I FORMS OF INTELLECTUAL PROPERTY PROTECTION
As in most countries in the world, Taiwan values the protection of intellectual property rights. As a civil law country, different forms of intellectual property protection and the related protective mechanisms are codified and established mainly through the process of legislation. Since 1928 when the Copyright Act was first enacted, intellectual property protection in Taiwan has evolved and become more and more mature, in order to be in line with the updated developments and global trends in the field. In particular, after Taiwan joined the World Trade Organization in 2002, the Patent Act has been amended several times following the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Taiwan has also entered into agreements with Japan, Korea, Spain and the US for the Patent Prosecution Highway, facilitating and accelerating the examination process if prosecution has been filed in any the listed countries. In terms of cross-strait intellectual property protection, Taiwan and China have agreed to mutually recognise the respective rights of priority.
Today, there are four acts that, collectively, play an essential role and provide the major protection for intellectual property in Taiwan: the Patent Act, the Trademark Act, the Copyright Act and the Trade Secrets Act.
Under the Patent Act, three types of patents (invention patent, utility model patent and design patent) are protected. For an invention patent, because a substantive examination is required and the validity is somehow verified upon approval, this kind of patent has, generally speaking, greater value than a utility model patent, which only needs to be reviewed through formal examination if there is a creation of technical ideas relating to the shape or structure of an article or combination of articles. With regard to a design patent, a substantive examination is also required but it merely covers those creations made in respect of the shape, pattern, colour or any combination thereof. In practice, it would take approximately three years for the examination of an invention patent; while the first Office Action would normally be issued within 19 months of the filing date. The substantive examination for a design patent, on the other hand, takes much less time (nine months on average), while the formal examination for a utility model patent can usually be concluded within six months.
Trademark is another right that requires registration with the competent authority before effectuating any legal protection. Currently, any sign with distinctiveness can be protected as a trademark, not limited to those specifically identified in the Trademark Act, which may, for example, consist of words, devices, symbols, colours, 3D shapes, motions, holograms, sounds or any combination thereof. By reference to the Singapore Treaty on the Law of Trademarks, the Taiwan Trademark Act has adapted and expanded its protection over those unconventional forms of signs.
In terms of copyright protection, essentially any creation with originality can be regarded as a work under the Copyright Act, which may include oral and literary works, musical works, dramatic and choreographic works, artistic works, photographic works, pictorial and graphical works, audiovisual works, sound recordings, architectural works and computer programs. The author of a work shall enjoy copyright upon completion of the work; no registration is required. A similar mechanism is provided for a trade secret. Under the Trade Secret Act, any method, technique, process, formula, program, design or other information that may be used in the course of production, sales or operations could be protected as a trade secret, as long as it is not known to persons generally involved in the information of this type; it has economic value, actual or potential, owing to its secretive nature; and its owner has taken reasonable measures to maintain its secrecy.
In addition to the above, Taiwan has enacted laws to protect plant variety and plant seed right and integrated circuit layout right. The former is for the protection and development of Taiwan's most traditional industry, agriculture; while the latter provides an independent protection particularly for Taiwan's economic pillar, the semiconductor industry.
II RECENT DEVELOPMENTS
One of the most important developments in patent protection was the amendment of the Patent Act in 2013, which adopted ‘continuation of rights'.
As discussed in Section I, supra, the examination for an invention patent takes a much longer time; therefore, it is very common for an applicant to file a patent application for invention and a patent application for utility model for the same creation on the same date, so that he or she can expect to be protected as soon as possible with the grant of the utility model patent first. However, in the past, if an approval decision on the patent application for invention is later rendered, the applicant had to make a selection, and if he or she chose the invention patent, the utility model patent right (already granted) was deemed to be non-existent from the beginning. This has caused a lot of disputes, owing to the fact that, for example, the utility model patent might have been licensed in the intervening time. Moreover, if a patentee had initiated an infringement lawsuit based on the utility model patent, he or she would face a dilemma in whether to select the more valuable invention patent and give up the lawsuit, or keep the utility model patent and continue enforcing his or her right. There is likely to be a degree of unfairness in this scenario, and scholars and practitioners heavily criticised this enactment.
