Taiwan: Patents Comparative Guide

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1 Legal framework

1.1 What are the sources of patent law in your jurisdiction?

As Taiwan is a civil law country, the Patent Law (2017) is placed at the highest level in terms of binding power within the country's patent law regime. Other important sources of law include the Enforcement Rules of the Patent Act, the Patent Examination Guidelines and the Important Notes on Patent Infringement Assessment issued by the Taiwan IP Office. The decisions of higher courts – in particular, the Supreme Court – may have a de facto binding effect on lower courts.

1.2 Who can register a patent?

Where an invention, utility model or design is made by an employee in the course of performing his or her duties, the right to apply for a patent is vested in the employer, unless there is an agreement providing otherwise. Where this application right is vested in the employer, the employer shall pay the employee reasonable remuneration.

In other circumstances, the default rule is that the application right is vested in the inventor (or the creator of a design), unless there is an agreement providing otherwise. For example, where an invention is funded, the application right is still vested in the inventor, unless the funding agreement provides otherwise.

The application right is both assignable and inheritable.

2 Rights

2.1 What rights are obtained when a patent is registered?

When a patent is issued, the patent owner will have the exclusive right to manufacture, offer for sale, sell, use or import for any of these purposes the patented article; or, where a method patent is concerned, the exclusive right to use such method/process, or to use, sell or import for any of these purposes articles made through direct use of such method/process.

2.2 How can a patent owner enforce its rights?

As far as invention patents and design patents are concerned, the Patent Law imposes no restrictions on enforcement. However, a utility model holder must first obtain a favourable technical examination report from the Taiwan IP Office before enforcing its utility model rights. A utility model holder that fails to comply with this duty will be liable to compensate the alleged infringer's damages incurred due to the enforcement of the utility model, if the utility model is ultimately invalidated. While patent marking is recommended to reduce the patent owner's burden of proving the required mental element of the defendant in asserting a damages claim (ie, that the defendant should have known that the disputed technology was patented), this is not mandatory, since other evidence is accepted to prove this mental element.

2.3 For how long are patents enforceable?

There are three types of Taiwan patents: invention patents, utility model patents and design patents. The respective patent terms are 20, 10 and 12 years, all calculated from the filing date of the patent application; while the patent rights are actionable from the issue date of the patent.

3 Obtaining a patent

3.1 Which governing body controls the registration procedure?

The Taiwan IP Office.

3.2 What is the cost of registration?

The official filing fee for an invention patent application is around US$100. If priority is claimed, roughly US$90 shall be additionally incurred.

3.3 What are the grounds to reject a patent application?

Formality issues put aside, a patent application may be rejected if it lacks industrial applicability, novelty or inventive step.

3.4 What programmes or initiatives are available to accelerate or fast track examination of patent applications?

A patent applicant can take advantage of the Accelerated Examination Programme (AEP) or the Patent Prosecution Highway Programme (PPH), as follows:

  • An AEP request may be filed under either of the following conditions:
    • A foreign counterpart has been allowed or issued; or
    • The applicant is planning to commercially practise the claimed invention.
  • To request accelerated examination under the PPH, the Taiwanese application must claim priority to a corresponding US, Japanese, Korean, Spanish or Polish application, or a Patent Cooperation Treaty application designating the United States, Japan, Korea, Spain or Poland.

3.5 Are there any types of claims or claiming formats that are not permissible in your jurisdiction (eg, medical method claims)?

A multiple dependent claim shall not serve as a basis for any other multiple dependent claims.

3.6 Are any procedural or legal mechanisms available to extend patent term (eg, adjustments for patent office delays, pharmaceutical patent term extension or supplementary protection certificates)?

Yes. An extension of patent term of a maximum of five years is possible for an invention patent that claims a pharmaceutical or agrochemical composition, a method of manufacturing the pharmaceutical or agrochemical composition, or a specific use of the pharmaceutical or agrochemical composition. Such pharmaceutical and agrochemical compositions do not include those for veterinary use.

3.7 What subject matter is patent eligible?

According to Article 24 of the Patent Law, an invention patent shall not be granted in respect of any of the following:

  • animals, plants and essential biological processes for the production of animals or plants, except for processes for producing micro-organisms;
  • diagnostic, therapeutic and surgical methods for the treatment of humans or animals; and
  • inventions that are contrary to public order or morality.

On top of the above-listed restrictions, the eligible subject matter of a patentable utility model is further limited to the shape or structure of an article or a combination of articles.

