Taiwan's Patent Benefits: Lilliputian in Size, Trailblazer in Cutting-Edge Tech

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Published on 13 February 2019

As a global manufacturing dynamo, especially for the semiconductor and other high-tech industries valued around $131 billion, Taiwan is of strategic significance to multi-national corporations. In this article, we shall analyze the costs of protecting inventions and innovations (i.e. patent protection costs) in Taiwan. Like a phoenix, this small but mighty country is rising to become a key hub for innovation and Intellectual Property.

The Taiwan Economy: Role Model for Developing Economies

With a size about half that of Australia's island state of Tasmania, Taiwan is currently the tenth biggest economy in the Asia Pacific Economic Cooperation for GDP measurements based on Foreign Exchange Rates. Alternately, it is the eleventh biggest economy for GDP measurements based on Purchasing Power Parities.

Taiwan matured into a high-income economy in the early 21st century after about four decades of rigorous industrialization, which resulted in sustained and jaw-dropping growth rates in excess of 7% year-over-year. This resulted in the sobriquet "Four Tigers" or "Four Dragons" being awarded to the economies of Taiwan, Hong Kong, Singapore, and South Korea, all of which embarked on the path to industrialization at about the same time. Further, it has also resulted in Taiwan's growth model being looked upon by other developing economies in Asia as a role model.

Patent Legislation in Taiwan

Patent filing and grant in Taiwan is governed by the Patent Act, which was promulgated in the first half of the 20th century, in 1944, and came into force on New Year's Day in 1949. The implementing regulations (known as the "Enforcement Rules) also simultaneously entered into force on the same day as the Patent Act. Both the Patent Act and the Enforcement Rules were last amended in 2017.

The Taiwan Intellectual Property Office, headquartered in the capital city of Taipei, is the statutory body that oversees the administration of the Patent Act and the Enforcement Rules.

Patent System in Taiwan

Taiwan is neither a signatory of the Paris Convention nor the Patent Cooperation Treaty. However, like the Gulf Cooperation Council Patent Office, which is also not a signatory of both the international arrangements, priority to an earlier application may be claimed if the earlier application was filed in a member state of the World Trade Organization.

Patent Filings in Taiwan

As per the statistics published by the Taiwan Intellectual Property Office, the Office receives an average of about 80,000 patent applications every year (based on the patent filing statistics between 2008 and 2017). However, there has been an incremental year-over-year decline in patent filings from 2012 onwards, with the number of patent filings in 2017 standing at about 73,500, as compared to about 85,000 in 2012. The trend seems to be continuing in the first half of this year as well, with a 0.76% decrease in the number of patent applications received by the Office, which stood at slightly over 35,000.

Patent Costs – Primary Concern for Patent Owners in Taiwan

At the IPBC Taiwan 2018, attended by over 200 senior executives from the private and public sectors, most corporate patent proprietors in Taiwan cited the management of limited budget resources as their topmost concern (Bing Zhao; 2018). The event was conducted in April 2018 and co-hosted by Intellectual Asset Management ("IAM") and the Industrial Technology Research Institute.

How Much Does Patent Protection Cost in Taiwan?

Let us now study the costs involved in obtaining and maintaining a patent in Taiwan. Since a patent is typically maintained for at least six to ten years, we shall consider the costs from July 2018 through June 2028. There are three categories of costs involved: official fees, attorney charges, and translation costs.

For the purposes of this article, we shall consider a patent specification drafted in English comprised of 40 pages (including five pages of drawings), and 15 claims, which is to be filed electronically by a company (i.e. large entity) in Taiwan.

For the above scenario, the total costs to file a patent application, get the patent issued, and maintain the patent are approximately $7,400. As shown in Table 1, the estimated costs are spread across the five different stages of the patenting process: Patent Filing, Patent Examination, Patent Prosecution, Patent Grant, and Patent Maintenance Fees/Patent Renewal Fees/Patent Annuities.

Official Patent Filing Fees

For the above scenario, the approximate official fees to be paid at the time of filing the patent application amount to $95. The fees are inclusive of a 17% discount for 'Going Green' (i.e. filing the patent application electronically).

Costs of Translating the Patent Specification

Translation of the patent specification into the official language is mandatory in Taiwan. The estimated costs of translating the patent specification into Chinese are $1,832 (i.e. about 70% of the total patent filing costs).

Official Patent Examination Fee

The patent system in Taiwan follows a deferred system of patent examination. A request for substantive examination is to be filed within three years from the date of filing of the patent application. The approximate official fees for filing this request are $358. The fees are inclusive of the basic patent examination fee, in addition to the fees for the examination of each claim in the patent specification in excess of 10 claims.

Patent Prosecution Costs, Translation Costs, and Patent Grant Costs

The estimated patent prosecution costs are based on the issuance of more than one office action with substantive objections. These costs are inclusive of the attorney charges for reporting each office action, preparing a response, and processing the response.

As is the case with patent filing, translation is also required during prosecution. Assuming 10 pages of translation per prosecution action, the estimated translation costs are $785 (i.e. about 38% of the total patent prosecution costs).

The estimated patent grant costs are inclusive of the first annuity.

Patent Maintenance Fees

Patent maintenance fees in Taiwan begin at the grant stage; the first patent maintenance fee is to be paid before the publication of grant, along with the official grant fee, with the subsequent patent maintenance fees being payable prior to the commencing date of the subsequent year. The estimate shown above is for a patent that will be granted in 2022. The approximate official patent maintenance fees for maintaining the patent for the first ten years are $914.

Patent Management Software

Worried about keeping pace with the dynamic patent costs landscape? The Global IP Estimator and the Portfolio Estimator – Patents are smart, robust, and state-of-the-art Patent cost calculators from the stables of Quantify IP, which greatly simplify the arduous and challenging task of Intellectual Property budgeting management. They offer what traditional Intellectual Property docketing software and patent portfolio management software do not - they can instantly and accurately calculate the costs of worldwide protection for either a single patent, trademark, design, or utility model, or a portfolio of patents, designs, or utility models, respectively. The calculations may be fine-tuned to the level of any particular stage of an Intellectual Property across its lifecycle, such as patent maintenance fees. Therefore, they can also function as patent annuity cost calculators.

The addition of Quantify IP's Patent Cost Calculators has empowered the decision-makers in many Fortune 500 companies and over 70% of the top 100 IP law firms in the U.S to solve diverse challenges in managing Intellectual Property budgets. To see what we can do for you, email us at qipcontact@quantifyip.com or call us at +1-808-891-0099.

Venkatesh Viswanath (Senior Content Strategist, Quantify IP) contributed to this article.
Exchange Rate Used: 1 U.S. Dollar = 30.66 Taiwan Dollars