Newsletter
Provisional Execution is Unnecessary for Judgment Approving Patent Transfer Recordation
In a lawsuit requesting payment of property rights, in order to prevent the losing debtor from delaying, failing to perform, or taking advantage of an opportunity to release the properties to another party through an appeal procedure, the winning creditor may request that the court deliver a pre-final enforcement order along with its judgment. Once the court does so, the creditor can petition for the pre-final enforcement procedure to satisfy their claims granted in the judgment before the said judgment becomes final and irrevocable.
As patent rights belongs to intangible property rights, in the lawsuit over the disputes relating to the ownership of patent rights, in addition to requesting the title transfer recordation of the disputed patent, the rights holder may also petition for a pre-final enforcement order to preserve its rights before the judgment becomes final and irrevocable. However, in the Supreme Court's Ruling 2019 Tai-Kan No. 825 of October 23, 2019, it was explicitly stated that the pre-final enforcement of the "Patent Transfer Recordation" is unnecessary, and that the enforcement court shall reject related petitions.
The background of this case is as follows. Party A claimed to the court of first instance that Party B should transfer the disputed patent in accordance with the employment contract, and expressed his willingness to provide a security deposit to petition for pre-final enforcement on the transfer of the disputed patent. The court of first instance considered that Party A's claim for the patent transfer was reasonable, and declared a pre-final enforcement order along with its judgment approving such a claim. Party A thus took said order as the writ of execution and petitioned to the enforcement court for the pre-final enforcement. Party A also claimed that the act of "patent transfer recordation" is irreplaceable, and that the enforcement court shall urge Party B to perform the said act by the indirect compulsory means provided in Paragraph 1, Article 128 of the Compulsory Enforcement Act, or may notify the related authorities to provide appropriate assistance in accordance with the provisions of Article 129-1 of the same act.
However, Party A's pre-final enforcement petition was dismissed by the enforcement court. Party A raised an objection but it was still dismissed by the enforcement court. Party A therefore made an appeal to the Intellectual Property Court, and then made an appeal to the Supreme Court, but it was finally rejected.
The Intellectual Property Court and the Supreme Court held that Paragraph 1, Article 130 of the Compulsory Enforcement Act clearly stipulates that where a judgment ordering the debtor to express a specific intention becomes irrevocable or a writ of execution bearing the same effect with an irrevocable judgment is created, the debtor is deemed as having expressed that intention when the judgment becomes irrevocable or the writ of execution is created. In this case, Party A filed of a lawsuit requesting that Party B express a specific intention (of agreeing to conduct transfer recordation of the disputed patent); when Party A obtains an irrevocable judgment, it can apply for the patent transfer recordation to the Intellectual Property Office on the basis of said irrevocable judgment regardless of whether Party B has expressed its intention to transfer the patent (as according to Article 130 Paragraph 1 of the Compulsory Enforcement Act, Party B is deemed as having expressed that specific intention of agreeing to transfer the said patent.) The pre-final enforcement is therefore unnecessary since Party A may achieve the purpose of enforcement in a legally pro forma way.
The Supreme Court also clearly stated that, although the debt for which the debtor shall express a specific intention is also an irreplaceable act of debt, it may be enforced with indirect compulsory enforcement means (as provided in Article 128, Paragraph 1, and Article 129-1 of the Compulsory Enforcement Act.) However, for a debt such as "patent transfer recordation," whose enforcement can be achieved simply with the creditor obtaining the legal effect of the debtor's declaration of expression, the provision of Paragraph 1, Article 130 of the Compulsory Enforcement Act shall prevail without enforcing the debt with indirect compulsory enforcement means.
It can be known from the foregoing judicial practice insight, in a lawsuit requesting the transfer of patent rights, creditors are unable to preserve their rights in advance through pre-final enforcement procedures, and can only be satisfied once the final and binding judgement has been completely delivered, even when the court has granted a pre-final enforcement order.