Introduction
Background
Decision
Comment


Introduction

To determine whether a claimed invention represents an inventive step – objectively and without hindsight bias – the Patent Examination Guidelines refers to the "commercial success obtained from the invention" as an auxiliary factor. Before a decision on the patent application is rendered, if an applicant submits evidentiary documents to prove that the technical features of a claimed invention resulted in its commercial success, the examiner must take such evidence into consideration.

Nonetheless, the thresholds for the applicability of "commercial success" in judicial practice do not yet seem to be stable. This article reviews the relevant case law and examines a recent case.

Background

An overview of the decisions rendered by the Supreme Administrative Court (SAC) and the Intellectual Property and Commercial Court (IPCC) shows that, even within the same court, there are different thresholds and opinions on whether to take "commercial success" into consideration.

Example one
In a 2020 judgment,(1) the SAC stated that "commercial success" is simply an auxiliary factor for determining the inventive step, not the sole factor, and that the success of a patented product may be subject to other factors, such as:

  • sales skills;
  • advertising;
  • market supply and demand; and
  • socioeconomic prosperity.

As the prior art combination was sufficient to prove that the patent lacked an inventive step, it was unnecessary for the Court to take the auxiliary factor of "commercial success" into consideration. The IPCC shared the same opinion in a 2015 case.(2)

Example two
In a 2019 decision,(3) the SAC emphasised that it is the patentee who is liable for providing evidence to prove the direct relation between "commercial success" and the patented invention. Ultimately, the SAC did not recognise the patentee's claim on "commercial success" because it deemed that the patentee had failed to provide sufficient evidence to prove the relation between the growth in business and the commercial exploitation of the patent at issue.

Example three
In a 2018 administrative judgment,(4) the IPCC took the "commercial success" factor into consideration and affirmed the inventive step of the patent. In this case, the patented technology related to a food cover for thermal preservation. While the prior art for such a cover was non-foldable, the patented technology at issue was foldable. Since the patentee evidenced that counterfeits of only the patented foldable cover existed in the market, rather than the non-foldable ones, the IPCC held that the evidence sufficed to prove that "the technical features of the foldable design of the patent at issue, rather than sales skills or advertising, indeed directly contribute to the commercial success". Thus, the evidence was adequate to prove that the patent at issue had achieved commercial success, and the Court recognised the inventive step of the patent.

Decision

In August 2022, the Supreme Court rendered a judgment(5) opining that the subordinate courts must examine the evidence and claims relating to commercial success submitted by the patentee when deciding on the inventive step of a claimed invention; otherwise, the decisions will be unlawful. The Supreme Court stated as follows:

When determining an inventive step of a claimed invention, the subordinate courts may also comprehensively take the following factors into consideration to avoid misjudgment caused by subjective arbitrariness (such as hindsight):

1) if an invention solves a long-felt but unsolved problem;

2) if an invention achieves commercial success and replaces the products with the prior art;

3) if the licensee and competitors acquiesce in the invention;

4) if an invention was recognized or reproduced by the infringers; or

5) no similar or identical invention(s) exist around the same time.

The appellant insisted on the claim that the patent at issue had been granted in many countries, such as the United Kingdom, the United States, China, and Japan, more than 20 years ago. The domestic voice IC industry, including listed companies such as . . . having been involved in the licensing of the patent at issue after reviewing the technical contents thereof, has exported billions of ICs with the patented technology at issue. Therefore, it is adequate to recognize the claim that the patent at issue has solved a long-felt but unsolved problem and has achieved commercial success. The patentee also provided the patent specifications or patent gazettes of foreign counterparts of the patent at issue as well as the first page of the patent license agreement as evidence . . . . In light of the above explanations and general rules of experience and logic, the patentee's statements on 'commercial success' appear to have merit and indeed affect the determination of an inventive step of the patent at issue. The original court ignored the patentee's statements on 'commercial success', not only violating rules of experience and logic, but also failing to provide reasons.

Comment

The Supreme Court's judgment indicates the five factors that may be taken into consideration when examining the inventive step of a patent so as to avoid hindsight bias. Further, it states that the "commercial success" claimed by the patentee affects the determination of inventive step and must not be ignored by the original court; otherwise, the decisions made will be unlawful.

The Supreme Court has thus affirmed the significance of "commercial success" for determining an inventive step. Accordingly, patentees may cite this judgment when undergoing patent application or cancellation proceedings to proactively defend the inventive step of their patents.

For further information on this topic please contact Julie 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.

Endnotes

(1) 2020 Shang Zi No. 575.

(2) 2015 Min Zhuan Shang Zi No. 29.

(3) 2019 Pan Zi No. 100.

(4) 2018 Xing Zhuan Su Zi No. 75.

(5) 2022 Tai Shang Zi No. 186.