In terms of the issue of patent validity, Taiwan adopts the bifurcation system in which the jurisdiction of civil cases and that of administrative cases belong to different courts.
Before 2008, only the Administrative Court could determine the validity of a patent; patent invalidity could not be raised as adefense in the civil court in which a patent infringement lawsuit was filed. According to Article 82 of the Patent Act, the effect of patent invalidation declared by the Administrative Court is that the patent right is cancelled and is deemed to have not existed “from the beginning.” Through the enforcement of the Intellectual Property Case Adjudication Act ("IP Case Adjudication Act") in 2008, the court was endowed with the power to declare invalidity of a patent during patent infringement litigation. Since then, patent invalidity can be raised as adefense in civil proceedings. If the court declares that the patent at issue is invalid, the patentee loses the ground against the opposing party at that very civil proceeding. However, such a patent invalidity declaration from the civil court only binds the present case between parties associated with the case. The patent at issue is still valid unless a separate invalidation proceeding is filed with the Taiwan Intellectual Property Office ("TIPO") and the validity of the patent is eventually confirmed by the Administrative Court. This suggests that a patent that has been declared invalid at the Court is still enforceable against others before the civil court.
With this background in mind, then, the following question remains: If a patent is eventually invalidated by the Administrative Court after a civil judgment confirming that the patent is infringed and the civil judgement has become final, can the defendant in the civil action request for a retrial on the ground that the patent has been invalidated and therefore is deemed to have not existed from the beginning in order to overrule the final civil judgement?
The IP Court delivered its opinion on this question for the first time in a recent judgement of the Intellectual Property Court (No. 102-CivilPatentAppealRetrial-4):
According to Item 11, Paragraph 1, Article 496 of the Code of Civil Procedure, a retrial action may be initiated to request a review of a final judgment if the referenced administrative disposition, based on which the judgment is entered, is amended by a subsequent final decision or administrative disposition. The grant of a patent right is an example of an administrative disposition, whereas an example of a final decision is a decision for patent invalidation. One aspect of the rationale for Article 496 is that the civil patent infringement judgment was entered based on the disposition of the patent right. Since the patent right was subsequently cancelled and was deemed to have not existed from the beginning, the referenced administrative disposition, namely, the judgment for validity of the patent was amended by a subsequent final administrative decision. According to the Code of Civil Procedure, a retrial action may be allowed for a review of the final judgment, and therefore, the party of the original civil case should be entitled to file a petition for a retrial.
However, in the judgement of Intellectual Property Court (No. 102-CivilPatentAppealRetrial-4), the IP Court ruled that the original civil court did not make its judgment based on the disposition of the patent right but determined the validity of the patent using the Court's own discretion with the power endowed by the Intellectual Property Case Adjudication Act. The Court also cited some references with legal rationales, such as the efficiency of the procedure, and foreign laws, especially Article 104-4 of the Japanese Patent Act which expressly forbids the petition for a retrial under the same circumstances, to support the Court's opinion.
However, there will not be any patent infringement if there is no patent right whatsoever. If a patent is invalidated and deemed to have not existed from the beginning, what valid basis is there for an infringement judgement? Moreover, unlike the Japanese Patent Act, the Taiwanese Patent Act does not expressly forbid a petition for a retrial under such circumstances. Further, the opinion of the Court may violate the principle of the bifurcation system and Article 82 of Patent Act, in which the actual validity of a patent should eventually be determined by the Administrative Court rather than a civil court declaring patent invalidity when adjudicating a patent infringement case. It will be interesting to observe whether the opinion will be supported by the Supreme Court and other courts.