In relation to solving disputes over the ownership of the right to apply for a patent, the Patent Act simply provides a ground for invalidation by referring to the situation where the patentee is not the genuine owner of the right to apply for a patent. This is found in article 7(1)(3) of the Act, and such invalidation action shall only be filed by an interested party. If the genuine owner files an invalidation action within a statutory period of time (ie, within two years after the patent was published), and files a patent application for the same invention within two months after the day on which the invalidation decision revoking the patent has become final and binding, the filing date of the revoked patent shall be served as the filing date for the newly filed patent application (article 3(5)(1) of the Act). Therefore, it seems that for the same invention, the genuine owner has an opportunity to reapply for a patent application and to be granted a patent.
However, this system requires the genuine owner, within two years after the publication date of the patent, to have knowledge of the fact that the invention in dispute has been patented by other persons, to fully prepare the relevant evidence and to file an invalidation action. This is to revoke the patent obtained by the non-genuine owner of the right to apply for a patent. Then, the genuine owner has to promptly reapply for a patent application for the same invention. In addition to the requirement that the invalidation action be filed within a short time period, and the situation that the legal status of the right is highly uncertain (as the right must be revoked first), it may take years for the genuine owner to go through the invalidation action and the subsequent administrative litigation, which is a slow and inefficient process. Therefore, it seems overly harsh if this procedure is the only remedy available to the genuine owner.
In practice, there is an alternative remedy that allows the genuine owner to use a civil legal basis for claims, including unjust enrichment (article 179 of the Civil Code) and torts (article 184 of the Civil Code). The genuine owner can directly request a civil court to render a judgment where the patent right obtained by the non-genuine owner shall be "returned" to the genuine owner. This remedy is an effective way to reinstate the patent right. For example, in the 2015 Min Zhuan Shang Zi No. 26 civil judgment rendered on 16 February 2017, the 2017 Min Zhuan Shang Zi No. 14 civil judgment rendered on 9 November 2017, and the 2017 Min Zhuan Shang Zi No. 9 civil judgment rendered on 5 March 2018, the IP Court (IPC) adopted such practice with the following rationale:
A patent right is an intangible property right. In the event that a person without any legal ground applies for and obtains a patent in his/her own name for other person's patentable creation, causing loss of the property right which he or she should have owned, and infringing the other person's right to apply the patent, the other person may request for return of the property right based on unjust enrichment and torts set forth in Articles 179 and 184 of the Civil Code, respectively.
However, on 27 May 2021 the Supreme Court rendered the 2020 Tai Shang Zi No. 2155 civil judgment, questioning whether the genuine owner can use this remedy on the basis of unjust enrichment and torts. The Supreme Court seemed to hold the opinion that the genuine owner can only seek remedies by filing an invalidation action and through reapplication, as provided for in the Act. The factual matters of the case and the rationale of the Supreme Court's judgment are summarised as follows.
The original instance (2018 Min Zhuan Shang Zi No. 17 rendered by the IP and Commercial Court on 11 April 2019) stated as follows:
Appellant A is the owner of the right to apply for a patent in dispute; however, Appellee B, who is without legal basis but filed a patent application with the TIPO based on that right and then obtained the patent in dispute, infringed upon Appellant A's right to apply for the patent. Therefore, it is reasonable that Appellant A requests Appellee B for return of the patent right in dispute based on the former part of Paragraph 1, Article 184 and Article 179 of the Civil Code.
However, the Supreme Court overturned this judgment on the following grounds:
- A utility model patent is granted by the Specific Patent Agency exercising its administrative power. In this regard, the civil court that handles IP cases is only responsible for supervision of the legal issues. According to article 2(2) of the IP Case Adjudication Rules, in disputes over the ownership of a patent or its application right, the civil court may determine on its own whether the patent right should be revoked or abolished. Such decisions can only be advisory, as the civil court has no right to directly revoke or abolish the patent right.
- When the genuine creator and the utility model patentee have disputes over the ownership of the utility model patent – except for the situation in which article 10 of the Act allows the employer and its employee to file a request with the Specific Patent Agency for changing the rightful owner, or the situation where the parties have an assignment agreement for the utility model patent – the genuine creator is only allowed to file an application for a utility model patent for the same creation according to article 120 of the Act, mutatis mutandis article 35 of the same.
- Before being lawfully granted the utility model patent by a publication from the Specific Patent Agency, can the genuine creator directly argue that their patent right has been infringed upon by the non-genuine patent applicant? Can they further argue that the damage is that the utility model patent then requires the non-genuine patent applicant to return or transfer the patent right? Additionally, unjust enrichment indicates obtaining interests without legal grounds, thus prejudicing other persons. Therefore, there should be a causality between the interests acquired by the non-genuine patent applicant and the damage suffered by the genuine creator. Since the utility model patent obtained by the non-genuine patent applicant was granted by the Specific Patent Agency, before being granted the utility model patent published by the Specific Patent Agency, can it be considered that the damage suffered by the genuine creator is the utility model patent, and can return of the utility model patent be requested? There is still room for further enquiry in this regard.
However, after the Supreme Court judgment, the IP and Commercial Court still rendered a judgment supporting the genuine owner to request the return of the non-genuine patentee's granted patent based on unjust enrichment. In the 2020 Min Zhuan Shang Zi No. 40 civil judgment rendered by the IP and Commercial Court on 30 September 2021, the judgment stated as follows:
Both the right to apply for a patent and the patent right in dispute belong to Appellant; Appellee has no right to apply for the patent in dispute in his/her name. In light of the fact that Appellee already applied for and was granted the patent in dispute in his/her name, it is also reasonable for Appellant to request changing of the ownership of the patent in dispute in accordance with Article 179 of the Civil Code.
This solved the dilemma.
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.