In 2013, Article 32, Paragraph 2 of the Patent Act was amended, and reads ‘[W]here the applicant selects the patent application for invention according to the provision set forth in the preceding paragraph, the utility model patent right shall become extinguished on the publication date of the invention patent.' This new continuation of rights provides an uninterrupted protection. However, an applicant filing a patent application for invention and a patent application for utility model for the same creation shall make respective declarations in respect of the said applications; otherwise the patent application for invention will not be granted.
Another interesting development in copyright practice is that the Taiwan Intellectual Property Court (TIPC), in its recent decisions,2 recognised that pornography can be copyrighted, provided such work has originality. These judgments changed the long-lasting opinion set by the Supreme Court in 1999, which excluded pornography from the definition of ‘works' under the Copyright Act. The TIPC's new opinion enhances the protection for creativity and conforms to the TRIPS Agreement.
III OBTAINING PROTECTION
As discussed in Section I, supra, there are different forms of protection and each of them has a different nature and focuses on different subject matter that can be protected.
For an invention patent, in general, a creation of technical ideas, utilising the laws of nature and that is industrially applicable, may be granted a patent upon application in accordance with the Patent Act, except where: the invention was disclosed in a printed publication prior to the filing of the patent application; the invention was publicly exploited prior to the filing of the patent application; the invention was publicly known prior to the filing of the patent application; or the invention can easily be made by a person ordinarily skilled in the art based on prior art.
Based on the above definition, computer software itself (generally a program composed by a person applying mathematical or scientific principles) that does not utilise the laws of nature, cannot be patented. Nonetheless, an invention, involving computer software, may be granted a patent, as a whole, as long as it is related to technicality and is industrially applicable. On the other hand, a creation of computer software may be protected under the Copyright Act, provided such work is original. This may serve as an alternative, and more importantly as an incentive, for computer programmers to protect and to explore their creativity. As for business methods, such methods, even though being innovative, are fundamentally derived from social or economic principles, experiences or other man-made rules. Since they are not utilising the laws of nature, business methods are not patentable in Taiwan.
Notwithstanding the foregoing, there are statutory exclusions: an invention in respect of (1) animals, plants, and essential biological processes for the production of animals or plants, except for processes for producing microorganisms; (2) diagnostic, therapeutic and surgical methods for the treatment of humans or animals; or (3) inventions contrary to public order or morality, shall not be granted a patent. Among the exclusions, an invention of essential biological processes for the production of plants, creating a new variety of plant, may be otherwise protected and granted a plant variety right, despite the fact that it is specifically excluded from the protection of a patent.
In the following paragraphs, some important aspects of Taiwan patent protection are elaborated on.
i Length of protection
The term of an invention patent shall expire after a period of 20 years from the filing date of the application, while the terms of utility model patents and design patents are 10 years and 12 years, respectively, from the filing date of the application.
ii Grace period
According to the Patent Act, any of the following events shall not be deemed as one of the circumstances3 that may preclude the grant of an invention patent, provided that the concerned patent application is filed within six months of the date of the event's occurrence: the invention concerned was publicly disclosed as a result of conducting a test; the invention was disclosed in a printed publication; the invention was displayed at an exhibition or recognised by the government; or the invention was disclosed without the consent of the applicant. However, an applicant claiming such exemption must state the fact and the relevant date in the patent application at the time of filing and provide documents of proof within the time period specified by the specific patent agency; otherwise that person cannot enjoy such grace period provided by law. Congress passed the amendment of the extending grace period from six months to 12 months at the end of 2016; the amendment entered into force on 1 May 2017.
