Patent Litigation 2020

Last Updated February 10, 2020

Taiwan

Law and Practice

Authors



Deep & Far Attorneys-at-Law mainly handles patent litigation in Taiwan, China and Hong Kong, and has more than 40 persons in its litigation team, including lawyers, patent attorneys, patent engineers and paralegals. The firm deals with all phases of law, with a focus on all aspects of intellectual property rights (IPRs), including patents, trade marks, copyrights, trade secrets, unfair competition, and/or licensing, counselling, litigation and/or transactions. Deep & Far also prosecutes worldwide patent matters for local clients, and prosecutes patent matters mainly in Taiwan, significantly in China and Hong Kong, for international or foreign clients, with minor representation in Macau, Singapore, Korea and Japan.

Patent rights are provided in Taiwan to protect inventions. If a design is not considered as an invention, its invention patent rights and utility model patent rights are based on statutory law. The Plant Variety and Plant Seed Act applies if plant varieties are regarded as inventions.

An invention patent needs to pass a formal examination and a substantive examination before being granted. Only a formal examination is needed for a utility model patent.

For an invention patent application, the pending period is one to three years. The average cost (excluding the translation of the specification) for ten claims before proceeding to grant after one response to an office action with cited reference(s) is around TWN70,000.

For a utility model patent application, the pending period is one year. The average cost (excluding the translation of the specification) before grant is around TWN30,000.

Representation is required for a foreign applicant.

The term of an invention patent expires 20 years after its local or actual filing date. The term of a utility model patent expires ten years after its local or actual filing date.

The rights of an owner include the following: 

  • preliminary injunctions; 
  • permanent injunctions; 
  • prohibition of continuous or future infringement; 
  • damages for post-grant/post-acquirement infringement; 
  • court fees and reasonable costs incurred for stopping a patent infringement; 
  • up to treble damages for an intentional infringement; and 
  • reasonable fees for pre-grant use, between the patent grant date and publication date or the date on which a defendant was notified of the patent application and its contents (available only for invention patents).

The obligations of an owner include the following: 

  • annual renewal fees; 
  • before exercising the right of a utility model patent, the patentee shall not make a warning without presenting the utility model technical report in advance; and
  • in addition to registration, the patent rights owner has the obligation to mark the patent certificate number on a patented article. If such a mark cannot be fixed to the patented article, the patentee may mark the labels or packaging, or make the mark in a distinct way that is sufficient to draw people’s attention.

Generally, there is no further protection for technical intellectual property rights after their maximum term has lapsed, except for a pharmaceutical patent where the patent can be petitioned to be extended for two to five years if the regulatory approval costs the patentee the petitioned period.

A third party can submit its observations for consideration by an examiner during prosecution. A written statement accompanied by relevant evidence is enough for third-party submission.

An applicant can appeal a refusal decision first to the Petitions and Appeals Committee (PAC) in the Ministry of Economic Affairs (MOEA). If the applicant is not satisfied with the PAC’s decision, it can further appeal to the Intellectual Property Court (IP Court). There are two possible outcomes in the IP Court. If the applicant is dissatisfied with the IP Court’s decision, it can further appeal to the Supreme Administrative Court (SA Court) to pursue a final decision.

If the annuity is not paid within the specified time period, a late payment can be made within six months of the original due date, with a specified percentage addition.

The additional amount shall be calculated according to the length of time that has elapsed from the original due date. For every month that lapses, an additional fee at a rate of 20% must be paid; the maximum additional fee shall be the same as the amount originally due. The elapsed time from one day to one month shall be calculated as one month.

In addition, a patentee who unintentionally fails to pay a patent annuity within the aforementioned time period for late payment may apply for reinstatement of the patent rights within one year after the expiration of the time period of late payment by paying triple the amount originally due.

Sending a warning or cease-and-desist letter for developing a licensing relation, seeking a settlement/mediation or initiating a lawsuit before the IP Court are actions available to the owner of a technical intellectual property right against infringement.  Injunctions or cross-border measures are also available. For trade mark and copyright infringements, criminal offences are involved.

