The formation of the Intellectual Property Court and implementation of the Intellectual Property Case Adjudication Act on July 1 2008 marked an important transition in the development of Taiwan's IP litigation mechanisms. A distinguishing feature of the newly formed court is that an allegation by the defendant in a patent infringement case that the patent at issue is invalid now requires the court itself to rule on the validity issue, rather than wait for the Taiwan Intellectual Property Office (TIPO) to resolve the matter through a cancellation action.

Furthermore, the court no longer has discretion to stay patent litigation due to a pending cancellation action. As the TIPO remains the government authority in charge of patent affairs, the act provides that the court may, when necessary, order the TIPO to participate in litigation to provide opinions on patent validity. In addition, technical examination officers are available to assist judges of the IP Court in conducting technical investigations and determinations. Most technical examination officers are patent examiners on assignment from the TIPO. Over the past three years, these new mechanisms and the growing expertise of IP Court judges have significantly advanced the quality and efficiency of patent litigation in Taiwan.

Problems remain, however. The limited time that the court allocates to trials and its perceived tendency to invalidate patents have raised concerns as to whether the IP Court leans too heavily on technical examination officers. Also of concern are the many cases in which the court's decision regarding the validity of a particular patent conflicts with the result of the TIPO's cancellation action on the same patent. These concerns have impacted on litigants' faith in the court's decisions. The court must take steps to ensure that a correct judgment is delivered without causing undue surprise to the litigants, while maintaining trial efficiency and protecting litigants' procedural and substantive rights. In several recent cases, the Supreme Court has taken important steps in this direction:

  • On September 10 2009 in Decision 98-Tai-Shang-1655, the Supreme Court ruled on Article 8 of the act, which provides that:

    "before any special professional knowledge the [IP] court already has is adopted as a ground for judgment, parties shall be accorded an opportunity to present their arguments regarding such knowledge [and that] the presiding judge or commissioned judge shall direct the parties to issues concerning the legal relations of the disputed matters, and shall, whenever appropriate, disclose his legal opinions and convictions."

    The Supreme Court held that this means that the court's failure to direct the parties to the relevant technical questions and special professional knowledge already known to the IP Court, or failure to disclose appropriately the judge's convictions so that the parties have an opportunity to present their arguments, may constitute deprivation of the parties' opportunity to be heard and cause surprise in fact finding.

  • Following that decision, on December 16 2009 the Supreme Court issued Decision 98-Tai-Shang-2373. The decision explained that the IP Court's authority to order the TIPO to participate in litigation was designed to help the court arrive at correct judgments and to avoid decisions that conflict with those of the TIPO. Therefore, this power should not be ignored simply because a technical examination officer is involved in the litigation. The participation of the TIPO is particularly important when the IP Court is considering issuing a judgment that would conflict with the result of a previous cancellation action decided by the TIPO. The Supreme Court further pointed out that the technical examination officer merely serves to assist the judge, and may not offer an independent assessment or act as a witness.
  • On January 21 2010 the Supreme Court issued Decision 99-Tai-Shang-112, which reiterated the view of the technical examination officer's role as being limited to assisting the judge, and reaffirmed the principle that the IP Court should involve the TIPO in litigation and solicit its opinion whenever the IP Court's determination, based on its special professional knowledge, differs from that of the TIPO.
  • On March 31 2011 the Supreme Court issued Decision 100-Tai-Shang-480. The decision explained in detail that when special professional knowledge of the IP Court or technical examination officers conflicts with determinations made by the TIPO, the IP Court should disclose such professional knowledge to the parties and give them the opportunity to present arguments, make timely and appropriately disclosure of the court's conviction, or order the TIPO to participate in litigation and provide its opinions. The IP Court should render its judgment only after sufficient adversarial debate has taken place.

In this series of cases, the Supreme Court has articulated an important procedural requirement concerning the determination of patent validity by the IP Court. When the IP Court has a different view from the TIPO on the validity of a particular patent, it should first disclose its opinion to the parties and allow them to present arguments, or alternatively, solicit the opinion of the TIPO by requiring its participation in the litigation. This procedural requirement will help to safeguard the procedural and substantive rights of the parties.

It is now up to the IP Court to implement such procedural protection.

For further information on this topic please contact Hsiu-Ru Chien at Lee and Li Attorneys at Law by telephone (+886 2 2715 3300), fax (+886 2 2713 3966) or email ([email protected]).