A design patent is a novel and creative design of the shape, colour or pattern, or any combination thereof, of an article, either in whole or in part, with visual appeal. Eligible subject matter of a design patent also includes computer-generated icons and graphic user interfaces applied to an article.

3.8 If the patent office does not grant a patent, is an appeal available and to whom?

Yes, an appeal is available to the Petitions and Appeals Committee of the Ministry of Economic Affairs and, after that, to the Taiwan IP Court.

4 Validity/post-grant review and/or opposition procedures

4.1 Where can the validity of an issued patent be challenged?

Either at the Taiwan IP Office by filing an invalidation action or at a civil court by filing a declaratory judgment; or simply by raising an invalidity defence in an infringement lawsuit.

Patent civil actions are filed with and tried at the Taiwan IP Court, unless the parties have consented to the jurisdiction of a district court before filing or the defendant does not raise an objection to a district court's jurisdiction where an IP litigation is filed.

4.2 How can the validity of an issued patent be challenged?

See question 4.1.

4.3 What are the grounds to invalidate an issued patent?

An issued patent may be invalidated on grounds of:

  • lack of patentability (ie, novelty, inventive step or industrial applicability);
  • ineligible subject matter;
  • a description which does not fully disclose the invention in a clear and sufficient manner;
  • failure to disclose claims in a clear and concise manner which is supported by the description;
  • lack of standing to apply for the invention at the time of filing; or
  • any other regulatory non-compliance as stipulated in Article 71 of the Patent Law.

4.4 What is the evidentiary standard to invalidate an issued patent?

Clear and convincing evidence shall be provided to rebut the presumption of validity of an invention patent.

4.5 What post-grant review or opposition procedures are available for third parties to challenge the validity of a patent?

A third party may challenge the validity of an invention patent by filing an invalidation action, by filing a declaratory judgment of non-infringement on the ground that the patent should be invalidated or simply by raising an invalidity defence against the patent in an infringement lawsuit. Neither a pre nor post-opposition action against a patent is available in Taiwan.

4.6 Who can oppose a granted patent?

Neither a pre nor post-opposition action against a patent is available in Taiwan.

4.7 What are the timing requirements for filing an opposition or post-grant review petition?

Neither a pre nor post-opposition action against a patent is available in Taiwan.

4.8 What are the grounds to file an opposition?

Neither a pre nor post-opposition action against a patent is available in Taiwan.

4.9 What are the possible outcomes when an opposition is filed?

Neither a pre nor post-opposition action against a patent is available in Taiwan.

4.10 What legal standards will the tribunal apply to resolve the opposition or challenge, and which party bears the burden of proof?

The legal standard adopted in this regard is the standard of clear and convincing evidence. The petitioner of the invalidation action bears the burden of proof.

4.11 Can a post-grant review decision be appealed and what are the grounds to appeal?

Neither a pre nor post-opposition action against a patent is available in Taiwan.

5 Patent enforceability

5.1 What makes a patent unenforceable?

In Taiwan, a patent applicant does not bear a duty to disclose to the Taiwan IP Office any information known to be material to patentability. Therefore, the defendant does not have a defence based on the patent owner's inequitable conduct. However, this does not mean that a bad-faith application will avoid punishment. A person that falsely asserts itself as an inventor or authorized applicant of a patent application may commit a criminal offence of providing false statements to government officials.

5.2 What are the inequitable conduct standards?

See question 5.1.

5.3 What duty of candour is required of the patent office?

See question 5.1.

6 Patent infringement

6.1 What Constitutes Patent Infringement?

A Taiwan patent is infringed if a party, without authority, "manufactures, makes an offer for sale, sells, uses, or imports for above purposes" the patented article; or where a method patent is concerned, "uses such process, or uses, sells or imports for above purposes the articles made through direct use of the said process" (Article 58 of the Patent Law).

6.2 Does your jurisdiction apply the doctrine of equivalents?

Infringement under the doctrine of equivalents is established by the Taiwan IP Office (TIPO) bylaws and Taiwan IP Court practice. Under the Important Notes on Patent Infringement Assessment issued by TIPO, the test of the doctrine of equivalents is applied after the product or process has been recognised as not falling within the literal scope of the properly construed claim. Under this doctrine, infringement occurs if an element, composition, step or combination thereof in the patent claim is altered or replaced, but such alteration or replacement does not result in substantial difference from the perspective of a person with ordinary skill in the art.

