19 May 2021
The Patent Law of Taiwan was amended in its entirety on January 1, 2013, following by its partial amendments in 2013, 2014, 2017 and 2019. The Ministry of Economic Affairs released the draft partial amendments (hereinafter, the “Draft”) again on December 30, 2020 and concluded the period for soliciting written opinions at the end of February 2021 with no further amendment schedule and planning to date.
Consisting of 33 amended articles, 30 added articles and 10 deleted articles, this Draft features the largest scale partial amendments following the full-scale amendments in 2013. The highlights of the Draft include: (1) the establishment of an independent organization dedicated to the trial of patent remedy cases by the Intellectual Property Office (hereinafter, the “TIPO”) under the Ministry of Economic Affairs, (2) enhancement of the TIPO’s trial procedure, (3) reform of the patent remedy procedure, and (4) the remedy channels for true patent applicants.
This article will discuss the review and dispute trial portions of the Draft. The Draft also covers other matters such as the grace period for design patents and transitional provisions, which are not discussed in this article.
Section 4 (Patent Rights) of the current Patent Law (Articles 52 to 86) seek to regulate the patent term extension, the validity of patent rights, the licensing and assignment of patent rights, post-grant amendment and invalidation after an invention patent is granted. In this regard, the Draft adds Section 4-1 (Review and Dispute Trial), which includes Subsection 1 (General Provisions), Subsection 2 (Review Cases), Subsection 3 (Dispute Cases), and Subsection 4 (Reexamination Procedure for Review Cases and Dispute Cases, which involves Points (1), (2) and (4) above). In particular, the first three subsections involve the core affairs of the TIPO’s review in its patent administrative procedure and are the focus of this article. Subsection 4 (Articles 86-1 and 86-2 of the Draft) provides that for a final trial decision, the procedure for review cases or dispute cases basically applies mutatis mutandis to the reexamination which may be filed by a dissatisfied party when the statutory grounds of reexamination are satisfied.
1. Review and Dispute Trial Board
In the “General Provisions”, the Review and Dispute Trial Board (hereinafter, the “Trial Board”), an independent unit to be set up at the TIPO and dedicated to the review of patent remedy cases, will be dedicated to the trial of “review cases” and “dispute cases” involving invention patents. In particular, the “review cases” include: (1) rejection review cases, (2) extension application cases, (3) post-grant amendment cases and (4) other cases involving review of other dispositions; and the “dispute cases” include: (1) invalidation cases, and (2) invalidation for extension cases (Article 66-1 of the Draft). In principle, a panel in which decisions are made by a majority vote is adopted for the organization of the Trial Board. The Trial Board consists of three or five reviewers who are patent examiners or personnel with legal expertise with one chairman and is staffed with review clerks to handle relevant administrative matters (Article 66-2, Article 66-3 and Article 66-6 of the Draft). The Trial Board is characterized by its independent exercise of authority, and its decisions no longer go through the review and approval of internal division chiefs and director-general of the TIPO. In case of dissatisfaction with the trial decision, a civil action may be directly brought with the Intellectual Property Court (hereinafter, the “IP Court”), and it is no longer required to apply to the Administrative Appeal Review Committee under the Ministry of Economic Affairs. Therefore, auxiliary intervention and the invariability of parties both apply to the trial procedure and a decision may be rendered to decline an application (Article 66-4, Article 66-5 and Article 66-7 of the Draft).
2. Relevant procedures for review cases
For “Review Cases,” there are respective requirements for procedures related to the statute of limitations, trial procedure, trial decisions, etc., with respect to the above four different types of review cases. The special portions which are different from the current legal regime are discussed below:
(1) Rejection review cases
In case of dissatisfaction with the rejection decision of the primary examination, a request for rejection review may be filed with the Trial Board within two months upon delivery of the rejection decision, and the current reexamination system is abolished. To prevent the remedy right from being affected when an indication of dissatisfaction is erroneously presented to another agency, a requirement is put in place for being deemed as ab initio review application and referral to the TIPO (Article 66-8 of the Draft). In addition, a “preliminary review,” which only applies to rejection review cases, is set up where an approval decision may be rendered directly by one patent examiner in the event that the examiner determines that there is no unpatentability in case of an amendment application filed along with a request for rejection review. Under such circumstances, the application for rejection review is deemed to have been withdrawn (Article 66-9 of the Draft). A rejection review case is a remedy for dissatisfaction with the TIPO’s decision of an ex parte application and is a trial procedure which basically requires written submissions but accepts oral arguments on an exceptional basis. The nature of such procedure is reexamination, and the Trial Board may separately search relevant cited documents and consider the grounds of unpatentability not recited in the rejection decision in the primary examination (Article 66-10 of the Draft). A rejection review case may be withdrawn before the review decision is delivered. However, in case of such withdrawal, no application may be filed again for the same rejection review case. This institutionalizes the res judicata principle (Article 66-11 of the Draft).
