February 13 2012

Patent law amendments completed

Lee and Li Attorneys at Law | Intellectual Property - Taiwan

Daisy Wang

Introduction
Main amendments


Introduction

On December 21 2011 the president promulgated amendments to the Patent Act, following completion of their third reading by the Legislative Yuan in November 2011. The amendments were introduced in order to enhance Taiwan's economic and industrial competitiveness and to promote the development of key local technology, as well as to improve the quality of patent examination. The Executive Yuan has yet to announce when the amended provisions will take effect, although the Taiwan Intellectual Property Office (TIPO) has commenced revising its enforcement rules, patent examination guidelines and internal patent examination management systems in order to adapt to the amendments. The amended act is expected to come into effect in November 2012.

Main amendments

Definitions and terms
Creations
To avoid the misunderstanding that a creation equates to a 'new utility model' or 'design', and to prevent inconsistent use of the term 'creation' in the Patent Act, inventions, new utility models and designs are now included under the term 'creations' (Article 1).

Chinese title of design patent
In line with international practice, the Chinese-language title of 'design patent' has been changed from 新式樣專利 (xin shiyang zhuanli) to 設計專利 (sheji zhuanli) (Articles 2 and 121).

Practice
The term 'practice' includes manufacturing, offering for sale, selling, using and importing, and represents a higher-level concept of use. To avoid inconsistent use of the terms 'practice' and 'use', a definition of 'practice' has been added and the relevant Patent Act provisions containing both terms (Articles 22, 58, 87, 122 and 136) have been amended.

Patent application
Novelty and inventive step/creativeness
Absolute novelty requirements already exist. Under the existing act, novelty is not affected by the following types of prior disclosure (as prescribed in the Patent Act) if a patent application is filed within six months of the disclosure date:

  • prior disclosure made for research or experimental purposes;
  • prior disclosure at a trade show that is sponsored or recognised by the government; or
  • prior disclosure made against the will of the patent applicant.

Under the amended act, "publication made based on the will of the applicant" has been added to the list of exceptions. In addition to applying to novelty requirements, all grace period exceptions also apply to the inventive requirement (for inventions and utility models) and the creativeness requirement (for designs) (Articles 22 and 122).

Separation of claims and abstracts
Under the existing act, the specification contains claims and abstracts. In order to align with international practice, the amended act provides that claims and abstracts are separate documents from the specification (Articles 23 and 25).

Assignment documents
Assignment documents are required when filing patent applications under the existing act. As a patent applicant always states in the transmittal letter that it is entitled to apply for a patent, and taking into account foreign practice, the amended act removes the requirement to submit an assignment (Articles 25, 106 and 125).

Deadline for submitting deposit certificates
Under the amended act, patent applications involving a biological deposit, a certificate of deposit and a viability test report have been merged into a single certificate. The deadline for submitting a certificate of deposit has been extended to "within four months of the filing date". For a patent application filed with priority claims, the deadline is "within 16 months of the earliest priority date" (Article 27).

Foreign-language specifications, claims and drawings as temporary substitutes
Under the existing act, a patent applicant can first file a patent application with a foreign-language patent specification and claims in order to obtain a filing date, provided that it submits a Chinese-language patent specification and claims within the specified deadline. If the content of the Chinese-language patent specification and claims is different from those originally filed, the filing date of the patent application is postponed until the submission date of the Chinese-language patent specification and claims.

In addition, if there is a translation error in the Chinese-language patent specification and claims, the patent applicant may apply for amendment (for pending applications) or correction (for granted patents) in accordance with the Patent Act; any such amendment or correction does not cause substantive changes to the original disclosure (as decided based on the Chinese-language patent specification and claims). In practice, the existing amendment and correction procedure is unsuccessful in dealing with translation errors.

The amended act clearly states that changes to a foreign-language patent specification and claims are not allowed. In addition, the amended act introduces a new procedure in this field. Except for amendment or correction of translation errors, any amendment or correction must not go beyond the disclosure scope of the specification, claims and drawings (Chinese-language version) submitted at the time of patent filing, and amendment or correction of a translation error must not go beyond the disclosure scope of the foreign-language specification, claims and drawings originally submitted.

