Hsiu-Ru Chien Elina Yu November 7 2022 Changes to IP case adjudication in Taiwan: what you need to know Lee and Li Attorneys at Law | Intellectual Property - Taiwan Hsiu-Ru Chien, Elina Yu Intellectual Property IntroductionTrade secret protectionCompulsory legal representation systemExpert interventionPatent and trademark review and dispute proceedingsElectronic judicial servicesParticipation in proceedings by victimConcentrated trials of IP casesBurden of proof and trial efficiencyOne-time resolutions to disputesResolving disputes in practiceIntroductionTo build an IP litigation system with a higher level of professionalism, efficiency and consistency with international trends, the Judicial Yuan recently published a draft amendment to the Intellectual Property Case Adjudication Act, proposing a comprehensive review of the adjudication proceedings of IP cases.(1) The draft was approved at the 202nd session of the Judicial Yuan on 24 June 2022 and is now pending deliberation before the Legislative Yuan. Covering a wide range of aspects, the draft represents an unprecedented revision to the Act since its implementation more than 14 years ago, and thus should be given particular attention. This article summarises its key aspects.Trade secret protectionAmended article 9The draft governs the exclusive jurisdiction of first-instance civil matters relating to intellectual property, stating expressly that first-instance civil matters involving the misappropriation of trade secrets are within the exclusive jurisdiction of the Intellectual Property and Commercial Court.Amended articles 33, 34 and 60The draft details a prohibition of or limits on the review of litigation materials containing trade secrets in civil and criminal cases.Amended article 37The draft states that, under certain circumstances, a party to the litigation who is not listed as a secret holder may petition the court to issue a confidentiality preservation order upon persons not bound by such an order.Amended article 59The draft clearly states that:first-instance criminal cases in violation of articles 13.1, 13.2, 13.3.3 and 13.4 of the Trade Secrets Act should be heard before the Intellectual Property and Commercial Court; andfirst-instance criminal cases in violation of articles 8.1 to 8.3 of the National Security Act (ie, misappropriation of trade secrets that are categorised as national core and key technologies) should be heard before the second instance by the Tribunal of Intellectual Property under the Intellectual Property and Commercial Court.Amended article 61The draft clearly states that the parties or stakeholders may, prior to the first trial date, petition the court to determine an alternative title or name for evidentiary documents containing trade secrets for the purpose of deidentification.Amended article 76The draft increases "penalties for violations of a confidentiality preservation order" and introduces the "crime of violating a confidentiality preservation order from abroad".Amended article 77The draft clearly states that unincorporated organisations (including their managers and representatives) are also obliged to prevent their employees or other business participators from misappropriating another party's trade secrets.Compulsory legal representation systemAmended article 10The draft states that legal representation is mandatory for certain types of IP civil matters – for example:first-instance civil actions in which the value or amount of litigation claims exceeds the amount under which an appeal may be taken to the court of third instance set out in the Taiwan Code of Civil Procedure; andfirst- or second-instance civil actions involving patent rights, computer program copyright or trade secrets.Amended articles 11-17The draft governs issues including:litigation aid;the validity of litigation acts; andthe attorney remuneration that should be calculated as part of the litigation expenses.For litigation involving patent rights, patent attorneys may be appointed as representatives with the consent of the presiding judge. The compulsory legal representation system may apply with certain changes to interveners. However, the remuneration of their representative(s) is not calculated as part of the costs of the litigation or proceedings.Expert interventionAmended articles 19-27 and 78After a lawsuit for patent infringement is initiated, the parties may petition the court to select and appoint an "inspector" to carry out the procedure of evidence collection. According to the draft, the inspector should be a neutral expert with professional knowledge and should be allowed to take evidence on site – for example, by confirming the structure and operation of large equipment at the factory – so the system will be a mandatory method for collecting evidence. The regulations apply with certain changes to the infringement of computer program copyright and the misappropriation of trade secrets.Amended article 28The expert witness system stipulated in the Commercial Case Adjudication Act applies with certain changes to the draft.Amended article 29The draft states that with regard to the application of law, technical or other essential issues in IP civil matters, the court may, upon a request by the parties and after listening to the opinions of the adverse party, publicly call on its website for written opinions from citizens other than the parties, institutes or groups when it deems necessary.Patent and trademark review and dispute proceedingsIn response to the Draft Amendment to Partial Provisions of the Patent Act and the Draft Amendment to Partial Provisions of the Trademark Act proposed by the Ministry of Economic Affairs – in which the remedies for patent or trademark infringements are to be changed from the current administrative litigation proceedings to civil litigation proceedings – the draft introduces new provisions for patent or trademark review and dispute case proceedings.Amended article 55The draft stipulates standards for judicial fees:litigation involving patent or trademark review is to incur a judicial fee of 7,000 new Taiwan dollars;for litigation involving disputes, an additional amount of 2,000 new Taiwan dollars per claim will be charged; andin the absence of claims, the amount or value of litigation claim(s) and the judicial fee will be determined in accordance with the Taiwan Code of Civil Procedures.Amended article 56The draft clearly states that the parties in a patent/trademark dispute case may present new evidence only when:the submission of evidence fails due to a violation of laws or