensing by means of a written or verbal form of mutual understanding between the rights holder and licensee is effective. However, for the licensing of patent rights and trademark rights, if the rights holder would like to have them recorded, a written contract must still be submitted. 

In practice, it is recommended that written contracts between the rights holder and licensee are signed to ensure the interests of both. After all, licensing of a luxury brand involves considerable profit.

Registration antagonism

The specific stipulations of registration antagonism in the Patent Act and Trademark Act state that “(transference of right) shall have no locus standi against any third party unless it is recorded with the Specific Agency”. The Specific Agency in the stipulations indicates the TIPO. As for the “third party”, it is considered that registration antagonism rules are not applicable to a third party which is not involved in any transaction in the opinions of the Supreme Court and recent practice (Taiwan Supreme Court 2014 Taishangzi No. 395 Civil Judgment). Therefore, an infringing person cannot defend with related reasons in an infringement case.

In addition, the purpose of recordation is to protect a third party involved in any transaction, and thus, in principle, the recordation shall include:

• licensee;
• licensed period;
• exclusive/non-exclusive licensing;
• licensed region;
• licensed scope (products/service for trademark rights, and claims for patent rights); and
• licensing contracts.

For luxury brands, the so-called “brand licensing” is typically related to issues of trademark. Since recordation for the licensing of trademarks does not have to disclose the license fee and any sensitive information in the licensing contracts is allowed to be masked, it is strongly recommended to record all the brand licensing with TIPO.

Infringement

Common types of infringement in luxury law

Information on infringement specific to patent and design rights, trademark and copyright can be found in Sections 1, 2 and 3, above.

Usual approach

Cease-and-desist letter

When dealing with infringement cases, it is common in Taiwan to first send a cease-and-desist letter requesting the cessation of infringement, to avoid investing too much time and money in litigation proceedings.

However, one may violate the “Fair Trade Commission Disposal Directions (Guidelines) on the Reviewing of Cases Involving Enterprises Issuing Warning Letters for Infringement on Copyright, Trademark, and Patent Rights” if either of the following obligations are not followed when sending a cease-and-desist letter:

1. Obtaining a patent, trademark, or copyright infringement ruling rendered by a court of first instance, or retrieving an assessment report, targeting the allegedly infringing article, delivered by a professional infringement assessment institution.
2. Notifying the potentially infringing manufacturer, importer, or agent beforehand or simultaneously to request a cease of infringement, and clearly stating the precise content and scope of copyright, trademark or patent rights, and the concrete facts of infringement.

Criminal proceedings

According to the regulations in Taiwan, individuals can be held criminally responsible for trademark rights, copyright, and trade secret infringement (Chapter 4 of the Trademark Act, Chapter 7 of the Copyright Act, and Article 13-1 of the Trade Secrets Act). Criminal prosecutions for trademark infringement shall be instituted without complaint of rights holders, while prosecutions for copyright and trade secret infringement are initiated only upon complaint (Antragsdelikt). Among these approaches, criminal sanctions, which impose greater stress on the defendant, are the most commonly used enforcement tactic by luxury brand owners.

Criminal Case Study: BANANE TAIPEI was found guilty for infringing trademarks of Hermès International S.A. (Taiwan Taipei District Court 2013 Zhi Jian Zi No. 30 Criminal Judgment)

The defendant BANANE TAIPEI printed a logo that is similar to the trademark “HERMES” on their bag products without the trademark holder HERMES’ consent. The court rendered a guilty ruling after the prosecutor initiated a public prosecution.

(https://www.mittw.org.tw/products/manu-more.aspx?GzlBlpERUto%3D)

Civil proceedings

According to the regulations in Taiwan, all infringers of patent rights, trademark rights, copyright, and trade secrets must bear civil responsibility, the proprietor or the trade secret owner is entitled to demand compensation for damages and the exclusion of such infringement (Article 96 of the Patent Act, Article 69 of the Trademark Act, Articles 84 and 88 of the Copyright Act, Articles 11 and 12 of the Trade Secrets Act).