iii Special patent filing procedure
It is acceptable that an application can be first prepared and filed in a foreign language. A foreign applicant would normally take this approach in order to get the earliest filing date as he or she possibly can. However, since Mandarin Chinese is still the official language in Taiwan, a Chinese version must be supplemented within a certain period of time. For an application of an invention patent or a design patent, a Chinese version must be filed within four months of the application date, while for a utility model patent an applicant only has two months. Upon request, the specific patent agency - the Taiwan Intellectual Property Office (TIPO) - can extend the above-mentioned deadlines by up to six months. However, applicants must provide the Chinese version before the due date or he or she will lose the benefit of the original filing date.
iv Border measures
A patentee may request Customs to detain the imported articles that are suspected of infringing the patent rights. The request shall be made in writing, accompanied by the preliminary showing of the facts of infringement and a security amounting to the duty-paid price of the imported articles, as assessed by Customs, or equivalent assurance. If the request is so accepted by Customs, such patentee must bring a civil lawsuit claiming that the detained articles infringe the patent rights and notify Customs of the same within 12 days following the date of Customs' acceptance of the request, otherwise the detention will be repealed by Customs. For the owner of the detained articles, he or she may provide a security amounting to double the security provided by the patentee or equivalent assurance, requesting Customs to repeal the detention. This mechanism is designed to save the power for the court to finally determine whether there is an infringement or not.
IV ENFORCEMENT OF RIGHTS
i Possible venues for enforcement
The TIPC was established on 1 July 2008. The jurisdiction of this court includes:
- a first instance and second instance of a civil action for the protection of intellectual property rights and interests under the Patent Act, Trademark Act, Copyright Act, Optical Disk Act, Trade Secrets Act, Regulations Governing the Protection of Integrated Circuits Configuration, Species of Plants and Seedling Act, and Fair Trade Act;
- b an appeal of the first instance decision of a criminal action rendered by a district court in an ordinary, summary or settlement proceedings (criminal actions involving juveniles shall be excluded) involving offences under Articles 253 to 255, 317 and 318 of the Criminal Code; violation of the Trademark Act or Copyright Act; violation of Article 35, Paragraph 1 of the Fair Trade Act concerning violation of Article 20, Paragraph 1 or Article 36 of the Fair Trade Act; or concerning violation of Article 19, subparagraph 5 of the Fair Trade Act;
- c first instance of an administrative action and a compulsory enforcement action concerning intellectual property rights under the Patent Act, Trademark Act, Copyright Act, Optical Disk Act, Regulations Governing the Protection of Integrated Circuits Configuration, Species of Plants and Seedling Act and Fair Trade Act; and
- d other cases prescribed by law or determined by the Judicial Yuan to be within the jurisdiction of the TIPC.
ii Requirements for jurisdiction and venue
There is only one intellectual property court in Taiwan; therefore, for the cases specified in subsection i, supra, the TIPC has subject-matter jurisdiction. However, such subject-matter jurisdiction is not exclusive; taking civil cases as an example, it is acceptable that the parties may enter into an agreement selecting a district court to hear an IP-related case, or the plaintiff can, without an agreement, unilaterally decide to initiate a civil action before a district court, as long as such district court has personal or subject-matter jurisdiction over the case based on Taiwan Code of Civil Procedure.
Nonetheless, in practice, because the TIPC is staffed with a technical examination officer, who has a technical background and can advise the court on technique-related issues, people may decide to submit their case to the TIPC for dispute resolution relating to intellectual property.
It is worth mentioning that, in Taiwan, when enforcing intellectual property rights by means of a civil action, according to the Taiwan Code of Civil Procedure and the relevant regulations, the plaintiff shall advance the court fee of the first instance, which is calculated based on the value of the claim. Generally speaking, the greater the amount of money the plaintiff claims, the more he or she has to advance to the court upon filing the lawsuit. Notably, if the plaintiff is foreign, without any asset or place of business in Taiwan, upon the defendant's motion and if so granted by the court, the plaintiff will be asked to provide a security covering the court fees of the second and third instances and other litigation expenses determined by the court. This cost issue is something a patentee should have taken into consideration before enforcing rights in Taiwan.