regulations made by the competent authority in charge of IP matters;the evidence is derived from or combined with evidence that has previously been presented in a patent or trademark invalidation action; orit is with the adverse party's consent or the adverse party has proceeded orally on the merits without objection.Amended article 58The draft clearly states that provisions governing the proceedings of IP civil matters, as set out in the second chapter of the Act, may apply with certain changes to patent or trademark review and disputes.Electronic judicial servicesAmended article 5The draft expands the use of technological equipment to participants of litigation proceedings, including interveners, expert witnesses and inspectors.Amended articles 54, 58 and 71According to the draft, the original copy of a judgment may be served electronically with the consent of corresponding recipient(s). Such provisions may apply with certain changes to patent or trademark review and dispute cases, as well as certain criminal cases or incidental civil actions thereof.Participation in proceedings by victimAmended article 71The draft clearly states that provisions governing participation in proceedings by the victim, as set out in Taiwan Code of Criminal Procedure, may apply with certain changes in IP criminal cases.Concentrated trials of IP casesAmended article 18The court should negotiate with the parties and determine a trial plan where:compulsory legal representation is required;the case is complicated;the court deems it necessary.The trial plan should specify:"the date or a period for sorting out disputed issues";"methods, sequence and dates or periods to investigate evidence"; and"periods for initiating attack or defence against particular issues" or "dates or periods for other matters necessary to advance litigation proceedings as planned".Matters concerning the trial plan should be recorded in the transcript.Burden of proof and trial efficiencyAmended article 6The draft clearly states that the court may, when it deems necessary, fully or partially disclose the technical report provided by a technical examination officer. Additionally, regarding the special expert technical advice that the court acquires from the technical examination officer, the court should provide the parties with an opportunity for oral argument before adopting the advice as a basis for a judgment.Amended article 36The current Act provides in article 10-1 that in actions against misappropriation of trade secrets, if one party has made a preliminary showing of misappropriation and yet the other party still denies such allegation, the court should order the other party to raise a specific defence, so as to ease the burden of proof in infringement actions. In addition to renumbering the provision, the draft further expands the applicability of the aforesaid provision to patent or computer program copyright infringement actions.One-time resolutions to disputesAmended article 43To keep the court and the parties abreast of the progress of deliberation by the competent authority in charge of IP matters, if a party states that there is a reason for the IP rights at issue to be revoked or abolished, the court should immediately notify the competent authority. Upon receiving the notification, the competent authority should immediately apprise the court of whether any requests to revoke or to abolish the IP rights at issue have been accepted. If so, the court may then ask for access to the case files kept by the competent authority at the request of the parties.Amended article 46Where IP rights at issue have been exclusively licensed, one of the proprietor(s), the owner(s) of the trade secrets or the exclusive licensee(s) should proactively and promptly disclose the ongoing litigation and its progress to the concerned parties of the IP rights at issue so that the concerned parties may decide whether to participate in the litigation or exercise their rights in accordance with other legal proceedings.Amended article 50Under the current regulations, the parties may initiate a rehearing action if:the court rules in favour of the validity of rights in a final judgment with binding effect rendered with respect to a civil action involving infringement upon a patent, trademark or plant variety right; andthe competent authority invalidates the same rights in a subsequent decision made with respect to a subsequently established patent invalidation case, trademark invalidation or revocation case, or plant variety right nullification or revocation case.This is possible due to a subsequent amendment to the administrative disposition which served as a basis for the final judgment rendered in connection with infringements upon patent, trademark or plant variety rights (see article 496.1.11 of the Taiwan Code of Civil Procedure).Under amended article 50 of the draft, however, parties in the above situation are no longer allowed to initiate a rehearing action so as to ensure the stability of the final judgment with binding effect.Resolving disputes in practiceAmended article 44Where a patentee files a post-grant amendment to patent claims against the reasons for invalidation asserted by the adverse party, this is known as "re-defence based on correction of claims against patent invalidity defence". The draft clearly states that where a patentee makes a request for re-defence based on a correction of claims, the patentee should, in principle, file with the competent authority a post-grant amendment to the claims, and then explain to the court what is to be claimed or sought based on the amended claims. If the patentee fails to file a post-grant amendment with the competent authority due to reasons not attributable to them and the rejection of the post-grant amendment is obviously unjustifiable, the patentee may directly provide the court with the amended claims and the argument based thereon. The legality of the post-grant amendment to the claims is at the court's discretionAmended articles 68-70The draft has amended provisions pertinent to "incidental civil proceedings" and related issues.For further information on this topic please contact Hsiu-Ru Chien or Elina Yu at Lee and Li Attorneys at Law by telephone (+886 2 2763 8000) or email ([email protected] or [email protected]). The Lee and Li Attorneys at Law website can be accessed at www.leeandli.com.Endnotes(1) For further details on the amendments proposed in the draft, refer to the general explanation to the draft and comparison table of clauses published by the Judicial Yuan on its website.