Newsletter
Draft Amendment to Patent Act — Major Changes in Patent Remedy System
On December 30, 2020, the Taiwan Intellectual Property Office (TIPO) announced draft amendments to certain articles of the Patent Act ("Draft Amendments") making substantial revisions to the litigation procedures for patent cases and consolidating the levels of appeal. Changes include abandoning the re-examination mechanism for patent applications, the introduction of a review procedure into the patent remedy system, and simplification of appeal levels. In addition, patent dispute lawsuits are handled as civil rather than administrative proceedings. The Draft Amendments involve a wide range of articles amounting to the biggest change to the Patent Act in recent years.
The key amendments to the patent remedy system are as follows:
1. A Re-examination and Dispute Review Committee ("Review Committee") is to be established and the examination process is to be strengthened (Articles 66-1 to 66-7).
The TIPO will set up a Review Committee. Review of re-examination and dispute cases is to be handled by three or five examiners of the Review Committee. Measures such as direct trial, oral argument, preparatory proceedings and examination plans are introduced. In the review process, examiners will appropriately disclose their opinions and may make an interim decision; a notification of review closure will be provided. The nature of the review process is an administrative adjudication procedure for patent disputes.
2. The re-examination system handled by the Review Committee is introduced into the patent application process, the original re-examination mechanism handled by an officer of the TIPO is abandoned, and appeal levels are simplified (Articles 66-8 to 68-1).
The types of patent re-examination cases specified in the Draft Amendments are as follows: (1) cases challenging decisions to dismiss a patent application, (2) applications for patent term extensions, (3) correction cases, and (4) cases challenging decisions on other related patent applications and procedures. The fourth type of re-examination cases refers to cases in which a person is dissatisfied with the decisions rendered by the TIPO excluding the other three types of cases. Examples include claims of priority rights not being recognized, applicant ineligibility, licensing, license transfer, and pledge registration cases.
Examination of patent applications under the current Patent Act is divided into "preliminary examination" and "re-examination." The amendment abolishes the re-examination procedure. If dissatisfied with the preliminary decision, an applicant may file for a re-examination with the Review Committee. If dissatisfied with the re-examination decision, they may file a lawsuit with the Intellectual Property and Commercial Court. Although re-examination review cases are handled by the TIPO, they are equivalent in level to an administrative appeal handled by the Ministry of Economic Affairs (the "MOEA"), so administrative appeal is not further required.
If there is cause for review of a final and binding re-examination decision, the Draft Amendments also grant the party involved a special remedy procedure, which shall apply mutatis mutandis to the provisions of the re-examination or dispute case procedures (Articles 86-1 to 86-2).
3. A dispute review system is introduced into the patent cancellation cases (Articles 71 to Article 82).
The Draft Amendments specify two types of dispute cases handled by the Review Committee: patent cancellation and patent term extension cancellation. Cancellation reviews shall be conducted through oral argument and in a public manner. However, if the TIPO deems it necessary, the review may be conducted in writing upon consent of the parties involved or at the discretion of the TIPO.
4. Dispute over patent ownership is no longer a matter for filing a cancellation action. Parties involved should seek a civil solution (Articles 10, 59, 71, 119, and 141).
A dispute over the ownership of a patent application or a patent right has traditionally a matter for filing a cancellation action. However, it often involves conflicts over the privacy rights between parties and does not pertain to professional judgment of the patents' technicality. In practice, it is difficult for the TIPO to substantively investigate the ownership issue, as done by the courts. Therefore, the current Article 71-3 concerning cancellation matters is deleted in the Draft Amendments, and the parties should follow civil litigation procedures to resolve their disputes.
5. The lawsuits concerning patent re-examination and dispute are handled as civil rather than administrative proceedings (Articles 91-1 to Article 91-10).
Due to the complexities of the dual civil and administrative remedy system, people are easily confused when filing lawsuits. Therefore, the Draft Amendments take a page from international to clarify the judicial authority of patent re-examination and cancellation dispute litigation, which are all under the jurisdiction of civil courts. Those who disagree with the result of a review decision by the Review Committee of the TIPO need not undergo an administrative appeal process, and can instead file a lawsuit with the Intellectual Property and Commercial Court.
For example, according to the current law, the patent application procedure is adjudicated by the TIPO. If dissatisfied with the decision, a party may file an administrative appeal with the MOEA. If dissatisfied with the MOEA's administrative appeal decision, the party may file an administrative lawsuit against the TIPO with the administrative court. But the amended articles stipulate that if an applicant is unsatisfied with the decision of the TIPO in regard to a decision on an application, it shall still in essence be handled as an administrative decision and the TIPO shall be the defendant; however, in order to avoid any discrepancy in the judgment, a civil action for patent review should be filed.
As for patent cancellation procedures, cases are reviewed by the TIPO as well according to the current law. If dissatisfied with a decision, a party may file an administrative appeal with the MOEA. If dissatisfied with the administrative appeal decision, the party may file an administrative lawsuit with the court against the TIPO. However, the amendments adopt the module that the disputing parties are listed as plaintiff and defendant and change the current administrative litigation to civil litigation. The reasons for the amendments are that: patent disputes in the lawsuits are not only on the appropriateness of the TIPO's decision; the issue is whether there is a cause for cancellation for patents themselves; therefore, the patent dispute litigation should be conducted by the actual parties with opposing interests.
As for disputes over patent validity, if the court believes that a patent is invalid, the court may render a judgment on the validity of the patent that is the subject of the action; the TIPO is not required to further revoke the patent. However, only after the court judgement on the invalidity of patent right is final and binding is the effect of patent right void ab initio.
In addition to the aforementioned amendments, the Draft Amendments also expand the grace period for design patents to twelve months (Article 122); clarify the legal basis for electronic patent applications and delivery; prohibit divisional applications during the re-examination period; specify the review procedures related to compulsory licensing and its revocation (Articles 19, 34, 88, 89, and 130); and specify the transitional provisions of the current and new laws (Article 157-5).
The TIPO held several public hearings at the end of January to collect public opinion, so adjustments to the Draft Amendments may be made. The Amendments have far-reaching effects on the patent application and remedy system. Patent owners and related professionals should pay close attention to the changes to the Patent Act and related laws and regulations to understand how their rights and interests may be affected.