Eddie Shih[1] and Jane Tsai[2]
I. Summary of the Draft Amendments to the Patent Law
1. Expiration of the pre-announcement period of the second version of the draft, which is the largest scale of partial amendments in recent years, on July 6, 2021
The Ministry of Economic Affairs pre-announced the first version of the draft Partial Amendments to the Patent Law on December 30, 2020 (hereinafter, the “Draft”). The pre-announcement period for soliciting written opinions expired at the end of February 2021. The recent pre-announcement period of the second version of the Draft, which was pre-announced on June 22, 2021, expired on July 6, 2021. Consisting of a total of 79 articles as amended in comparison with the current Patent Law, the second version of the Draft is the largest scale of partial amendments after the full-text revision in 2013.
The major changes in the first version of the Draft consisted of two portions. The first portion is related to the administrative trial proceedings for review cases and dispute cases conducted by the Intellectual Property Office (hereinafter, the “IPO”), while the second portion pertains to the civil procedure for review cases and dispute cases heard by the Intellectual Property and Commercial Court. Concerning the above administrative trial proceedings, we previously issued an introductory article (titled the “Introduction of the Draft Amendments to the Patent Law – Review and Dispute Trial (Taiwan),” LTP special column dated May 17, 2021).
As compared with the first version of the Draft, the second version of the Draft contains two major amendments to the above administrative trial proceedings in response to the public recommendations during the first pre-announcement: (1) the provisions are eased so that an applicant may apply for division within two months upon delivery of the decision of refusal or during the review proceedings; and (2) in case of any dispute over the right to apply for patents and the ownership of patent rights for which remedies are sought via civil action, the parties may apply to the IPO to suspend proceedings involving changes of said right and ownership.
2. Major changes to the civil procedure for review cases and dispute cases in the second version of the Draft
This article will then continue to introduce the above civil procedure based on the second version of the Draft as the blueprint. In comparison with the first version of the Draft, the second version of the Draft also contains two major amendments concerning the above civil procedure in response to public recommendations: (1) exceptions for introducing new grounds or new evidence in patent dispute litigation by an invalidator or intervener are added; and (2) the adjudication of the newly established patent dispute litigation under the Patent Law is clearly stipulated, as described as follows.
Under the second version of the Draft, patent review and dispute litigation are subject to the exclusive jurisdiction of the Intellectual Property and Commercial Court, which are at a high court level; an appeal or interlocutory appeal may be filed with the Supreme Court; a trial will be conducted pursuant to the civil procedure; and the agents ad litem shall be qualified lawyers, patent attorneys or patent agents.
3. Provisions of the second version of the Draft on patent review litigation
Patent review litigation may be brought concerning trial decisions on the following cases rendered by the Review and Dispute Trial Board of the IPO (hereinafter, the “Trial Board”):
(a) Rejection review cases involving dissatisfaction with the decision to reject a patent application;
(b) Extension application cases for the term of a patent;
(c) Post-granted amendment cases, and
(d) Other disposition review cases involving dissatisfaction with dispositions concerning patent application and other proceedings.
Important provisions related to patent review litigation include the following:
(1) Acceptance of litigation: for a case involving “dissatisfaction with a trial decision,” the applicant and intervenor (such as the exclusive licensee in a post-grant amendment case) can both act as a plaintiff to bring litigation with “the IPO” as the defendant.
(2) Progression of litigation: since a trial decision is related to public interest due to its legality in the above-mentioned review cases, the court should ex officio investigate necessary factual relationships and evidence and is not bound by the assertions, admissions of facts, abandons of claims, admissions of claims, or settlements of the parties.
(3) Conclusion of litigation: if the plaintiff’s complaint is well-grounded with clear factual relationship and evidence in the case, the court may hand down a decision to “revoke or amend the trial decision” or “order the IPO to render a trial decision as demanded in the plaintiff’s claims,” depending on the circumstances.
4. Provisions of the second version of the Draft on patent dispute litigation
Patent dispute litigation may be brought concerning trial decisions on the following cases that have been rendered by the Trial Board:
(e) Invalidation cases of patent rights;
(f) Invalidation for extension cases for the term of a patent.
In addition, patent dispute litigation may also be brought concerning (g) the application for the invalidation cases or invalidation for extension cases above, which the Trial Board has rendered a decision not to accept the application for failure to meet procedural requirements.
