According to Article 62 of the Taiwan Patent Act, changes in patent rights, such as assignment, entrust, licensing, or establishment of a pledge, are subject to the doctrine of registration for opposability. This means that if a change in patent rights is not registered, such change remains valid but has no locus standi against any third party. Regarding the absence of locus standi against any third party, Civil Judgment (96) Tai-Shang-Tzu No. 1658 of the Supreme Court held that this means if a patent assignee has not completed registration, such assignee may not assert its rights against a third party infringing the patent. In addition, the aforementioned Supreme Court ruling holds that since registration is not a requirement for the validity of the contract, the transfer of patent rights between the parties involved remains effective. In such cases, the transfer is binding not only on the parties themselves but also on any successors in interest. In other words, successors cannot invoke the lack of registration to challenge the original transferee’s claim to having validly acquired the patent rights. Since the above ruling, however, the judicial interpretation has changed. The resolution reached in the 9th Discussion on Civil Litigation at the Judicial Yuan’s 2009 Intellectual Property Law Symposium held that the registration’s opposability system is intended to protect third parties involved in transactions rather than infringing parties. In addition to such resolution, the Civil Judgment (104) Tai-Shang-Tzu No. 671 of the Supreme Court adopted such position and further held that the provision in the Patent Act stipulating that the absence of locus standi against any third party without registration is not intended to protect patent infringers, but is rather intended to safeguard third parties whose interests merit protection due to disputes concerning the authorization or other matters related to such registration. Accordingly, the registration confrontation system under Article 62 of the Patent Act is established for the purpose of protecting transactional security. In short, if a prior patent transaction is not registered, it cannot be asserted against a subsequent transaction counterpart.

 

In the Civil Judgment (114) Min-Juan-Shang-Tzu No. 15 issued by the Intellectual Property and Commercial Court (hereinafter the "IP Court") on January 30, 2026, based on the registration confrontation system aimed at protecting transactional security, the IP Court addressed the legal interpretation regarding determination of the respective rights and obligations when a patentee successively grants both non-exclusive and exclusive licenses of the same patent to different parties without registering such license grants. The IP Court's legal views concerning this matter are summarized below.

 

The case involves a dispute arising from patent royalty payments. The Appellee (i.e., the Plaintiff in the first instance, hereinafter the "Patent Owner") is the patent owner of Taiwan Patent No. M571911 (hereinafter the "Disputed Patent"). The Patent Owner first granted the Appellant (i.e., the Defendant in the first instance, hereinafter the "First Licensee") a non-exclusive license for the Disputed Patent, with the non-exclusive license period agreed to be from June 14, 2023 to June 13, 2024. Subsequently, on November 15, 2023, the Patent Owner entered into an exclusive patent license agreement with a third party, Company A, whereby the Patent Owner granted Company A an exclusive license for the Disputed Patent. The licensed territory includes Taiwan, and the license term extends from the date of execution until the expiration of the Disputed Patent.

 

Subsequently, the Patent Owner filed a lawsuit with the IP Court, claiming that the First Licensee shall pay patent royalties to the Patent Owner in accordance with the agreement between the parties. After consideration, the first-instance court acknowledged the existence of an agreement on the Disputed Patent royalties between the parties and, on June 16, 2025, issued the Civil Judgment (113) Min-Juan-Su-Zi No. 51, ordering the First Licensee to pay patent royalties to the Patent Owner. Dissatisfied with such decision, the First Licensee filed an appeal. The second-instance court upheld the first-instance court’s position. First, the second-instance court recognized the existence of the agreement on the Disputed Patent royalties between the parties and, based on correspondence between the parties and objectively observable conduct, determined that the parties had agreed to calculate the royalties at NT$2.6 per unit multiplied by the quantity shipped.

 

Second, the First Licensee argued in both the first and second instances that the Patent Owner had granted an exclusive license of the Disputed Patent to Company A, which made it difficult for the First Licensee to use the Disputed Patent during the license period. Therefore, the First Licensee claimed that the Patent Owner should be held liable for damages for partial non-performance in accordance with Article 227, Paragraph 1 of the Civil Code, applying mutatis mutandis Article 226, Paragraph 1, to compensate for the losses suffered by the First Licensee. The First Licensee further claimed that, even if the court determines that the First Licensee should pay patent royalties, the First Licensee shall be entitled to offset such royalties against the aforementioned claim for damages.

 

The key point in determining whether the offset claimed by the First Licensee is applicable lies in clarifying how an unregistered patent license affects the rights and status of prior and subsequent licensees. The second-instance court is in line with the reasoning of the Civil Judgment (104) Tai-Shang-Tzu No. 671 of the Supreme Court. Patent licensing adopts the principle of registration antagonism. The so-called "confrontation" refers to situations in which conflicts, contradictions, or mutual opposition arise when different rights are exercised, wherein the presence or absence of "registration" will be the criterion for determining the ownership of rights. This aims to protect third parties engaged in transactions, rather than the infringing parties.

 

Upon investigation, it was determined that the Patent Owner did not register the non-exclusive license granted to the First Licensee for the Disputed Patent with the Taiwan Intellectual Property Office of the Ministry of Economic Affairs (hereinafter the "TIPO"), nor did the Patent Owner subsequently register the exclusive license granted to Company A for the same patent. The second-instance court held that since none of the aforementioned licenses of the Disputed Patent were registered, according to the Patent Act, such licenses cannot be asserted against third parties. Therefore, neither the First Licensee nor Company A can use its respective patent license to assert rights against the other. The First Licensee obtained the non-exclusive license for the Disputed Patent from the Patent Owner prior to Company A’s acquisition of the exclusive license from the Patent Owner; thus, Company A’s exclusive license should be deemed to include the pre-existing non-exclusive license relationship between the Patent Owner and the First Licensee.

 

Accordingly, the exclusive licensing relationship between Company A and the Patent Owner does not affect the First Licensee’s implementation rights to the Disputed Patent obtained under the non-exclusive license agreement between the Patent Owner and the First Licensee. Therefore, the First Licensee is still entitled to exercise the patent rights based on the license it acquired. Consequently, the second-instance court found no defect in the non-exclusive license granted by the Patent Owner to the First Licensee. There is no circumstance of incomplete performance by the Patent Owner in fulfilling its obligations under the agreement as alleged by the First Licensee, and thus the First Licensee shall not assert set-off against its obligation to pay patent royalties on such basis.

 

As for the exclusive licensing agreement between Company A and the Patent Owner, which includes the obligation to handle patent license registration, the First Licensee argues that once the exclusive license is properly registered, Company A may invoke the Patent Act against the First Licensee. Therefore, the Patent Owner should be held liable for damages due to incomplete performance in accordance with Article 227, Paragraph 1, by applying mutatis mutandis Article 226, Paragraph 1 of the Civil Code. The second-instance court explained that if the First Licensee had registered the non-exclusive license with the TIPO, the First Licensee could have effectively eliminated legal risks related to patent license disputes or infringement. However, the First Licensee chose not to do so, which is not beyond dispute.

 

In summary, since the licenses for the Disputed Patents in the current case were not registered with the TIPO, neither party’s licensees can rely on its respective patent license to assert rights against the other. Instead, the effectiveness of the licenses must be determined based on the timing and nature of the patent licensing. To effectively protect one's own rights, it is recommended that patent licensees ensure proper registration of patent licenses upon acquisition, thereby avoiding subsequent disputes.