In assessing whether a patent possesses an inventive step, care should be taken to avoid mechanically combining prior art references and, with the benefit of hindsight, concluding that the patent lacks an inventive step. Although the Patent Examination Guidelines identify "commercial success of the invention" (hereinafter, "commercial success") as an auxiliary factor supporting the presence of an inventive step, judicial practice has not yet established a consistent standard regarding the circumstances under which courts will consider commercial success as valid evidence. Specifically, there remains uncertainty as to when such evidence is deemed relevant to demonstrate inventive step and the manner in which the patentee must present such evidence.

 

In prior rulings, the Supreme Administrative Court (hereinafter the "SAC") has held that even when a party presents evidence asserting that its patent has achieved commercial success (including relevant documentation to substantiate the inventive step), such evidence of commercial success does not need to be considered if the combination of prior art clearly and unmistakably demonstrates that the patent lacks inventive step. This principle was articulated in Judgment No. 102-Pan-Tzu-205 rendered on April 18, 2013. Subsequently, in Judgment No. 107-Pan-Tzu-707, rendered on November 29, 2018, the SAC further clarified that while "commercial success" may be taken into account in assessing inventive step, the burden of proof borne by the patent applicant or patentee remains high. Specifically, the patentee must not only demonstrate that the sales volume of the patented product surpasses that of comparable products, or that the product enjoys a monopoly or has supplanted competitors’ products in the market, but must also provide evidence establishing a causal link between the commercial success and the technical features of the patent.

 

Influenced by the two aforementioned SAC judgments, the Intellectual Property and Commercial Court (hereinafter the "IP Court") adopted a similar approach in Civil Judgment No. 113-Ming-Chuan-Shang-Tzu-16, rendered on February 13, 2025. In that case, the IP Court referenced the cited Supreme Administrative Court decisions and held that, although the appellant submitted a non-exclusive license agreement related to the patent in question to support its claim of commercial success, it failed to provide any sales data demonstrating that the sales volume of its product exceeded that of comparable products or that it had established a market monopoly or supplanted competitors' products. Additionally, there was no evidence indicating that the commercial success of the product was primarily attributable to the patented technical features. Accordingly, the court found it difficult to conclude that the invention embodied in the patent had achieved commercial success. Moreover, the prior art presented by the appellee was sufficient to establish that the patent lacked novelty and inventive step, rendering further consideration of "commercial success" as an auxiliary factor in the inventive step analysis unnecessary.

 

Recently, both the Supreme Court and the SAC have adopted a more permissive approach in two consecutive rulings regarding the consideration of "commercial success" as an auxiliary factor in the assessment of inventive step. In Civil Judgment No. 113-Tai-Shang-Tzu-459, rendered on November 20, 2024, the Supreme Court held that when a party submits auxiliary evidence that is persuasive, relevant, and objective in evaluating inventive step, the court is obligated to investigate and examine such evidence in order to reconstruct, as accurately as possible, the factual and contextual environment at the time of the patent application. Subsequently, in Judgment No. 113-Shang-Tzu 132, rendered on January 15, 2025, the SAC endorsed the same principle, ruling that where a patent applicant submits auxiliary materials asserting that the invention has achieved commercial success and thereby demonstrates inventive step, such factors must be considered collectively. The court further clarified that if the applicant relies on a patent license agreement to substantiate commercial success, the examination to determine whether the invention possesses an inventive step should encompass several considerations, including whether the licensee voluntarily obtained the license, whether the licensed subject matter covers a single patent or multiple patents, the duration and scope of the license, the amount of royalties paid, the licensee’s motivation for obtaining the license, and the circumstances surrounding the licensee’s implementation of the patent. Ultimately, the SAC set aside the lower court's judgment, finding that the lower court had failed to investigate ex officio the facts related to the auxiliary factors favorable to the appellant. This omission constituted a violation of law, resulting from improper application of the law and insufficient reasoning.

 

In addition to criticizing the IP Court's failure to investigate and consider the parties' assertions regarding auxiliary factors such as "commercial success" in the assessment of inventive step, the two abovementioned recent judgments of the Supreme Court and the SAC did not, as in 2018's Judgment No. 107-Pan-Tzu-707, impose a higher burden of proof on the parties. Specifically, these judgments did not require parties to provide evidence demonstrating that their patented products have achieved a monopoly, replaced competitors' products, or that the commercial success of their products is primarily attributable to the patent's technical features. Such omission suggests a possible intention to relax the evidentiary requirements for introducing auxiliary factors such as "commercial success" into the assessment of inventive step. Nonetheless, it remains to be seen whether the courts will adopt the same approach in future cases and how they will concretely define the evidentiary standards expected from the parties.