Since a civil procedure incurs court costs, luxury brand owners usually initiate the criminal proceeding first. After the District Prosecutor’s Office brings charges against the defendant, the plaintiff may bring a supplementary civil action along with the criminal procedure, and the plaintiff would be exempt from paying court costs.

Lodging complaint with the e-commerce platforms to take down the counterfeit products

To gain continuous media exposure and establish more marketing channels, luxury brand owners have started selling some of their products through their websites or various e-commerce platforms. Nevertheless, the unique traits of online retail, such as anonymous vendors and lack of physical interaction with the product, have made online platforms the top choice for trading counterfeits. This results in authentic products and counterfeits co-existing on the same e-commerce platform.

In light of this dilemma, most large e-commerce platforms in Taiwan provide reporting channels for patent, trademark, and copyright infringement cases. It is possible to file a complaint requesting the platforms to remove counterfeit product pages by submitting relevant trademark and patent registration certificates, infringement comparison verifications, infringement analysis reports, and other required documents.

Border protection measures

A trademark rights holder or author may record their registered trademark or copyright with Taiwan Customs (“Customs”). Customs will record the registered IP rights according to the trademark registration certificates and documents submitted by the rights holder. Such records will be kept in the IP rights database and serve as a vital reference for Customs when scrutinizing imports and exports of counterfeits. In practice, Taiwan Customs also actively cooperates with local lawyers. When a suspect article is found, they notify the lawyers appointed by the rights holders to perform a counterfeit analysis.

If the rights holder has acquired information on the import and export of trademark, patent, or copyright counterfeit, they can report to Customs with evidence and request detainment of the counterfeits.

Passing off 

Sources of law

Infringements regarding passing off are mainly prescribed in the Fair Trade Act and the Trademark Act in Taiwan.

Fair Trade Act

When an enterprise supplies the goods and services, it shall not use the same or similar manner in the same or similar category of merchandise, the personal name, corporate name, or trademark of another, or container, […] or any other symbol that represents such person’s goods, commonly known to the public; nor use in the same or similar manner in the same or similar category of services, the corporate name, or service mark of another, or any other symbol that represents such person’s services, commonly known to the public, so as to cause confusion with the goods, facilities or activities of the business or service of such person (Article 22, paragraph 1, of the Fair Trade Act).

In order to avoid overlapping of legal provisions between the Fair Trade Act and the Trademark Act related to infringement, the former further specifies conditions in which it does not apply. That is, the corporate name or any other symbol representing the goods or services, as referred to in the above paragraph, shall not apply if such name or symbol has been registered as a trademark in Taiwan. In other words, such conditions are not subject to the Fair Trade Act (Article 22, paragraph 2 of the Fair Trade Act) but to the provisions of the Trademark Act.

Trademark Act

Without the consent of the proprietor of a registered trademark and using a trademark which is identical with the registered trademark in relation to goods or services which are identical with those for which it is registered, or, knowingly using a trademark which is identical with or similar to another person’s well-known registered trademark and hence causing the dilution of the distinctiveness or reputation of the said well-known trademark […], these acts constitute infringements of trademark rights (Articles 68 and 70 of the Trademark Act).

Additionally, to avoid the imbalance in the protection of legal interests of passing off, the violation of the abovementioned Fair Trade Act provisions is subject to civil liabilities. On the other hand, if using a trademark which is identical with or similar to the registered trademark in relation to goods or services which are identical with or similar to those for which it is registered without the consent of the proprietor of a registered trademark and thus leading to a likelihood of confusion in relevant consumers, the infringer is liable for both civil and criminal liabilities (Article 95 of the Trademark Act). 

Unfair competition 

The Fair Trade Act, which was established to regulate the passing off of well-known trademarks (see the section above), also encompasses acts of unfair competition. The following behaviors may violate the Fair Trade Act, including:

1. An enterprise imposing restrictions on resale prices of the goods supplied to its trading counterpart (Article 19, paragraph 1).
2. An enterprise making or using false or misleading representations or symbols on the matter that is relevant to goods and is sufficient to affect trading decisions, such as price, production process, manufacturer, etc., on goods or in advertisements (Article 21, paragraph 1).
3. For the purpose of competition, an enterprise making or disseminating any false statement that is capable of damaging the business reputation of another (Article 24).
4. An enterprise otherwise having any deceptive or obviously unfair conduct that is able to affect trading order (Article 25).

