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In Taiwan, the primary legal framework governing patents is the Patent Act, which establishes the substantive law concerning patentable subject matter, eligibility criteria, application procedures, and liabilities and remedies arising from patent infringement. Additionally, the Intellectual Property Case Adjudication Act (IPCAA), along with the Code of Civil Procedure and the Administrative Litigation Act, provides the procedural rules applicable to the resolution of patent disputes in both civil and administrative litigation.

Types, criteria, ownership

Patents protected under the Patent Act are categorised into invention patents, utility model patents and design patents, and are required to meet three fundamental criteria: industrial applicability; novelty; and non-obviousness.

Patent terms are 20 years for invention patents, 10 years for utility models, and 15 years for design patents, all calculated from the application filing date. Patent rights are enforceable only after the patent is granted.

Invention patents protect creations based on technical ideas utilising natural laws and are subject to a stringent non-obviousness standard, requiring a significant inventive step. Utility model patents cover innovations in the shape, structure or configuration of an article that improves its function or efficiency. Design patents protect the aesthetic features of an article (such as shape, pattern or colour) that enhance its visual appeal, perceived quality and market competitiveness.

Regarding ownership, unless otherwise agreed by the parties, the right to apply for patents and the resulting patent right for inventions, utility models or designs developed by employees while performing their duties belong to the employer. Although the employer must provide reasonable remuneration to the employee for such inventions, the Intellectual Property and Commercial Court (IP Court) has clarified that such payment obligation does not constitute a condition or consideration for the employer’s acquisition of patent rights.

Enforcement, infringement, remedies

Patent rights and enforcement. Under article 58 of the Patent Act, the patentee has exclusive rights to manufacture, sell, use or import the patented product. For method patents, these rights also extend to the use of the patented method, as well as the use, sale or importation of articles directly obtained from such use.

However, since utility model patents are granted without substantive examination, the holders are required to obtain a favourable technical examination report from the Taiwan Intellectual Property Office (TIPO) under articles 116 and 117 of the Patent Act before patent rights can be enforced. Failure to do so may expose the patent holder to liability for damages incurred by an alleged infringer if the utility model patent is later invalidated.

Determination of patent infringement. Patent infringement is primarily determined based on two principles: literal infringement; and the doctrine of equivalents. Literal infringement occurs if the accused product or process meets every technical limitation in the patent claims. If such limitations are not met, the doctrine of equivalents may apply, under which infringement may be determined if the accused product performs substantially the same function, in substantially the same way, to achieve substantially the same result as the claimed invention.

Legal remedies for patent infringement. Pursuant to articles 96 and 97 of the Patent Act, in case of patent infringement, the patentee or the exclusive licensee is entitled to seek injunctive relief (including the destruction or other appropriate disposition of the infringing products, as well as the materials used in the infringing activities) and monetary damages.

Regarding the calculation of damages, the patentee (or the exclusive licensee) may elect one of the following methods:

1. 1. The amount of the damages and lost profit of a patentee (or the exclusive licensee);
   2. The amount of the infringer’s profits attributable to the infringement; or
   3. An amount based on reasonable royalties that could have been collected from licensing the patented invention. Punitive damages may be awarded if the infringement is found to be intentional. The awarded amount (actual damage plus punitive damage) can be as much as three times the proven damages.

Litigation

Patent invalidation and administrative litigation. Once a patent right has been granted, any person or interested party who believes that the patent was improperly granted may, pursuant to the Patent Act, file a petition for patent invalidation with the TIPO. If, on examination, the petition is determined to be well-founded, the patent right shall be revoked and deemed void from the beginning. Any party dissatisfied with the TIPO’s decision may seek relief by filing an administrative appeal, followed by administrative litigation before the IP court.

Patent infringement lawsuit.

1. 1. Forums for patent infringement litigation. Taiwan courts can exercise jurisdiction if either the infringement or its effects occur within Taiwan. The IP court has exclusive jurisdiction over patent infringement lawsuits, except in instances where jurisdiction is conferred by the mutual or implied consent of the parties.
   2. Filing of lawsuits. According to paragraph 6, article 96 of the Patent Act, patent infringement claims must be filed within two years of discovery of the infringement and the identity of the offender, or within 10 years of the act, whichever is earlier.
   3. Interim remedies for civil litigation. Interim remedies available in patent infringement litigation pursuant to the Code of Civil Procedure and the IPCAA include provisional attachment, provisional disposition, and preliminary injunctions. Such interim remedies aim to preserve the plaintiff’s claims, ensure future execution, or maintain the status quo of the disputed legal relationship until a final judgment is rendered. For preliminary injunctions, the IP court considers the factors similar to the
      “four-factor test” established by the US Supreme Court in eBay Inc v MercExchange LLC (2006).
   4. Trial procedures. Courts typically conduct multiple preparatory hearings, during which the parties may present arguments, submit evidence, clarify issues, and examine witnesses. Following these sessions, the judge will schedule an oral hearing and subsequently issue a judgment. The court generally rules independently on the validity of the patent without staying the procedure to wait for the TIPO’s validity determination.
   5. Evidence collection and investigation. At trial, the IP court may appoint a technical examination officer to assist the judge in resolving technical issues involved in the case. Although such officers may provide opinions, prepare reports and question the parties involved, their statements do not constitute evidence and cannot be relied on as proof of the facts at issue. The parties bear the burden of presenting admissible evidence to satisfy the “preponderance of the evidence” standard, which requires demonstrating that the claim is more likely true than not.

Either party may request the court to appoint a neutral expert as an inspector to examine documents, devices or equip-ment held by the opposing party or third parties for evidence collection. With court approval, parties may also appoint expert witnesses to submit written opinions. The court has the authority to compel testimony, permit cross-examination of opposing experts, and order joint expert consultations and reports within set deadlines.

1. 6. Disclosure rules and restrictions. Taiwan does not adopt the discovery system. If a document is held by the opposing party or a third party, the other party can request the court to compel its production, although the court has discretion to determine the credibility of such requests. Non-compliance with an order to produce documents may lead to fines.

Under article 36 of the IPCAA, courts may, on petition of a party or a third party, issue confidentiality orders to protect trade secrets, restricting unauthorised use or disclosure by the opposing party, counsel, experts or witnesses. Violating such orders can result in criminal penalties.

The court may impose further restrictions or prohibitions on the opposing party’s access to review, copy or reproduce litigation files containing trade secrets or confidential business information of any party or third party.

1. 7. Appeal. Parties dissatisfied with the judgment of the first-instance court may file an appeal with the IP court within 20 days from the date of the judgment. Appeals from second-instance decisions to the Supreme Court are permitted solely on the grounds that the lower court’s judgment contravenes the law.

Recent developments

The TIPO has recently proposed draft amendments to the Patent Act aimed at addressing developments in digital technologies. Key changes include expanding design patent protection to cover digital images, permitting multiple similar designs to be included within a single application, and extending the grace period to 12 months, as well as relaxing the timing requirements for filing divisional applications, and eliminating ownership disputes as grounds for invalidation.

LEE AND LI, ATTORNEYS-AT-LAW
8F, No.555, Sec 4, Zhongxiao E Rd,
Taipei 11072, Taiwan, ROC
Tel: +886 2 2763 8000
5F, Science Park Life Hub, No.1,
Industry E 2nd Rd, Hsinchu Science Park,
Hsinchu 30075, Taiwan, ROC
Tel: +886 3 579 9911
Email: attorneys@leeandli.com