According to Article 145 of the amended act, the relevant authority designates the specific foreign languages used in preparing foreign-language specifications, claims and drawings which are acceptable as temporary substitutes for obtaining filing dates as stated above. Violation of the requirement for amending or correcting translational errors is grounds for invalidation of a granted patent (Articles 25, 44, 67, 106, 110, 127, 133, 139 and 145).

Revival of priority claim
At present, a patent applicant must declare a priority claim at the time of patent filing. In addition, within four months of the filing date the applicant must submit the required priority document. Should any of these requirements be violated, the priority claim becomes void. The amended act states that where a patent applicant unintentionally fails to claim priority at the time of patent filing or fails to submit the priority document within 16 months of the first priority date (resulting in the priority claim being deemed void), it may, within 16 months of the earliest priority date, apply for revival of the priority claim, pay the required fee and proceed with the revived priority claim (Articles 29, 59 and 70).

Relaxation of the timing requirement for divisional application
At present, a divisional application for an invention patent application must be made at any time before the end of the first examination stage or before the end of the re-examination stage (ie, further examination conducted by the TIPO); a divisional application made after the patent allowance is not allowed.

To provide patent applicants with fair opportunities to file divisional applications, the amended act allows an invention patent applicant to file such an application within 30 days of receiving the decision to allow the patent at the first examination stage. Additionally, if the patent application is allowed at the re-examination stage, a divisional application may not be filed afterwards (Article 34).

Restrictions on domestic priority claim
The grounds for not allowing domestic priority claims have been amended (eg, a domestic priority claim is not allowed if the original patent application is a divisional patent application for a utility model). At present, a domestic priority claim is not allowed if the original patent application has been decided. Since the timing for issuing an examination decision (for inventions) or a decision (for utility models) is beyond the control of a patent applicant, this restriction has been relaxed from "where the original patent application has been decided" to "where the original patent application has been granted and published or rejected via an examination decision (for inventions) or a decision (for utility models)" (Article 30).

Invention patent applications
Under the existing act, for a pending invention patent application the applicant can apply for a voluntary amendment only at the specific time prescribed in the Patent Act – that is, within 15 months of the filing date or at any time when:

  • applying for substantive examination;
  • filing a response to an office action;
  • applying for re-examination; or
  • filing a re-examination brief.

In order to make patent disclosure clearer and to facilitate patent examination, the legislature considered it unnecessary to limit the time periods for making amendments. Therefore, such time limits have been removed. However, to avoid delays to patent examination due to repeated amendments being filed by patent applicants, the amended act introduces the practice of 'final notification'.

Final notification practice
Before the TIPO issues a rejection decision for an invention patent application, it must issue a pre-rejection notification to allow the patent applicant an opportunity to file a response within a specified time limit, during which the applicant may – among other things – apply for amendment.

According to the amended act, after the TIPO issues a pre-rejection notification at the first examination stage, it may issue a final notification. In such cases, the applicant can apply for amendment within the response period only to:

  • delete a claim or claims;
  • narrow the scope of a claim;
  • amend an erroneous disclosure; or
  • clarify an unclear disclosure.

If the above-mentioned requirement is violated, the TIPO may issue a decision accordingly.

For an original patent application or its divisional patent application, the TIPO may issue a final notification where:

  • the content of the notification issued for the original patent application is the same as that issued for the divisional patent application;
  • the content of the notification issued for the divisional patent application is same as that issued for the original patent application; or
  • the content of the notification issued for the divisional patent application is the same as that issued for any other divisional patent application.

The amendment limits set out above also apply when making an amendment at re-examination stage to a patent application rejected at the first examination stage, for which a final notification was issued before that rejection. However, such limits do not apply if, at re-examination, the TIPO concludes that the final notification (as issued at the first examination stage) was improperly issued.

The TIPO may issue a final notification where:

  • the re-examination reason(s) cannot overcome the patentability issues;
  • the amendment(s) made at the re-examination stage cannot overcome the patentability issues; or
  • the amendment made where a patent application was rejected by the TIPO at the first examination stage for which a final notification was issued fails to meet the amendment limits set out above (Articles 43 and 49).

