Introduction of the Indirect Patent Infringement System (Taiwan)

Hsiao-Han Su

1. Evolution of the concept of indirect patent infringement

Patent rights are rights granted to the patentees or their lawful assignees who enjoy a monopolistic status granted by law due to such rights, which are highly exclusive and which can exclude others from practicing the patents without the consent of the patentees or their lawful assignees.  In other words, except as otherwise stipulated by law, no one can manufacture, sell, use or import patented products or use patented methods without the consent of the patentees or their lawful assignees.  Otherwise, this would constitute a patent infringement.[1]  Pursuant to the gist of the Guidelines for the Patent Infringement Determination of the Intellectual Property Office, whether a patent infringement is constituted depends on whether the alleged infringing object falls within the claims of the patent-in-suit,[2] and an “all-element rule”[3] is used as the determination standard.  This is also a common international approach for determining if a direct infringement is constituted.

However, when the all-element rule is not satisfied, it is possible that an actor has deliberately sought to evade patent infringement determination through devious means, even though what has been practiced are important portions of the patent with a high probability for causing subsequent patent infringement.  To wit, although the criteria for the all-element rule are not met, still the results of infringement are also caused indirectly.  This is known as the concept of indirect infringement.  At this juncture, the patentee may be required to assert patent rights against every single user when the end users constitute direct infringement.  This not only results in procedural disadvantages but also is actually difficult to repair the harm.[4]  In consequence, there is no actual protection benefit to the patent rights.

Therefore, the concept of indirect infringement has gradually emerged in patent law in various countries.  For example, the earliest and most well-known case involving indirect infringement is an oil lamp chimney case[5] in the US in the 19th century.  The claims in the patent-in-suit included a chimney, while the alleged infringing product did not have such part.  However, all a user needed to do was to additionally add a chimney to complete a substantially infringing oil-burning lamp.  However, the alleged infringing product mentioned above can be prevented from falling within the scope of the claims by evading the all-element rule.  In this case, however, the court indicated that since such act had had quite palpable interference with the patentee’s rights, the actors should be deemed joint infringers.[6]  Later, relevant indirect infringement cases emerged in the US and types of indirect infringement were formally included in the statutory law in 1952.

2. Direct patent infringement system in the US

As previously indicated, types of indirect infringement were formally included in Section 271 (35 U.S.C. § 271) of the Patent Act in 1952 with direct infringement[7] set forth under Paragraph a of such section and induced infringement [8] and contributory infringement[9] set forth in Paragraphs b and c.  The latter two are the so-called “indirect infringement.”  In view of the provisions, contributory infringement under the US Law requires an actor’s subjective and apparent knowledge of such patent rights, while the actor still sells, offers for sale or import such articles which are provided by the actor to infringe such patents, and such articles constitute important portions or processes of the patent rights.  However, commonly used goods with substantive non-infringing use are excluded.  In addition, it is also required that indirect infringement should be based on the establishment of direct infringement.  This is generally known as the “subordination theory.”

3. Indirect patent infringement system in Taiwan?

There is no specific legal provision concerning indirect infringement in Taiwan.  However, the Intellectual Property Office considered that Article 100 of the Patent Law could be amended in 2008 and stated in the draft that “any person who is obviously aware of an object which is a main technical means to resolve the issues addressed by an invention patent and who sells and offers for sale such object that infringes the patent rights shall be deemed to be infringing the patent rights.  However, this shall not apply if such object is normally obtainable in the course of ordinary trade.”  Such article also requires that the subjective criterion for an actor is obvious awareness, while the objective criterion is a sale or offer for sale.  In addition, the legislative requirement that the subject matter of the act should be a main technical means to resolve issues addressed by the patent with the exclusion of objects normally obtainable in the course of ordinary trade is generally the same as the practices in various countries.  However, since it became a concern for all walks of life that because outsourced manufacturing was a major operation in the industries in Taiwan, frivolous suits could be resulted by such specific legislation, this provision was deleted after this matter was carefully considered.  Currently, if any indirect infringement is involved, this is mostly dealt with as a joint infringement under Article 185 of the Civil Code.

In summary, there are generally two opinions concerning the issue of indirect patent infringement in Taiwan.  One denies the necessity of specific legislation for indirect infringement.  This view holds that many products and components in a modern society which emphasizes the constitution of supply chains by industry division of labor have existed before any patent emerges.  If the concept of indirect infringement is overemphasized or even specifically regulated, the scope of intellectual property protection will be definitely unduly expanded, resulting in rights abuse.[10]  In addition, some scholars hold that now that the provisions of Article 185 of the Civil Code are in place, there is no need to independently legislate indirect infringement.  In particular, it is inappropriate to rashly follow the legislative examples of other countries when the actual benefits that can be achieved by specific legislation are not certain.

The other view recognizes the necessity of specific legislation of indirect infringement.  This view holds that the culpability of many indirect infringers is not lower than that of direct infringers.  It is even possible that indirect infringers pursuing commercial gains are the masterminds that deliberately leverage consumer combination or suppliers to practice a patent by indirect means in order to evade the criteria for direct patent infringement, even though they have substantially reached a state of legal violation.  These people are the main targets whose liabilities are pursued by the patentees.[11]  Meanwhile, it is also stressed that the issue of indirect patent infringement cannot appropriately be addressed by the Civil Code, which has different regulatory purposes than the Civil Code, is likely to play down the uniqueness of patent rights and can hardly address the issue of patent rights abuse.  In addition, if direct infringement is governed by the Patent Law while indirect infringement has to be regulated by the Civil Code again, the issue of divided application of legal provisions will arise.  Therefore, this should be specifically stipulated as indicated in legislative examples concerning other countries.[12]

[1] Website of the Intellectual Property Office at (last visited on April 9, 2019)

[2] Ministry of Economic Affairs (2016), Chapter III of the Guidelines for Patent Infringement Determination

[3] According to the definition under the Guidelines for Patent Infringement Determination of the Ministry of Economic Affairs (Version 2016), the all-element rule means that the object accused of infringement should include every technical feature in the claims of the patent-in-suit as analyzed.  To wit, each technical feature in the claims of the patent-in-suit as analyzed, regardless of whether it is an identical or equivalent technical feature, should be present or exist in the object accused of infringement before the object accused of infringing may possibly constitute an infringement.

[4] Chin-mei Chao and Kuo-ching Chiang (2010),Exploration of Indirect Patent Infringement, The Patent Agents, Issue 3, Page 49

[5] Wallace v. Holmes, 29 F. Cas. 74, 79 (C.C.D. Conn. 1871).

[6] Chin-mei Chao and Kuo-ching Chiang, ibid, Page 53

[7] 35 U.S.C. § 271(a), “Except as otherwise provided in this title, whoever without authority make, use, offers to sell., or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.”

[8] 35 U.S.C. § 271(b), “Whoever actively induces infringement of a patent shall be liable as an infringer.”

[9] 35 U.S.C. § 271(c), “Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination, or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer.”

[10] Cheng-lun Chen (January 2009), Existence of Indirect Patent Infringement in Patent Infringement Examination (Part II), The Exhibitors, January Issue, PP 31-33

[11] Chin-mei Chao and Kuo-ching Chiang, ibid, PP53-54

[12] Chin-mei Chao and Kuo-ching Chiang, ibid, PP60-63