March 2023
Jane Tsai and Julian Lai
I. Relevant provisions of the Intellectual Property Case Adjudication Act on the obligation to explain cases
Since the comprehensive revision of the Code of Civil Procedure in 2000, our country has recognized the collaborative obligation of the parties to provide detailed explanations on specific issues (hereinafter, the “Case Explanation”).[1] In intellectual property cases, since the evidence concerning infringement and the scope of damage is clearly more biased towards one of the parties to the lawsuit, Article 10 was added to the Intellectual Property Case Adjudication Act during its amendment in 2007, and Article10-1 was added when it was amended in 2014 to provide specific provisions under both circumstances on the Case Explanation obligation of the parties to assist the court to hand down a proper decision.
When the Intellectual Property Case Adjudication Act was amended in 2007, Article 10, Paragraph 1 additionally provided explicitly: “If the holder of documents or objects for inspection fails to submit the documents or the objects for inspection pursuant to a court order without justification, the court may impose a fine of up to NT$30,000 and, if necessary, may order a compulsory disposition.” In contrast to Article 345, Paragraph 1 of the Code of Civil Procedure, the court may not only consider the claims of the other party regarding the document or the facts to be substantiated by the document to be true, but may also order the other party to submit the documentary evidence if necessary.
When the Intellectual Property Case Adjudication Act was amended in 2014, Article 10-1 was added with Paragraphs 1 and 2, which stipulate: “For a trade secret misappropriation, if the party concerned has presented a prima facie evidence demonstrating that the trade secrets have been or are likely to be misappropriated, while the opposing party denies the allegation, the court shall order the opposing party to provide a specific answer concerning the reasons for the denial within the specified period,” and “the court may, at its discretion, consider the party’s claim, supported by a prima facie evidence, to be true in case the other party fails to provide an answer or a specific answer within a specified period without justification.”
This article expressly provides that if the party concerned has clearly presented a prima facie evidence demonstrating that its trade secrets have been or are likely to be misappropriated, while the opposing party still denies such an allegation, the court shall impose a period in which the opposing party should be ordered to provide an answer along with specific reasons concerning the facts as denied (e.g., the sources for the acquisition of the trade secrets and the scope of their use) and shall not allow the opposing party to simply deny the allegation. In case the opposing party fails to provide an answer or a specific answer within a stated period without justification, the court may, at its discretion, consider the facts presented by the party concerned to be true.[2]
II. Further expansion of the scope of the evidence explanation obligation by the Intellectual Property Case Adjudication Act as amended in 2023
The comprehensively amended Intellectual Property Case Adjudication Act,[3] which was promulgated by the President on February 15, 2023, not only retains the provisions of Article 10 and Article 10-1 of the Intellectual Property Case Adjudication Act but also further expands the scope of its application, as separately discussed below:
Article 10, Paragraph 1 of the previous Intellectual Property Case Adjudication Act was changed to Article 34, Paragraph 1 with its provisions revised as follows: “For holders of documents, objects for inspection, or materials required for examination who fail to provide the documents, objects for inspection, or materials required for examination pursuant to a court order, the court may issue a ruling to impose a fine of up to NT$100,000 and, if necessary, to render a compulsory disposition” As compared with Article 10, Paragraph 1 of the old law, Article 34, Paragraph 1 of the new law expands the scope of the evidence production obligation to include materials required for examination, since they contribute to the court’s discovery of the truth.”
Article 10, Paragraph 1 of the previous Intellectual Property Case Adjudication Act was changed to Article 35, Paragraph 1 with its provisions being revised as follows: “In the event of infringement upon patent rights, computer program copyrights, or trade secrets, if the party concerned has has presented a prima facie evidence demonstrating that his or her claimed rights or interests have been infringed or may potentially be infringed, while the opposing party denies the allegation, the court shall order the opposing party to provide a specific answer concerning the facts and evidence denied within specified period.” As compared with Article 10-1, Paragraph 1 of the old law, Article 35, Paragraph 1 of the new law expands the scope of application to the incident involving patent rights or computer program copyrights and specifically provides that the opposing party shall provide a specific answer concerning the facts and evidence denied.
[1] For example, Articles 195 and 266 of the Code of Civil Procedure stipulate that the parties have the obligation to make truthful statements and specific statements; Articles 344, 367 and 345 of the Code of Civil Procedure provide that the parties have the obligation to present specific documentary evidence and tolerate the inspection of such evidence, and if the parties do not present the evidence without justification, the court may consider the the claims of the other party regarding the document or the facts to be substantiated by the document to be true; and the proviso of Article 277 of the Code of Civil Procedure further provides that the court may adjust the burden of proof on the parties in the event of manifest injustice.
[2] For practical cases related to Article 10-1 of the Intellectual Property Case Adjudication Act, please see a Firm’s cover article published in December 2022 and titled Brief Analysis of the Application of Article 10-1 of the Intellectual Property Case Adjudication Act (Taiwan) (last reviewed on March 3, 2023)。
[3] For a comprehensive introduction of the Intellectual Property Case Adjudication Act promulgated by the President on February 15, 2023, please refer to the Firm’s newsletter article published in August 2022 and titled Taiwan Executive Yuan Approves the Draft Amendments to the “Intellectual Property Case Adjudication Act” (last reviewed on March 3, 2023); and refer to the Firm’s newsletter article published in March 2023 and titled Promulgation of the Amendments to the Intellectual Property Case Adjudication Act by the Presidential Decree (Taiwan) (last reviewed on March 30, 2023).
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