In terms of luxury brands, the brands should focus more on point 1, above. At present, Taiwan’s restrictions on resale prices are based on the following principle: it is illegal in principle, but it is not prohibited if there is a justifiable reason. Maintaining product prices is certainly a way to keep the brand value of luxury goods, however, it is usually difficult to use it as a justifiable reason to raise a defense in practice.

On the other hand, it should be noted that although point 4, above, is a general clause, it applies to “the subsidiary principle”. In other words, it can only be applied to behaviors that are not covered by other provisions of the Fair Trade Act.

In conclusion, in Taiwan’s judicial practices, the conflicts that boutique brands are more likely to face are mainly trademark disputes. Furthermore, violation of the Trademark Act may incur criminal liability; thus, in practice, most methods for protecting rights are still based on regulations of the Trademark Act. After the amendment to the Fair Trade Act in 2015, the Act only served as one of the means of protecting designs of trademarks that have not been registered. Therefore, it is still recommended that boutique businesses with the need to develop their business strategies should obtain registered trademarks as early as possible in order to gain more comprehensive protection for their rights.

Other causes of action 

Domain names

Judicial and administrative approaches to domain name protection

According to the Fair Trade Act, once a trademark is registered it can no longer claim protection from the Fair Trade Act and must rely on the Trademark Act for enforcement.

As a result, considering whether the subject trademark has been registered in Taiwan, rights holders can enforce their rights based on Article 70 of the Trademark Act or Article 22 or 25 of the Fair Trade Act when their marks are registered as domain names by infringers. However, rights holders must meet the following criteria no matter which act they invoke:

1. The subject trademark has become a well-known trademark in Taiwan.
2. The infringers are using the trademark as a domain name, causing a likelihood of confusion among the consumers.

If a rights holder believes there is an infringement, they can choose either of the following approaches to protect their rights:

1. Judicial approach: File a lawsuit in court, claiming that the infringer is liable for removing the infringement and providing compensation.
2. Administrative approach: File a complaint with the Fair Trade Commission. If the Commission finds that the infringer has violated any provisions, it may order the infringer to cease the action and impose a fine.

Case Study: MASTERCARD INTERNATIONAL INCORPORATED v. TM CASH FLOW CO. LTD. (Taiwan Intellectual Property and Commercial Court 2023 Minshangsuzi No. 25 Civil Judgment)

In March 2024, the renowned payment card company, Mastercard Inc., won a civil lawsuit, pressing “TM CASH FLOW CO. LTD.” to stop using “萬事達卡“ (“Master Card” in Traditional Chinese) or “Master Card” in its company title, the domain name of its official site, Google keyword advertisements, official pages on social media platforms or online video platforms, etc. 

Other dispute mechanisms other than judicial and administrative approaches

In addition to approaches directly involving government agencies, trademark holders can also file a complaint with the domain name dispute resolution agency appointed by the Taiwan Network Information Center. If the complaint is upheld, the complainant may assign the domain name under the control of a specified party or cancel the registration. For example, in one successful case, a famous social platform operator, LinkedIn Corporation, transferred the falsely registered domain name “linkedin.tw” to its control at the end of 2023.

Takedowns

Taiwan amended its Copyright Act in 2009, based on the United States’ Digital Millennium Copyright Act. The amendment added legal excuses for Internet Service Providers (ISP) against copyright infringement claims, encouraging ISPs to collaborate with copyright holders to prevent online copyright infringements. However, similar amendments to the Trademark Act have never progressed beyond the proposal stage. Consequently, rights holders can only invoke the Copyright Act to request ISPs to remove infringing content.

