The Greater China IP Updates – June 2023

Taiwan Revises Enforcement Rules of the Patent Act

The revisions to the Enforcement Rules of the Patent Act went into effect on May 1, 2023.  A summary of the key points are as follows:

1. To determine whether any amendments are made in divisional applications, the Taiwan Intellectual Property Office shall carefully review whether their subject matter has extended beyond the content of the earlier application as filed. Applicants are required to attach a marked document indicating differences or changes in the application, with added parts underlined and deleted ones struck through, along with a relevant explanation of any and all alterations made, thus improving efficiency in the examination of divisional applications.
2. In accordance with Article 27 of the Patent Act, if a biological material has been deposited in a depository designated by a foreign country in its territory with which Taiwan recognizes the effects of deposits based on reciprocity, and the certificate of deposit issued by said foreign depository is submitted within the time period prescribed, the applicant is exempted from the requirement of making a deposit in Taiwan. Presently, foreign depository institutions that have been reciprocally recognized by Taiwan are international depositary authorities under Article 7 of the Budapest Treaty.  These authorities shall issue documents that include certificates of deposit and viability statements, a practice that Taiwan also adopts.  In order to promote mutual recognition of biological material deposits between Taiwan and other countries, documents issued by depositories without the status of an international depository authority must include a viability statement.

Taiwan Legislative Yuan Approves Draft Revision of Trademark Act

The Economics Committee of the Legislative Yuan reviewed and approved the draft revision of the Trademark Act on April 20, 2023.  The most significant content and the likely impact of the draft revision are found below:

1. After payment of the examination fee, expedited examination of the trademark registration application will occur, with the aim of the trademark authority being to conduct the examination within two months. This will allow the successful applicant to obtain the rights and protections of a registered trademark more quickly.
2. Trademark agents will be regulated more strictly. A trademark agent will have to pass a professional certification exam which will be held by the trademark authority.  Alternatively, the trademark agent must have already worked in the industry for a certain period of time and also complete an annual training course to secure permission to continue employment in trademark agency services.  This will help to improve the quality of trademark agency services and protect the rights of applicants.
3. Trademark registration applications that have been rejected or require amendment are ineligible for expedited examination. This will enhance the level of fairness in the examination process.
4. Trademark dispute litigation cases require high legal expertise and must be represented by an agent. Trademark reexaminations will now be handled by an independent Trial and Appeal Board operating under the competent authority.  Hitherto, 97% of trademark opposition cases were disputes over refusal of trademark registration, which overlaps considerably with grounds for evaluation.  Therefore, the amendments will abolish the trademark opposition procedure.  Instead, a review panel of between 3 and 5 examiners will be established to review and decide on each reexamination or dispute case.  In addition, the grounds for absolute refusal of trademark registration will be expanded to allow any person to apply for evaluation, and third party opinions can be accepted into the record during the application examination to effectively eliminate the need for trademark opposition as a public review mechanism.  The court of final appeals, previously the Supreme Administrative Court, will be the Supreme Court.

