Amendment to Taiwan’s Trademark Act Passed on May 9, 2023

On May 9, 2023, Taiwan’s Congress passed a draft Amendment to the Trademark Act.  The implementation date of this Amendment is yet to be decided by the Government. The main features of the passed amendments are as follows:

1. Qualifications of trademark agents

Taiwan has not previously limited the qualification of trademark agents. However, due to the growing complexity of trademark practices, the Amendment now requires that individuals must either pass a trademark agent exam to be held by the IP Office or have engaged in trademark examination for a period of time to be registered as a trademark agent.  Despite this, lawyers are still eligible to act as trademark agents without the need to meet these requirements.

2. Request for accelerated examination

Under the Amendment, if trademark applicants require timely registration, such as when their goods are already on the market or when infringement has occurred and litigation is pending, they may request expediting examination by providing the IP Office with a statement of facts and reasons, along with payment of an official fee.

However, this acceleration program is not available if the IP Office has already issued an official letter requesting correction or an Office Action rejecting the application. Also, it is not available in applications for certification marks, collective membership marks, or collective trademarks. 

3. Functional elements in trademarks

Under the current Article 30.1.1 of the Trademark Act, trademarks “being exclusively necessary for the goods or services to be functional” are not registrable. The Amendment further provides that trademarks containing functional elements are not eligible for registration unless the functional elements are presented in dotted lines. The IP Office’s Explanatory Notes to the Amendment state that functional elements cannot obtain registrability through use and will not be considered in determining trademark confusion. 

If a trademark contains functional elements that cannot be presented in dotted lines (such as functional sound or smell), the applicant must declare that these elements are not part of the mark being applied for.

4. Enhanced protection of famous organization names

The amendment prohibits the registration of a mark that is the same as or similar to the name of a famous juristic person, business, or other organization if such registration is likely to cause confusion among consumers. By adding the words “or similar to” into the current law, the Amendment enhances the protection of famous organization names.

5. Indicative fair use

The pre-amended Trademark Act already recognized the concept of “descriptive fair use of trademark” as a form of non-infringement. The Amendment now further defines “indicative fair use” to formalize a longstanding practice of the IP Office and courts. 

Under the newly added Article 36.1.2 of the Act, trademark rights cannot exclude use of another person’s mark if the user needs to use the mark to indicate that person’s goods or services, and if the use is in good faith and consistent with conventions of commercial transactions.

6. New exceptions to trademark right exhaustion

Taiwan’s Trademark Act follows the principle of international exhaustion, but provides exceptions if the trademark holder intends to prevent changes or impairments to parallel imports after they have been put on Taiwan’s market, or if there are other legitimate reasons.

The Amendment further allows for exceptions to the exhaustion principle in cases of preventing “unauthorized processing or alteration” of parallel imports. The existing catch-all clause for “other legitimate reasons” remains unchanged.

7. Relaxed Customs proceedings

Under Article 75 of the pre-amended Trademark Act, if Customs officials detained imported or exported goods suspected of infringing on a trademark registered with Customs, the trademark owner or its agent was required to respond within a short time and “appear at the customs house” soon after to identify the detained goods and confirm whether they infringe on the registered trademark.

The Amendment removed the outdated and burdensome requirement of physical appearance by registrants in light of the availability of advanced information technologies. In fact, as of September, 2021, Taiwan’s Customs Administration has implemented an information exchange platform to enhance border protection. Trademark owners can now access digital photos of suspected infringing goods on the online platform when notified by the customs house, eliminating the need for them or their agents to make a visit on short notice.