Revival of patent right regarding patent issuance fees and annuity payments
Under the existing act, where a patent applicant fails to pay the patent certificate fee and the first year's annuity on time, the patent right is deemed not to exist from the beginning. Where a patentee fails to pay any of the subsequent annuities before the deadline, it may make a late payment within six months of the original deadline by paying twice the original fee. If such late payment is not paid on time, the patent will extinguish on the day following the original due date. Unless the default is due to a natural disaster or a reason beyond the patentee's control, the patentee cannot revive its patent right and make up the payment.

To protect patent owners fairly and to align with international practice, the amended act provides as follows:

  • If the annuity for the second or any subsequent payment year is not paid within the original time limit, a late payment can be made within six months of the original due date, with an additional 20% late penalty for each month elapsed, up to a maximum of 100% of the annuity amount originally due.
  • "Payment of additional annuities based on the specified percentage" as stated above means that additional annuities will be required on a monthly basis, depending on the period elapsed from the original due date. For each month elapsed, an additional fee at a ratio of 20% will be incurred, with a maximum additional fee of the same as the amount originally due. If the period elapsed is between one day and one month, the period will automatically be deemed to be one month.
  • If an applicant unintentionally fails to pay the patent certificate fee and the first year's annuity before the deadline, it may pay the patent certificate fee and double the first year's patent annuity within six months of the original due date.
  • If a patentee unintentionally fails to pay the second year's annuity or any further annuity within the six-month late payment period, it may apply to reinstate the patent right within one year of the due date for effecting a late payment by paying triple the amount originally due.
  • Where the revival of a patent right is sought and obtained (as stated above) after the patent extinguishes and before the patent is revived and the patent revival is published, such patent right does not apply to practice carried out in good faith and any necessary preparations already completed (Articles 52, 59, 70 and 94).

Utility model patent practice
Major amendments regarding utility model patent practice include the following:

  • Where an amendment of a utility model patent application goes beyond the scope of the disclosure at the time of patent filing, the application is not allowed.
  • Where an invention patent application and a utility model patent application are filed on the same day by the same applicant for the same invention, the applicant must make a selection before the invention patent application is granted. If the invention patent application is selected, the utility model patent is deemed non-existent; if the utility model patent is selected, the invention patent application shall not be allowed.
  • A correction of a utility model patent is subject to formal examination. However, if such correction is examined together with an invalidation case, it is subject to substantive examination and a combined decision is made.
  • Where a utility model patent is revoked for damages caused to another person due to exercise of the utility model patent before patent revocation, the patentee is liable for compensation. However, this does not apply if the exercise of the patent right is made based on the content of a utility model patent technical report and if the patentee has exercised considerable attention thereto (Articles 32, 112, 117 and 118).

Design patent practice
Major amendments regarding design patent practice include the following:

  • Design patent protection has been expanded to partial designs, computer-generated icon designs and graphical user interface designs.
  • Where two or more items belong to the same category and such articles are sold or used as a set, one design patent application can be filed to cover the designs applying to these items.
  • Derivative design patent practice has been introduced into the patent system (ie, for two or more similar designs owned by the same person, design patent applications may be filed for a design patent and its derivative design patent(s)). The filing date of a derivative design patent application cannot precede the filing date of the original design patent application. An application for a derivative design patent filed after the publication of the original design patent is unacceptable. An application for derivative design patent protection will not be accepted if the design covered in such application is not similar to that covered in the original design, but is similar to the design covered in another derivative design patent.
  • Where a design patent application is converted into a derivative design patent application, or where a derivative design patent application is converted into a design patent application, the filing date of the original design patent application is taken as the filing date of the converted application. Further, an application for such patent conversion cannot be filed:
    • after a decision allowing the original design application has been served; or
    • after two months have elapsed from the day on which a decision rejecting the original design patent application was served.
  • The term of a design patent expires 12 years after the filing date. A derivative design patent expires at the same time as the original design patent expires.
  • A derivative design patent can be enforced independently and its effect has been extended to the scope of similar designs (Articles 121, 127, 129, 131, 135 and 137).