(2) Extension application cases
For an application to extend the patent term of an invention patent involving a pharmaceutical or agrichemical, or the manufacturing process thereof, a trial procedure which basically requires written submissions but accepts oral arguments on an exceptional basis is adopted. If it is concluded in the trial that the extension is not granted or the extension application on the patent term exceeds the permissible patent term extension, the applicant should be notified to respond within a designated period. If the response is submitted beyond such period, it should be deemed that such response is not submitted, and in case of no response within the period, a decision will be rendered directly (Article 66-12 of the Draft).
(3) Post-grant amendment cases
Post-grant amendment cases are handled in a trial procedure which requires written submissions in principle but accepts oral arguments on an exceptional basis. If it is concluded in the trial that there is no basis, the applicant should be informed to provide a response within a designated period. If a response is submitted beyond such period, it should be deemed that such response is not submitted, and if no response is provided within the period, a decision will be directly rendered. In practice, the same patent right is often subject to multiple post-grant amendment cases during the trial period of a previous post-grant amendment case. To ensure the accuracy of the version under trial, it is specifically stipulated that previous post-grant amendment cases shall be deemed withdrawn (Article 68 of the Draft).
(4) Other disposition review cases
For cases involving dissatisfaction with other dispositions in general procedures, application for review may be filed with the TIPO within one month upon delivery of the dispositions. If a review application is erroneously filed with another agency, it will be deemed that the review application is filed ab initio and transferred to the TIPO. The trial procedure basically requires written submissions but accepts oral arguments on an exceptional basis, and the Trial Board will, ex officio or upon application, investigate evidence (Article 68-1 of the Draft).
3. Relevant procedures for dispute cases
For “Dispute Cases”, detailed provisions are made concerning the above two different types of dispute cases. The special portions which are different from the current legal regime are discussed below:
(1) Invalidation cases
With respect to grounds of invalidation, since disputes over ownership of patent application rights or the patent right often involve private right disputes between the parties and do not pertain to technical and professional determination of the patent per se, it is practically difficult for the TIPO to investigate the true ownership of the right like a court, and the parties should resolve their disputes through civil action. Therefore, the Draft deletes the true holder of patent application right as an invalidation ground and revises relevant provisions (Articles 10, 35, 59, 71, 119 and 141 of the Draft).
With respect to exchange of documents and disclosure of inner conviction, since the civil procedure is adopted instead for patent dispute litigation and Article 33 of the Intellectual Property Case Adjudication Act, in which new evidence may be submitted, no longer applies, the evidence submitted in the trial procedure will be primarily relied on for future litigation. On one hand, the Draft eases the current restrictions in order to safeguard the procedural benefits of the parties, and the supplemental grounds or evidence of the invalidating party as well as documents such as the answers and post-grant amendments of the patentee should be submitted in due course before the trial is concluded. On the other hand, the Draft provides, in order to enhance the efficacy of the trial, that if a party undermines the conclusion of the trial for failure to submit documents with an intent to delay the trial or out of gross negligence, it shall be deemed that the documents are never submitted. In addition, the Trial Board is required to appropriately disclose its inner conviction on factual, legal and evidentiary issues (Article 74 of the Draft).
With respect to the trial procedure, a procedure which requires oral arguments in principle but accepts written submissions on an exceptional basis and which is held in public in principle but is conducted in camera not held in publish on an exceptionally basis is adopted. When an invalidation case “has reached an extent possible to render a trial decision,” the parties should be informed of the conclusion of the trial and the decision shall be rendered within one month. At this juncture, the parties are not allowed to submit relevant evidence anymore. For an invalidation case heard via written submission, a written notification that the trial is concluded shall be made. When invalidation appears to be obviously groundless, it may be directly rejected without oral arguments. In addition, how to handle the failure of either or both of the parties to appear on the trial date or the change of the reviewers participating in the hearing of oral arguments is also specifically stipulated (Article 74-1 and Article 76 of the Draft). After the inner conviction is disclosed in the course of the trial, the parties may further submit evidence or apply for post-grant amendments to change the factual basis of the trial. If necessary, the Trial Board may consult both parties to set a “trial plan” concerning the order and schedule of the subsequent procedure. If any party submits relevant evidence which is likely to delay the trial procedure, it shall be deemed that such evidence has not been submitted except when the justifications are expounded (Article 74-2 of the Draft). If necessary, the Trial Board may also conduct a “preparatory procedure” where a reviewer handles matters such as the summary of the contending issues and issue simplification agreement and appropriate disclosure of the inner conviction on the existence of proper grounds for post-grant amendment (Article 74-3 of the Draft). With respect to ex officio investigation, the Draft requires that such investigation should be conducted only when “inner conviction cannot be formed based on the evidence submitted by the parties and in order to uncover the truth” so as to address the issue that the scope of the evidence not submitted by the invalidation requester but considered ex officio is overbroad (Article 75 of the Draft).
