Possibility to transfer cases
Relevant case law
In civil disputes over IP rights, the parties involved are often employers and employees. Examples of such disputes include whether a patent, trademark or piece of work developed and created by an employee belongs to the employer, or where an employee discloses confidential information to a competitor of the employee. In the past, first-instance and second-instance civil cases arising out of IP rights disputes similar to these have normally fallen under the priority jurisdiction of the Taiwan Intellectual Property and Commercial Court (the IP Court).
The Taiwan Labour Incident Act, which came into force on 1 January 2020, enables employees to petition to transfer a case to the jurisdictional court of their choice before the oral arguments take place. This provision aims to protect the rights and interests of economically disadvantaged employees and facilitate the litigation process. Meanwhile, where an employer files a lawsuit with the court of common pleas, the employee involved in the case may also petition to transfer the case to the IP Court.
However, these provisions do not apply to cases in which the parties have failed to reach an agreement through labour mediation (see articles 6 and 7 of the Taiwan Labour Incident Act and article 4 and article 7(1) of the Taiwan Labour Incident Adjudication Rules).
Following these statutory provisions, the IP Court has transferred several IP rights cases arising from or connected with labour contracts or other labour relations to the jurisdictional court requested by the employees. In cases where several employees in the same case petition to transfer the case to different jurisdictional courts, the IP Court may designate one final jurisdictional court after taking all relevant factors into consideration, such as:
- the intertwined nature of the means of attack and defence towards the same transaction or occurrence;
- mutual exploitation of information for oral arguments;
- avoidance of contradictory judgments and balance of the litigation economy; and
- improper case splitting for different court adjudications.(1)
Nevertheless, in cases where an employee faces no litigation inconvenience, the IP Court has also rejected employee petitions to transfer the jurisdiction of the case.(2) In one such case, the plaintiff company A filed a lawsuit with the IP Court, claiming that its employee B arbitrarily filed a patent application for a creation made in the course of performing their duties during the period of employment in the names of employee B, his spouse C, and D and E of the company founded by both B and C. Although the employee B petitioned to transfer the case to the Taiwan New Taipei District Court for jurisdiction, the IP Court rejected the petition because both the IP Court and the Taiwan New Taipei District Court are located in New Taipei City, and it would not be substantially inconvenient for the employee to attend the IP Court.
The case was further appealed to the Supreme Court, which upheld the original ruling, but on different grounds. The Supreme Court held that the dispute involved non-employee third parties (ie, C, D, and E), who were not entitled to choose the jurisdictional court, having no labour relations with the employer A. The Court held that the employee's ability to split the litigation into parts and petition to transfer the case to the jurisdiction of their choice shall depend on the specific facts of the case and the requests made by the plaintiff. If the obligations of the subject matter of litigation are to be jointly borne by the defendants, or are based on the same factual and legal grounds, the employees' right to choose the jurisdictional court shall be restricted in the interests of balancing the litigation economy and avoiding contradictory judgments. Under such circumstances, employees may not be entitled to petition to transfer their cases to their preferred jurisdictional court.(3)
Now that the Taiwan Labour Incident Act is in force, when an employer files a labour case involving an IP rights dispute with the IP Court, the employee may petition to transfer the case to another labour court for jurisdiction on the grounds of litigation inconvenience. The employee's choice of other jurisdictional court may be precluded if no litigation inconvenience exists or non-employee co-defendants are involved. At this point, the employer should immediately express their opinion to the Court to avoid the Court's discretionary ruling to transfer the case to other jurisdictional courts.
For further information on this topic please contact Shih-I Wu at Lee and Li Attorneys at Law by telephone (+886 2 2763 8000) or email ([email protected]). The Lee and Li Attorneys at Law website can be accessed at www.leeandli.com.
(1) See 2020 Min Ying Su No. 9 Ruling rendered by the IP Court on 26 October 2020.
(2) See 2020 Min Zhuan Su No. 91 Ruling dated 9 November 2020, and 2020 Min Zhuan Kang No. 21 Ruling dated 8 January 2021, both rendered by the IP Court.
(3) See 2021 Tai Kang No. 315 Civil Ruling rendered by the Supreme Court on 29 April 2021.