22 Oct
2020

Taiwan

Tsai, Lee & Chen Patent Attorneys & Attorneys at Law - Taiwan

Q: How can patent owners best enforce their rights in your jurisdiction?

Patentees may best enforce their rights by taking the following steps and measures:

  • Collecting evidence – unlike in the United States there is no discovery procedure in Taiwan, so the patentee must collect evidence itself by making a sample purchase, notarising the infringer’s website and collecting information regarding infringing products.
  • Conduct a patent infringement assessment – after acquiring evidence, the patentee should conduct a patent infringement assessment either by itself or by engaging a competent firm. If the outcome of the assessment confirms the existence of infringement, the patentee may take further legal action against the infringer.
  • Dispatch a warning letter – the patentee may dispatch a warning letter to the infringer requesting that it immediately stop the infringement and to negotiate for damages compensation. The main purpose of such a letter is to try to resolve the dispute without litigation. If the infringer makes no positive reply, then the patentee can consider legal action.
  • Motion for a preliminary injunction order if the patentee would like to stop the infringement as soon as possible – in Taiwan, the proceeding of motion for a preliminary injunction order is separate from the patent infringement lawsuit. The patentee can file said motion before or after it files the patent infringement lawsuit. The average time for the court to make a first-instance decision is about six months. The grant rate in 2019 was about 31%.
  • File a patent infringement lawsuit – it is recommended to evaluate the validity of the patent at issue before filing a patent infringement lawsuit, since most defendants will raise an invalidity defence and, according to the statistics, such a defence is extremely likely to be sustained by the court. If any substantial weakness in the patent is found after the evaluation, the patentee may try to amend the scope of the patent to resolve the weakness and then file the lawsuit.

Q: Are mediation and arbitration realistic alternatives to litigation?

No, it is rare for a patent dispute to be resolved through mediation or arbitration for the following reasons:

  • The cost of litigation in Taiwan is relatively low compared to Europe and the United States.
  • The turnaround time is relatively short for a court to decide on a patent infringement lawsuit. On average, it takes about seven months in the first or second instance.
  • In general, the accused infringer denies infringement and is unwilling to resolve the dispute through mediation or arbitration.

Q: Who hears patent cases – for example, individual judges, a panel of judges, a mix of judges and technical experts, judges, and juries?

In the first-instance court, the case will be heard by one judge, while in the second-instance court it will be heard by three judges. Meanwhile, the IP Court judges may designate technical examiners and seek their technical advice in the lawsuit.

Q: What level of expertise can litigants expect from courts?

The Taiwan IP Court was established in July 2008 for hearing cases in the IP field (including copyright, trademarks, patents, trade secrets and unfair competition). Since the judges in the IP Court hear only IP cases, and they can assign a Taiwan Intellectual Property Office technical examiner to provide advice on technical issues, high-quality judgments can be expected. To date, the IP Court has 14 experienced judges, some of whom have a technical background.

Q: Are validity and infringement dealt with together in proceedings?

Yes. In the patent infringement lawsuit, the defendant can raise an invalidity defence and the court will determine whether the patent at issue is invalid or not in the judgment. However, unlike in the administrative proceeding, the invalidity determined by the civil court does not have in rem effect and can only be used against the parties in the lawsuit.

Q: Who may represent parties engaged in a dispute?

To protect the citizen’s right to litigate under Article 16 of the Constitution, and to reduce the cost of the civil lawsuit, the parties in the first and second instance are not required by law to engage lawyers to represent them. However, as the third-instance court (the Supreme Court) deals only with matters of law, the parties must engage lawyers to represent them.

Q: To what extent is forum selection possible in your jurisdiction?

The forum can be determined by various factors (eg, the domicile of the defendant and the place of infringement). However, since the geographical landscape of Taiwan is limited, parties in a patent litigation rarely do forum shopping and the IP Court is the best option because the IP judges are more experienced and some possess a technical background.

Q: To what extent is pre-trial discovery permitted?

There is no discovery proceeding under the local legal system. In principle, a patentee must collect evidence itself. However, a motion for pre-trial discovery may be granted if the patentee can prove that such discovery is necessary for preserving evidence and there is an emergent situation.

Q: To what extent is evidence written and oral at proceedings?