Under Taiwan’s patent practices, any third party can petition for an invalidation proceeding against the validity of a patent at the Taiwan Intellectual Property Office (TIPO), and the losing party can subsequently appeal before the PAC, IP Court and SA Court. There is generally no particular admissibility/standing requirement.

In response to a national emergency or other circumstances of extreme urgency, the TIPO will – in accordance with an emergency order or after notice from the central government authorities in charge of the business – grant compulsory licensing for a patent and notify the patentee as soon as reasonably practicable.

The TIPO may, upon request, grant compulsory licensing for a patent under any of the following circumstances: 

  • where a patented invention is to be exploited non-commercially for the enhancement of public interest; 
  • where a later invention or utility model patent cannot be exploited without infringing upon a prior invention or utility model patent, and where the later invention or utility model patent involves an important technical advancement of considerable economic significance in relation to the prior invention or utility model patent; or 
  • where a patentee has committed acts restricting competition or has committed unfair competitive acts, for which a judgment has been made by a court of law or a decision has been rendered by the Fair Trade Commission of the Executive Yuan.

The IP Court has jurisdiction in the first instance, and the IP Court has exclusive jurisdiction for some cases in the second instance, while the Supreme Court (SC) has jurisdiction in the third instance for civil or criminal infringement action. For prosecution or administrative matters, the IP Court has jurisdiction in the first instance while the SA Court has jurisdiction over the second or final instance.

There is no specialised body or organisation, other than the IP Court, for the resolution of intellectual property disputes.

Except recoding the patent with the TIPO, there is no prerequisite to filing a lawsuit, but generally the plaintiff will issue warning letters before filing the lawsuit.

It is unnecessary for the parties in intellectual property matters to be represented by a lawyer, but hiring a lawyer is always recommended. Furthermore, a civil court action before the SC or an administrative court action before the SA Court needs legal representation, as does a private prosecutor before a criminal court or an agent for oral debate before an SC criminal panel.

Provisional Attachment and Injunction

A creditor or claimant may apply for a provisional attachment and injunction respectively with regard to monetary and non-monetary claims for purposes of securing the satisfaction of specific performance or compulsory execution. A provisional injunction or measure will not be granted unless it can be shown that it is impossible or extremely difficult to satisfy a claim by specific performance or compulsory execution in the future.

A plaintiff must explain why it is necessary to apply for provisional attachment or injunction through such motion. The courts may dismiss the motion if the explanation is insufficient. Even when the grounds of motion for an attachment or injunction are sufficient, the court may still order an applicant to provide a security for granting the attachment or injunction. 

Temporary Status Quo

A plaintiff can move for an injunction maintaining the temporary status quo before infringement proceedings. The plaintiff must explain why it is necessary to prevent material harm or imminent danger, or other similar circumstances, through such a motion. The practical standards may be understood as those implemented in the US, such as:

  • there is a likelihood of irreparable harm with no adequate remedy at law; 
  • the balance of harm favours the movant; 
  • there is a likelihood of success on the merits of the case; and 
  • the public interest favours the granting of an injunction.

The courts may dismiss a motion if the explanation is insufficient. Even when the grounds of motion for an injunction maintaining the temporary status quo are sufficient, the courts may still order an applicant to provide a security for granting the injunction.

The potential opponent can do the following to protect itself: 

  • try to submit a protective brief, though this is not statutory and there is no precedent, as far as is known; 
  • investigate whether the patent rights term has expired; 
  • investigate whether the annuity was duly paid; 
  • investigate whether the patent rights are invalid or whether the patent rights are subject to an unfavourable invalidation decision or vulnerable to invalidation; 
  • investigate whether the patent rights have been limited by law, like: 
    1. whether the suspect products are subject to a non-infringement statutory exemption;
    2. whether the suspect products are subject to compulsory licensing; 
    3. whether the scope of the claims of the invention or utility model patent is limited by prosecution history estoppels; or 
    4. whether the suspect products are merely an implementation of the prior art and a prior art defence is available; and 
  • investigate whether the time limit for actions has expired.

