Under current legal practices in Taiwan, an alleged infringer may raise a defense of non-infringement and/or patent invalidity in a patent infringement lawsuit. The IP Court may dismiss the patent holder's complaint upon sustaining either of the above two defenses. Given the efficient pace of IP Court procedure, disputes can normally be resolved relatively quickly. However, in some cases, the patent holder merely sends a warning letter to the alleged infringer or privately conveys allegations of patent infringement to third parties without filing a lawsuit with the court. Under such circumstances, though the alleged infringer can lodge a cancellation action with the TIPO to invalidate the patent at issue, it normally takes more than a year for the TIPO to conduct an examination. Meanwhile, the alleged infringer is unable to clear its name. This scenario is particularly unwelcome to a party confident in its non-infringement and/or patent invalidity defenses. Without litigation before the court, there is no way to obtain a timely favorable judgment to confirm the innocence of the accused party, who would consequently suffer great damages to its business and reputation.
In such cases, the alleged infringer may consider filing a lawsuit with the IP Court against the patent holder, asking the Court to grant a declaratory judgment that "the patent holder does not possess the right to claim injunction and damages from the alleged infringement." The IP Court has rendered several declaratory judgments in favor of the alleged infringer.
In the case of civil judgment 2013-Min-Zhuan-Su No. 102, the defendant had issued letters to the plaintiff's channel sales merchants with on-site displays or counters claiming that the plaintiff's product was in infringement of its patent, forcing withdrawal of the plaintiff's products from such channels. However, the defendant did not proceed with litigation, thus causing uncertainty as to whether or not the plaintiff's products did indeed infringe the defendant's patent. The IP Court thus ruled that the plaintiff was entitled to initiate a lawsuit for declaratory judgment, and determined that the patent in question lacked an inventive step and should be invalidated. The Court's declaratory judgment confirmed the absence of the defendant's right to claim damages and injunction against the plaintiff and the plaintiff's product at issue.
Similarly, in civil judgment 2013-Min-Zhuan-Su No. 54, the IP Court ruled that the patent in question did not have an inventive step and hence the defendant had no right to request a damage award or an injunction against the plaintiff. In this case, the defendant had also issued warning letters to the plaintiff but did not take any legal action.
In civil judgment 2010-Min-Zhuan-Su No. 166, the court accepted the plaintiff's assertion that its manufacturing process was not covered by the scope of the defendant's patent, and hence ruled that the defendant did not have the right to ask for an injunction or a damage award. The cause in this case was that the defendant had carried out preservation of evidence procedures against the plaintiff. It is worth noting that although the defendant had in this case initiated a patent infringement suit, the court still held the view that the plaintiff was entitled to motion for a declaratory judgment.
The declaratory judgment system presents an alleged infringer with an alternative means of "proactive" defense.