In a standard patent litigation proceeding, after receiving the first briefs submitted by both parties, the court will schedule a preparatory hearing for arranging matters disputed by both parties and deciding on the evidence that is to be investigated. Subsequently, the court will schedule three to five oral hearings, in which the court will hear both parties’ arguments, express the judge’s initial opinion on the matters in dispute, and investigate evidence. Both parties may also submit written briefs making arguments in the proceeding.

Q: What role, if any, can expert witnesses play?

The court may assign technical examiners who may express their opinions on technological matters for the judge’s reference. If both parties are dissatisfied with the technical examiners’ opinions, they may engage their own expert witnesses. The expert witnesses may produce expert reports and attend the hearing to address their opinions for the judge’s further reference.

Q: Is the doctrine of equivalents applied by courts in your jurisdiction and, if so, what form does it take?

Yes, the doctrine of equivalents may be applied by courts.

The tripartite test is popularly used to determine infringement under the doctrine of equivalents. An accused product or method is found to be infringing if it employs substantively the same ‘way’ to achieve substantively the same ‘function’ and therefore to yield substantively the same ‘result’.

For chemical and biological inventions, the ‘insubstantial difference test’ is instead encouraged, which suggests that a product or method is found to be infringing if a replacement for a corresponding technical element is known to a person having ordinary skill in the art at the time of infringement and the resulting function is also substantially the same.

Defences against infringement under the doctrine of equivalents include prosecution history estoppel, prior art defence and the disclosure-dedication rule, among others.

Q: Are there problems in enforcing certain types of patent relating to, for example, biotechnology, business methods or software?

In evidentiary practice, it is easier to enforce an apparatus claim than a method claim. As an apparatus claim embodies a product, infringement may be immediately asserted by physically presenting the product as evidence. To prove infringement on a claimed method, each and all steps performed by the accused party must be demonstrated, meaning that such evidence is generally difficult to collect.

Allowable types of apparatus claim for software-related inventions are equipment and systems, computer-readable media and computer program products. By obtaining physical storage hardware, which includes software able to execute the steps of the instructions as recited in the patent claim, the software patent may be enforced.

A means-plus-function claim may prove weak in claims construction. In general, an element provided in the form of ‘a means for’ is interpreted narrowly to include the examples described in the patent specification, rather than being expanded to include equivalent scope.

Pharmaceutical patent terms are sometimes extended to make up the non-enforceable time period owing to the time spent on the application for market approval. During the patent’s extended term, enforceability is limited to the verbal scope where the patent claims and the indications specified in the market approval overlap.

Q: To what extent are courts obliged to consider previous cases that have covered issues similar to those pertaining to a dispute?

As Taiwan has a civil law rather than common law system, the courts are not legally bound by precedent. However, the judges generally respect precedent to avoid their judgments being vacated by the superior court.

Q: To what extent are courts willing to consider the way in which the same or similar cases have been dealt with in other jurisdictions? Are decisions from some jurisdictions more persuasive than those from others?

The IP Court judges are willing to consider foreign case law, especially when there is no local precedent. Decisions from the United States, Japan and Europe tend to be of referential value.

Q: What realistic options are available to defendants seeking to delay a case? How might a plaintiff counter these?

In a patent infringement lawsuit, most of the defendants will raise an invalidity defence. Since the civil court can determine the invalidity issue by itself, the defendants cannot delay the case by raising an invalidity defence. However, some defendants may try to delay a case by challenging the authenticity of the plaintiff’s documents, raising various arguments on trivial matters or asking for suspension of the hearing with various excuses (eg, sickness or staying abroad). The plaintiff may request that the court disregard the defendant’s frivolous arguments and motion for a default judgment if the defendant keeps making excuses for not attending the hearing.

Q: Under what circumstances, if any, will a court consider granting a preliminary injunction? How often does this happen?

The patentees may consider filing a motion for preliminary injunction order when they wish to stop the infringement as soon as possible. After the patentee files the motion, unless the patentee can persuade the court that it is necessary to make the decision without notifying the asserted infringer, the court will generally schedule an inter partes hearing in which the patentee must elaborate on the necessity of the preliminary injunction. To determine whether to grant a preliminary injunction, the court will consider whether:

  • the plaintiff has suffered irreparable harm;
  • the remedies available at law, such as monetary damages, are inadequate to compensate for the injury;
  • the remedy in equity is warranted on consideration of the balance of hardships between the plaintiff and defendant; and
  • the preliminary injunction being sought would harm the public interest (in the past five years, the average grant rate of preliminary injunction has been around 57%).