6.3 Can a party be liable if the patent infringement takes place outside the jurisdiction?

The Patent Law does not include a rule that is equivalent to Article 271(f) of the US Patent Code. Cases on this aspect are still in the development stage.

In a 2018 decision in a copyright infringement dispute, the IP Court indicated that Taiwan's courts can exercise jurisdiction over foreign defendants whose products are sold in Taiwan through a website outside Taiwan, even if other infringing conduct took place outside Taiwan, as long as the foreign defendant could have reasonably anticipated Taiwan to be one of its major markets or fields of activity (Hsu v Village Vanguard, 107 Min-Zhu-Kang 1 (IP Court 2018)). If the same theory is applied to patent disputes, then an e-commerce platform outside Taiwan is likely to be held liable for patent infringement if some of the infringing products are sold into Taiwan and this result should have been foreseeable to that platform.

6.4 What are the standards for wilful infringement?

Wilful infringement is proved if infringement commences or continues despite the knowledge that a patent will be or has been infringed by such conduct. As IP Court decisions show, the strongest evidence to prove a party's knowledge is a letter which that party has actually received from the patent owner or licensee indicating how a specific patent is being or has been infringed.

The IP Court is traditionally hesitant to deny wilful infringement upon defendants' submission of non-infringement analyses prepared by IP professionals. Unsuccessful invalidation actions filed by accused infringers are likewise of doubtful evidential weight to avoid wilful infringement liability. The onus of rebuttal on defendants is even heavier if the analyses or the invalidation briefs are found to contain errors (IP Court, Civil Case 104, Min Zhuan Shang 31). However, cases of successful rebuttal do exist. In Sanofi Aventis v Orient EuroPharma the defendant generic drug company filed a patent invalidation action plus a re-examination against the US counterpart of the Taiwanese patent in dispute and successfully convinced the IP Court that infringement was not wilful (IP Court, Civil Case 98, Min Zhuan Shang 57).

6.5 Which parties can bring an infringement action?

The patent owner or an exclusive licensee (unless the licence agreement explicitly provides otherwise) has standing to bring an infringement lawsuit, according to Article 96.4 of the Patent Law.

6.6 How soon after learning of infringing activity must an infringement action be brought?

Under the statute of limitations of the Patent Law, a patent owner must file for damages:

  • no later than two years after gaining knowledge of the damages and the identity of the infringer; or
  • no later than 10 years after the infringement first occurs, whichever is sooner.

6.7 What are the pleading standards to initiate a suit?

The basic pleading rule is set out in Article 244 of the Code of Civil Procedure, which requires that a complaint to initiate a civil lawsuit state the following:

  • the names of the parties and their respective legal representatives;
  • the relief sought;
  • the subject of the litigation – for example, specifying the claim(s) of the patent at issue; and
  • the factual grounds in support of the relief sought.

Moreover, according to the IP Court's rules (which are published on its website), complaints should also include:

  • the specific legal cause(s) of actions upon which the plaintiff relies to seek the relief (eg, the specific provision of the Patent Law); and
  • evidential materials (eg, a sample or photo of infringing products or infringement analysis).

6.8 In which venues may a patent infringement action be brought?

Patent infringement actions are filed with and tried at the IP Court, unless the parties have consented to the jurisdiction of a district court before filing or the defendant does not raise an objection to a district court's jurisdiction where an IP litigation is filed.

The IP Court is noted for its expeditious proceedings. It is not uncommon for the IP Court to issue a first-instance decision in a patent infringement suit within one year.

6.9 What are the jurisdictional requirements for each venue?

As a centralised forum, the IP Court has jurisdiction over all patent infringement lawsuits where the alleged infringing conduct takes place in Taiwan or the effects of the infringement arise in Taiwan. Both the first and second instances of a civil action related to IP disputes are tried at the IP Court.

6.10 Who is the fact finder in an infringement action?

The fact finders are the judges, as jury trials are not available in Taiwan.

To assist IP Court judges in handling the technical issues in patent litigation and other technology-related disputes, the IP Court has set up a panel of technical examination officers (TEOs), most of whom used to work as senior patent examiners and have specialised skills in various technological fields. While a party may move the court to permit an expert to testify on relevant issues, such motion is subject to the discretion of the judge. Aside from providing necessary technical assistance, including preparing written reports for judges, TEOs may attend court hearings and interrogate parties, witnesses and experts.

6.11 Does the fact finder change based on venue?

No.