As for the defence side, one of the most important strategies is to argue that the intellectual property right at issue is invalid. Taking patent litigation as example, there are two approaches: one is through invalidation action independently brought before the TIPO; the other is making an argument in the infringement litigation, alleging the patent right at issue should be revoked. These two approaches can be taken in parallel, but their legal effects are totally different.
In terms of the invalidation action, if it is considered well grounded, the patent right will be revoked. Revocation of a patent right shall become final and binding where no administrative remedy proceedings are filed in accordance with laws; or where administrative remedy proceedings are filed but dismissed finally and bindingly. When a patent is revoked finally and bindingly, the effect of patent right shall be deemed not to have existed.
As outlined, the entire process for a patent right to be finally revoked takes time, maybe years. It would be unfair if an infringement litigation should stay before the revocation decision becomes final and binding. Therefore, in an infringement litigation, when the defendant raises an argument that the patent right at issue should be revoked, the court shall decide based on the merit of the case, not staying the case even if an invalidation action had been initiated and not necessarily bound by the TIPO's revocation decision, if any, as long as it is still not final or binding. Where the court has recognised the grounds for revocation of a patent right, the plaintiff shall not claim any rights during the civil action against the defendant. However, such decision only applies to each particular case and theoretically, the TIPO is not bound by the court's decision. However, in practice, when the TIPC makes a decision invalidating a patent right, the TIPO will be more or less ‘influenced' by such decision and vice versa.
iii Obtaining relevant evidence of infringement and discovery
There is no discovery in the Taiwanese legal system. The plaintiff who needs to obtain relevant evidence can only motion for preservation of evidence or request the court to order the holder of documents or objects to submit the same to the court, in accordance with the Taiwan Code of Civil Procedure and Intellectual Property Case Adjudication Act.
A motion for preservation of evidence can either be made before or after an action has been initiated. Where no action has been initiated, such motion shall be made to the court where the action is to be brought; where the action has been initiated, the same shall be made to the court where the action is pending. When preservation of evidence is ordered, the court may inspect, examine or preserve documentary evidence, and it may order a technical examination officer to execute his or her duties on site. Where an opposing party has no grounds to refuse an order of preservation of evidence, the court may enforce such order by force, but only to the extent necessary, and may request assistance from the police to execute such order if it is required. Considering that patentees in Taiwan are facing difficulties in collecting evidence, especially for an infringement of a method claim, the TIPC has become more willing to grant such motion, as provided in Article 368 of Taiwan Code of Civil Procedure, which reads:
[W]here it is likely that evidence may be destroyed or its use in court may be difficult, or with the consent of the opposing party, the party may move the court for perpetuation of such evidence; where necessary, the party who has legal interests in ascertaining the status quo of a matter or object may move for expert testimony, inspection or perpetuation of documentary evidence.
As for requesting the court to order the holder of documents or objects to submit the same to the court, if so granted, such order is enforceable and the court may impose a penalty of not more than NT$30,000 upon such holder who refuses to submit the document or object to the court. The court may also order such holder be subject to enforcement. Provisions of the Taiwan Compulsory Execution Act concerning mandatory submission of documents or objects for inspection shall apply mutatis mutandis to such enforcement.
Correspondingly, in order to balance the protection of secrecy, there are complementary measures. Article 11 of Intellectual Property Case Adjudication Act provides:
[W]here any one of the following situations occurs with respect to trade secrets held by a party or a third party, the court may, upon motion along with preliminary proof by such party or third party, issue a confidentiality preservation order upon the other party, agent, assistant ad litem, or other related party to the action: (1) Contents of a party's pleadings disclose its own trade secrets or those of a third party, or evidence-taking that has been or is to be made involves trade secrets of a party or a third party. (2) Limitation on discovery or use is required so as to prevent the discovery or use of the trade secrets in the preceding paragraph being intended for purposes other than those related to the case, and there are concerns of obstruction to the party's or the third party's business operation as a result of the disclosure of the trade secrets. The preceding paragraph does not apply where the other party, agent, assistant ad litem, or other related party has obtained or possessed such trade secrets through means other than the document review or evidence-taking prescribed in the Paragraph 1 of the preceding paragraph. The person subject to a confidentiality preservation order shall not use the trade secrets for purposes other than those related to the case, nor shall he disclose said trade secrets to those not subject to the order.
