The Patent Act provides the following for determining whether an invention has an inventive step: "if an invention can be easily completed by persons with common knowledge/ordinary skill in the art based on the disclosure of prior art, a patent shall not be granted to the invention." Recent practice in determining inventive step has gradually put more weight on establishing the technical level of persons with common knowledge/ordinary skill in the art at the time when the patent application was filed. Nevertheless, in a patent cancellation (invalidation) action procedure, it is generally not easy to establish such technical level because frequently a long time will have elapsed (several years or even more than ten years) from the filing date of the target patent to the date that the cancellation action is filed.

Recently, the Supreme Administrative Court provided a way to define such technical level in Judgment No. 106-Pang-266. The court is of the opinion that the prior art stated in a patent specification should be deemed common knowledge/ordinary skill that persons ordinarily skilled in the art had at the time when the patent application was filed and thus can serve as (part of) the basis for determining whether a patented technique can be easily conceived or completed in view of the disclosure of one or several prior art references. The background of this case is as follows:

A cancellation action was filed against the patent owned by Hon Hai Precision Industrial Co., Ltd (hereinafter referred to as "the patent at issue"). The first instance administrative court concluded that the patent lacks an inventive step. Hon Hai argued in the appeal procedure that since the court has obtained all the parties' consent to limit the issues to be tried in the first instance and one of the issues is "whether Exhibit 1 (i.e., one of the prior art exhibits submitted by the cancellation petitioner) is sufficient to prove that Claims 2 and 3 lack an inventive step," the court should not have cited "the prior art mentioned in the specification of the patent at issue" and combined it with Exhibit 1 to reach the conclusion that the patent claims lack an inventive step. Hon Hai had never thought that the court would introduce prior art on its own initiative and combine the new prior art with Exhibit 1 to negate the inventive step of the claims, so it could not effect a post-grant amendment in time.

With regard to the technical issue that Hon Hai asserted that the protrusion of Exhibit 1 is different from the protrusion and the pin insertion area of the patent at issue, the Supreme Administrative Court indicates: "If the common knowledge or ordinary skill in the technical field relating to the invention has been stated in a patent specification, or if said prior art has been specified in the specification, the common knowledge/ordinary skill/prior art stated therein should be deemed the common knowledge/ordinary skill that persons ordinarily skilled in the art generally knew at the time when the patent application was filed." Based on such opinion, the Supreme Administrative Court concludes that the first instance court's introduction of the prior art mentioned in the specification of the patent at issue on its own initiative conforms with the stipulation of the Patent Act and did not introduce any new issue to be tried and determined in the first instance. Indeed, the prior art mentioned in a patent specification is, generally speaking, commonly known to persons in the related field before the filing date. Nevertheless, from the perspective of the patent owner, since it is not easy to pass the patent office's examination to obtain a patent, to well maintain the patent right, it is necessary when drafting the specification to give due attention to how to disclose the prior art which has the drawbacks that the invention would like to eliminate or improve.

As to the procedural issue, the Supreme Administrative Court found that the first instance court had asked the cancellation petitioner to strengthen his argument on the teaching or motivation provided by the prior art to modify or combine the prior art exhibit(s) to arrive at the invention of the patent at issue, and that the first instance court had asked Hon Hai whether it had applied for post-grant amendment. It therefore concluded that the first instance court did not violate the procedural requirements to make Hon Hai miss the time for effecting post-grant amendment. It opined that even if the first instance court's quoting of the prior art mentioned in the specification of the patent at issue was deemed as introducing a new prior art exhibit, since the Intellectual Property Case Adjudication Act permits introduction of new prior art evidence to facilitate dispute resolution at one time, it should still be appropriate for the first instance court to overturn the patent office's cancellation decision and order the patent office to revoke the patent as long as it had informed the parties to the suit of the issues(s) that it is concerned about and given opportunities for the parties to submit arguments (and the patentee should have made its decision during this period on whether to effect post-grant amendment to improve the survivability of the patent). In fact, this is the current administrative court's practice. Therefore, the patentee who has received the patent office's decision in his/her favor at the end of the cancellation action should still deal seriously with the administrative suit following the cancellation action. Particularly, the pace of progress in an administrative suit is generally fast; in the face of new prior art evidence submitted by the opposing party, it is important for the patentee to quickly decide whether to effect post-grant amendment regardless of whether the court discloses its preliminary opinion on the new prior art evidence.