Taiwan Semiconductor Manufacturing Co. Top in Invention Patents in 2023

For the first quarter of 2023, TSMC remained the top invention patent applicant in Taiwan, outpacing all local and foreign applicants.  TSMC filed 752 invention patents, up 4% from a year earlier, marking the fourth consecutive year the company has claimed the first place in the first quarter.  Smartphone IC designer MediaTek Inc. took second place among local applicants with 146 invention patent applications, up 121% from a year earlier, the highest rate of growth among local firms.  DRAM chip supplier Nanya Technology Corp. was third with 115 invention patent applications, up 17% from a year earlier, followed by flat-panel makers Innolux Corp. and AUO Corp., which filed 101 and 94 applications, up 3% and 7% respectively.  The office said it was the first time Innolux has filed more than 100 invention patent applications in a single quarter.  Rounding out the top 10 local applicants were communication network IC designer Realtek Semiconductor Corp. with 77 applications, down 28%, contract notebook computer maker Inventec Corp. with 55 applications, up 17%, Chunghwa Telecom Co. with 45 applications, up 50%, memory chip supplier Macronix International Co. with 42 applications, down 9%, and the government-sponsored Industrial Technology Research Institute with 42 applications, up 5%.  Among foreign applicants, Applied Materials Inc. reclaimed the top spot after nine years by filing 182 invention patent applications, down 12% from a year earlier.  In second place was Japanese electrical product maker Nitto Denko Corp. with 176 applications, up 18%.  In third place was US-based smartphone IC designer Qualcomm with 169 applications, down 30%.  In fourth place was South Korea’s Samsung Electronics Co. with 166 applications, up 44%.  In fifth place was Japanese semiconductor supplier Tokyo Electron Ltd. with 128 applications, down 10%.  In the first quarter, 12,486 invention patent applications were filed, little changed from a year earlier.  The number of invention, utility model and design patent applications totaled 17,226 in the first quarter, down 2% from a year earlier.

Taiwan Issues Rules for People Involved in Core Technologies Wanting to Travel to China

Lawmakers in the Executive Yuan passed amendments to Articles 9 and 91 of the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area in May last year, and they have now come into effect this May.  Government permission will now be needed for people working with state-funded core technologies who wish to travel to or transit in China.  The changes revolve around the creation of a regulatory mechanism to control the China-bound travel or transit of people who work with core technologies, and safeguards to prevent Beijing-affiliated entities from conducting illicit investments or business operations in Taiwan.  In effect, people who work with core technologies, legal persons, institutions and other groupings that receive more than a specified level of state funding will have to obtain permission to travel to China.  The restrictions apply for three years beyond the time that they either retire, are discharged from duty or are otherwise released from their contractual obligations.  Those who contravene the law face a fine of NT2 million to NT10 million.  The National Science and Technology Council is to establish a national core technology evaluation committee to set the definition for core technology and make determinations about authorizing transit and travel.  Also, those entities that receive more than 50% of their funding from the government must submit to the National Immigration Agency and the National Science and Technology Council a list of all the people who have access to sensitive technologies.

The Intellectual Property Court of China Releases Report for 2022

China’s Supreme People’s Court recently released the Annual Report of the Intellectual Property Court (IPC) for 2022.  One noteworthy detail was the 18% increase in accepted cases bringing a total of 6,183 technology-related IP appeal cases and monopoly appeal cases.  In addition, the overall rate of remand and reversion was 13.5%.  The average number of cases accepted per judge was 142.5, an increase of 16 cases from 2021.  The average case closure was 79.9 cases per judge, which was 3.6 cases fewer year on year.  The average adjudication period was 165.2 calendar days.  The IPC accepted 2,956 new second instance substantive civil disputes, of which 615 involved infringement of invention patents, 968 involved infringement of utility patents, 312 involved patent application rights and patent ownership, 144 involved new plant variety, 78 involved technological secrets, 648 involved computer software, 96 involved technology-related IP contracts, 15 involved monopoly disputes and 74 involved other disputes.  The IPC accepted 887 new second instance administrative cases, of which 241 involved re-examination of invention patent applications, 234 involved invalidation of invention patents, 207 involved invalidation of utility model patents, 84 involved invalidation of design patents, 24 involved monopoly disputes and 65 involved administrative enforcement.

China Plans to Grade Patent Agencies from May 1, 2023

China’s National Intellectual Property Administration issued the Administrative Measures for Credit Evaluation of Patent Agencies on April 11, and they became effective on May 1, 2023. CNIPA has categorized the rating system, A, B, C, and D in descending order.  Starting with 100 points, agencies get points deducted for such negative aspects as, irregular practice, abnormal operation, any history of administrative punishments and so on.  The severest point deductions will be for filing abnormal patent applications domestically or abroad.