Amendments to Trademark Law passed

A major amendment of the Trademark Law was passed by the Legislative Yuan on 31st May 2011 and promulgated by the Presidential Office on 29th June 2011. The effective date of the new Trademark Law is subject to further announcement, but is expected to be in mid-2012. This article addresses the key points of the amendment, which includes substantive revisions as the Trademark Law was last amended in 2003.

First, the new law extends the scope of registrability for trademarks to any mark that is distinctive, which requires that a mark enable the relevant consumers to identify and distinguish the source of the goods or service. The new law specifically includes motion marks, hologram trademarks and all non-traditional marks, in addition to words, figures, symbols, colours, sounds, three-dimensional shapes or a combination thereof as indicated in the existing law. A mark is registrable regardless of its format or medium provided that it can be presented in a clear, complete, objective, permanent and understandable way.

Second, the new law enumerates various methods of the use of trademarks, and specifically includes use by digital audiovisual media, electronic media, the Internet or other media. Moreover, the new law broadly defines the "use of trademarks for marketing purposes" as one of the following situations and provides that such use is sufficient to make relevant consumers recognise it as a trademark: 

• Use of the trademark on goods or packaging or containers thereof.
• Use of the mark for the possession, display, sale, import or export of the goods.
• Use of the mark in articles relevant to providing services (eg, restaurant menus).
• Use of the mark in commercial documents or advertisements relevant to the goods or services.

Such definition applies where it is necessary to determine whether the marks have been used in a revocation action, and also to determine whether a trademark has been infringed.

Third, the previous Trademark Law allows coexisting registrations of identical or similar marks if the first applicant or registrant consents to the later application or registration, except in situations where identical marks are to be used on or with the same goods or services. Some trademark owners have consented to subsequent applications simply for the purpose of bypassing an injunctive order prohibiting the transfer of the marks; therefore, the new law requires the later application to be rejected if it is obviously inappropriate.

Fourth, the new law requires that if an invalidation or revocation is based on a prior trademark which has been registered for more than three years, supporting evidence proving the use of the prior trademark must be submitted. This is to avoid a registered mark being invalidated or revoked by another mark which has not been used.

With respect to remedies for trademark infringement, the new law specifically requires that in order to claim monetary damages, a trademark owner must prove that the infringement is intentional or negligent. The new law also abolishes the minimum amount of statutory damages (ie, 500 times the unit retail price of the infringing goods) because of public criticism stemming from a case where a defendant which sold only four counterfeit Hermès products was fined more than $8 million due to the minimum statutory damages. On the other hand, the new law strengthens the protection of well-known trademarks and prohibits the use of trademarks identical or similar to another party’s well-known registered trademark so as to cause a likelihood of dilution by blurring the distinctiveness or tarnishing the reputation of the registered trademark. The new law also replaces the current administrative regulations with detailed procedural provisions that empower Customs to seize, on an ex officio basis, imported or exported goods that allegedly infringe a trademark. The new law also adds provisions on geographical certification marks and geographical collective trademarks, as well as a penalty clause applicable to the infringement of certification marks.

With respect to the exercise of trademark rights, the new law articulates the relationship of co-applicants of a trademark and the co-ownership of a registered mark, which requires consent from all co-owners to license, sublicense, transfer, abandon or pledge co-owned trademarks. The new law categorises trademark licences into exclusive, sole and non-exclusive licences and allows only exclusive licensees to sublicense rights, unless the contract states otherwise.

Finally, the new law abolishes the provisions that allow the payment of registration fees in instalments. The instalment process was designed to enable owners to utilise trademarks at lower costs by paying only the first instalment for products that had shorter lifecycles. However, in practice, the trademark right often lapsed due to the unintentional or negligent failure to pay the second instalment, rather than the trademark owner’s deliberate omission. The abolition of the instalment process is expected to increase administrative efficiency. In addition, the new law allows the reinstatement of rights after failure to pay registration fees within the required time period where such failure is unintentional. In such case, an applicant is allowed to reinstate the right by paying double the normal registration fee within six months after the original payment deadline has passed, provided that no third party's trademark rights will be affected.