Taiwan: Commercial Success Recognized By IP Court To Support Patent's Non-Obviousness

For years patent practitioners in Taiwan had been looking forward to an IP Court decision affirming a patent's non-obviousness (or inventive step in local legal terms) on the ground of commercial success, or other objective indicia categorized as "auxiliary considerations", and now they received a heartening response from the IP Court. Wan-Sheng Trade Corp. v. IP Office, 107 Shing-Zhuan-Su 75, Taiwan IP Court (February 2019).

The seminal IP Court decision was rendered in late February 2019 for a patent invalidation dispute, in which a utility model patent for "a heat preservation cover for food" had been challenged, and later declared by the IP Office, as obvious in view of two prior art patents. As in many invalidation actions, the main issue contended by the parties before the IP Office was whether there would have been adequate motivation to combine the prior art features to arrive at the disputed UM (and the IP Office's answer was in the affirmative.) It was only after appealing the case to the IP Court that the patentee first brought forth the commercial success argument, which the IP Court found convincing. The IP Office's ruling was reversed and remanded.

Among the four objective indicia termed as "auxiliary consideration" by the Patent Examination Guidelines (2017) for the test of non-obviousness, commercial success of a patented product was the one most frequently invoked by patentees, the other three being unexpected efficacy, resolving a long pre-existing problem, and overcoming a technical bias. Despite this, before Wan-Sheng, never was any commercial success argument, or any objective indicia argument, known to be found convincing by the IP Court, the chief obstacle being the causal connection test — whether there was a reasonable causal link between the asserted indicia and the patented features was oftentimes found daunting to decide. The ill-chosen word "auxiliary" suggesting such considerations are secondary in importance and relevance further increased the difficulty for patentees to win on an objective indicia argument. The truth is, notwithstanding the somewhat misleading word "auxiliary," the Patent Examination Guidelines never indicated that objective indicia like commercial success should be considered secondarily. Quite the opposite, the Guidelines said commercial success and other objective indicia are in the class of "positive factors for inventive step" which "shall be considered together and weighed against negative factors against inventiveness" (referring to prior art disclosure, motivation to combine, etc.) More, the Guidelines reminded the reader that acknowledging these positive factors in the test of inventive step is for the purpose of "avoiding hindsight caused by arbitrary combination of segments of prior art references." Perhaps a better understanding of the term "auxiliary considerations" would be that these considerations being objective indicia help the examiner stay clear of said hindsight bias.

One might think that, to make the court buy its commercial success argument, the patentee in Wan-Sheng must have rendered an elaborate narrative along with abundant evidence proving all possible aspects of commercial success resulted from its UM. In fact, the patentee told a simply story, centering on the mushrooming of counterfeits after the patented product was offered for sale online.

According to the IP Court's decision, the patentee initially developed an original type of heat preservation cover which was first sold in 2012. That old product enjoyed longer sale duration and better market exposure, but no counterfeit was spotted, as results of a Google image search revealed. In 2014, the patented product was introduced to the market, the major distinguishing feature being that the patented product was foldable while the old product was not. In the period from 2014 through 2015, the patented product dominated the market, where no other foldable covers were found. However, as soon as the patented product was sold online in 2015, copycats started to appear, and counterfeits went rampant in 2017; they were sold at much lower prices and eroded the patentee's revenue.

Based on the above, the court was convinced that the commercial success of the patented product was not only real but was resulted from the patented feature (foldability) over prior art (including the patentee's old products which were unfoldable.) The interesting part is that the main body of the patentee's evidence consisted of nothing else than a dozen of print-outs of Google image search results.

While the patentee was fortunate enough to help turn a historical page for the development of Taiwan patent law, this was not a total victory, as the patentee did not win solely on the battle front of commercial success. Its defense against the "negative factors" turned out likewise effective as the IP Office's holding for the asserted motivation to combine the prior art was reversed by the IP Court. We do not really know whether the IP Court would have ruled in favor of the patentee if he had not won on positive factors and negative factors alike. However, it is the writer's belief that with Wan-Sheng as a firm bridgehead, increased confidence will be found in patentees as well as judges to advance into cases where patents' inventive step can be solely proved by commercial success and/or other objective indicia of non-obviousness in Taiwan.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

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.

By clicking Register you state you have read and agree to our Terms and Conditions