Taiwan Executive Yuan Approves the Draft Amendments to the “Intellectual Property Case Adjudication Act”

August 2022

Jane Tsai and Tina Lee

The Judicial Yuan announced a draft amendment to the Intellectual Property Case Adjudication Act (IPCAA) on June 24th, 2022, and joint by the Executive Yuan, has sent the amendment to Legislative Yuan for deliberation on July 20th. This is a full amendment which signifies the largest adjustment scale for IPCAA since its enactment in 2007. Highlights of this amendment include: the exclusive jurisdiction under the Intellectual Property (IP) Court, patent and copyright relief proceedings now using inter-parties proceedings, addition of mandatory legal representation and amendment to the relevant provisions on trade secret protection, summarized below:

1. First instance regarding civil and criminal intellectual property cases shall be heard exclusively by the IP Court

A. Intellectual Property Civil Actions

Article 9 of the IPCAA currently states “ No superior court may, on grounds of wrong jurisdiction, reverse the substantive adjudication of a civil or administrative court on an intellectual property civil or administrative action which, though not subject to the exclusive jurisdiction of the intellectual property court, shall be deemed to be so subject substantively.” It may be deduced that first instance for civil IP cases is currently given “primary jurisdiction” and not “exclusive jurisdiction” to the IP Court.

Regarding whether first instance appellation for IP cases are given exclusive jurisdiction to the IP Court, though Article 8 of the IPCAA states “Any appeal against a judgment rendered by the first instance court on an intellectual property case shall be lodged with the Intellectual Property Court having jurisdiction.”, the article does not explicitly state whether or not “exclusive jurisdiction” is claimed, therefore caused discrepancy (differences in opinion regarding/in) interpretation and action.

This draft amendment puts into consideration the technicality and legal expertise required specifically for civil IP cases, in order to maintain the intention to reach professional yet fair judgement and stability in procedure, it is to regulate that: first intention for civil IP cases, other than exceptions of “consensus jurisdiction” and “deemed consensus jurisdiction” under the Code of Civil Procedure which directs the jurisdiction to respective district courts, should be exclusively heard by the IP Court. (Draft amendment, hereby abbreviated as DA, Article 9) Further, if the party appeals the verdict from the first intention for an IP case, when appealing a ruling or judgement, unless otherwise stipulated by the law, would still be heard by the IP court, to centralize processing and ruling to a professional court for said purpose. (DA Article 48)

B. Intellectual Property Criminal Actions

Article 23 of the IPCAA currently states “An indictment of any of the criminal offenses prescribed in the first part of Subparagraph 2, and Subparagraph 4, Article 3 of the Intellectual Property Court Organization Act, shall be filed with the competent district court.”, which was in consideration for criminal IP cases to be investigated by the district prosecutor’s office, for promptly investigation, correspondence between investigation and trial, it is to be ordered that first instance trial should heard by the district court.

This draft amendment regarding criminal IP Case contains highly technical and professional characteristics, for the purpose of proper and expeditious processing, to order that first instance of criminal cases involving the violation of the following provisions, to be tried by the IP Court (DA Article 59):

(1) Cases of violations involving or of the Trade Secrets Act Articles 13-1, 13-2, 13-3 Sub 3 and 13-3.

(2) Cases of violations involving or of the National Security Act Articles 8 Sub 1 to 3. (Cases of infringement upon trade secrets of national core and key technology)

2. Relief Procedures for Patent and Trademark Related Cases (Inter-Parties Proceedings)

In coordination with relief procedures from the Patent Act Draft Amendment and Trademark Act Draft Amendment, the current administrative litigation procedure has been changed to the “Inter-Parties Proceedings”, this draft amendment also adds provisions on relevant trial procedures. Including:

A. Clarify the standards for litigation expenses for patent related disputes

Patent rights invalidation related litigation is involved with disputes of the scope of patent rights and the content of the claim, which causes complications with determining the litigation expenses for the lawsuit. Therefore, the amendment clarifies the standards for litigation expenses for patent related disputes. (DA Article 55)

B. Amendment to patent right revocation or cancellation, revocation of trademark rights related dispute litigation and the accepted scope of new evidence presented by the parties.

Existing law does not limit the scope of new evidence or the same grounds of revocation or denying validity of a patent or trademark, therefore derives issues of patent invalidation or trademark cancellation and revocation applicants delayed presenting evidence during deliberate proceedings, instead, presenting new evidence in the administrative proceedings; in alternative form, to have the court rule the validity of review procedures regarding the patent rights or trademark rights, not only increases the burden of litigation, but also hinders the proceedings of litigation procedures.

In view of such, the draft amendment stipulates that the following conditions must be met before new evidence can be presented on the same grounds for revocation or cancellation, to reduce disputes over the validity of the same patent or trademark and the occurrences of cycled disputes for more efficient and smooth litigation procedures. (DA Article 56)

(1) Failure to file due to violations of regulations of the specialized intellectual property agency.

(2) Has presented evidence or manipulated the combination of evidence during deliberate proceedings.

(3) With the consent of the other party or the other party present argument on the merits without objection.

3. Addition of Mandatory Legal Representation

Taking into consideration the high levels or legal professionalism and complications regarding civil intellectual property cases, it is certainly difficult for people who are unqualified as an attorney to conduct proceedings on their own. This amendment ensures the rights of the party, clarifies that certain classes of civil IP cases must be enforced to have legal representation (DA Article 10), main classes including:

A. The price of the claim value exceeds the value of the interests that can be appealed to the third instance under the Code of Civil Procedure.

B. First instance civil cases involving patent rights, computer program authorization rights and trade secrets.

C. Second and third instances and retrial procedures regarding civil IP cases.

For the following situations where the party fails to appoint an attorney as mandatory legal representation and was ordered by the court for correction but fails to do so within the timed requirement, the court will rule to deny the motion. (DA Article 12)

Additionally, considering that patent-related litigation requires legal expertise and technical judgement, to protect the rights of the involved parties and promote efficient trials, with permission of the presiding judge, the parties may appoint the patent attorney as the authorized agent. It must be noted, when the acts of litigation of the patent attorney and that of the attorney conflicts, the previously stated is ineffective. (DA Article 16)

4. Enhancing the Protection of Trade Secrets

A. The court has the authority to issue the Confidentiality Preservation Order

Although the confidentiality preservation order exists under the current law, it is limited to the petition of holder of trade secrets, the court has not yet able to grant otherwise. As a result, trade secret holders have conventionally used the grounds of protecting trade secrets to deny petitions or limit the scope of the confidentiality preservation order, which hinders the other party’s right to information and proceedings of the litigation. This draft amendment grants the court the “authority” to issue the confidentiality preservation order upon according to the requests of the trade secret holder. (DA Article 37)

B. Increasing the penalty for breach of the Confidentiality Preservation Order

This draft amendment considers those that endured significant losses due to those that breached their duty of confidentiality, to now increase the maximum penalty from NTD100,000 to NTD1,000,000. In addition, such crime shall be additionally prosecuted under the law “Offshore Violation of Confidentiality Preservation” when the subject breaches the confidentiality preservation order authorized by the court outside the territory. (DA Article 76)

These draft amendments involve many fundamental revisions on multiple IP trial systems. The Firm will further discuss and analyze the revised content in a separate article and will continue to monitor the progress the deliberations from the Legislative Yuan.