COURT AGAIN INVOKES APL TO OVERTURN IPO RULING

11/01/2002

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In a recent patent application case in which Lee and Li acted for the applicant, the applicant mistakenly designated compound A as com-pound B throughout the original specification, for the name of a chemical compound for which it sought a patent. But the examination opinion produced by the IPO mentioned only compound A, and the IPO rejected the patent application, citing previous cases relating to A as evidence of lack of novelty and inventive step. The applicant insisted throughout that the invention concerned related to B, not A, although it had by mistake used the designation A in its statement of grounds for reexamination. However, while the reexamination by the IPO was pending, the ap-plicant was informed by the patent authority of another country that in its opinion the designa-tion B had been used mistakenly for A. There-fore the applicant on its own initiative ac-knowledged its mistake to the IPO and applied to make a correction. But the IPO refused the cor-rection on the grounds that it would "change the substance of the invention," and shortly thereaf-ter rejected the application on the grounds that the applicant was unable to provide numerical data showing the efficacy of B. After an un-successful administrative appeal, the applicant brought an administrative suit in the Taipei High Administrative Court. The court recently deliv-ered its judgment, in which it set aside the original examination decision for the adminis-trative appeal.

In stating the basis for its judgment, the court cited many general principles from the Admin-istrative Procedure Law (APC). One can say that this judgment represents the most vigorous ap-plication yet by the administrative court of the spirit of the APL since the law took effect on 1 January 2001. The judgment also incorporates legal principles from related areas of jurispru-dence, and puts forward several innovative views on judicial practice. It thus represents a mile-stone in the development of administrative remedies in Taiwan. We present the highlights below:

I.Agencies’ duty to explain (Art. 10 APL: limits on discretionary powers; principle of public interest in administrative law)

The Civil Code principle for interpreting dec-larations of intent should also apply to public law (Civil Code Article 98: "in interpreting a declaration of intent, [the court] shall seek to establish the true intent of the party concerned, and shall not be constrained by the words used."). If there is doubt as to the linguistic meaning of a patent specification, patent ex-aminers should seek to understand the true meaning intended by the applicant, and should not be limited by the actual words used.

Based on the purpose of public interest stated in Article 1 of the Patent Law, if inconsisten-cies in the language used in a patent specifi-cation make the true meaning of the applica-tion unclear, or if the examiners believe that an amendment to the specification, as proposed by the applicant, would change its substantive content, and wish to base their examination on the original content, then the patent authority has a duty of explanation, because these mat-ters have a bearing on whether or not a patent will be granted.

The patent authority has a degree of discretion as to whether to grant an interview in person. But where it is under a duty of explanation, the scope for such discretion is reduced to zero. The authority must grant an interview or, ex officio, directly instruct the applicant to amend the application or make a statement. If it fails to do so, its exercise of discretion is defective.

II.Citizen's right to state opinion in adminis-trative procedures (Art. 1 of the APL, pro-tection of citizens’ rights and interests; Art. 102, right to state opinion)

Based on the protection given by the APL to a citizen's right to state an opinion and right to be involved in administrative procedures, the patent authority must give the citizen an op-portunity to present a defense or make a statement, in order to promote public confi-dence in the administrative agency, and to put into practice the principle of efficacy set forth in the APL.

If the true meaning intended by the applicant is unclear, or if it is believed that an amend-ment proposed by an applicant would change the substance of the application and it is therefore not allowed, the administrative agency has a duty of explanation, and should, ex officio, instruct the applicant to attend an interview or present a defense. If the agency ignores the applicant's request for an interview, or does not instruct the applicant to present a defense, but directly proceeds with examina-tion on the basis of the original content of the specification, over which there is doubt, it will have failed to uphold the applicant's legitimate interest in stating an opinion during an ad-ministrative procedure, and will have acted in a way contrary to the legislative intent of the Patent Law.

III.Administrative acts must be in good faith (Article 8 of the APL, principle of good faith in administrative actions)

In all its official documents at the time of initial examination and reexamination, the IPO had in all cases mentioned only A. It appeared to have concluded that B in the patent specification was used mistakenly instead of A, and directly made a correction itself. Yet later when the applicant of its own accord acknowledged the error and applied to correct it, the IPO suddenly changed its view and refused the correction. This could manifestly be construed as being contrary to the principle of good faith.