An infringement is actionable within two years of the date on which the owner knows thereto, and within ten years of the date on which the action is made. Furthermore, the patent rights shall not extend to: 

  • actions for private and non-commercial purposes; 
  • actions for research or experimental purposes; 
  • prior use before the patent filing date; 
  • the seizure of vehicles merely passing through the territory of Taiwan; 
  • a false patent applicant’s prior use before invalidation by the actual patentee; and 
  • use under the international exhaustion doctrine.

When a document or object (hereinafter document) is in the possession of an opposing party or third party, a party can move that the courts order the opposing party or third party to produce such document. When the courts find that the disputed fact is material and that the motion is justified, it may order the opposing party or third party to produce the document through a ruling. 

In addition, a party has the duty to produce the following documents: 

  • documents to which such party has made reference in the course of a litigation proceeding; 
  • documents of which the opposing party may require the delivery, production or an inspection, pursuant to the applicable laws; 
  • documents which are created in the interests of the opposing party; 
  • commercial account books; and 
  • documents which are created regarding matters relating to the action.

There is generally no special provision for lawsuits in intellectual property proceedings that differs from non-intellectual property proceedings. However, for a patent infringement lawsuit, a plaintiff is required to demonstrate why there is a patent infringement, or to submit a patent infringement evaluation report. Therefore, it seems that the initial pleading standard for a complaint is, at least, plausibility.

After service of the complaint, the plaintiff may not amend its claim or raise additional claims, except in the following circumstances: 

  • where the defendant agrees; 
  • where the amendment or addition of the claim is based on the same transaction or occurrence; 
  • where only the demand for judgment for the relief sought is expanded or reduced; 
  • where a change of circumstances makes it necessary to replace the original claim with another claim; 
  • where the claim shall be adjudicated jointly with regard to several persons and one or several such persons who are not parties are joined as parties; 
  • where the existence or non-existence of a certain legal relation, based upon which the case shall be decided, becomes disputed in the course of the proceeding and an additional claim for a declaratory judgment confirming such legal relation against the defendant is raised; or 
  • where it would neither severely obstruct the defendant's defence nor delay litigation. 

In addition, supplementing or rectifying factual or legal statements supporting rather than changing the claim may always be submitted by closure of the oral debate.

Multiple parties with common interests may appoint one or more persons from among themselves to sue or be sued on behalf of the appointing parties and the appointed parties. In addition, multiple parties with common interests who are members of the same incorporated charitable association may appoint such an association as an appointed party to sue or be sued on behalf of them, to the extent permitted by said association's purpose as prescribed in its bylaws.

It is impermissible to collect royalties on unpatented products or an expired or impracticable patent; otherwise, the patent is unenforceable because of patent misuse/abuse.

A patentee may not commit acts of restricting competition or unfair competition. Furthermore, upon request, the TIPO may grant a compulsory licence for a patent when a patentee has committed acts restricting competition or has committed unfair competition acts, for which a judgment has been made by a court of law or a decision has been rendered by the Fair Trade Commission of the Executive Yuan. A compulsory licence will also be granted when there is a non-profit use in a national emergency or public interest improvement. A compulsory licence is also possible when a re-invention represents economic significance.

A patent owner and an infringer are the necessary parties to an action for infringement. An exclusive licensee, however, may also file an action for infringement at any time, unless provided otherwise in the licensing agreement.

Direct infringement is the act of making, offering for sale, selling, using or importing an infringing product for the aforementioned purposes, or using an infringing process, or using, offering for sale, selling or importing for the aforementioned purposes the product obtained directly by the infringing process.