Currently, there are four types of ISPs according to the Copyright Act:

1. connection service providers: for instance, service providers for dial-up internet access;
2. caching service providers: for instance, proxy server providers;
3. information storage service providers: for instance, operators of blog sites, online auction platforms, or social media platforms; and
4. search service providers: for instance, operators of search engines.

The detailed criteria for takedowns are not specified in the Copyright Act or relevant regulations but are determined by each ISP arbitrarily. At this moment, each ISP does not have a unified process or format for requesting a takedown, except for the disclosure of a certain set of contact information as required by relevant administrative regulations (e.g., the name, address, and telephone number of the contact person). In conclusion, the details and procedure of requesting a takedown from a specific ISP are determined by the contract of the ISP and its users separately.

IP disputes process

Contentious trademark proceedings

In Taiwan, the first level of a legal attack against a trademark registration is at TIPO. The common approaches are opposition, invalidation and non-use cancellation.

Opposition

After TIPO approves the trademark registration and publishes the trademark in the gazette, there is a three-month opposition period. Anyone can file an opposition request within the period (Article 48, paragraph 1 of the Trademark Act). The opposition can be based on reasons such as the trademark is descriptive of the goods/services, the trademark is considered generic for those goods/services, or the trademark is similar or identical to an earlier registered trademark.

An examination on the trademark opposition shall be carried out by an examiner, who did not participate in the examination of the application for registration of the opposed trademark (Article 51 of the Trademark Act). Where an opposition to a registered trademark is sustained, the registration of the opposed trademark shall be revoked (Article 54 of the Trademark Act).

Invalidation

In general, an interested party can file invalidation against a trademark registration if the registration has, at that date, been published for not less than five years (paragraph 1 of Article 57 and Article 58 of the Trademark Act). The invalidation can be based on reasons such as the trademark is descriptive of the goods/services, the trademark is considered generic for those goods/services, or the trademark is similar or identical to an earlier registered trademark. 

An examination on the trademark invalidation shall be conducted by an invalidation panel consisting of three or more examiners assigned by the head of the Registrar Office (Article 59 of the Trademark Act). Where invalidation against a registered trademark is sustained, such registration shall be revoked (Article 60 of the Trademark Act).

Non-use cancellation

When a trademark registration has not been used or has been continuously suspended from use on the registered goods/services in Taiwan for three years, a non-use cancellation can be filed according to Article 63, paragraph 1(2) of the Trademark Act. 

The burden of proof to show that the trademark has not been used or has been continuously suspended from use on the registered goods for three years lies with the applicant of the non-use cancellation in Taiwan. In practice, the applicant of the non-use cancellation can submit a market survey on the use of the trademark registration in the past three years made by a professional investigative agency. 

On the other hand, the trademark registration may be revoked directly if the trademark owner fails to submit observations within the prescribed period.

Trademarks disputes process

It would take several weeks for TIPO to check the documents after the application for opposition/invalidation/non-use cancellation has been filed with them. If the statement of grounds or other required information is not filed, TIPO will issue an official notification letter to ask the opponent/applicant to file it within two months from the date of receipt. 

Otherwise, TIPO will issue an official letter within one to two weeks to ask the trademark owner to file the response, which the owner should file within one to two months from the receipt date. TIPO will then inform the opponent/applicant to file the statement within one month from the date of receipt if the trademark owner files the response in time. Usually both parties would file two to three responses before TIPO makes a decision.

If neither party files a response, or the evidence provided by both parties is sufficient for TIPO to make a decision, TIPO will make the decision on the dispute case in three months.

Patent invalidation

Agency responsible for invalidation examination 

After an invalidation request is filed, TIPO shall be responsible for examining the invalidation request. If a party involved in the invalidation case is dissatisfied with TIPO’s decision, the subsequent administrative procedures are the same as the procedures in re-examination cases, as explained above in Section 1 (Examination of design patents).

Time for filing an invalidation action 

A request for an invalidation action may be filed any time after the publication and before the expiration of the patent. However, where an interested party has recoverable legal interests resulting from the revocation of a patent, such party may request invalidation even after said patent has extinguished ipso facto (Article 72 of the Patent Act).

