Introduction to a Revolutionary Reform of the Patent Remedy System in Taiwan

The currently effective Patent Act is the version of 2013. There were several revisions over the years, while the comprehensive structure of examination system remains largely constant. Yet the patent remedy regime implemented in the Taiwan Intellectual Property Office (“TIPO”) will inevitably embrace an enormous change followed by a draft of amendment (“Draft”) ready to enter the parliament. Inclusive of 40 articles revised, 29 added, and 7 deleted, the Draft marks a change of largest scale to the patent system since 2013.

Modeling from the PTAB/TTAB of the USPTO and other counterpart offices in China, Korea, Japan, and Germany, TIPO plans to establish a new “Patent Appeal and Dispute Review Committee (“Committee”; tentatively so translated while the official title in English has not announced yet).” The Committee will be vested with jurisdictions over, among others, primarily the succeeding reviews of the first decision of application examinations and patent invalidations respectively¹.

Function and Organization of the Committee

The “re-examination” now as the second-time consideration after the first examination of a patent application will be abolished, and be replaced by the “patent appeal” proceedings. In addition to the review of a rejected application, the patent appeal further deals with applications for patent term extension, post-grant amendments, and other procedural decisions of the TIPO.

During a patent appeal proceeding, filing of a divisional application remains possible. In addition to the pendency of first examination and three months from the allowance, the applicant is allowed to file for divisional applications during the pendency of the appeal either before a rejection decision is issued or within three months if it is an allowance decision².

On the other hand, dispute resolution aspect as the other half of the Committee’s main functionality will address cases of patent invalidity and patent term extension invalidity. The former refers to the cancellation of one or several patents claims; while the latter refers to the cancellation of an erroneous grant of a particular duration of extended patent term.

The Committee will review each case by a panel of 3-5 members ex officio who are patent examiners or officers of legal expertise with litigation experience. Recusals of the panel members’ staffing due to existing or potential conflicts of interests will be administered. For example, the examiners who previously rejected the application in the phase of first examination will not be allowed to participate in the case as the case migrates to the phase of patent appeal³.

Besides, intervention of a third party is possible in a patent appeal or dispute case⁴. A party having legal interests as to the conclusion of a case such as a licensee or an assignee may request or be ordered by the Committee to participate the proceeding of a case if necessary.

Patent Appeal and Dispute Resolution Proceedings

The applicant in face of a rejection may request for patent appeal within two months from the service of the rejection decision. Before advancing straight to a panel review, “preliminary review” will step in when there is a set of amended claims proposed alongside with the appeal request⁵. The preliminary review, which is similarly instituted in the peer offices of JPO, KIPO, and CNIPA, is devised to pursue improvement of efficiency. Cases where the applicants concede to the examiner’s rejection reasons by further narrowing patent claims accordingly will be presided by the same previous examiner alone. Since the same examiner best understands the history of an application thoroughly, it is expected that a rejected application would be more quickly reversed to become allowance as a result of a consensual compromise. On the other hand, rejected applications which are appealed without claim amendments concurrently proposed will enter panel reviews as per the default process.

As for invalidations, a major change will be the adoption of “adversarial” system, in which the confronting pair of opponents will no longer be the invalidating party versus the TIPO. Instead, an invalidation proceeding will organize like a tribunal between the invalidating party and the patentee while the TIPO’s Committee serves as the neutral adjudicator.

Invalidations will require oral hearings by default, in contrast to examination by documents only nowadays⁶. A party’s absence from an oral debate without presenting justifiable excuses may lead to a decision basing on unilateral arguments. When necessary, the panel may produce a case review schedule that contains issues on the facts, law, evidence, as well as an agenda timeline⁷. Moreover, the panel members are allowed to advise interim opinions before the proceeding goes towards a decision.

In an invalidation case, the patentee is permitted to narrow the scope of patent right as a defensive measure in response to challenges. But the changes of patent claim set sometimes cause confusions as to which admitted version is the latest to be reviewed against invalidity evidence. Under the Draft, the review panel may firstly issue an interim decision that adjudicates the claim amendment, based on which a final decision on claim validity will be made later. After an interim decision, no more new or combination of evidence or another claim amendment will be acceptable⁸.

Patent remedy in the court

Reduction of remedial levels is one of the major goals in the reform. For either patent appeal or dispute cases, the party may straightly file a lawsuit to the Intellectual Property and Commercial Court (“IPCC”) upon an unfavorable decision of the Committee. That is, an intermediate stage of administrative appeal in the Ministry of Economic Affair as currently is will be removed. In the end, the patent remedy system will consist of only two levels beyond the stage at the TIPO – first instance at the IPCC and second instance at the Supreme Court.
Another major change is the governing procedural law in the court. The IPCC holds exclusive jurisdictions over patent appeal and dispute cases. To try these cases, the IPCC installs and operates the rules of civil procedures instead of administrative litigation procedures as is. In the trials of patent appeal decisions, TIPO becomes the defendant; while in the trials of dispute decisions, the opposite party (which is usually the patentee) remains as the defendant. In these cases, an advocacy by a lawyer or patent attorney becomes compulsory.

Resolution for patent ownership contentions

Currently a dispute as to who the real or lawful owner to a patent or application is can be resort to either invalidation proceeding by TIPO or civil litigation in the court. In several precedent cases, the courts criticized the role of an executive body to resolve the questions of ownership⁹. The TIPO is the only specialized agency in the government possesses expertise in intellectual property-related matters. It has the best position to exercises its judgements on prosecutions, grants, or validity of patents. However, speaking to the ownership of a granted patent or an invention, TIPO as a government agency does not resemble a judicial court vested with investigatory powers. TIPO is not the suitable organization to find the true ownership. As per the Draft, patent ownership disputes will be resolved only by the court or through a settlement, arbitration or other ADR processes in the future¹⁰.

When a dispute of ownership is pending at the court, the parties may petition for provisional injunctions (per restoring non-monetary asset post legal action) or status-quo orders (per establishing pro tem legal relationship). And then the injunctions and orders may further be submitted to the TIPO in order to suspend any relevant proceedings activated at the TIPO accordingly. Besides, as an ownership dispute remains ongoing, the nominal owner on the record shall not abandon the patent until a court’s judgment or ADR decision is finalized¹¹.

Sunset clause

After the new Patent Act enters into effect, both pending and finalized re-examination cases shall remain to be governed by the old law, so as the finalized cases of post-grant amendments, patent term extensions, invalidity, utility model rejections, and other procedural decisions¹². Non-finalized cases remanded back from the court or Ministry of Economic Affairs to the TIPO will resume in accordance with the old law.

On the opposite, non-finalized cases other than those in the preceding paragraph will be subject to the new law.

¹Article 66-1 of the Draft
²Articles 34, 120, and 130 of the Patent Act
³Article 66-2 of the Draft
⁴Article 66-4 of the Draft
⁵Article 66-9 of the Draft
⁶Article 74-1 of the Draft
⁷Article 74-2 of the Draft
⁸Article 77 of the Draft
⁹SAC-2000-Judgement-No.1752; IP-2012-CivilPatAppeal-No.2
¹⁰Article 10 of the Draft
¹¹Articles 69 and 140 of the Draft
¹²Articles 157-5 of the Draft