Invalidation actions
Major amendments to invalidation actions include the following:

  • The practices regarding patent revocation actions initiated by the TIPO have been abolished.
  • In compliance with other related amendments, new grounds for filing invalidation actions have been added (eg, violation of the requirement for correcting translation errors, violation of the timing for filing a divisional application and violation by making amendments after receiving a final notification).
  • With respect to grounds for filing an invalidation action, the provisions of the Patent Act in effect at the time when the patent at issue was allowed shall govern. However, for invalidation actions filed based on the grounds that a patent division, conversion or correction goes beyond the scope of disclosure made at the time of patent filing, or that a patent correction goes beyond the claim scope at the time of patent publication, the Patent Act provisions applicable at the time of filing the invalidation actions shall govern. These grounds for invalidation refer to the substantive requirements and apply to patent cases that are allowed before the amended act is implemented.
  • When filing an invalidation action, the petitioner must submit a declaration of invalidation. Once filed, a declaration of invalidation cannot be amended, but it can be narrowed. The TIPO will examine an invalidation action without further notice if the provision of reasons or evidence by the invalidation petitioner is likely to delay the examination, or if the evidence submitted is sufficiently clear.
  • Where a patent covers two or more claims, a petition for an invalidation action can be filed against a part of the claims of the patent.
  • When examining an invalidation action, the TIPO may ex officio examine the reasons and evidence not submitted by the invalidation petitioner if the reasons and evidence are within the scope of the invalidation declaration (the TIPO must issue a notice to the patentee ordering it to file a defence within a specified time limit).
  • An invalidation petitioner may withdraw its invalidation petition before a decision is rendered. However, if the patentee has already submitted a defence, withdrawal of the petition will require the patentee's consent. The TIPO will serve a notice to the patentee with respect to withdrawal of an invalidation petition. If the patentee raises no objection within 10 days of receiving notification, the patentee is deemed to have agreed to the withdrawal.
  • If, during the examination stage of an invalidation action against a patent, an application to correct the patent is filed, the examination and decision concerned will be consolidated. If, through examination, the TIPO deems the correction application to be acceptable, it will serve the invalidation petitioner with a duplicate copy of the corrected specification, claims or drawings. Where during the examination stage of an invalidation action there are two or more applications for correction, the earlier filed correction applications are deemed to have been withdrawn.
  • Where two or more invalidation petitions are filed against the same patent, the TIPO may, as it deems necessary, consolidate its examination of the invalidation petitions. Where the examination of invalidation petitions has been consolidated as above, decisions for these petitions may also be consolidated.
  • Decisions on an invalidation petition are rendered on a claim-by-claim basis.
  • A separate invalidation petition against the same patent based on the same facts and evidence cannot be filed where:
    • another invalidation petition filed based on the same facts and evidence has been dismissed through examination; or
    • new evidence is submitted with the TIPO pursuant to Article 33 of the IP Case Adjudication Law and, on examination, such new evidence is considered to be groundless.
  • Where an invalidation petition against an invention patent is sustained on examination, the patent right is revoked; such revocation can be made on a claim-by-claim basis (Articles 71, 73 to 75 and 77 to82).

Patent rights
Patent term extension for pharmaceutical-related or agrichemical-related patents
The amendment deletes the following requirement for seeking patent term extension: "The time period during which the concerned patent cannot be practised due to application for a permit has exceeded two years from the patent grant publication date."

The following have been added to the Patent Act:

  • Where a patent term extension application was not granted before the original patent term of the concerned patent expires, but is granted afterwards, the patent right is deemed to be extended from the day following the expiration date of the original patent term.
  • During the extended patent term, the patent right is limited to the active ingredients and the uses identified in the permit (Articles 53, 54 and 56).

Limitations on patent right
According to the amended act, the limitations imposed on a patent right have been extended to include:

  • non-public activities made for non-commercial purposes;
  • where a revival of a patent right is sought and obtained after the patent extinguishes and before it is revived and the patent revival is published, and where practice has already been made in good faith and the necessary preparations have already been completed; and
  • research, trial and related acts as conducted in order to obtain pharmaceutical inspection and registration approval under the Pharmacy Law or to obtain market approval of pharmaceutical products from a foreign country.