Q: What is the realistic timescale to get a decision at first instance from the initiation of proceedings?

On average, it takes about seven months.

Q: How much should a litigant budget for in order to take a case through to a decision at first instance?

It depends on the complexity of the case. In general, it takes about US$30,000 to US$50,000 in the first or second instance for a normal patent infringement case.

Q: To what extent are the winning party’s costs recoverable from the losing party?

The successful party can acquire the damages awarded by the court and recover the court fees. Regarding the attorneys’ fees, in general the successful party cannot recover the attorneys’ fees for the first and second instances where the parties are not obliged to engage lawyers as their representatives. However, since the parties must engage lawyers to represent them in the Supreme Court, the successful party may recover reasonable attorneys’ fees determined by the Supreme Court (usually a nominal amount between US$1,500 and US$2,500) from the losing party.

Q: What remedies are available to a successful plaintiff?

The remedies include:

  • a permanent injunction order;
  • damages;
  • court fees;
  • destruction of infringing products; and
  • the publication of an apology in the newspaper.

Q: How are damages awards calculated?

According to Article 97 of the Patent Act, damages can be calculated in one of the following ways:

  • damage suffered and lost profit – if no method of proof can be produced to prove the damages suffered, a patentee may claim damages based on the difference between the profit earned through patent exploitation after infringement and the profit normally expected through exploitation of the same patent;
  • the profit earned by the infringer as a result of patent infringement;
  • the amount calculated based on reasonable royalties that may be collected from exploiting the invention patent being licensed; or
  • punitive damages up to three times the proven loss if the infringement is proven to be wilful.

Q: Under what circumstances will courts grant permanent injunctions?

The court will grant permanent injunctions as long as the infringement is found by the court, unless the patent has expired when the court issues the judgment.

Q: Does the losing party at first instance have an automatic right of appeal?

The losing party may appeal within 15 days after receipt of the first-instance judgment.

Q: How long does it typically take for the appellate decision to be handed down?

On average, it takes about seven months for the appellate court to render a decision.

Q: Is it possible to take cases beyond the second instance?

Yes, as long as the amount is more than NT$1.5 million (approximately US$50,000).

Q: To what extent do the courts in your jurisdiction have a reputation for being pro-patentee?

According to the statistics, between 2008 and 2018, the average winning rate of a patentee was 13.62%. One of the reasons for such a low winning rate is that the patents enforced are likely to be held invalid by the court if the defendant raises an invalidity defence. For example, 72.6% of the invention patents at issue are held to be invalid by the IP court.

Q: Are there other fora outside the court system in which it is possible to assert patents in your jurisdiction? If so, under what circumstances might it be appropriate to use them?

No.

Q: Are there any other issues relating to the enforcement system in your country that you would like to raise?

No.

Tsai, Lee & Chen Patent Attorneys & Attorneys at Law

11th Floor,148 Songjiang Road

Taipei 104

Taiwan

Tel +886 2 2564 2565

Fax +886 2 2562 7650

Web http://www.tsailee.com

Crystal J Chen

Partner

[email protected]

Crystal J Chen is a partner at Tsai, Lee & Chen. In her more than 20 years of practice she has covered all areas of IP law, including trademark prosecution and litigation, advising on patent law, anti-counterfeiting and infringement actions, as well as trade dress protection under the Fair Trade Act.

Ms Chen has been admitted to the Chinese National Bar and the New York State Bar. She was the chair of delegates for independent members of the International Association for the Protection of Intellectual Property (AIPPI) and is now a member of the AIPPI Statutory Committee. She has also contributed to various IP conferences as a speaker or moderator.

Nick JC Lan

Attorney at law

[email protected]

Nick JC Lan is an associate attorney in the legal department of Tsai, Lee & Chen. He has been practising IP law for 10 years. He specialises in applications and registration of copyrights, due diligence for enforcement and legal consultation related to copyright, patent, trademark and unfair competition, as well as various contract reviews.

Mr Lan has an LLM in IP law from the University of Washington and an LLM from National Cheng Kung University. He is admitted to the New York State and is a member of New York Bar Association.