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08

MAY

2020

Newsletter May 2020

Trademark

I.The “Fast Track” system has been implemented and applied to new trademark applications filed on and after May 1, 2020

To encourage the applicants to use the e-filing system to apply for new trademark applications and to speed up the trademark examination, Taiwan Intellectual Property Office (“TIPO”) has introduced the “Fast Track” system. After paying the official filing fee, all new trademark applications which are filed on and after May 1, 2020 and meet the following conditions will be examined two months earlier than others.

1. The trademark application is filed through the e-filing system.

2. The system can only be applied to a two-dimentional trademark, excluding non-traditional trademark, certification mark, collective membership mark, and collective trademark.

3. All of the designated goods and services must be completely identical to the standard descriptions listed by the TIPO.

4. The Official filing fees are paid through a designated bank account or an electronic payment sheet in printed form by the counter or via eATM.

5. A Power of Attorney should be submitted at the time of filing if there is a trademark attorney in power.

Trademark applications fulfilling the above conditions are considered already complying with all formality requirements. Thus, they will automatically enter the substantive examination earlier. The applicants do not have to file additional application form nor pay extra fee for entering into the system. TIPO expects that the applicants can receive the notice 1.5 months earlier than the average examination time as to whether the application is allowed to be registered. In this way, the applicants can speed up their use of the trademark to expand the business and layout.

Nevertheless, the "first-to-file" principle still applies here. That is, the applications which arrive at TIPO first will still be registered first, thus expelling latecomers.

Trademark applications that meet the conditions of the “Fast Track” system will be indicated as “Fast Track-case” in the detailed form of the TIPO’s database in circa one month after the filing. Also, the status of the case will be shown as well.

Source: https://www.tipo.gov.tw/tw/cp-85-803408-0ff13-1.html

II.Jaw-Hwa’s Trademark Review: Up-to-date Case on Parallel Imports

Recently, a judgment issued by the Supreme Court raised a new viewpoint on "parallel importation of goods and the exhaustion of trademark rights", and the case was remanded to the second-instance court, the Intellectual Property Court, for retrial. The summary of the case and our relevant comments are shown as follows.

1. Summary of the case (Civil Judgment of Supreme Court 2019 Tai-Shang-Tzu 397):

The plaintiff A purchased the product X from the original company P in the United States (the trademark of the product is PHILIP B) and shipped the product to Taiwan. A then sold the parallel import, product X, on Taiwan’s various online platforms, while the Taiwanese company B obtained the authorization from the original company P and registered PHILIP B trademark in Taiwan. Thus, the company B requested A removing all the goods that were sold on all the platforms, and A filed the lawsuit.

2. Issues of this case: Parallel Imports; Exhaustion of Rights 

(1). Parallel imports are often referred to as grey products in the market. They are original products and are not counterfeit. The importer buys the original products through other channels at a cheaper price, and then transports them to the domestic market to earn a spread.

(2). The parallel import is legal based on the Trademark Act 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.” That is, the trademark owner has received the compensation for the first sales of the trademarked products that were sold in domestic or foreign market, and thus the trademark right has been exhausted during the first sales of the product. When the trademarked products are put on the market again, the trademark owner is no longer to claim the trademark rights in principle.

3. In the first instance (2016 Min-Shang-Su-14) and the second instance (2016 Min-Shang-San-Zi-14), both judgments held that:

(1). Although the products sold by A were purchased from the original company P in the United States, they were sold in Taiwan. The trademark owner in Taiwan was B, and the trademark owner in the United States was the original company P. Therefore, different trademark ownerships do not fall under the conditions of the regulation and the rights should not be considered to be exhausted.

(2). The courts of the first and second instances held that the trademark owner in Taiwan is different from that in the United States. The sale of products in Taiwan does not comply with the principle of exhaustion of rights. Therefore, it is necessary to re-examine whether the products X sold in Taiwan have obtained B’s consent or authorization. Obviously, such sales in Taiwan did not obtain authorization from B. The judgment determined that A had infringed B’s trademark rights and dismissed A’s request in the lawsuit.

4. The Supreme Court’s opinions:

(1). The Supreme Court deems that the trademark owner of the "PHILIP B" trademark in Taiwan is B, and the trademark owner in the United States is P. Although the trademark owner is different, the reason why B can register the trademark in Taiwan is that they obtain P’s consent and authorization. Hence, the "PHILIP B" trademark right originates from the same right-holder P. The Supreme Court held that P has received compensation for selling products to A in the United States (first sale), and if it requires B’s consent for A to sell the products in Taiwan (second sale), P would have been paid twice under this circumstance. It seems to be against the purpose of exhaustion of rights.

(2). The Supreme Court revoked the previous judgments, questioning the IPC’s reasoning on whether the exhaustion of rights applies to B. In other words, whether the trademark owner B in Taiwan can claim that A infringes their trademark rights

5. Jaw-Hwa’s comments:

(1). In principle, there will be no such issue as long as the product is genuine in general Parallel input discussion. However, this is based on the premise that the trademark owner is the same. For example, when the product is purchased from the United States and then imported into Taiwan for sale, if the owner of the trademarks in the United States and Taiwan is the same, there will be no conflict.

