At a glance: patent enforcement proceedings in Taiwan

Patent enforcement proceedings

What legal or administrative proceedings are available for enforcing patent rights against an infringer? Are there specialised courts in which a patent infringement lawsuit can or must be brought?

Taiwan established a specialised court (the IP Court) to adjudicate IP-related cases on 1 July 2008. The IP Court has jurisdiction over the first and second instances of civil actions, the second instance of criminal cases and the first instance of administrative litigation cases.

As the Patent Act fully decriminalised all types of patent infringement in 2003, all legal proceedings in Taiwan for enforcing patents rights against infringers are civil actions, which are generally brought before the IP Court. However, the IP Court has only ‘prioritised’ rather than ‘exclusive’ jurisdiction; that is, in the event that a patent infringement case is brought to a common civil court, the civil court may decide to move the case to the IP Court. However, if the common civil court accepts the dispute and renders the decision on its own, such decision may not be revoked for lack of jurisdiction.

The Patent Act also provides administrative border control measures and patentees may apply for detention of infringing goods. A patentee or its exclusive licensee can file a request for detention at customs to stop the import of allegedly infringing products.

What is the format of a patent infringement trial?

In the past, a patent infringement trial was handled by judges who normally lacked technical backgrounds. There was no discovery, no jury trial and no separate hearings (such as Markman hearings in the US) for claim construction. Different from the previous practice, where the judges in the common courts often relied heavily on the opinions of outside patent verification institutes to conclude whether infringement existed in a given case, in most cases the IP Court reviews the technical issues (namely, validity issues and infringement issues) by itself with the support of technical examination officers. Documentary evidence, factual witnesses (who may be cross-examined) and experts (who are generally appointed by the courts) are all admissible in the proceedings.

In response to criticism that judges do not possess sufficient technical understanding of patent issues, the IP Court is staffed by technical examination officers who have expertise in science and technologies. The technical examination officers not only sort out the controversies of both parties to clarify the disputes, but also provide to the judges reference opinions on technical issues.

Typically, a patent trial lasts one to two years at the first instance. The IP Adjudication Act (enforeced on 1 July 2008) specifically prohibits judges from staying the civil proceedings adjudicating infringement issues and requires them to make a determination on the defence of invalidity, while judges previously agreed to stay the civil litigation pending the parties’ exhaustion of administrative remedial procedures for related invalidation actions. The problem of long stays of proceedings has thus been ameliorated.

What are the burdens of proof for establishing infringement, invalidity and unenforceability of a patent?

The burden of proof for establishing the existence of infringement, as well as an infringer’s intentional or negligent act, is borne by the patentee, while the burden to prove invalidity and unenforceability lies upon the alleged infringer. As commonly applied in any civil case, the party that bears the burden of proof must satisfy the burden by a preponderance of the evidence.

Who may sue for patent infringement? Under what conditions can an accused infringer bring a lawsuit to obtain a judicial ruling or declaration on the accusation?

The patentee has standing to sue for patent infringement. An exclusive licensee also has the same right, unless the licence contract provides otherwise, according to article 96.4 of the Patent Act. According to current court precedents, a non-exclusive licensee has no standing to sue in a patent infringement case. A distributor probably does not have standing to sue either, although there is currently no court precedent to give guidance on this issue.

An accused infringer may file a declaratory action under article 247 of the Code of Civil Procedure if it can illustrate the existence of its legal interests upon which a declaratory action is sought (eg, reasonable apprehension on being sued for patent infringement) and there is no other civil remedy available.

To what extent can someone be liable for inducing or contributing to patent infringement? Can multiple parties be jointly liable for infringement if each practises only some of the elements of a patent claim, but together they practise all the elements?

There is no concept of contributory infringement or inducement of infringement similar to that applicable in the US. If the patentee intends to sue multiple infringers, he or she may do so under the joint tort theory, where the aider and abettor are jointly and severally liable for civil liability together with the primary infringer.

If each party only practises part of the element of a patent claim, there will be no patent infringement. However, under the joint tort theory, the court has found in one judgment that a party can only be jointly liable as an aider or abettor if there is a direct tortfeasor. This means that without a party satisfying all of the elements of a patent claim as the direct tortfeasor, there cannot be an aider or abettor to such patent infringement. Therefore, it would be very difficult, if not impossible, for multiple parties to be jointly liable if no party’s action actually satisfies all elements of a patent infringement claim. Although the concept of joint infringement has been discussed in many scholarly articles and public conferences, it is still an unresolved issue according to current precedents.

Can multiple parties be joined as defendants in the same lawsuit? If so, what are the requirements? Must all of the defendants be accused of infringing all of the same patents?

Yes, according to the Taiwan Code of Civil Procedure, multiple parties can be joined as co-defendants if the rights or obligations of the claim are common to them; or if the rights or obligations of the claim arise from the same factual and legal grounds; or if the rights or obligations of the claim are of the same nature and arise from the same kind of factual and legal grounds, as long as the court has jurisdiction over all defendants. As a result, all of the defendants need not be accused of infringing the same patents. Nevertheless, it is very rare for a patentee to initiate litigation against multiple parties who infringe different patents.

