TIPO History

In 1999 the Taiwan Intellectual Property Office (TIPO) of the Ministry of Economic Affairs was officially established. Prior to the restructuring, the office was known as the National Office of Standards. The Directors General of TIPO have been Chen Ming-bang (retired in 2002), Tsai Lian-sheng (retired in 2007), and current Director General Wang Mei-hua.

Lowering Fees

To promote and facilitate the filing of invention patents, TIPO has introduced many measures, including lower fees. According to a Business Overview report released by TIPO for January through August 2010 (Note 1), measures such as the implementation of new Fees on January 1st, 2010; the introduction of refunds for withdrawn patent applications; the encouragement to enterprises to review patent portfolios; introduction of itemized charges; and others have stimulated higher quality invention patent applications. These measures are intended to reduce the financial burden on filers.” Furthermore, a public hearing was held on March 22nd (Note 2) to gather opinions from the public on a proposal to reduce annuities for design patents. The fee is expected to be significantly lowered by as much as 40.5%. The total cost for a 10 year term, which currently stands at 42,000 NTD, will drop to 25,000 NTD. The new fees are scheduled to be formally implemented in July this year.

Increasing Backlog

Concurrently, an increase in applications at TIPO has led to an increase in application backlog. According to the 2011 Central Government Budget (Note 3), pending invention patent applications numbered 52,757 in 2007. By 2009 that figure had risen to 140,646. Furthermore, from 2007 to 2009, the average review period also increased from 24.89 months to 36.78. To prevent these extensive delays from adversely affecting business opportunities and overall industry competitiveness, TIPO has sought to implement policies to improve examination times. A central issue, according to TIPO, is a lack of personnel and resources. And to resolve this problem, TIPO has stated that they must receive adequate financial support and hire more examiners in order to tackle the backlog.

The two paragraphs above show that, with regard to TIPO's income, TIPO has taken measures to reduce patent fees and provide incentives for businesses and organizations to file patents; however, the concurrent shortage of qualified personnel suggests that TIPO's annual budget is stretched. This conflict between a reduction of income (lowered fees) and the increase in expenditures (stretched budget) causes many to wonder if TIPO can actually securely navigate the blue waters of the IP industry. To shed some light on this issue, we have compared TIPO's complete income from all fees, with its budget (as allocated by Taiwan's Central Government). The data can reveal if TIPO is in financial danger or if it is simply the government's cash cow. This would further clarify the amount that should be budgeted, and help stimulate measures to find a reasonable mechanism for clearing the application backlog.

TIPO Fee Income, Allocated Budget & Percentage

The data below show per year: TIPO's fee income, its budget as allocated by the Central Government, and the total annual budget as a proportion of fee income, beginning 1999 to early 2011.

The data allow us to plot the following three charts:

TIPO Fee Income

Budget Allocated by Central Government

When first founded in 1999, the Central Government allocated a relatively generous 1.74 billion NTD to support the establishment of the Intellectual Property Office. That year's budget has also been the highest allotted. Since then, the allocated budget has hit a low of 1.26 billion, and for most years has hovered around or below 1.5 billion NTD.

Percentage of Allocated Budget to Total Income

What About Inflation?

The data above show a clear trend in TIPO fee income, its allocated budget and proportion. However, since inflation and interest rates have not been included, the trends may be over- or under-estimated.

Inflation Figures for Taiwan

From 2002 to 2010, inflation rates have bee low and stable. In fact, for a two-year period 2003 to 2004, inflation rates were negative. Additionally, data from 2008 and through the global financial crisis (collected from the CIA World Factbook, Note 4) is estimated based on 2006 information, and is likely seriously overestimated and should be revised downward.

In short, over the past decade, Taiwan inflation rates have essentially been stagnant. As a result, the effects of inflation on our TIPO fee income, budget and percentage can be ignored.

Conclusion

By combining the data on TIPO fee income, its budget as allocated by the Central Government, and their relationship in percentage, we can chart the following graph:

This marked contrast between TIPO's ever-growing fee income and the slumping budget clearly shows that income and budget are not moving in step, but rather seem to be in a tug-of-war.

References

Note 1: http://www.tipo.gov.tw/ch/Download_DownloadPage.aspx?path=3633&Language=1&UID=5&ClsID=6&ClsTwoID=244&ClsThreeID=0
Note 2: http://udn.com/NEWS/FINANCE/FIN10/6215778.shtml
Note 3: http://lci.ly.gov.tw/lcew/index_5.zul
http://www.president.gov.tw/PORTALS/0/BULLETINS/PAPER/PDF/6961-1.PDF
Note 4: https://www.cia.gov/library/publications/the-world-factbook/geos/tw.html