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Actual Inventor Is Allowed to Enter into "Name Lent Contract" with a Third Party for Right to Apply for a Patent
In Taiwan, an application for a patent must be made by the person who possesses "the right to apply for a patent." Regarding the precise definition on said "person who possesses the right to apply for a patent," Paragraph 2, Article 5 of the Patent Act stipulates that, in principle, only an inventor, a utility model creator, or a designer (collectively referred to herein as the "actual inventor") or the assignee or successor of the actual inventor may enjoy such a right. However, except where stipulated otherwise in the Patent Act (such as in the case of employer or financier under Article 7) or in a contract, a patent application may still be filed in the name of an individual or entity which is not the actual inventor himself/herself or his/her assignee or successor.
In judgment 2014-Min-Zhuan-Su-3 rendered on October 31, 2014, the Intellectual Property Court affirmed that the actual inventor might enter into a "Name Lent Contract for Registration" with a third party with respect to the right to apply for a patent. Under such arrangement, an individual ("the lender") may lend his/her name to the patent application and acquire the patent right. In the event that the trust between the parties is compromised, the entrustment relationship may be rescinded at any time in accordance with the relevant regulations of the Civil Code. The lender should then transfer the patent right originally granted in his/her name to the actual inventor, subject to each party being responsible for restoring the status quo after termination of the entrustment.
The facts of this case are as follows: Plaintiff A is the father of Co-Plaintiff B and Defendant C. Plaintiff A claimed that the patent at issue was jointly created by him and Co-Plaintiff B. Due to the fact that A was entering old age and B had only been working in the industry for a relatively short period, they decided to enter into a "Name Lent Contract for Registration" with Defendant C, under which they applied for the patent at issue in C's name. However, they later lost their trust in C and therefore terminated the said Name Lent Contract and demanded C to transfer the patent at issue to them.
Defendant C argued against the claims on several grounds: Ownership of the right to apply for a patent should be determined by way of administrative complaint, not civil litigation; the patent at issue was his creation, and the Plaintiffs had not furnished evidence on the facts of the existence of said Name Lent Contract; the patent, as published, explicitly indicated that Defendant C is the inventor and also the patent holder; there was no registration of patent license or trust in the Patent Gazette, and the government fees for patent prosecution and the annuities for patent maintenance were all paid by Defendant C. However, the Court did not accept Defendant C's assertions.
The Court first explained that the nature of the "right to apply for a patent" is a right under civil law, and any relevant dispute is a matter of civil law and should be subject to a civil dispute resolution mechanism. That is to say, such a dispute should be determined by a civil court, which then forms the basis for applying with the patent authority for correcting the ownership of the "right to apply for a patent." The Court emphasized that determination of an ownership of a patent right is not within the discretion of the patent authority by way of administrative procedures. Furthermore, with regard to the Name Lent Contract, the Court believed that the contract in question was merely an oral agreement between family members, and the facts could only be deduced based on the factual evidence offered by the litigants. Based on the factual evidence offered by the plaintiffs (e.g. A's long experience in the related field; B being listed as inventor in the application for the patent at issue; and witness testimony asserting B's participation in the creation) and C's failure to offer proof of the patent at issue being his own concept, the Court was able to determine that there was indeed a Name Lent Contract between the litigants. Subsequently, the Court applied the relevant provisions of the Civil Code with respect to the entrustment contract to reach its ruling.
The Court ultimately ruled that the Name Lent Contract was terminated on the day when the Plaintiffs' complaint was served on the Defendant. Because the respective parties had the duty of restoring the status quo, Defendant C was ordered to transfer the patent at issue to Plaintiff A and Co-Plaintiff B.