6.12 What are the steps leading up to a trial?

Generally, the proceedings are divided into three stages. In the first stage, the IP Court assigns an interim docket number for a case and holds one or two hearings to assess the value of the plaintiff's asserted legal claims, so as to determine whether additional court fees should be paid.

In the second stage, the case is assigned to the presiding judge for review. The presiding judge will give the parties the chance to specify their respective disputed and non-disputed issues in the lawsuit. For instance, the plaintiff may assert that specific wording of a patent claim is in dispute and must be construed. Upon expiration of the prescribed timeframe for the parties to raise a new dispute, argument and evidence, the presiding judge will close the preparatory proceeding and set a date for an oral argument proceeding, which is the third stage.

As a rule of thumb, the plaintiff bears the burden of proving that the asserted patent is infringed and the claimed damages were thereby incurred. On the other hand, the defendant challenging the presumed validity of the patent bears the burden of rebuttal.

In the third stage, the judge will hear the oral arguments of the parties and review the merits of the case based on the evidence submitted in the prior proceedings. In principle, the parties will be bound by any stipulation rendered in the preparatory proceeding and evidence not presented by the end of the preparatory proceeding cannot be introduced at the third stage.

6.13 What remedies are available for patent infringement?

Under the Patent Law, if an infringement case is established, the patent owner is entitled to claim for injunctive relief, damages and destruction or other necessary measures to dispose of the infringing articles and the materials used in the infringing act. The patent owner can choose one of the following methods for calculation of damages:

  • an account of the patent owner's profits lost due to the infringement;
  • an account of profits that the patent owner would have otherwise gained from the patent, minus the account of profits actually gained after the infringement;
  • an account of profits gained by the infringer attributable to the infringement; or
  • reasonable royalties.

6.14 Is an appeal available and what are the grounds to appeal?

A first-instance judgment in a civil lawsuit may be appealed to the second-instance panel of the IP Court and further to the Supreme Court if appellate requirements are met (eg, the value of the asserted claims exceeds a threshold of approximately US$50,000).

The structure of the second-instance proceedings at the IP Court is basically the same as that of the first-instance proceedings. A panel of three judges will be established to review the appeal and may review the appeal independently without giving deference to the findings of the first-instance level. However, this does not mean that a party is free to introduce any evidence it wishes; under Article 447 of the Code of Civil Procedure, evidence not presented in the first-instance proceedings may be precluded from the appellate proceedings.

7 Discovery

7.1 Is discovery available during litigation?

The discovery conducted in Taiwan IP Court proceedings is of limited scope. Nevertheless, violation of the IP Court's stipulations on discovery may give rise to substantial legal consequences. For instance, IP Court judges have appeared more willing in recent years to sanction defendants that do not comply with an order to disclose books or commercial documents for the purpose of calculating damages. The judge can sanction such defendants by ordering that the damages be deemed in default as what the plaintiff claims.

Meanwhile, a patent owner may file a motion with the judge to obtain an evidence preservation order against any person holding evidence. By filing this motion a plaintiff may, before initiation of a lawsuit, ask the judge to visit the defendant's or a third party's premises and order disclosure of evidence to the necessary extent. Likewise, during the lawsuit either party may request the judge to order the opposing party or a third party to disclose evidence for the purpose of proving infringement or calculating damages. Although these orders do not have coercive force, the court may impose a sanction on a non-observant party by accepting the other party's allegations with regard to the evidence at issue or the fact to be proved by such evidence.

7.2 What kinds of discovery are available?

See question 7.1.

7.3 Are there any limitations to the amount of discovery allowed?

See question 7.1.

8 Claim construction

8.1 When during a patent infringement action are claim terms defined by the tribunal?

Although no laws or bylaws require the Taiwan IP Court to hold special hearings to interpret disputed claim terms, as the US courts do in Markman hearings, IP Court judges are increasingly adopting this practice, requesting the parties to present arguments on claim construction at an early stage of a patent infringement lawsuit.

8.2 What is the legal standard used to define claim terms?

The standard of clear and convincing evidence is adopted in terms of claim construction disputes which are deemed as a matter of law (while the preponderance of evidence standard is adopted for adjudication of factual disputes in patent infringement lawsuits). Occasionally, the IP Court issues its own version of claim construction where it believes the parties' interpretations are both wrong.

8.3 What evidence does the tribunal consider in defining claim terms?

Both intrinsic and extrinsic evidence may be considered in defining disputed claim terms. However, intrinsic evidence is accorded higher priority. If the intrinsic evidence is sufficient to render a clear interpretation to the claim language and the meaning of its technical features, it is not necessary to consider the extrinsic evidence. If extrinsic evidence and intrinsic evidence are in conflict or inconsistent with respect to the interpretation of the claims, priority will be given to the intrinsic evidence (Important Notes on Patent Infringement Assessment).