The amended act adopts the international first sale exhaustion principle (Articles 59 and 60).

Exclusive patent licensing
According to the amended act, patent licensing is categorised as either exclusive or non-exclusive. Subject to the licensing scope, an exclusive licensee is entitled to exclude the patentee or a third party from practising the licenced patent; however, where there is an agreement providing that the patentee can also practise the patent, such agreement governs. An exclusive licensee may sub-license the patent to a third party for practice. However, where there is an agreement providing otherwise, such agreement governs. The licensee of a non-exclusive licence shall not sub-license to a third party its right to practise the patent without the patentee's consent. A sublicensing arrangement has no legal standing against third parties unless it is recorded with the TIPO (Articles 62 and 63).

Compulsory patent licensing practice
Major amendments to compulsory patent licensing practice include the following:

  • In response to national or other major emergencies, the TIPO may, through an urgent order or on notice from the central government, grant compulsory licensing of a patent as needed, and will notify the patentee as soon as possible.
  • On request, the TIPO may grant compulsory licensing of a patent where:
    • a not-for-profit use of the patent is sought to improve public welfare;
    • the practice of a later invention or utility model patent may infringe on an earlier invention or utility model patent, and where the later invention or utility model patent offers significant technical improvement with considerable economic significance compared to the prior invention or utility model patent; or
    • a patentee has committed an act restricting competition or has an anti-competitive act, which has been confirmed by a court judgment or a decision of the Fair Trade Commission of the Executive Yuan.
  • Applications for compulsory licensing of a patent covering semiconductor technology shall be filed based on the grounds set forth in the first and second items above. An application for compulsory licensing of a patent based on the grounds stated in the first and third items above will be accepted only when the applicant for compulsory licensing fails to reach a licensing arrangement with the patentee within a considerable time period based on reasonable commercial terms and conditions proposed thereto. For an application for compulsory licensing of a patent based on a ground stated in the second item above, the owner of such patent may propose reasonable terms and conditions and seek a grant of compulsory licensing of the patent owned by the applicant filing the earlier compulsory licensing application.
  • A decision on an application for compulsory licensing will be made in writing and must indicate the reasons, scope, period and the required compensation (Articles 87 to 89).

New compulsory licensing ground – public health
The amended act provides new grounds for seeking compulsory patent licensing to assist developing countries and lower-tier developed countries in acquiring pharmaceuticals under patent protection that are needed in order to alleviate public health crises afflicting these countries. In order to assist countries lacking pharmaceutical production ability or with inadequate pharmaceutical ability to obtain the drugs needed to treat AIDS, tuberculosis, malaria or other infectious diseases, the TIPO can, on application, grant compulsory licensing to practise a patent in order to supply the required pharmaceuticals. Such an application for compulsory licensing will be accepted only if the applicant fails to reach a licensing arrangement with the patentee within a reasonable period, based on reasonable commercial terms and conditions. However, this does not apply if compulsory licensing for the required pharmaceuticals has been granted in any of the importing countries (Articles 90 and 91).

Enforcing patent rights
Major amendments to the enforcement of patent rights include the following:

  • The amended act sets out the subjective elements of an act of patent infringement (ie, a patent owner may claim damages from a party which infringes on its patent with intent or out of negligence). As to the remedy, the removal of the infringement or prevention of an anticipated infringement or the possibility of an infringement, looked at objectively, is sufficient, and it is irrelevant whether subjective elements of a patent infringement act are involved.
  • 'Royalty payment amount receivable in case of patent licensing' has been added as a method to calculate the amount of damages. To comply with the principle that civil compensation is intended to make up for actual damage suffered, the provision of the existing Patent Act stating that "a maximum of triple damages can be awarded for malicious infringement" has been deleted.
  • Considering that patent marking on the patented object or its packaging may be impossible for patents with specific natures, the patent-marking requirement has been amended as follows:

"The patent certificate number of a patent shall be marked on the patented article. In case patent marking on the patented article is not feasible, the patentee may mark such marking on the labels or packaging, or make such marking in a distinct way sufficient to draw other persons' attention. Where no patent marking is made, evidence shall be produced when claiming damages to prove that the infringer had knowledge or should have had knowledge with respect to the fact that the said article is under patent protection." (Articles 96 to 98.)

