General Matter for Payment of Annuity
- There are three types of patents in Taiwan: invention patent, utility model patent and design patent. The patent term is 20 years for an invention patent, 10 years for a utility model patent, and 12 years for a design patent, starting from the filing date of the patent application.
- The applicant will start to pay the annuities of a Taiwan patent after the patent application has been allowed. The issue fee with the first annuity should be paid within 3 months upon receiving a Notice of Allowance. Then Taiwan Intellectual Property Office will publish the patent application and issue a Letters Patent (patent certificate), and the patent right shall start from the date of publication. If the applicant has unintentionally failed to pay the fees during the 3-month period, the issue fee and two times the amount of first annuity fee must be paid within 6 months after the expiration of said 3-month period.
- The second and subsequent annuity is calculated from the publication date, and each annuity fee is due every year before the expiration of said date. If the second or subsequent annuity is not paid by the original due date, the annuity can be paid within 6 months of a grace period with an overdue payment (surcharge fine) based on a 20% proportion rate of the annuity as shown below:
| within 1 month | within 2 months | within 3 months | within 4 months | within 5 to 6 months |
|---|---|---|---|---|
| 20% | 40% | 60% | 80% | 100% |
- Reduction of patent annuity :
A patentee who qualifies for the reduction of the annuity fee must be a natural person, school or medium/small enterprise (SME). Specifically, the annuity fee can be reduced by NT$800 for each of the first to third annuity, or NT$1200 for each of the fourth to sixth annuity.
For a patentee who is a natural person or local school, the above-mentioned annuity fee shall be reduced automatically. However, if the patentee is a foreign school or domestic/foreign SME, it is required to file a written request with TIPO for the reduction of annuity fee. The foreign school as recognized by Taiwan’s Ministry of Education shall be eligible to enjoy the reduced annuity fee. As to the SME standards in Taiwan, a qualified patentee for annuity reduction must meet one of the following requirements:- An enterprise in the manufacturing, construction, mining or quarrying industry with paid-in capital of NT$80 million or less.
- An enterprise in the industry other than any of those mentioned above and has sales revenue of NT$100 million or less in the previous year
- An enterprise in the manufacturing, construction, mining or quarrying industry with paid-in capital above NT$80 million but with less than 200 regular employees
- An enterprise in the industry other than any of those mentioned above and has sales revenue above NT$100 million in the previous year but less than 100 regular employees
Per TIPO practice, the above SME requirements are also applicable to the patentee of a foreign company. Therefore, a qualified foreign company will need to provide the patent agent with the necessary information of the capital or sales revenue, or number of employees, when filing the annuity reduction request. If necessary, TIPO may request the patentee to submit documents as evidence.
- The patentee can make a lump sum payment for annuities of several years, and will not have to pay or make up the difference if the annuity fees increase after the payment was made in advance.
- The patentee may apply for a refund of annuity fee if it was paid before the due date. In other words, a refund of annuity fee will not be allowed on/after the date when the patentee has started to enjoy the benefit of patent right protection.
- The patent annuity can be paid by any person other than the patentee, and a power of attorney is not required for annuity payment. However, a power of attorney will be required if the annuity reduction request for a patent is not filed by the original agent on record for said patent.
Practice of Patent Right Restoration
As mentioned above, the annuity fee must be paid by the due date, or an additional fine must also be paid within the grace period. Failing to pay the annuity fee will cause the patent right to become extinguished after the expiration of original due date. If the patentee has unintentionally failed to pay the annuity fee and the surcharge fine within the grace period, the patentee may apply for reinstatement of the patent right within one year after the expiration of said grace period by paying triple the amount of the annuity fee.
The above can be explained in the following exemplary scenarios.
[ Scenario I ]
If the 7th annuity of an invention patent was not paid by its original due date (June 30, 2017), the 6-month grace period would be from July 1, 2017 to December 31, 2017. The 7th annuity fee plus surcharge fine (based on the number of month after June 30, 2017) would have to be paid at the latest on December 31, 2017, in order to maintain the patent right without lapse, otherwise the patent would lapse on July 1, 2017.
[ Scenario II ]
If the above 7th annuity fee and its surcharge fee were not paid by December 31, 2017, the invention patent would extinguish on July 1, 2017. To restore the patent right, the patentee would have to pay triple the amount of the 7th annuity fee no later than December 31, 2018.
Under Scenario II, the next 8th annuity of the same patent would be paid by June 30, 2018. If the patentee filed a patent restoration request by paying the 7th annuity fee and its surcharge fee, say on July 31, 2018, the patentee would also have to pay the 8th annuity fee at the same time. For official fees of 7th annuity and 8th annuity each at TWD8000 for an invention patent, the total official annuity fees to be paid are as follows:
| 7th annuity fee, tripled | TWD24000 (= TWD8000 X 3) |
| 8th annuity fee | TWD8000 |
| Total | TWD32000 |
The patentee can file the patent restoration by stating that the failure to pay the annuity fee was unintentional, and it is usually not required to submit any document as evidence. Basically, a patent restoration has to be filed by the patentee, or the patentee must submit a special power of attorney appointing an agent to file the said patent restoration.