Indirect infringement can be described in Taiwan as an infringement done by an accessory or abettor, and can only arise when the accused indirect infringer has at least some knowledge of the patent and has intent to help completion of the infringement. If, however, there is no direct infringement, there is no such indirect infringement either. Inducing or contributory infringers are joint tortfeasors to be jointly liable for the damages arising therefrom. The remedies for direct and indirect infringement are basically the same and include the following: 

  • preliminary injunctions; 
  • permanent injunctions; 
  • prohibition of continuous or future infringement; 
  • damages for post-grant/post-acquirement infringement; 
  • court fees and reasonable costs incurred for stopping a patent infringement; 
  • up to treble damages for an intentional infringement; and 
  • reasonable fees for pre-grant use, between the patent grant date and publication date or the date on which a defendant was notified of the patent application and its contents (available only for invention patents).

Claims delineate the exact periphery, or metes and bounds, of the conferred protection, and the scope of protection is based on the construction of the plain meanings of a claim. In addition, the courts may be conservative in boldly applying the doctrine of equivalents. In general, the courts may adopt any doctrine or principle that is prevalent in a major jurisdiction.

The defences available against a claim for infringement can be summarised as follows: 

  • the patent rights are invalid; 
  • non-infringement; 
  • the patent rights have been limited by law, such as: 
    1. the suspected products are subject to a non-infringement statutory exemption, such as prior use rights; 
    2. the suspected products are subject to a compulsory licence; 
    3. the scope of the claims of the invention or utility model patent is to be interpreted in terms of the prosecution history estoppel; and
    4. the suspected products are merely an implementation of the prior art, and a prior art defence is available; 
  • the right to claim patent infringement becomes extinguished if not exercised within two years of the patentee becoming aware of the damage. The rights to claim also become extinguished if not exercised within ten years of the time of infringement; and 
  • patent exhaustion.

An expert may testify on behalf of a party or before the courts, and may assist a court to understand or evaluate the technical or specific issues related to a case. An expert may also help to evaluate or spot any weaknesses in the technical credentials or testimony of an opposing party’s expert witness.

There is no separate procedure for construing the terms of a patent’s claims, but the IP Court may order such a procedure.

An invalidation proceeding may be sought against a patent before the TIPO after the patent is granted; an administrative appeal may be filed before the PAC against an unfavourable TIPO decision from the invalidation proceeding; an administrative appeal may be filed before the IP Court against an unfavourable PAC decision; and an administrative appeal may be filed before the SA Court against the unfavourable IP Court decision. 

The most common reasons for invalidation include: 

  • the claimed invention does not meet the definition of invention or utility model; 
  • the invention does not have industrial applicability, novelty or non-obviousness; 
  • the claimed invention belongs to a statutory subject matter exclusion; 
  • the specification does not meet the requirement of enablement or written description; 
  • the claims are indefinite, not concise or not supported by the specification; 
  • the claimed invention violates the first-to-file principle; 
  • the amendments/divisional application/corrections fall beyond the scope disclosed by the specification, claims or drawings as filed; 
  • the corrections substantively enlarge or alter the scope of the claims as published; 
  • the patent was not filed by the person who has the rights to file the patent application or by all joint owners of the rights to file the patent application; and 
  • the home country of the patentee does not accept patent applications filed by ROC nationals.

Partial invalidation is usually possible if only part of the claims violates the legal requirements and is subject to invalidation.

Amendment is possible in invalidation proceedings. A patentee may amend or correct the patent when responding to the briefs of the invalidation petitioner. The patentee filing a request for correcting the description, claim(s) or drawing(s) of a granted invention patent, however, may only do so: 

  • to delete claim(s); 
  • to narrow the scope of claim(s); 
  • to correct errors or translation errors; and 
  • to clarify ambiguous statement(s). 

In revocation/cancellation/invalidation proceedings, the patentee may amend the claims in light of the newly cited prior art and/or the attacking arguments. Certainly, the amendment shall not extend beyond the scope of the content disclosed in the description, claim(s) or drawing(s) as filed. It goes without saying that such amendments shall also not substantively enlarge or alter the scope of the claim(s) as filed or published.