In case of a post-grant amendment case filed along with an invalidation case, the inner conviction on the merits of the post-grant amendment case should be properly disclosed and the post-grant amendment case and the invalidation case should be tried and decided together. To avoid a patentee’s frequent application for post-grant amendment, an “interim trial decision” may be rendered, if necessary, and the patentee shall not apply for post-grant amendment again and the invalidation requester shall not submit new grounds, evidence or any new combination of evidence, either, during the period between the rendition of the interim trial decision and the review decision (Article 77 of the Draft).
Regarding the scope of res judicata, it is currently required that no one may file an invalidation for the same patent right again based on the same facts and the same evidence under specific circumstances. To avoid the circumstance where the true interested party is prevented from filing invalidation based on such facts and evidence, the Draft limits the scope to the “invalidation requester or intervenor.” In addition, the patent right disputes decided in an invalidation trial are instead remedied by civil procedure. Since the parties cannot submit new evidence in an administrative action pursuant to Article 33 of the Intellectual Property Case Adjudication Act, the relevant provisions are removed in the Draft (Article 81 of the Draft).
With respect to the validity of patent rights, the Draft requires that in case of dissatisfaction with an invalidation decision, a patent dispute lawsuit, which is by nature a civil suit, should be filed, if the patentee fails to bring a lawsuit or brings a lawsuit which is finally dismissed, the patent rights are finally revoked and deemed non-existent ab initio when the invalidation is established. If the invalidation is not established, the subject matter of the lawsuit brought by the invalidation requester is the patent right per se rather than the trial decision, which is by nature an administrative disposition. If the IP Court’s final judgment determines that the patent right is invalid, the TIPO is not required to separately render a disposition revoking such patent right which is deemed non-existent ab initio upon the final count decision. (Article 82 of the Draft)
(2) Invalidation for extension cases
The trial of the invalidation cases filed concerning the approved patent term extension of an invention patent involving a pharmaceutical or agrichemical, or the manufacturing process thereof shall be governed mutatis mutandis by the above provisions on the invalidation against invention patents (Article 82-1 and Article 83 of the Draft).
4. Matters to be noted to cope with the Draft
The Draft is still at the initial amendment stage and has not been adopted by the Executive Yuan Council before being sent to the Legislative Yuan for deliberation. Therefore, the subsequent development remains to be observed.
In view of the Draft, an optimistic expectation is warranted since the TIPO’s role to conduct professional examination is enhanced on a large scale to meet international trends. Conversely, patent applicants should also make more comprehensive preparation to meet the requirements of several relevant procedures after the legal amendments.
In addition, the introduction of the review system should enhance the examination quality for invention patents, reduce the circumstances where patentees often suffer from the IP Court’s invalidation of patents at present, but the application cost of an invention patent may also increase. If the current Draft is adopted by the Legislative Yuan, businesses should reconsider their patent application and deployment strategies (e.g., setting the scope of the claims at the time of application within a reasonable scope through prior art search before the application and seizing opportunities to reach a consensus with the examiner during the stages of the primary examination and the preliminary review) and thus obtain the patent rapidly by avoiding the review procedure. As pointed out in the amendment reasons of the Draft, the recent data in Japan show that after being rejected in the primary examination, over 85% of the review application filed along with amendments entered the stage of preliminary review with an approval rate as high as 60%. This shows that preliminary review does contribute to earlier grant of patent, and applicants should make good use of this system.
For further information, please contact:
Jerry Huang, Lee Tsai & Partners
lawtec@leetsai.com
Eddie Shih, Lee Tsai & Partners
lawtec@leetsai.com
[1] This author is a lawyer at Lee, Tsai & Partners. However, the contents of this article merely reflect personal opinions and do not represent the position of this law firm.
[2] This author is a Of-Counsel and the Manager of the Technology and Patent Department of Lee, Tsai & Partners. However, the contents of this article merely reflect personal opinions and do not represent the position of this law firm.
