Q&A: Proposed Abolishment of Trademark Opposition Proceeding in Taiwan

Taiwan currently adopts a post-registration opposition system.  Under this system, once a trademark application is approved for registration, it undergoes a 3-month opposition period following publication. If no opposition is filed during this period, the registration will be maintained and subject to potential invalidation, typically within 5 years of registration. 

The Taiwan Intellectual Property Office (TIPO) proposed a draft Amendment to the Trademark Act, which has been passed by Taiwan’s Executive Yuan (Taiwan’s highest executive branch of the Government) and submitted on March 9, 2023 to Taiwan’s Congress for deliberation. Once the draft Amendment is passed as proposed, the opposition and invalidation will be consolidated into a single procedure.  This means that the opposition system will be abolished and replaced by the invalidation proceedings.

According to the Annual Report 2022 published by TIPO on June 30, 2023, the statistics on the trademark oppositions and invalidations are as follows:

To facilitate the readers’ better understanding, this article will enumerate overarching questions surrounding the proposed abolishment of the opposition proceeding in Taiwan:

(i) What are the alternative actions against trademark squatters once the opposition proceeding is abolished?

a. Any party can file an informal observations during prosecution of a trademark application any time before the Examiner completes examination of the application. However, the third-party observation, not a legal procedure, is merely for the Examiner’s reference and has no binding effect.  If the application eventually matures into registration despite the third-party observations filed thereagainst, it is still allowed to file an invalidation against the trademark registration.

b. The draft Amendment will bring about the following significant changes regarding invalidation proceedings:

  1. The qualification and grounds for filing an invalidation action will be relaxed and therefore any party is entitled to file an invalidation action based on any absolute non-registrable grounds stipulated in the Trademark Act.
  2. A Trademark Trial and Appeal Board (TTAB) will be set up within the TIPO to examine invalidation cases on the basis of a complete adversary system and through oral hearings.  When a party appeals the TTAB’s decision, it will be the opposite party rather than the TIPO to be named as the defendant, and the appeal will be heard by the IP & Commercial Court (the IPC Court).  In contrast, under the current law, opposition and invalidation cases both start from TIPO, and there is a pre-court appellate agency called the Petitions and Appeals Committee of Ministry of Economic Affairs (MOEA) to review appeals of TIPO’s rulings.

(ii) Will the invalidation process undergo any modifications once the opposition proceeding is abolished?

As explained above, if the Amendment is passed as proposed, the invalidation actions will be dealt with by TTAB, an agency within TIPO, although they are dealt with by TIPO under the current law regime. Either way, they can be appealed to the IPC Court.

The evidentiary requirements, costs involved and expected timelines are basically the same in invalidation and opposition actions under the current law regime, although the official fee payable in invalidation actions are higher (NTD 7,000 per class versus NTD 4,000 per class at the TIPO level.)  Both proceedings are inter partes and are conducted on a pleading-and-defence basis, and hearings are uncommon and not conducted as a default rule. The process can repeat until the parties have no further arguments or new evidence to file. Neither proceeding has discovery or specific evidentiary requirement. Unlike some other countries, documentary evidence need not be filed along with the affidavit. The relevancy and admissibility of documentary evidence is determined on a case-by-case basis.

While it is hard to make a prediction, it is generally believed that invalidation actions may be subject to a shorter timeline with deadlines more clearly defined after they are dealt with by TTAB as the Amendment proposes.  Further, the removal of the Petitions and Appeals Committee from the appeal system suggests that parties might spend less time (and money) in the entire invalidation proceedings in the future.

(iii) How do opposition/invalidation actions interact with infringement lawsuits? 

The Taiwan IPC Court is the centralized forum dedicated to solving IP disputes and, at the same time, exercises both first instance and appellate jurisdictions in terms of civil IP lawsuits.

It is worth noting that if there is a pending trademark infringement lawsuit in which the defendant argues that the plaintiff’s trademark registration should be cancelled or revoked, the TIPO can suspend an opposition/invalidation action pending the lawsuit. Conversely, the IPC Court cannot suspend the infringement lawsuit pending the outcome of an opposition/invalidation action and is empowered to review disputes on the validity of the alleged trademark registration in an infringement lawsuit. 

(iv) How does the option of third-party submission work in Taiwan?

Any party may file an informal observation with the TIPO before the Examiner completes examination of the trademark application.  However, the third-party observation is not a legal procedure and merely for the Examiner’s reference, and does not lead to any hearing.  As such, the Examiner is not obliged to reply to a third party observation and has the full discretion to decide whether or not to give weight to the observation filed. In the event that the Examiner does not find the third party observation persuasive and grant the trademark registration, it is still allowed to file an invalidation action against the trademark once it is registered.

It remains to be seen as to whether Taiwan’s Congress will make modifications to the draft Amendment.  We will keep a close eye on any further progress.