If revocation/cancellation and infringement are instituted separately, they will not be heard together – ie, the infringement follows civil proceedings but the invalidation follows administrative proceedings. Nevertheless, the judges in civil proceedings may independently judge whether the claimed invention is invalid or not, and do not need to wait for the results of the invalidation.  The valid or invalid decision by the judges in an infringement proceeding, however, may bind the case at issue only, and may not bind any other parallel or associated cases in theory – ie, an invalidation case before the TIPO.

Although the court procedures for patents are generally the same as those for common civil proceedings, civil actions for patents are filed before the IP Court, where there is a special act organising the IP Court (Intellectual Property Court Organisation Act) and a special law (Intellectual Property Case Adjudication Act) providing how the IP Court should try a case, although provisions in the special law largely adopt those of the Code of Civil Proceedings.

A case is determined by legal judges through the assistance of technical experts at the IP Court. Some legal judges, however, claim technical experts have not really helped, while some technical experts complain that legal judges often ignore either their valuable technical opinions or appraisal. The parties have no influence on who the decision maker is.

The courts may seek settlement at any time, irrespective of the phase the proceedings have reached. When both parties are close to agreeing to a settlement, they may ask the courts for a settlement proposal within the scope specified by the parties.

When the disputed subject price or value of a case is less than TWN100,000, the case shall be subject to mediation by the courts before the relevant action is initiated. However, a party may move for mediation before initiating the relevant action even though the disputed subject price or value of the case is more than TWN100,000.

It is possible for revocation and infringement proceedings to be respectively pending before two different courts if a separate revocation proceeding has been initiated before the TIPO prior to or during a civil action. For an infringement case in the civil courts, the case will not be suspended until the resolution of an invalidation proceeding at the TIPO, PAC, IP Court or SA Court. If, however, the SA Court holds that the patent at issue is invalid, all the courts with pending related cases must follow the decision of the SA Court because the SA Court’s validity decision is binding.

The remedies or rights an owner may claim include: 

  • preliminary injunctions; 
  • permanent injunctions; 
  • prohibition of continuous or future infringement; 
  • damages for post-grant/post-acquirement infringement; 
  • court fees and reasonable costs incurred for stopping the patent infringement; 
  • up to treble damages for an intentional infringement; and 
  • reasonable fees for pre-grant use, between the patent grant date and publication date or the date on which a defendant was notified of the patent application and its contents (available only for invention patents).

All of the above remedies are subject to the discretion of a judge.

A prevailing defendant has no rights but may petition before the SC to prescribe that a plaintiff shall bear a nominal or small sum – ie, TWN80,000 – for compensating the attorney fees it expends if the defendant eventually wins the case before SC. 

There are three kinds of patents: invention, utility model and design. Each kind of patent has the same, or full remedies, except that reasonable fees for pre-grant use by a defendant between the patent grant date and publication date or the date on which the defendant was notified of the patent application and its contents are available only for invention patents, and the utility model patent can enforce its rights only after having an official positive technical report. Damages calculations for patents and trade marks are certainly different.

If a patent is found to be valid and infringed at first instance, the injunction petition in an appeal is much more likely to be granted. As a matter of fact, some judges may grant the injunction as long as the patentee submits a bond. If the patent has been found to be valid and infringed, some judges may still require a plaintiff to submit a bond for granting the injunction. Once the injunction is granted, it will not be stayed by appeal by an infringer unless the infringer submits a counterbond, which may be three times that of the initial bond submitted by the plaintiff.

Appellate procedures for a civil proceeding for patents are identical to those of common civil proceedings. There are, however, two instances at the IP Court, so a losing party in the first instance at the IP Court can appeal before the IP Court for a second instance judgment.

The second instance of the IP Court may have a full review of the facts and legal issues of a case. The SC may, however, only review the legal issues of the case, including if the lower court’s method or process of finding the facts violated the rules of logic and experience.

