Article 58 of the Taiwan Patent Act provides that a patent holder is entitled to preclude others from implementing his/her patented invention without his/her consent.  While the patentee may enforce such an exclusive right on the basis of the Act, the exercise of the said rights has its limits. Article 148 of the Taiwan Civil Code explicitly states that the exercise of rights shall not violate public interests, shall not primarily aim to harm others, and shall be exercised in accordance with the principle of good faith. Exceeding these limits may be deemed a misuse of patent rights, which would even constitute a tort under Article 184 of the Civil Code or violate the Fair Trade Act.  Drawing the line for the above-mentioned limits to implement one's patent rights shall depend on the actual circumstances of each case, and any established rules shall rely on the continuous accumulation of court judgments.

 

In patent infringement litigation, if the accused infringer wins the case, it is not uncommon for him/her to counterclaim against the patent holder for patent misuse and even seek damages from the patent holder, especially in cases where a pre-litigation preventive measure, such as a provisional attachment or preliminary injunction, is taken by the patent holder.  Although most judgments in Taiwan recognize that the patent holder's initiation of legal actions to enforce his/her patent right is a justified exercise of their legitimate rights granted by the law, and should not be considered a tort solely because the patent holder's claims are not ultimately supported by the court, there are also cases where the court held the patent holder liable for torts and unfair competition based on the fact that the patent holder submitted a clearly defective infringement assessment report as evidence when petitioning for a preventive measure against the accused infringer, as in the judgment of the Intellectual Property Court (the IP Court), No. 2010-Min Gong Shang-3 (Judgment Date: December 2, 2010).

 

The IP Court recently delivered a judgment No. 2020-MinJuan Shang Geng (1)-3 (dated June 29, 2023), also adopting the same view.  The reasoning of the judgment points out that the patentee had the ability to check and verify the infringement assessment report, yet despite being aware of its significant flaws, still enforced the patent right, which constituted an intentional tort or, at the very least, gross negligence, and thus violated the provisions of Article 184, paragraph 1 of the Civil Code and the Fair Trade Act. 

 

In the aforementioned 2020 judgment, the court found that the characteristics of the alleged infringing product recited in the infringement assessment report submitted by the patentee to petition for provisional attachment were incorrect and significantly different from those of the alleged infringing product. Moreover, the patentee obtained two assessment reports from different assessment institutions and submitted them separately in the provisional attachment petition proceeding and the principle patent infringement litigation proceeding; however, not only were the contents of the reports identical, but even the typos and errors in the circuit diagrams were the same, thus indicating a high possibility of plagiarism. In addition, the court also recognized that the patentee is the leading manufacturer in the industry, with a market-leading position and professional knowledge, and should have the ability to judge the reasonableness of the infringement assessment reports. Furthermore, the patentee already provided detailed explanations regarding common knowledge in the relevant technical field when applying for provisional attachment, and should have been aware that the contents of the assessment reports do not align with common knowledge. However, the patentee still submitted these significantly flawed assessment reports to the court for the application of provisional attachment and subsequent principle litigation, which, even without intention, constitutes gross negligence due to the lack of due diligence.

 

Before exercising their rights, patentees should carefully investigate and verify the to-be-asserted facts and the corresponding evidence to avoid unnecessary legal liabilities.