iv Trial decision-maker
In Taiwan, trials are decided by the judges. For civil and criminal actions, a case will be decided by a single judge for the first instance, a panel of three judges for the second instance and a panel of five judges for the third instance, respectively. As for administrative litigation, a panel of three judges will decide the case for the first instance, while in the second instance (final instance in administrative litigation) there will be five judges constituting a panel.
The TIPC is staffed with a technical examination officer who can, as requested by the court, ask questions or explain to the parties pertaining to factual and legal issues based on the professional knowledge, in order to clarify the disputes in action; ask questions directly to witnesses or expert witnesses; state opinions on the case to the judge; assist in evidence-taking in the event of preservation of evidence; and assist in injunctive procedures or compulsory enforcement procedures. The court may also, where necessary and on its own initiative, consult an expert in the field.
v Structure of the trial
In the TIPC, an infringement action will first go through a formality examination. One of the major issues here is the determination of the value of the claims that will be the basis for the calculation of court fees. After the formality is confirmed, the case will be assigned to the judge who will actually hear the case in substance. The judge will decide how to proceed and the normal practice is that hearings will be set forth as many times as the judge deems necessary.
In the trial, the person who bears the burden of proof is always critical. Generally, the party making an assertion shall bear the burden of proof that such assertion is true. Therefore, in infringement cases, the plaintiff bears the burden of proof for issues such as whether there was infringement and how much the damage was. Likewise, the defendant who argues that the right at issue is invalid bears the burden of proof that the right should be cancelled or revoked.
As an exception, where an article produced following a manufacturing process is still unknown within and outside Taiwan before the filing of a patent application for the manufacturing process, another article identical thereto made by another person shall be presumed to have been produced following the said manufacturing process. Such presumption may be rebutted by providing proof to the contrary. A proof made by the defendant that the process used in manufacturing the article at issue is different from the patented process shall be deemed as proof to the contrary.
There is no Markman hearing in Taiwan. For patent infringement cases, the court will, at its sole discretion, interpret and determine the scope of the claims in trial. According to Article 58, Paragraph 4 of the Patent Act, the scope of the protection conferred by an invention patent shall be determined by the claims, and the description and drawings may be considered as a reference when interpreting the claims. When the scope is determined, the court will decide whether the claims can read on the alleged infringing product, and if not, the doctrine of equivalents applies, which shall be subject to estoppel, prior art and other limitations.
In addition to initiating an independent invalidation action, possible defences in patent infringement litigation are, for example:
- a the patent at issue lacks novelty, non-obviousness or industrial applicability;
- b the description does not disclose, in full, the invention in a manner clear and sufficient for it to be understood and carried out by a person ordinarily skilled in the art;
- c the claim is not disclosed in a clear and concise manner or cannot be supported by the description;
- d the limitation of patent right as provided in Article 59 of the Patent Act;4
- e the alleged infringing product does not fall within the scope of the patent; and
- f there is no damage or the damage cannot be proved.
viii Time to first-level decision
By reference to the Guidelines on the Deadlines for Courts Handling Cases, a civil or criminal case for the first instance is expected to be closed within one year and four months; any delay should be reported.
A patentee of an invention patent may demand a person who infringes or is likely to infringe the patent right to stop or prevent such infringement, at the same time requesting destruction of the infringing articles or the materials or implements used in the infringing act, or other necessary disposal. Where the inventor's right to be indicated as such is infringed, the inventor may request for necessary disposition to have his or her name indicated or to restore the impaired reputation.