Costs of warning letters, infringement evaluation reports, evidence investigations and collections, possible unsuccessful negotiations with the potential opponent, etc, may arise before filing a lawsuit. Although hourly charges are preferred by attorneys, a flat fee or fee cap is possible.

The method of calculating court fees for commencing proceedings depends on what kind of remedies the plaintiff claims.  If the plaintiff claims for prohibition of continuous or future infringement, the court fee will generally be calculated on a per defendant basis. However, if the plaintiff claims for damages for post-grant/post-acquirement infringement or reasonable fees for pre-grant use, the court fee will generally be value dependent.

Court fees are paid by the losing party; if the losing party is the defendant, reasonable costs incurred for stopping the patent infringement will be borne by the defendant as well. Each party must pay its own attorney’s fees, except the nominal attorney fees borne by the losing party in a third instance and decided by the SC.

Parties to a dispute occurring at present or arising in the future may enter into an arbitration agreement assigning a single arbitrator or an odd number of arbitrators to constitute an arbitral tribunal to determine the dispute. However, disputes are limited to those that can be settled in accordance with the laws, and are very broad in coverage. 

In addition, parties to an arbitration may explore settlement options to their dispute prior to the issuance of an arbitral award. If the parties reach a settlement prior to the conclusion of an arbitration, the arbitrator shall record the terms of settlement in a settlement agreement, which has the same effect as the arbitral award.

In the absence of any arbitration agreement to the contrary, the parties may also choose to submit their dispute for mediation and jointly appoint an arbitrator to conduct a mediation. Upon the successful conclusion of mediation between the parties, the arbitrator shall record the results of the mediation in a mediated agreement, which has the same effect as a settlement agreement in the preceding paragraph. As mentioned, it is possible to have a case before the court first, and to ask the court for mediation.

A patent right owner may assign a patent right, and must record it with the TIPO. The requirements for recordal include a petition form submitted by the patentee or the assignee, and the relevant assignment or documents. In general, if the patent rights are jointly owned, they shall not be completely or partly assigned without the consent of all joint owners. The assignment shall have no locus standi against any third party unless it is recorded with the TIPO.

A patentee or assignee may submit the relevant assignment or documents with a petition form for assignment before the TIPO for assigning a patent. If a petitioner is foreign, a Power of Attorney is required.

A patent right owner may license a patent right. The requirements for recordal include a petition form submitted by the patentee or the licensee, and the relevant licensing agreement or documents. In general, if the patent rights are jointly owned, they shall not be completely or partly licensed without the consent of all joint owners. The licensing agreement shall have no locus standi against any third party unless it is recorded with the TIPO.

An exclusive licensee may sub-license a third party to exploit the licensed patent, unless otherwise agreed upon by contract. A non-exclusive licensee is not allowed to sub-license a third party to exploit the licensed patent without the consent of the invention patentee or the exclusive licensee. The sub-licensing contract shall have no locus standi against any third party unless it is recorded with the TIPO.

A patentee or licensee may submit the relevant licensing agreement or documents with a petition form for licensing before the TIPO for licensing a patent. If a petitioner is foreign, a Power of Attorney is required.

Deep & Far Attorneys-at-Law

13th Fl., No. 27, Sec. 3, Chung San N. Rd.
Taipei 104
Taiwan
R.O.C.

+886 2 2585 66888

+886 2 2598 9900

email@deepnfar.com.tw www.deepnfar.com.tw
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Law and Practice

Authors



Deep & Far Attorneys-at-Law mainly handles patent litigation in Taiwan, China and Hong Kong, and has more than 40 persons in its litigation team, including lawyers, patent attorneys, patent engineers and paralegals. The firm deals with all phases of law, with a focus on all aspects of intellectual property rights (IPRs), including patents, trade marks, copyrights, trade secrets, unfair competition, and/or licensing, counselling, litigation and/or transactions. Deep & Far also prosecutes worldwide patent matters for local clients, and prosecutes patent matters mainly in Taiwan, significantly in China and Hong Kong, for international or foreign clients, with minor representation in Macau, Singapore, Korea and Japan.

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