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Supreme Administrative Court Provides Opinion on Commercial Success
The Patent Examination Guidelines include "commercial success obtained from the invention" (hereinafter referred to as "commercial success") as an auxiliary factor when assessing the criterion of "inventive step." However, based on an overview of decisions from the Supreme Court, the Supreme Administrative Court, and the Intellectual Property and Commercial Court, there does not seem to be any standard or consensus as to how commercial success affects the assessment of inventive step and how the courts examine inventors' claims and evidence of commercial success.
The judgment 2021 Shang Zi No. 670 (hereinafter referred to as "Judgment") rendered by the Supreme Administrative Court on June 15, 2023, stated that "commercial success is only an auxiliary factor in assessing inventive step, not the sole factor. The commercial success of a patented product may be related to factors such as sales techniques, advertising, supply and demand, and overall social and economic conditions, in addition to its technical features. Therefore, in order to affirm inventive step based on commercial success, it must be directly attributable to the technical features of the patent and not the result of other factors (such as sales techniques or advertising). Consequently, even if the patented product does not include 'non-patented elements or common knowledge,' it cannot be concluded that its commercial success is directly the result of its technical features."
The inventor's evidence and claims of commercial success presented in the original trial included news reports about the patented drug and its sales figures, and a statement of the absence of non-patented elements or common knowledge in the patented drug. However, the Supreme Administrative Court agreed with the original trial court's judgment, stating that the evidence and claims presented by the inventor were insufficient to establish that the commercial success of the patented drug was directly attributable to the technical features of the disputed patent.
1. Regarding news reports and sales figures of the patented drug:
"The news reports mentioned by the plaintiff (inventor) referred to the sales revenue of the disputed patented drug 'Truvada' being close to 3 billion US dollars in 2018, and the drug being hailed as a 'miracle drug for AIDS.' However, the reports did not provide objective experimental data (such as comparative tests with other drugs) proving that its commercial success was directly the result of its technical features of the invention. The reports about Truvada's market dominance and sales figures in Taiwan only demonstrated that it was the only drug available for PrEP (pre-exposure prophylaxis) before 2019, and that it had significant sales. However, the process of obtaining marketing approval for pharmaceutical products involves factors like expensive and time-consuming clinical trials, which are different from free market competition. Thus, the reports could only prove that the drug enjoyed strong sales by virtue of it being sold in the free market, making it difficult to conclude that its success was directly attributable to the technical features of the disputed patent."
2. Regarding the claim that the patented drug did not include non-patented elements or common knowledge:
"The plaintiff claimed that the patented drug did not include non-patented elements or common knowledge, so its commercial success was attributable to its technical features of the disputed patent. However, when determining whether commercial success is a positive factor for inventive step, one should focus on whether the success is directly attributable to the technical features of the disputed patent. The presence or absence of non-patented elements or common knowledge is not necessarily related to the determination of commercial success. If the court were to follow the plaintiff's argument, it could lead to the consequence whereby a patented product with a lower technical level than prior knowledge but without non-patented elements or common knowledge would still be considered to have inventive step simply because it achieved commercial success through low-cost marketing and advertising (and not from its technical elements). This would be unreasonable and contravene the principle of using commercial success attributable to the technical features of an invention to help assess a patent's inventive step."
3. Taking into account the evidence presented by the intervener:
"The court also considered the evidence presented by the intervener, such as news reports about the donation of 2.4 million bottles of an HIV drug in 2018—Truvada tablets—and how the donation was handled by the Taiwan Centers for Disease Control of the Ministry of Health and Welfare. As the Truvada tablets were donated and subsequently used as preventive medication, demand for Truvada was created, leading to increased sales. Therefore, Truvada's sales were actually the result of industrial factors or marketing strategies, and not its technical features per se."
In a previous judgment, 2021 Shang Zi No. 597, the Supreme Administrative Court criticized the original trial for failing to investigate the evidence and claims related to auxiliary factors (including commercial success) while rendering a judgment detrimental to the patent holder, which was considered to be against the law. In this Judgment, the Supreme Administrative Court explicitly stated which factors it was taking into consideration. Although the Supreme Administrative Court has a higher threshold and ultimately denied the inventive step of the disputed patent, the Judgment could still serve as a reference in the preparation of evidence and the formulation of strategies in disputes concerning the validity of a patent.