LEGAL NEWS AND CASE DEVLOPMENT

TIPO Announced Intellectual Property Trend of Q3 2017 re Patents

In the third quarter of 2017, a total of 18,765 (+4%) patent applications were filed with TIPO, of which 11,631 (+7%) applications were for invention patent, 4,937 (-2%) were for utility model patent, and 2,197 (+1%) were for design patent.

Of the filed invention patent applications, 4,718 (+16%) were by domestic applicants and 6,913 (+2%) were by foreign applicants. Among the foreign applicants, the top 5 applicants by nationality were: Japan (3,162), the U.S. (1,476), South Korea (520), China (484) and Germany (289).

A total of 18,202 (+2%) patents were issued, of which 11,148 (-2%) patents were for invention p atents, 1,749 (-0.2%) patents were for design patents, and 5,305 (+12%) were for utility model patents. 

TIPO announced the statistics of Patent Prosecution Highway (PPH) during the period from January through October of 2017

Taiwan-U.S. PPH: 2,027 applications;

Taiwan-Japan PPH: 2,594 applications;

Taiwan-Spain PPH: 1 application;

Taiwan-Korea PPH: 38 applications

TIPO announced statistics for the Accelerated Examination Program (AEP) on Invention Patents during the period from January through October 2017

In the period from January through October 2017, there were 305 patent applications taking advantage of the accelerated examination program (AEP), of which 154 were filed by domestic applicants and 151 were filed by foreign applicants. The top 4 foreign applicants by nationality were: Japan (69); the U.S. (29); The Netherlands (8) and Germany (7).

Among them, there were 182 applications filed under Category 1 (i.e., the corresponding application has been approved by a foreign patent authority after substantive examination), and the first office action in those matters (including examination opinions and final decisions) was issued in an average of 71.2 days. There were 90 applications filed under Category 3 (i.e., the invention application is essential to commercial exploitation), and the first office action was issued in an average of 131.3 days. There were 24 applications filed under Category 4 (i.e., inventions related to green technologies), and the first office action was issued in an average of 99.7 days. 

IP Court reiterates that the material feature recited in a claim of Utility Model will not be considered if it does not affect the structural feature of the claimed article

According to Article 104 of the Patent Act, the subject matter of a Utility Model is directed to the creation of technical ideas relating to the shape or structure of an article or combination of articles, utilizing the laws of nature. If the Utility Model lacks any improvement of shape or structure of an article or combination of articles and only contains material variation, the material variation cannot be the basis of asserting the inventive step of Utility Model.

The IP Court held in its judgment in Shing-Zhuan-Su-Zi No. 106-15 that both the “bonding method” disclosed in Exhibit 2 and the “adhering method” of claim 1 of subject Utility Model were the measures for connecting; and that, although the material of “adhesive” might be different, such “adhesive” with conventional property would not change the shape or structure of an article or combination of articles. The court concluded that a comparison of such material feature was not necessary and such material could not be a basis of determining whether the subject patent had an inventive step.

TIPO Trends Q3 2017: Trademark Statistics

The TIPO received 22,168 trademark applications in Q3 2017, an increase of 12% compared to the same period last year. Domestic applicants increased 12% to 16,230 applications, and foreign applicants increased 11% to 5,938. In terms of the applicants by origin, China (mainland) ranked first with 1,197 applications, followed by the U.S.A. (991 applications), Japan (974 applications), South Korea (499 applications) and Hong Kong (404 applications). 

The Ministry of Economic Affairs promulgated the “Examination Criteria on Non-traditional Trademarks” on September 12, 2017

Article 18 of the Trademark Act provides that any signs with distinctiveness which can identify and distinguish the origin of the goods or services can be an object for registration and protection. Such signs are not limited to those listed in the text of said Article, to wit: words, designs, symbols, colors, three-dimensional shapes, motions, holograms, sounds, and any combination thereof sensible by visual or auditory sensation. Any other sign that may be perceived by the sense of smell, touch or taste can also be registered for trademark protection so long as it meets the distinctiveness requirement. By virtue thereof, the Ministry of Economic Affairs renamed the “Examination Criteria on the Trademarks of Three-dimensional Shapes, Colors and Sounds” to “Examination Criteria on Non-traditional Trademarks”, and increased the types of signs acceptable for trademark examination to include repeating patterns, scents (odors), positions, etc. Accordingly, the TIPO will examine the following three aspects when examining untraditional marks: 1) the way of expression: design, description and specimen: 2) the distinctiveness, and 3) the non-functional nature. 

The IP Court found that the mark ROWANA (with design) was similar with the trademark RIMOWA (with design)

The IP Court affirmed TIPO’s decision to revoke the registration of the mark. The IP Court found that: (1) the Roman elements of the cited mark, “RIMOWA”, and the Roman elements “ROWANA” were both formed by six letters and four of them were identical. Both began with the letter “R” and ended with the letter “A”. Hence, they carried a similarity of moderate degree in terms of appearance and pronunciation. (2) The designated goods of both marks were luggage and travelling trunks. The opposed mark would cause confusion to the relevant consumers if it is used on such goods or related advertisement materials. The court found after reviewing the supporting evidence submitted by the parties that the cited mark had been widely used and well known in Taiwan. The court further found that the Opposed Party should be well aware of the existence of the cited mark since the registration of its other Roman mark “ROWANA” was previously cancelled due to the fact that an oval design was added during actual use which was found to be causing confusion with the cited mark. The court held that the Opposed Party’s filing for registration of the opposed mark was apparently not in good faith, and that the opposed mark should not be allow to register according to the Trademark Act.