Transitional clauses
Some of the proposed amendments involve significant changes in patent practice, including:

  • new grounds for asserting the novelty/inventive step/creativity grace period;
  • division of an invention patent after approval at the first examination stage;
  • formality examination of an amendment of a new utility model patent without co-pending invalidation action; and
  • changes regarding invalidation actions, patent amendments and design patents.

Therefore, transitional clauses are included in the amended act. According to Article 149 of the amended act, unless otherwise provided, the amended act shall govern:

  • pending patent applications for which irrevocable examination decisions have not been rendered before the implementation of the amended act; and
  • pending applications for correction and pending invalidation petitions, for which irrevocable examination decisions have not been rendered before the implementation of the amended act.

Other transitional clauses are as follows:

  • For invention patent applications which are pending when the amended act is implemented, and for which examination decisions have not been rendered, if the period for making a divisional application (within 30 days of the date of receiving the allowance decision issued at the first examination stage) has not expired, the amended act shall govern (Article 150(2)).
  • The amended provisions governing the following shall apply to to patent applications filed after the amended act takes effect (Article 151):
    • six-month grace period for novelty/inventive/creativeness requirement based on prior publication made in accordance with the applicant's wills;
    • granting design patent protection to partial designs, icons designs and graphical user interface designs;
    • applying for design patent protection on two or more articles used or sold as a set; and
    • derivative design patent practice.
  • Where a patent applicant fails to submit a certificate of deposit in a timely manner (within three months of the filing date, under the existing act) and thus it is deemed that the deposit has not been made, the deadline for submitting the certificate of deposit as prescribed in the amended act (within four months of the filing date or within 16 months of the earliest priority date) shall apply, provided that an irrevocable examination decision has not been rendered for the patent application when the amended act takes effect (Article 152).
  • Before the amended act takes effect, for a patent application for which an applicant fails to claim priority (at the time of patent filing) or fails to submit a priority document (within four months of the filing date), thus leading to a loss of the priority claim, the amended act concerning the revival of priority claim applies, provided that the application has not been decided when the amended act takes effect and that a period of 16 months (inventions and utility models) or a period of 10 months (designs) from the earliest priority date has not expired (Article 153).
  • For applications filed to seek invention patent term extensions before the date on which the amended act takes effect, if decisions have not been issued for these applications and if the invention patents are still in force at the time of implementing the amended act, the amended act shall govern (deleting the requirement that "the time period during which the concerned patent cannot be practised due to application for a permit has exceeded two years from the patent grant publication date") (Article 154).
  • The provisions of the amended act regarding the revival of patent rights due to failure to pay patent certificate fees and/or annuities do not apply where:
    • at the time of implementing the amended act, the period for paying an annuity has expired and the concerned patent has been deemed non-existent from the beginning pursuant to the Patent Act before the implementation of the amended act; or
    • at the time of implementing the amended act, a patent has extinguished in accordance with the Patent Act before the implementation of the amended act (Article 155).
  • Where, at the time of implementing the amended act, a decision for a design patent application has not been issued, the applicant may, within three months of the implementation date of the amended act, apply to convert it into an application covering a partial design (Article 156).
  • For pending associated new design patent applications, for which decisions have not been issued at the time when the amended act is implemented, the existing act shall apply. If pending associated design patent applications, for which decisions have not been issued when the amended act is implemented, were filed before the patent grant publication of their original design patent applications, the applicants may apply to convert these associated applications into derivative design patent applications within three months as of the implementation of the amended act (Article 157).

For further information on this topic please contact Daisy Wang at Lee and Li Attorneys at Law by telephone (+886 2 2715 3300), fax (+886 2 2718 8497) or email ([email protected]).