(2). However, the situation is different in this case. The U.S. trademark owner is P whereas the Taiwan trademark owner is the authorized agent B. The trademark owners are different, so the conflict arises.

(3). If the opinion of the Supreme Court is adopted, there will be undoubtedly a big impact on the agency. It takes a lot of costs for a company to obtain the domestic agency, but they cannot claim the right to the parallel importer, which will reduce the willingness of companies to strive for an agency. Agencies can ensure product warranty and maintenance so that consumers can send products for repair or return with confidence, but parallel importers may not provide such services, which will have a certain impact on consumers. As the case is still pending and has not been determined, we will keep following up on the further developments.

P.S. If the US trademark owner P of the product and the trademark owner B in Taiwan have no authorization or agency relationship but are two completely independent owners, there is no doublt that A ’s sale of the product in Taiwan is indeed infringing on B ’s trademark right. The exhaustion of rights cannot be applied to this circumstance.

Patent

Analysis Report of AI-related Patent Applications in Taiwan (II)

TIPO has published a report analyzing the AI-related patent applications in Taiwan, which provides an overview of the trends of applications, including the AI techniques, the functional applications, and the application fields. This report also analyzes the issues that the AI-related patent applications may encounter in the examination and provides the suggested solutions.

We have provided a short summary of this report in our former newsletter. In our newsletter of January 2020, we have introduced the trends of AI-related patent applications in Taiwan. In this article, we will keep introducing this report and provide a briefly review as to the issues that the AI-related patent applications may encounter in the examination and provide the suggested solutions.

In addition to the issues of novelty and inventiveness which are common for patent applications in all fields, the AI-related patent applications may encounter the issue of failing to satisfy the definiation of invention and the issue of insufficient disclosure of the specification.

1. Failing to satisfy the definiation of invention

To meet the definition of invention as “the creation of technical ideas utilizing laws of nature”, there must be a technical feature, that is, the means by which the invention solves the problem must be technical means involving the technical field. The "Computer Software Related Inventions" examination guidelines further require a computer hardware or software invention shall provide means to overcome technical difficulties and produce related technical effects. The fields of "commerce" and "mathematics" do not use laws of nature in themselves and thus do not belong to the technical fields. If a patent application merely uses mathematical methods to solve problems in commerce, such as using deep learning to analyze business data, the patent application will possibly be regarded to fall out of the definition of invention. Therefore, for AI-related patent applications that use the "predictive analysis" function in the "commercial" or "banking and finance" fields, there is a higher potential risk of not satisfying the definition of invention.

Secondly, if the patent specification provides neither specific technical function nor specific technical application, the patent specification may be merely an improvement of the mathematical algorithm without combination with the technical means. In such case, simple mathematical methods also cannot meet the definition of invention.

TIPO’s Comments

Neural networks are mainly mathematical algorithms, and computers are only the carriers of mathematical operations, which cannot provide much technical contribution. In such case, the most important criteria for judging the technical features of an AI-related patent application is in what field it is applied to and with what technical functions it is closely combined.

If AI is only used to analyze commercial data without resolving any technical problems, it may be deemed to be untechnical. It will also be difficult to overcome this kind of rejection by filing a response or amendment.

On the other hand, if the specification detailedly elaborates on the technical means of embodiments, or explains the connection and cause-and-effect relationship with specific technical applications, it will be easier to be recognized as technical. Even if the examiner deems that the patent application fails to meet the definition of the invention, there will still be a higher chance to overcome the rejection by filing a response and amendments. Through TIPO’s analysis, the granted patents mostly overcome the rejection by incorporating the substantial features related to the technical field in the specification into the claims to argue that the amended claims as a whole have technical effects.

2. Insufficient disclosure of the specification

Article 26.I of the Patent Act regulates the obligation of the applicant for sufficient disclosure, which is the enablement requirement. The description of the specification shall fully disclose the invention in a manner clear and sufficient for it to be understood and carried out by a person ordinarily skilled in the art. However, there are two common situations in which the description will be regarded as insufficiently disclosed and do not fulfill the enablement requirement. The first is that the applicant neglects some technical details that only the applicant knows and thus merely brushes over these technical details in the specification, which causes others unable to carry out the invention. The second is the applicant's intent to “hold back a trick”. Fearing being plagiarized by others, the applicant intentionally chooses not to disclose technical details, which violates the spirit of Article 26.I of the Patent Act.

If the description lacks essential technical means at the time of filing the application, because of the limitation that any amendment shall not extend beyond the scope of content disclosed in the description as filed, the applicant can only try to persuade the examiner that those missing technical details are merely the common knowledge at the time of the application. However, if the examiner deems that the missing part is an essential part of the application, it will be difficult to convince the examiner with the argument of "general knowledge".

TIPO’s Comments

TIPO recommends two methods to solve the issues of insufficient disclosure. The first is to elaborate on how the contents questioned by the examiner can be clarified by the contents that are clearly stated in the specification as filed. The second is to delete the corresponding technical features in the claims. Whether the specification meets the enablement requirement is subject to the claimed invention. Thus, the inventions that is not included in claims will not be examined for the enablement requirement, regardless of whether they are clear and fully disclosed in the specification. However, the applicant should pay attention to that any amendment shall not extend beyond the scope of content disclosed in the description as filed. Also, if it is an essential technical feature for the claimed invention, it will also not be allowed to be deleted.