The Supreme Administrative Court held that the registration of the mark “” should be revoked since it was similar to four prior trademarks registered by PIP CO., LTD.

The Supreme Administrative Court held that the pronunciation of the Japanese “” (Yi-Li-Pan) contained in the opposed mark “” was similar to the main element “” (Yi-Li-Ki-Pan) of the cited mark #1 “”; that the pronunciation of “易利絆” (Yi-Li-Ban) of the opposed mark was identical to the cited mark #2 “益立絆” (Yi-Li-Ban); that the pronunciation and appearance of the first two Chinese characters of the opposed mark, “易利” (Yi-Li), were also identical to the first two characters of the cited mark #3 “易利氣” (Yi-Li-Chi); that the pronunciation of the opposed mark was almost the same as the cited mark #4 “ELEKIBAN” despite the difference in appearance; that both parties designated their respective marks for “moleskin for medical purposes”, and, that the cited marks had already been known to the relevant consumers before the registration date of the opposed mark. The Court denied the appeal and affirmed the IP Court’s judgment which sustained the TIPO’s decision to revoke the registration of the opposed mark.

COMMENTARY

Comment on the Case of the Fair Trade Commission (“FTC”) Fining Qualcomm Incorporated (“Qualcomm”)

After two years and eight months of ex officio investigation, the FTC made a resolution on October 11, 2017, finding that Qualcomm had a monopolistic position in the CDMA, WCDMA and LTE mobile communications standard baseband chip market, and used the following unfair competition conducts to prevent competition and stabilized its commercial transaction model: (1) refusing to license its Standard Essential Patents (“SEPs”) to other chipmakers and further requesting them to sign an agreement with unfair provisions, (2) adopting a “no license, no chips” policy for cell phone manufacturers, and (3) signing an exclusive rebate with specific businesses.  The aforesaid conducts jeopardized the fair competition order of the baseband chip market and violated Subparagraph 1 of Article 9 of the Fair Trade Act.  Accordingly, the FTC imposed a fine of NT$23.4 billion on Qualcomm.

In order to eliminate unfair competition in the market and promote decent competition in the domestic mobile communications industry, the FTC also demanded Qualcomm to: (1) cease applicability of the anti-competition provisions in the already signed contracts with competitors in chipmakers, cell phone manufacturers, and relevant businesses, (2) notify rival chipmakers and cell phone manufacturers within a time period that they could negotiate relevant patent license agreements in accordance with the principles of good faith and reciprocity, and (3) report to the FTC the status of aforementioned negotiations.

Qualcomm’s long-running global patent licensing model is not only in violation of Taiwan’s Fair Trade Act as determined by the FTC, but also in violation of China Anti-Monopoly Law as determined by China’s National Development and Reform Commission (“NDRC”) in February of 2015.  The NDRC found that the following conducts of Qualcomm constituted abuse of its monopolistic position in the CDMA, WCDMA and LTE mobile communications SEPs market and the baseband chip market: collecting unfairly high licensing fees, tying non-SEPs in wireless communications without justification, and forcing manufacturers to accept its “no license, no chips” policy.  Accordingly, the NDRC imposed a fine of RMB$6.088 billion (about NT$30.5 billion) on Qualcomm.  Furthermore, in December of 2016, the Korea Fair Trade Commission (“KFTC”) also found that Qualcomm violated its Fair, Reasonable and Non-discriminatory (“FRAND”) obligations by refusing to license SEPs to its rival chipmakers, forcing cell phone manufacturers to sign unfair license agreements as a condition of supplying chips, only providing whole-package patent licensing, forcing cell phone manufacturers to accept unilaterally authorized license agreements, and demanding for free cross-license.  The aforesaid conducts of Qualcomm was determined to have abused its market position and constituted unfair competition conducts, and violated Korea Monopoly Regulation and Fair Trade Act.  The KFTC imposed a fine of US$850 million (about NT$27.8 billion) on Qualcomm.  In addition to the fine, the KFTC also demanded Qualcomm to negotiate in good faith with rival chipmakers and cell phone manufacturers to enter into FRAND license agreements, and to regularly report to the KFTC the status of negotiations.

Obviously, Qualcomm’s global patent licensing model in the field of mobile communications has been found to be illegal after being investigated by multinational competition law authorities.  The goal of the Taiwan FTC’s decision is to demand Qualcomm to renegotiate relevant patent license agreements with rival chipmakers and cell phone manufacturers to fundamentally stop Qualcomm’s unfair competition conducts through amendment to the license agreements, so as to promote fair competition in relevant industries.  This decision indeed has a significant and positive impact on domestic relevant industries such as cell phone chip suppliers, cell phone brands and cell phone manufacturers.  This case is the first decision made by the FTC regarding SEPs license.  The decision conforms to the law enforcement trend of international competition authorities, and provides relief for other domestic manufacturers suffering a similar unfair treatment on patent license.