In the event infringement of an invention patent occurs because of an intentional act or negligence, the patentee may claim for damages suffered therefrom. The damages claimed may be calculated according to any of the following methods:
- a the method as set forth in Article 216 of the Civil Code (the damages actually suffered and the interests that have been lost) - 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;
- b the profit earned by the infringer as a result of patent infringement; or
- c the amount calculated on the basis of reasonable royalties that may be collected from exploiting the invention patent being licensed.
Where the infringement is found to be intentionally committed, the court may, upon request and on the basis of the severity of the infringement, award damages greater than the loss suffered but not exceeding three times the proven loss.
x Appellate review
According to the Code of Civil Procedure, in principle, no additional means of attack or defence shall be presented in the second instance.5 For the third instance, the appellant can only challenge the original judgment on the ground that such judgment is in contravention of the laws and regulations, not its determination of facts.
xi Alternatives to litigation
For the accused infringer, besides defending in the litigation, an invalidation action brought before the TIPO can be a feasible alternative.
V TRENDS AND OUTLOOK
Based on the 2014 Judicial Statistics Yearbook, civil cases handled by the TIPC that the plaintiff won were very few. In the future, there may be more cases involving violation of the Trademark Act, Copyright Act or Trade Secret Act because in such cases criminal liability may be incurred, which will be a more powerful action for people to enforce their rights.
1 Edward Liu is a partner and Brian Wang is a senior associate at Chen & Lin Attorneys-at-Law.
2 See, for example, TIPC 101-Xing-Zhi-Shang-Yi-Zi-74 and 104-Xing-Zhi-Shang-Yi-Zi- 47 criminal judgments.
3 Those circumstances are (1) the invention was disclosed in a printed publication prior to the filing of the patent application; (2) the invention was publicly exploited prior to the filing of the patent application; or (3) the invention was publicly known prior to the filing of the patent application.
4 Article 59 of Patent Act provides, [T]he effects of an invention patent right shall not extend to the following circumstances:
(1) acts done privately and for non-commercial purpose(s);
(2) necessary acts to exploit the invention for research or experimental purpose(s);
(3) acts done by a person who has been exploiting the invention or making all the necessary preparations for doing such act in this country before the filing date of the invention. However, this provision shall not apply where the person has learned of the invention from the patent applicant for less than six (6) months and the patent applicant has made a statement reserving his/her right to a patent being granted;
(4) a vehicle merely passing through the territory of this country, or any device of such vehicle;
(5) where a patent granted to a person not the owner of the right to apply for a patent is revoked as a result of an invalidation action filed by the patentee, acts done by a licensee who has, prior to invalidation, been exploiting the invention or making all the necessary preparations to do such an act in good faith;
(6) where, after the sale of a patented product made by the patentee or made under consent of the patentee, using or reselling such product. The making and selling as stated above are not limited to acts done domestically; and
(7) where, after an invention patent is extinguished pursuant to Subparagraph 3, Paragraph 1 of Article 70 and before it is reinstated and published pursuant to Paragraph 2 of Article 70, acts done by a person who has been exploiting the invention or making all the necessary preparations to do such an act in good faith.
The person exploiting the invention as stated in Subparagraphs 3, 5, and 7 of the preceding paragraph, may continue such exploitation within the original business purpose(s).
A licensee as stated in Subparagraph 5 of Paragraph 1, who continues to exploit the invention after the patent is revoked, shall pay the patentee a reasonable royalty from the date of receiving a written notice from the patentee.
5 Exceptions are:
a where such additional means of attack or defence were prevented from being presented as a result of the court of first instance acting in contravention of the laws and regulations;
b where the occurrences giving rise to such additional means of attack or defence took place after the conclusion of oral argument in the court of first instance;
c where additional means of attack or defence are presented for purposes of supplementing those already presented in the first instance;
d where the occurrences giving rise to such additional means of attack or defence are generally known or known to the court in the course of performing its functions, or the court should take evidence on its own initiative with regard to such occurrences;
e where the party was unable to present such additional means of attack or defence owing to reasons not imputable to him or her; or
f where it would be manifestly unfair to prevent the party from presenting such additional means of attack or defence.