Thus, based on TIPO’s comments, the best way is to clearly and fully disclose the technical content when filing the application.

Source: https://www.tipo.gov.tw/tw/cp-85-859330-1189b-1.html

IP FAQs

Differences Between “NICE Classification” and “the Practice of TIPO” in Classes 12 and 16

TIPO generally follows NICE classification of the designated goods and services. However, some descriptions of the designated goods and services in NICE classification are not acceptable in Taiwan because some of them are not definite enough under the present practice in Taiwan. We will continuously provide the list of descriptions in NICE classification which are not acceptable along with our suggestions of how to amend these descriptions in accordance with the regulation in Taiwan.

In our previous issues, we have introduced examples in Classes 1~11 NICE classification. Please be informed that all the descriptions of the designated goods in Classes 13, 14 and 15 of NICE classification are acceptable in Taiwan. Thus, in this issue, we provide the list of some examples in Classes 12 and 16 as below for your reference.

Nice (Indication of Goods)

Our suggestions

Class 12

aeronautical apparatus, machines and appliances

Please be informed this item is too broad to be accepted under the practice in Taiwan. The item should be amended into the standard description(s), such as “Aeroplanes; Helicopters; Jet plant; Propeller; Airplane landing gear; Hydroplanes; Amphibious airplanes; Aircraft; Balloon [boat]; Boarding bridge; Airplane parts and components; Hot-air balloon; Air transport carrier; Air balloons; airships ; Air traffic vessel; Aerial conveyors; Helicams; camera drones; gyrocopters; etc”.

side cars

Please be informed that this item is not acceptable in class 12 under the practice in Taiwan. We suggest the client designate the standard description “motorcycle with a sidecar”.

vehicles for locomotion by land, air, water or rail

Please be informed that the term “vehicles for locomotion by rail” is not acceptable in class 12 under the practice in Taiwan. We suggest the item be amended into “land vehicles; air traffic vessel; water vehicles”.

Class 16

drawing materials

Please be informed this item is too broad to be accepted under the practice in Taiwan. The item should be amended into the standard description(s), such as “Drawing pens; Tracing needles for drawing purposes; Drawing ruler; Drawing boards; Drawing sets; Drawing instruments; etc”.

engraving plates

Please be informed that this item is not acceptable in class 16 under the practice in Taiwan.

erasing products

Please be informed this item is too broad to be accepted under the practice in Taiwan. The item should be amended into the standard description(s), such as “Writing board erasers; Automatic erase; Rubber erasers; Office eraser; etc”.

filtering materials of paper

Please be informed this item is too broad to be accepted under the practice in Taiwan. The item should be amended into the standard description(s), such as “Paper coffee filters; Filter papers; Oil filter pape; etc”.

apparatus for mounting photographs

Please be informed that this item is not acceptable in class 16 under the practice in Taiwan. We suggest the client designate the standard item “Photograph stands”.

office requisites, except furniture

Please be informed that this item is not acceptable in class 16 under the practice in Taiwan. It should be further specified into concrete ones, such as “Pen; Writing instruments; Printing paper; Rubber erasers; Glue for stationery; etc”.

paper sheets [stationery]

Same as above.

printing sets, portable [office requisites]

Please be informed that this item is not acceptable in class 16 under the practice in Taiwan. It should be further specified into concrete ones, such as “Galley racks; Composing sticks; Electrotypes; Hectographs; Etching needles; Printing blocks; Printing type; etc”.

school supplies [stationery]

Please be informed that this item is not acceptable in class 16 under the practice in Taiwan. It should be further specified into concrete ones, such as “pen; Writing instruments; Writing paper; Rubber erasers; Glue for stationery; etc”.

scrapers [erasers] for offices

Please be informed that this item is not acceptable in class 16 under the practice in Taiwan.

teaching materials [except apparatus]

Please be informed that this item is too broad to be accepted in class 16 under the practice in Taiwan. It should be further specified into concrete ones, such as “Teaching aids for natural science; Educational learning box; Teaching aids for physics experiment kits; Histology sections for teaching purpose; Terrestrial globes; Teaching paper craft; Teaching model sample; etc”.

vignetting apparatus

Please be informed that this item is not acceptable in class 16 under the practice in Taiwan.

stationery

Please be informed that these items are too broad to be accepted in class 16 under the practice in Taiwan. These items should be further specified into concrete ones, such as “Pen; Writing instruments; Writing paper; Rubber erasers; Glue for stationery; etc”.

paper

writing materials


JAW-HWA INTERNATIONAL PATENT & TRADEMARK & LAW OFFICES

10-1FL., NO.23, SEC.1, CHANG-AN E. RD., TAIPEI 10441, TAIWAN, R.O.C

TEL: 886-2-25310876 FAX: 886-2-25812761

http://www.jaw-hwa.com.tw E-mail: jawhwa@jaw-hwa.com.tw

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