Formosa Transnational - Taiwan
Whether to introduce contributory infringement into the Patent Act has long been disputed in Taiwan. In 2009 the Taiwan Intellectual Property Office (TIPO) proposed a draft amendment to the Patent Act concerning contributory infringement. The draft was widely discussed, and while patent owners welcomed such an amendment, the draft was criticised for its strict legal requirements, which made contributory infringement under the proposed Patent Act hard to establish. Industry players offered further criticism, arguing that introducing contributory infringement into the Patent Act would adversely affect industries in Taiwan. Given that the Taiwan Intellectual Property Court (TIPC) was established in 2008, its capability to correctly and properly apply the legal requirements of a claim of contributory infringement was highly doubted. The proposed amendment regarding contributory infringement was not included in the amendment of the Patent Act promulgated in 2011, which was the biggest amendment to the Patent Act since 2003.
Despite the absence of contributory infringment in the Patent Act, it is still possible for rights holders to claim against infringers for contributory infringement under the Civil Code. Under the tort, the prerequisite for contributory infringement is a finding of direct infringement. Further, the intention of the alleged contributory infringer must be reviewed.
Since 2008 the TIPC has rendered certain judgments regarding contributory infringement in patent litigation. The court tends to admit that contributory infringement can exist subject to certain legal requirements. However, due to multiple reasons – including burden of proof, arguments as to whether the accused element is a core element in the patent claim and whether it has an ordinarily non-infringing use, as well as issues regarding damage calculation, remedies and (especially) patent validity – there are still no clear and firm opinions from Taiwanese courts concerning contributory infringement in patent litigation.
TIPO is once again considering whether contributory infringement should be introduced into the Patent Act. In order to form its policy on the issue, TIPO held a meeting on October 30 2017 in which industry representatives were asked to comment on contributory infringement. The opinions expressed in the meeting included the following:
- Contributory infringement is necessary, but there is no need to make contributory infringement dependent on direct infringement – this can be resolved by appropriate claim drafting.
- It is unnecessary to consider patent owners’ needs in order to maintain customer relationships and to adopt contributory infringement in order to allow the patent owner to sue competitors without suing customers first – the difficulty of suing competitors without suing customers is a result of poor patent claim drafting.
- Contributory infringement should be introduced in order to discourage the intentional ‘design around’ of a patent by setting up different legal entities, each to conduct part of a patent claim. However, if such intentional design around is sustained, the problem stems from the lack of patentability of each part of a patent claim, which cannot be independently patented. On the other hand, if each part of a patent claim is eligible for an independent patent but the inventor chooses not to file a patent for the same, the patent owner will not be allowed to expand its rights by asserting contributory infringement.
- Liability risk for contributory infringement is detrimental to many small to medium-sized businesses in Taiwan, particularly considering the fact that many companies in Taiwan are original equipment manufacturers or original design manufacturers which simply accept customers’ orders and instructions without evaluating the risk of patent infringement.
- It is practically impossible to conduct a thorough patent search in order to avoid concerns of patent infringement for component or equipment manufacturers. A component may serve various cross-technology purposes. On the other hand, equipment may contain numerous components. Imposing unreasonable legal risks on manufacturers cannot be justified.
- The theory of joint tort is sufficient.
- The risks of patent right misuse cannot be overlooked.
- Patent owners need to introduce contributory infringement in order to harmonise the patent legal system with global legal trends.
- Inventors commonly have global patent filing policies – there is no ground for a Taiwanese patent owner to claim for contributory infringement in foreign jurisdictions while not pursuing these avenues in its home country.
- The difficulties surrounding the assertion of contributory infringement are not necessarily the result of the need to maintain customer relationships; they may derive from the specialty of the patented technology, such as mobile-related technology, which often requires more than one entity to enforce the whole patent claim.
- Lack of legal sense is not an excuse – small to medium-sized businesses must be educated. A better IP protection legal regime is beneficial to the improvement of Taiwan’s industries.
- The tort under the Civil Code is insufficient due to its legal requirements – patent infringement has a unique character and the need for contributory infringement must be considered.
- The Judicial Yuan (the highest judicial power in Taiwan) was concerned with TIPO’s proposed amendments to the Patent Act with regard to contributory infringement, because the draft contains vague legal terms without clear definitions.
- If TIPO chooses to introduce contributory infringement in the Patent Act, its decision must be supported by a reliable and prudent cross-jurisdiction study.
Other discussions, concerns and ideas exchanged during TIPO’s meeting included whether contributory infringement will apply only to apparatus patents or will apply to patents concerning methods, software, systems and other types of patent as well.
TIPO will consider these opinions and ensure that they are sufficiently discussed among the patent community and relevant industries before and if it makes a new proposal.
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