TIPO Proposed to Amend IP Laws Echoing
Trans-Pacific Partnership Agreement
Responding to the Trans-Pacific Partnership (TPP) agreement contracted by 12 Pacific Rim member states on February 4, 2016, Taiwan has been endeavoring to review relevant national laws and regulations in the hope of future TPP participation. The Taiwan Intellectual Property Office (TIPO) has been formulating draft amendments to the IP laws as an effort to fill the gap between current system and IP regulations of the TPP. On May 12 of 2016, TIPO released a first series of drafts of amendments to the Patent, Trademark, and Copyright Acts. These drafts have been sent to Taiwan’s Executive Yuan, the executive branch of Taiwan’s central government, for review. Although the amendments will be introduced in a form harmonizing with the TPP standard, predictably the draft bills may be modified before being passed as effective laws by the Legislative Yuan.
Focuses of amendments to Patent Act are outlined as follows:
1. Extension of Grace Period
In order to encourage filing of patent applications, the grace period will be extended to 12 months from occurrence of disclosure, in contrast to a previous six (6)-month period stipulated by current law. The applicable facts of said disclosure will be either 1) out of the intention of the applicant or 2) without the consent of the applicant, which is echoing Article 18.38(a) of TPP. The general language set forth in the amended statute suggests that the applicant’s intentional disclosure will be able to enjoy the grace period and said disclosure does not need to be limited to only specific types of incidents, nor does the disclosure require any limitations to be made by the applicant. Moreover, an applicant’s prerequisite of specifying facts and the date of disclosure simultaneously at time of filing will be lifted. The amendment essentially relaxes the eligibility and procedural requirement of the grace period system.
However, if the disclosure is a publication of another foreign or domestic patent application, given that such publication is foreseeable and may be intended by the applicant, the applicant will not enjoy this grace period because the publication is formulated under the patent filing mechanism. In this scenario the principle of first-to-file shall prevail.
2. Limitation on Prior User Defense
As an exception to prior user’s defense, during the grace period a third party becomes aware of the disclosed invention and the inventor expressively reserves his right to patent, the third party will be barred from exercising prior use defense. Paralleling the draft amendment with respect to grace period extension, the statute will be read as that “[the prior user right] shall not apply where the person has learned of the invention from the patent applicant for less than twelve (12) months and the patent applicant has made a statement reserving his/her right to a patent being granted;”
3. Patent Term Adjustment due to Office Delay
Unreasonable office delay during examination shall be compensated to patentee according to Article 18.46 of TPP. In the draft amendment, the patentee is entitled to patent term adjustment of a maximum of five (5) years if patent issuance is made for more than five (5) years from filing date or three (3) years from examination, whichever is later. A time period which is not attributable to the examiner or is attributable to the applicant shall be excluded.
The request for adjustment shall be made within three (3) months from the patent issuance. Besides, when the term patentee requests for adjustment and the delayed time period calculated by TIPO are different, whichever one that is shorter shall prevail.
Two grounds for invalidating an adjusted patent term are also provided. Anyone may file for invalidation either 1) if the adjusted term exceeds the period of office delay or 2) if the entity/person requests for adjustment is not the patentee. Yet, invalidation under ground 1) only applies to the adjusted term segment that exceeds.
4. Litigation and Patent Linkage
Patent-market approval linkage will be introduced into Taiwan’s patent system for the first time along with a draft amendment to the Pharmaceutical Affairs Act to identify any potential patent infringement as a result of generic competitor’s new drug application (NDA). When a generic competitor alleges that the patent is invalid or not infringed by the generic NDA, the patentee may file infringement action upon receiving a notification. In reverse, if the patentee fails to initiate, the generic competitor may file for a declaratory judgment seeking no infringement.
Amendment to Trademark Act is drafted and summarized as follows:
1. Civil Liability and State of Mind factor
Article 18.74(3) of TPP prescribes that a person who is liable for damages in civil proceedings shall be either knowingly or with reasonable grounds to know his engagement of infringing activity, which has a lower standards than and is contrary to Taiwan’s current Trademark Act. A stricter “intentional” state of mind is indispensable for constituting indirect trademark infringement, such as manufacturing and selling trademark labels to a trademark infringer.
To keep in line with TPP, the draft amendment removes the “intentional” state of mind from the provision for statutory trademark infringement. Therefore, either directly or indirectly, preparatory or contributory infringement of a trademark, such as making, selling, possessing, displaying, importing, or exporting goods or service with which a label, tag, or packaging identical or similar to the trademark attached/associated to another, the state of mind requirement will be resorted back to that in the general provision of civil liability, namely negligence or intention.
2. Criminal Penalty for Trademark, Collective Trademark, and Certification Trademark Infringement
Article18.77 (3) of TPP provides that criminal procedures and penalties shall be “applied in cases of willful importation and domestic use, in the course of trade and on a commercial scale, of a label or packaging: (a) to which a trademark has been applied without authorization that is identical to, or cannot be distinguished from, a trademark registered in its territory.”
In reference to Article 18.77 of TPP, the draft amendment has specified that use for commercial purpose, of a label, tag, or packaging that is identical to or cannot be distinguished from a registered trademark, collective trademark, or registered certification mark to make, sell, possess, display, import, or export the same product or service shall be subject to criminal liability.
Additionally, to be criminally liable owing to the afore-mentioned acts, an infringer’s “knowing,” or actual intent, requirement will be replaced and broadened by a mere “intent” which includes both actual and indirect intent.
This criminal penalty also applies to infringement of marks via means of electronic media or Internet service.
Copyright Act is proposed to be amended as follows:
1. Extension of Copyright Term
The copyright term for a work, a joint work, or a pseudonymous work will be the life time of the author and 70 years from his decease. The copyright term for a work where the author is an entity or for a work being photographic, audiovisual, or sound recordings will be 70 years from publication.
Nevertheless, in the event where the 50-years term of a work is terminated before the amendment becomes effective, such work shall not enjoy another copyright term of the 20-years difference.
2. Criminal Penalty against Compromise of TPMs
Disarming, destroying, or by any other means circumventing technological protection measures (TPMs) in order to facilitate unauthorized access to or copying a protected work, for commercial advantage or financial gains, will be subject to criminal liabilities.
3. Action without a Complaint
The authorities may initiate legal action on its own initiative against copyright infringement by copying and dissemination in commercial scale according to TPP. Criminal offenses that are able to be prosecuted by the public prosecutor without a formal complaint will be reproduction of a work without authorization with the intent to sell or rent, the act that knowing distribution or publicly display or possession of copies with an intent to distribute, or public recitation, broadcasting, presentation, performance, transmission, display, adaptation, compilation, or leasing.
4. Protection of Encrypted Program Signals
As a new chapter in the Copyright Act, encrypted program-carrying satellite and cable signals shall not be willfully received or further distributed to others without authorization.
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