9 Remedies

9.1 Are injunctions available?

Both permanent and preliminary injunctions are available.

9.2 What is the standard to obtain an injunction?

Permanent injunctions, if included in the relief sought in the complaint, are automatically granted when the patent owner wins.

Preliminary injunctions are granted only upon a showing of a "necessity to prevent material harm or imminent danger or other similar circumstances". The necessity requirement should be determined based on the following factors:

  • the patent owner's likelihood of success in the (future) principal case;
  • whether a preliminary injunction or lack thereof will cause irreparable harm to the opposing party or the patent owner, respectively;
  • the degree of damage to both parties; and
  • the impact on the public interest.

9.3 Are damages available?

Yes.

9.4 What types of damages are available?

The patent owner can choose one of the following methods for calculation of damages:

  • an account of the patent owner's profits lost due to the infringement;
  • an account of profits that the patent owner would have otherwise gained from the patent, minus the account of profits actually gained after the infringement;
  • an account of profits gained by the infringer attributable to the infringement; or
  • reasonable royalties.

9.5 What is the standard to obtain certain types of injunctions?

See question 9.2.

9.6 Is it possible to increase or multiply damages due to a party's actions?

Yes. If wilful infringement is found, the patent owner may ask the court, at its discretion, to increase the total damages awarded up to triple the original amount (see also question 6.4).

9.7 Are sanctions available?

No criminal sanctions are available. However, the plaintiff may plead for destruction or other necessary measures to dispose of infringing articles and materials used in the infringing act, which is part of the civil remedies.

9.8 What kinds of sanctions are available?

See question 9.7.

9.9 Can a party obtain attorneys' fees?

Attorneys' fees are not recoverable, except for those incurred in third-instance proceedings (ie, at the Supreme Court.) In other words, the prevailing party at the Supreme Court level is entitled to request that the losing party bear attorneys' fees up to a maximum of approximately US$16,600.

9.10 What is the standard to obtain attorneys' fees?

See question 9.9.

10 Licensing

10.1 What patent rights can a party obtain through a licence?

The exclusive or non-exclusive right to manufacture, sell, offer for sale, use or for any of such purposes import a product that embodies the licensed patent if it is a product patent; or, for a licensed process patent, the exclusive or non-exclusive right to use that process, or to use, manufacture, sell, offer for sale or for any of such purposes import a product obtained directly by that process.

Further, an exclusive licensee has standing to sue an infringer independently for all types of remedies, unless the licensing agreement provides otherwise.

10.2 What limits can a patent owner impose on a licence?

Under the Guidelines on Technology Licensing Agreements (2016) issued by the Fair Trade Committee, a patent owner may impose clauses that have the following effects, among others, on a licensee:

  • restrict the licensee's scope of practice to manufacture, use or sales;
  • restrict the term of the licence arrangement;
  • stipulate that, for ease of calculation, royalties for licensed technology that is part of a manufacturing process or that subsists in component parts will be calculated based on the quantity of finished goods manufactured or sold that employ the licensed technology, or the quantity of raw materials or component parts used that employ the licensed technology, or the number of times such materials or parts are used in the manufacturing process;
  • require the licensee to pay fees after expiration of the patent term for use already made of the licensed technology, where the fees for use of a licensed patent are paid in instalments or on a post-paid (running royalty) basis;
  • require the licensee to grant a non-exclusive licence to the licensor with respect to any improvements to or new applications of the licensed technology;
  • so as to guarantee the licensor a minimum amount of revenue from licensing fees, require the licensee to produce a minimum volumes of goods employing the licensed technology, to employ the licensed technology a minimum number of times in the manufacturing process or to sell a minimum quantity of goods manufactured with the licensed technology;
  • restrict any transfer or sub-licence; or
  • restrict the licensee's use of the licensed technology after the term of the licence has expired, insofar as the licensed patent remains valid.

11 Antitrust

11.1 Are there any limits on patent protection due to antitrust laws?

Yes. Under Article 87 of the Patent Law, where a patentee has committed acts that restrict competition, or unfair competition acts for which a judgment has been made by a court of law or a decision has been rendered by the Fair Trade Commission, an interested party may request the Taiwan IP Office to grant a compulsory licence to the patent at issue.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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