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Does the Intellectual Property Court Have Exclusive Jurisdiction Over the Second Instance of an Intellectual Property Civil Case?

Hsiu-Ru Chien/Powei Huang


Items 1 and 4 of Article 3 of the Intellectual Property Court Organization Act and Article 7 of the Intellectual Property Case Adjudication Act stipulate that the first and second instances of civil cases involving the Patent Act, Trademark Act and other laws related to intellectual property are under the jurisdiction of the Intellectual Property Court (“IP Court”). However, the regulations do not specify if the court has “exclusive jurisdiction.” Regarding this, Article 9 of the Intellectual Property Case Adjudication Rules explicitly states, “No superior court may, on grounds of wrong jurisdiction, reverse the substantive adjudication of a civil or administrative court on a case that is substantively an intellectual property civil or administrative action, because they are not subject to the exclusive jurisdiction of the IP Court.” The statement of the legislative reasoning is as follows: “With regard to the court jurisdiction of intellectual property civil cases, the Intellectual Property Court Organization Act adopted the doctrine of preferential jurisdiction; therefore, intellectual property civil cases are not under the exclusive jurisdiction of the Intellectual Property Court.” In practice, most interpretations based on this statement took it to mean that the IP Court only had preferential jurisdiction over the first instance of civil and administrative cases but not exclusive jurisdiction. When a party files a lawsuit in an ordinary court, and both parties involved do not request to transfer the case to the IP Court, but the ordinary court still rules to transfer the case to the IP Court, the ruling has a risk of being overturned. This interpretation was adopted by the IP court in its recent ruling of case No. 2020-Min-Zhu-Kang-2 on February 25, 2020 and in an earlier ruling of the case No. 2011-Min-Zhu-Kang-2. The interpretation was even adopted by the Taiwan Taichung District Court in the civil ruling of case No. 2008-Su-2897.

 

While there seems to be a consensus in the judicial practice that the Intellectual Property Court only has preferential jurisdiction over the first instance of civil cases, there seems to be a different position on the second instance. In particular, if both parties agree to a second instance conducted by an ordinary court, can the ordinary court transfer the case to the IP court?

 

Article 19 of the Intellectual Property Case Adjudication Act stipulates, “Any appeal against a judgment rendered by the first instance court on an intellectual property case shall be lodged with the Intellectual Property Court having jurisdiction.” The regulation does not state explicitly that the IP Court has exclusive jurisdiction in the second instance of intellectual property cases, and when the act was just enacted, the majority opinions seemed to reject this interpretation. For example, when the Legislative Yuan held an intellectual property law forum on June 22, 2009, the conclusion of its discussion on Civil Action Type No. 2 stated, “Intellectual property lawsuits are not under the exclusive jurisdiction of the Intellectual Property Court; hence, substantive decisions on intellectual property civil cases made by ordinary district courts and high courts are not illegal. Furthermore, after the Intellectual Property Case Adjudication Act was put into effect, intellectual property civil cases still adjudicated by district courts were usually cases where the parties involved agreed to or had an implied contract agreeing to the district court having jurisdiction over their case. Based on the fact that both parties are the main subjects of the proceedings, their wishes should be respected.” Moreover, according to Paragraph 10 regarding “ordinary courts as the courts of the first instance” in the Intellectual Property Case Adjudication Act New System Q&A Compilation published by the Legislative Yuan in June 2008, “if both parties agree or have an implied contract agreeing to the ordinary court having jurisdiction over the first instance (Article 24 and 25 of the Taiwan Code of Civil Procedure) and the sole judge of said court making the judgment, and that party does not accept such judgment, they shall file an appeal to an ordinary court of the second instance. Therefore, when parties involved accept an ordinary court’s jurisdiction over the first instance, the second instance of the case should be heard by an ordinary court as well. For example, both parties involved reside in Pingtung County. In order to avoid going to the IP Court up north, they agreed to have their case heard in the Taiwan Pingtung District Court. After a decision from the district court, the Taiwan High Court Kaohsiung Branch Court becomes the court of the second instance to meet the wishes of both parties.” From examining actual precedents, it can be seen that the high courts in the past did not deem cases regarding intellectual property as under the exclusive jurisdiction of the IP Court, such as when an employee stole business secrets while employed in a company and violated their employment contract (see the Taiwan High Court Civil Judgment No. 2013-Zhong-Lao-Shang-52). In summary, in the second instance of an intellectual property case, especially when both parties agree, it seems appropriate to recognize that the intellectual property court only has preferential jurisdiction so as to protect the parties’ right of being the main subjects of the proceedings.

 

However, the Supreme Court Ruling No. 2019-Tai-Kang-381 dated May 22, 2019 (the previous trial thereof was the Taiwan High Court Ruling No. 2017-Zhong-Shang-55) relied on the legislative reasoning of Article 19 of the Intellectual Property Case Adjudication Act, stating, “At present, the first instance of an intellectual property case is not under the exclusive jurisdiction of the IP Court. If a case is under the jurisdiction of an ordinary court, it shall also be heard by the district court’s intellectual property special unit in order to unify legal interpretations. Appeals of these cases ‘shall’ thus be heard by the professional IP Court. But Paragraph 2 of the current article remains unclear regarding the court for appeals against a judgment rendered by an ordinary court in the first instance of an intellectual property case. Therefore, the amendment to Paragraph 2 is being considered to prevent disputes.” In addition, the Supreme Court believes, “Although the article does not contain the word ‘exclusive,’ it is still sufficient to deem that in appeals against a civil judgment rendered by the first instance court on an intellectual property case, only the Intellectual Property Court has the substantive exclusive jurisdiction to unify legal interpretations. This is in reference to Paragraph 1 of Article 5 of the Intellectual Property Case Adjudication Act regarding this explicit regulation: ‘For intellectual property civil cases already pending in the Supreme Court before the enactment of the Intellectual Property Case Adjudication Act or intellectual property civil cases after the act was enacted that had their judgments made by the High Court rejected by the parties involved and invalidated by the court, the cases shall be under the jurisdiction of the court of last resort or otherwise ‘shall’ be transferred to the IP Court.’ It is through this paragraph that makes consent or implied agreement of jurisdiction not applicable to the court of the second instance.’

 

In view of this, the Supreme Court has recently seemed to consider Article 19 of the Intellectual Property Case Adjudication Act to essentially be a regulation on exclusive jurisdiction even though it is not stated explicitly in writing. Therefore, regardless of whether the first instance of an intellectual property civil case is under the jurisdiction of an ordinary court or the IP Court or whether the parties involved have agreed for it to be under the jurisdiction of an ordinary court, the second instance of an intellectual property civil case shall be under the jurisdiction of the IP Court. If a case is pending before an ordinary court, it shall be transferred to the IP Court in order to prevent procedural errors. Whether this becomes the general consensus remains to be seen.
 



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