Taiwan Patent Annuity Reduction Practice

1. In Taiwan patent system, there are three types of patents, namely invention patent, utility model patent and design patent. For a patent application, the applicant will have to pay the issue fee and first annuity within 3 months upon receipt of a Notice of Allowance from Taiwan Intellectual Property Office (TIPO). The patent application will then be published when a Letters Patent is issued thereon.

2. Per the current practice, TIPO will publish the issued patents on the 1st day, 11th day or 21st day of each month. Thereafter the second and/or its subsequent annuity of a granted patent must be paid before the expiration of its first annuity and/or the publication date of each anniversary.

3. If the Patentee has unintentionally failed to pay the above second or its subsequent annuity by the due date, said annuity can be paid within 6 months of a grace period with an overdue payment (surcharge fine) at a 20% proportion rate of the annuity on a monthly basis and the maximum surcharge fine will be 100% of the original annuity payment. The same rule applies to the overdue annuity payment of which the Patentee is qualified for a reduction of annuity payment.

4. The patent annuity reduction is applicable to a Patentee who is a natural person; school, or medium/small enterprise (SME). The annuity reduced fee is limited to the first to third annuity at NTD800 each year, and fourth to sixth annuity at NTD1200 each year; namely, a total of NTD6000 can be reduced from first to sixth annuity. As the regular annuity fee of a design patent is NTD800 for first to third annuity, the qualified Patentee needs to pay only an issue fee at NTD1000, so that TIPO will directly record the annuities paid up to third annuity and the next payment shall be the 4th annuity.

5. Generally, TIPO will automatically reduce the annuity fee for a Patentee of natural person or school, regardless of whether the Patentee’s nationality is ROC (Taiwan) or foreign national, such that the Patentee is not required to request the reduction of patent annuity.

6. However, for a medium/small enterprise (SME), a written application must be filed for requesting annuity reduction. According to the “Recognition Standards on a Small-Medium Enterprise” by Taiwan Ministry of Economic Affairs, the SME requirements are set as follows:
   • A registered corporation with a paid-in capital of NT$100 million (about US$3,600,000) or less; or
   • A registered corporation with 200 regular employees or less.
     
     For a Patentee of foreign corporation which has met either one of the above SME requirements, the Patentee may also inform his/her local Taiwan agent by a written instruction stating the paid-in capital or number of regular employees, in order to file a request for annuity reduction with TIPO. If necessary, TIPO may request the Patentee to submit an evidencing document.

7. Kindly note the followings:
   1. If a patent is in the name of two or more patentees, all patentees must be eligible for the annuity reduction.
      
   2. If there is an overdue annuity payment, the surcharge is based on the reduced fees with its fine depending on the belated month.
      
   3. A request for patent annuity reduction should be filed by the same agent who was the recorded agent when filing the patent application. Otherwise, the non-recorded agent must have a restricted and signed Power of Attorney by Patentee for filing such annuity reduction.

8. Although the Patentee of a foreign SME with either one of above requirements may request for annuity reduction, it would be of no real benefits for the Patentee when taking into consideration the followings:
   • The reduced fee is only NTD800 (about USD29) to NTD1200 (about USD43) each year;
   • The annuity reduction has to be requested each year;
   • The annuity reduction is applicable only to first to six year; and
   • Local agent will charge an agent fee for filing the annuity reduction.

Taiwan Patent Annuity Reduction Practice