Taiwan's existing patent laws do not recognise partially valid patents. A patent right is granted only if the Taiwan Intellectual Property Office (TIPO) finds the patent application to be patentable in its entirety; otherwise, the application is rejected in its entirety. In an invalidation action, after reviewing the invalidation petitioner's arguments and the patentee's rebuttals, the TIPO is obliged to render a decision invalidating the entire patent right, even if it were to consider it only partially unpatentable.
The Supreme Administrative Court (SAC) applied this principle in Judgment 99-Pan-1261, issued on November 25 2010. In this case, the TIPO's original decision was to invalidate a patent entirely. However, in the first instance of the administrative suit, the IP Court found only part of the claims of the same patent invalid. The SAC supported the TIPO's decision, citing as the basis for its judgment the aforementioned principle and explaining that under the current laws it had no way of partially revoking the TIPO's invalidation decision. Furthermore, the SAC specifically rejected the patentee's request that the TIPO's decision be vacated and remanded so that the patentee would have the opportunity to amend those claims that the IP Court had found invalid.
The draft amendments to the Patent Act, which passed the first reading in the Legislative Yuan on April 6 2011, are intended to reject the principle whereby partially valid patents are not recognised. On November 29 2011 the Legislative Yuan completed the third reading of the amendments, which are expected to become effective by the end of November 2012. Article 75, Paragraph 2 and Article 81, Paragraph 2 of the draft amendments would:
- allow invalidation actions against only part of the patent claims; and
- require that the TIPO decide on each claim under an invalidation action.
Consequently, upon implementation of the draft amendments, the TIPO would no longer be restricted by this principle, and would have discretion to find a patent partially invalid in an invalidation action.
Before the draft amendments passed final reading in the Legislative Yuan, the SAC had already adjusted its position. In Judgment 100-Pan-896, issued on June 3 2011 – which concerned a case similar to that considered in Judgment 99-Pan-1261 – the SAC opined that the current approach to patent validity effectively renders claim-by-claim review in administrative suit meaningless, because even if an administrative court determines that a patent is only partially invalid, it is legally prohibited from issuing a judgment of partial validation or partial invalidation. To remedy the situation, the SAC instructed that in such cases, the administrative court should vacate the TIPO's decision to invalidate the entire patent on the grounds that "the [T]IPO failed to fulfill its duty to notify the patentee and provide an opportunity to amend the patent", as required by the TIPO Patent Examination Guidelines. This interpretation gives patent holders the chance to amend their patent claims, thereby preserving their patent rights.
The guidelines cited by the SAC in Ruling 100-Pan-896 provide that:
"during the invalidation action proceeding, if the Patent Authority finds that only part of the claims should be invalid, it shall notify the patent holder and provide an opportunity for amendment; if the patent holder fails to make amendments or the amendments are unable to overcome the defects in those claims, the Patent Authority shall render an invalidation decision on the entire patent."
Previously, the TIPO's duty to notify the patent holder existed only when the TIPO held the view that some of the claims were unpatentable. However, in the above two cases, the TIPO determined that all of the claims were unpatentable and the 'duty of notification' need not apply. Even though the IP Court thereafter took a partially different position from that put forward by the TIPO, theoretically the duty of notification could not serve as the legal basis to reverse the latter's decision. By expanding the duty of notification to include such cases, Judgment 100-Pan-896 provides an additional layer of protection for patent holders; it gives them the opportunity to amend their patent claims under the circumstances that the IP Court finds the patent partially valid, despite the prevailing principle.
As discussed, the amendments to the Patent Act abandon the principle whereby partially valid patents are not recognised. Even though the amendments are yet to be implemented, it appears that the SAC has already anticipated this development and adjusted its practice to reflect the pending change in the Patent Act. In the future, patentees will be better able to defend their patents.
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]).