Using Utility Models to Protect your Intellectual Property in Taiwan

Hodgson Russ LLP

taiwanA new “green” attitude is pervading Taiwan. Besides ongoing environmental efforts, Taiwan is home to multiple green technology companies. While revenue results for some Taiwanese solar cell manufacturers declined this year, Taiwanese companies like Motech are still prominent in the green technology sector. Taiwan’s continuing presence in the green technology sector can be seen in the duties imposed by the U.S. Department of Commerce in early 2015 on solar cells imported from Taiwan.

Like China (which I previously wrote about here), Taiwan offers utility model coverage. Filing a utility model application in Taiwan can potentially speed growth of an international intellectual property portfolio. Taiwanese utility models have lower fees than an invention patent application and there is no upper claim limit (though unity of invention requirements may need to be satisfied). There is no substantive examination of novelty or obviousness. Pendency from filing to allowance is typically less than a year and may be as low as four to six months. Priority to either a U.S. provisional or nonprovisional patent application is possible, but note that Taiwan is not a member of the Patent Cooperation Treaty (PCT) or the Paris Convention.

A utility model also can be filed concurrently with an invention patent application covering the same invention. Filing both a utility model and invention patent application concurrently means the utility model can be used as insurance if prosecution of the invention patent application becomes too expensive or can provide usable coverage before the invention patent application is allowed. The invention patent application and utility model application must be filed by the same party, must be filed on the same day, and the dual filing must be declared at the time of filing. For a corresponding allowed invention patent application to issue, the utility model must lapse. Thus, any utility model will be extinguished to enable the grant of the corresponding invention patent.

It’s important to also understand the potential drawbacks of Taiwanese utility models.

The first drawback is the scope of potential protection. Only shapes, structures, or assemblies can be protected by a utility model in Taiwan. Functions, methods, or compositions are ineligible.

The second drawback is patent term. A Taiwanese utility model only has a term of 10 years, which is half that of an invention patent. Patent term is sacrificed for speed.

The third drawback is eventual examination. To be asserted or enforced, a Taiwanese utility model must be examined. A technical report is obtained (with added fees if more than 10 claims are present) to assess patentability. For this technical report, novelty and obviousness are evaluated under the same standard as an invention patent application. While examination can be delayed until desired or needed, a utility model is subject to the same examination requirements as an invention patent application. Furthermore, a third party can obtain such a technical report to ascertain a utility model’s patentability.

Taiwanese utility models, when used effectively, can help establish your global intellectual property portfolio in a growing technology market. Allowance can be obtained quickly and cheaply. A larger portfolio can be obtained for the same cost compared to invention patents. Examination can be delayed until you are ready to assert a utility model against another party. Thus, examination costs can be delayed until an infringer appears or a market develops. However, there are some drawbacks to consider. If you are willing to accept these potential drawbacks, Taiwanese utility models can help accelerate your efforts to expand intellectual property protection into a region that is a high-tech player on the global technology scene.

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Hodgson Russ LLP

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