Parties entitled to file an invalidation request 

Since invalidation is a system of public patent review, in principle any party is entitled to request it. In certain cases, however, only interested parties are entitled to file such request, namely where a dispute over attribution of the ownership of the right to apply for a patent or a dispute over a joint application is at issue.

Time limits

The requesting party can provide new evidence or reasons within the following deadlines:

1. within three months after filing the invalidation request;
2. within one month after receiving TIPO’s notification instructing the requesting party to respond to the post-grant amendments made by the patentee; or
3. within one month after receiving notification instructing the requesting party to submit comments, whereby TIPO conducts investigation of evidence or exercises the power of inquiry.

The time limit the patentee has to observe according to Article 74, paragraph 2 of the Patent Act is one month for their response to the requesting party’s invalidation request form and the reasons or evidence.

Examination 

1. The examination and, subsequently, decision in invalidation cases pertaining to invention or utility model patents shall be made on a claim-by-claim basis (Article 82, Patent Act), while an invalidation decision regarding a design patent shall be based on the application as a whole.
2. Applying the ne bis in idem principle, Article 81 of the Patent Act prescribes that where an invalidation request has already been considered groundless by TIPO, any further invalidation requests against the same patent that are based on the same facts and evidence shall not be admissible, (irrespective of whether the decision has become final and binding after administrative litigation) or where the requesting party has provided new evidence to the IP Court pursuant to Article 70 of the Intellectual Property Case Adjudication Act and such new evidence was considered groundless by a judgment.

Strategies for challenging the validity of patents by invalidation

As the time frame for filing evidence in the course of an invalidation request is severely restricted, the requesting party is well advised to develop an invalidation strategy before filing a request and to prepare enough evidence to prevent delayed submission of evidence. 

If the requesting party fails to file new evidence within the specified time limit, it can file a new invalidation request separately or file the new evidence in an administrative action in accordance with Article 70, paragraph 1 of the Intellectual Property Case Adjudication Act, which specifies that “in an administrative action concerning cancellation or revocation of a registered trademark or patent, the IP Court shall take into account any new evidence submitted on the same grounds for the cancellation or revocation prior to the end of the oral argument”. The new invalidation request shall be filed while the previous one is still pending.

It should also be noted that TIPO will not serve the patentee’s response to the requesting party on its own initiative. In order to learn the patentee’s response in time and to speed up the preparation of the grounds of invalidation, the requesting party should regularly request access to the patent’s file wrapper and copy its contents.

Defense strategies against invalidation and litigation

TIPO will not examine evidence and reasons submitted by the requesting party after the specified time period of three months after the filing date.

In practice, TIPO does not serve the request form for invalidation action to the patentee within two weeks after the date of the request form’s receipt. The patentee can then strategically request a one-month extension for the response, which would allow him to respond within two months after having been served with the notification. This would render it difficult for the requesting party to file new evidence in a timely manner within the mentioned time limit of only three months after the invalidation action was filed.

In addition, under the new Act, the time period for the patentee to apply for post-grant amendments is limited during invalidation proceedings. Post-grant amendments must be filed within specified time periods unless an infringement litigation involving the same patent is pending. According to the old Act, a patentee could instead apply for post-grant amendments at any time. Nowadays, the best way for a patentee to maintain their patent is to carefully assess their chances and to grasp the opportunity to provide a well-formulated response to the invalidation by submitting well-drafted post-grant amendments that do not exceed the allowable scope.

If there is no invalidation proceeding, a patentee can apply for post-grant amendments at any time during the term of patent. Also, when there is no pending invalidation or infringement litigation involving the patent, post-grant amendments are much more likely to be permitted by TIPO. Therefore, before filing a civil action for infringement, patentees are advised to conduct a patent search and patentability assessment so as to determine whether they should better first apply for a post-grant amendment to avoid invalidation due to prior art. That way, the patentee can avoid post-grant amendments during parallel infringement and invalidation proceedings, which may give reason to a requesting party’s assertion that such amendment has unduly altered the scope of claims.