To what extent can activities that take place outside the jurisdiction support a charge of patent infringement?

The Patent Act makes the manufacture, sale, offer for sale, use or importation for any of the foregoing purposes an infringement of a product patent, while the use, sale or importation of a product made through the direct use of a patented process constitutes infringement of a process patent. Generally, only behaviour taking place in Taiwan will constitute infringement of a Taiwan patent. However, the importation of infringing products manufactured outside Taiwan will constitute an infringement.

To what extent can ‘equivalents’ of the claimed subject matter be shown to infringe?

The Guidelines for Patent Infringement Verification published by Taiwan’s Intellectual Property Office (TIPO) stipulate that the doctrine of equivalents shall apply, after verification by literal infringement fails. Judges have found infringement under the doctrine of equivalents where the claimed subject matter has the same functions, applies in the same ways and gets the same results as the literal reading of the claims, and in such cases, the subject equivalents will be liable for infringement.

What mechanisms are available for obtaining evidence from an opponent, from third parties or from outside the country for proving infringement, damages or invalidity?

Taiwan does not have US-like discovery proceedings. Instead, the Code of Civil Procedure allows a party to apply for an order requesting the other party to submit certain documents or evidence essential to resolution of the dispute during trial. If the judge so orders and the party ordered to produce evidence fails to comply without proper justification, the judge may uphold the applicant party’s assertion based upon the evidence. In addition, according to the Intellectual Property Case Adjudication Act, the IP Court can enforce such an order if the opposite party has no grounds to refuse the submission of the requested evidence.

The other mechanism with direct compulsory effect for evidence collection is the preservation of evidence proceeding. A party may file an application, before or after a civil litigation is initiated, for preservation of evidence on the ground that there is a risk that the relevant evidence might be concealed or destroyed. This is an ex parte proceeding and respondents will not become aware of the application until the judge arrives on site for execution with the ruling to be served.

If the parties feel that it is necessary to collect evidence outside of Taiwan, they must request the court to seek assistance from foreign authorities, Taiwan’s diplomatic agencies or other institutions or organisations.

What is the typical timetable for a patent infringement lawsuit in the trial and appellate courts?

Typically, a patent trial lasts one to two years at the first instance, but varies with the complexity of the subject matter of the case. The appellate courts generally take a year to 18 months to complete proceedings at each instance.

What is the typical range of costs of a patent infringement lawsuit before trial, during trial and for an appeal? Are contingency fees permitted?

The costs of a patent litigation infringement lawsuit mainly include:

• court fees, which are calculated at approximately 1.1 per cent of the value of the claims at the first instance and 1.65 per cent of the same at the appellate levels;
• bonds required for preliminary injunction, or civil litigation applicable only if the plaintiff has neither a presence nor assets in Taiwan;
• verification fees for court-appointed or party-retained institutes; and
• attorneys’ fees.

There is no specific rule that prohibits contingency fee arrangements in patent litigation. The client can request a contingency fee arrangement with his or her attorney.

What avenues of appeal are available following an adverse decision in a patent infringement lawsuit? Is new evidence allowed at the appellate stage?

The decision of the first instance in a patent infringement lawsuit made by one judge at the IP Court can be appealed to a panel of three judges of the same court, and the appellate decision by this panel of judges can in turn be appealed to the Supreme Court, provided that the value of the claim exceeds NT$1.5 million.

Under article 447 of Taiwan’s Code of Civil Procedure, no additional means of argument or defence is allowed at the appellate stage, except in cases where:

• such additional means of argument or defence were prevented from being presented as a result of the court of first instance acting in contravention of the laws and regulations;
• the occurrences giving rise to such additional means of argument or defence took place after the conclusion of oral arguments in the court of first instance;
• additional means of argument or defence are presented for purposes of supplementing those already presented in the first instance;
• the occurrences giving rise to such additional means of attack or defence are generally known or become known to the court in the course of performing its functions;
• the court should take evidence on its own initiative with regard to such occurrences;
• the party was unable to present such additional means of argument or defence due to reasons not imputable to him or her; or
• it would be manifestly unfair to prevent the party from presenting such additional means of argument or defence.

To what extent can enforcement of a patent expose the patent owner to liability for a competition violation, unfair competition, or a business-related tort?

Taiwan’s Fair Trade Act prohibits enterprises from engaging in unfair competition, such as by abusing market power or by cooperation among horizontal competitors. Taiwan’s Fair Trade Commission has published the Guidelines for the Review of Cases Involving Enterprises Issuing Warning Letters for Infringement of Copyright, Trademark and Patent Rights, and the Guidelines on Technology Licensing Arrangements. Patentees will expose themselves to civil liabilities or administrative sanctions or even criminal penalties if the enforcement of patent rights violates the Guidelines or the Fair Trade Act.

To what extent are alternative dispute resolution techniques available to resolve patent disputes?

Arbitration and mediation are both available as means to resolve patent disputes, but in practice, parties rarely opt for alternative dispute resolution techniques.

Law stated date

Give the date on which the information above is accurate.

30 April 2020.