Important provisions related to patent dispute litigation include the following:
(1) Acceptance of litigation: any party or intervenor who “disputes against the patent rights decided by the trial decision” or “is dissatisfied with the decision not to accept the application” may serve as the plaintiff to file this litigation with the “other party” as the defendant.
(2) Progression of litigation: if an invalidator or intervenor files the invalidation case (e) above for not meeting substantive requirements (such as lacking inventive steps) in the administrative trial proceedings conducted by the Trial Board, any of the following exceptions shall be expounded: (1) new grounds and new evidence could not be filed due to the Trial Board’s violation of laws and regulations (such as the failure to comply with the trial plan), and (2) the facts are generally known to the court or known to the court in the course of performing its functions, or evidence should be ex officio investigated by the court (such as the technical level of the “person having ordinary skill in the art”) before the assertion of such grounds and evidence. In addition, when hearing the invalidation case (e) above or the invalidation for extension cases (f) above, the court’s trial is delimited to the “scope of the patent right determined in the trial decision” (such as the invalidation against Claim 1), and the parties shall not make any amendments, additions, abandons of claims, admissions of claims, or settlements (such as the addition of Claim 2 to the complaint) outside the scope.
(3) Conclusion of litigation: if the plaintiff’s claims are well-grounded in the invalidation cases (e) or in the invalidation for extension cases (f) above, the court shall revoke the trial decision and “determine the scope of patent rights.” In the application for failure to meet procedural requirements (g) above, the court shall revoke the decision not to accept the application and “remand the case to the Trial Board for retrial.” In addition, for the sake of information management, the court shall notify the IPO of the acceptance of the litigation and its conclusion. If the court judgment amends the scope of the patent rights, the IPO will publish it directly in the gazette.
II. Points to consider concerning the second version of the Draft
Since the second version of the Draft is still at the initial amendment stage and has not been adopted by the Executive Yuan and delivered to the Legislative Yuan for deliberation, its subsequent development remains to be seen. The following points to consider concerning the second version of the Draft are hereby provided as follows:
Under the current provisions, in case of dissatisfaction with the IPO’s decisions in the cases (a) through (g) above, the applicant is required to follow the administrative remedy procedure by filing an administrative appeal first before bringing an administrative action. Pursuant to the contents of the second version of the Draft, the civil procedure may be initiated directly for cases (a) through (g) above to streamline the level of administrative appeal so that an applicant can obtain a court judgment earlier with less spend on time and money.
In comparison, the Trial Board is in essence equivalent to the first instance of the civil action at a district court, and the applicant is required to confirm the subject matter (such as Claim 1 to be invalidated) and submit the grounds and evidence (such as Evidence 1 used to prove the lack of inventive steps of Claim 1) to the greatest extent possible in the administrative trial proceedings. In the civil procedure before the court, the subject matter shall not be added (such as the addition of Claim 2 to the complaint) and the submission of new grounds and evidence is basically prohibited (such as the assertion that the combination of Evidence 1 and Evidence 2 proves the lack of inventive steps of Claim 1 and Claim 2). An applicant has to make more comprehensive preparation for the cases (e) and (f) above as heard by the Trial Board.
In addition, the court deals with such cases by the format of civil procedure. However, the substantive hearing of the legality of a trial decision or a decision not to accept the application reflects the spirit of administrative procedure. Therefore, the parties cannot freely make admissions of facts, abandons of claims, admissions of claims, or settlements as those in general civil cases.
Moreover, practical cases primarily involve infringers that argue the invalidity of patent rights as a defense in civil infringement actions brought by the patentees. In addition, the infringers often file invalidation with the IPO against patent rights (i.e., the case (e) above). According to the contents of the second version of the Draft, it is possible that civil infringement actions and the case (e) above are both appealed to the second instance of the Intellectual Property and Commercial Court to have such two types of cases combined for trial by the same judges. Therefore, before filing a civil infringement action, a patentee should not only collect infringement evidence but also search prior art to confirm the validity strength of the patent rights to avoid the risk that non-infringement is established while the patent rights are invalidated.
[1] This author is a lawyer at Lee, Tsai & Partners. However, the contents of this article merely reflect personal opinions and do not represent the position of this law firm.
[2] This author is a partner of Lee, Tsai & Partners. However, the contents of this article merely reflect personal opinions and do not represent the position of this law firm.