Highlights of the Draft Amendment to the Intellectual Property Case Adjudication Act

To build an intellectual property litigation system with a higher level of professionalism, efficiency and consistency with international trends, the Judicial Yuan has recently published a draft amendment (hereinafter the “Draft”) to the Intellectual Property Case Adjudication Act (hereinafter the “Act”), proposing a comprehensive review of the adjudication proceedings of intellectual property cases. The Draft was approved at the 202nd session of the Judicial Yuan on June 24, 2022, and is now pending deliberation before the Legislative Yuan. Covering a wide range of aspects, the Draft represents an unprecedented revision to the Act since its implementation more than 14 years ago, and thus should be given particular attention. Key aspects are summarized as follows.

I. Enhancing Protection of Trade Secrets

  1. The Draft stipulates provisions governing the exclusive jurisdiction of intellectual property related first-instance civil matters, stating expressly that first-instance civil matters involving misappropriation of trade secrets are within the exclusive jurisdiction of the Intellectual Property and Commercial Court (Amended Article 9).
  2. The Draft stipulates provisions detailing prohibition of or limits on review of litigation materials containing trade secrets in civil and criminal cases (Amended Articles 33, 34 and 60).
  3. The Draft clearly states that, under certain circumstances, one party of the litigation who is not listed as a secret holder may petition the court to issue a confidentiality preservation order upon persons not bound by such an order (Amended Article 37).
  4. The Draft clearly states that first-instance criminal cases in violation of Articles 13.1, 13.2, 13.3.3 and 13.4 of the Trade Secrets Act should be heard before the Intellectual Property and Commercial Court, and first-instance criminal cases in violation of Articles 8.1 to 8.3 of the National Security Act (i.e., misappropriation of trade secrets that are categorized as national core and key technologies) should be heard before the Second Instance by the Tribunal of Intellectual Property under the Intellectual Property and Commercial Court (Amended Article 59).
  5. The Draft clearly states that the parties or stakeholders may, prior to the first trial date, petition the court to determine an alternative title or name for evidentiary documents containing trade secrets for the purpose of de-identification (Amended Article 61).
  6. The Draft increases “penalties for violations of a confidentiality preservation order” and introducing the “crime of violating a confidentiality preservation order from abroad” (Amended Article 76).
  7. The Draft clearly states that unincorporated organizations (including their managers and representatives) are also obliged to prevent their employees or other business participators from misappropriating another party’s trade secrets (Amended Article 77).

II. Adding Compulsory Legal Representation System

  1. The Draft stipulates provisions stating that legal representation is mandatory for certain types of intellectual property civil matters, for example, first-instance civil actions in which the value or amount of litigation claims exceeds the amount under which an appeal may be taken to the court of third instance set out in Taiwan Code of Civil Procedure, and first- or second-instance civil actions involving patent rights, computer program copyright or trade secrets (Amended Article 10).
  2. The Draft stipulates provisions governing litigation aid, validity of litigation acts, attorney remuneration which should be calculated into litigation expenses, and the like. For litigation involving patent rights, patent attorneys may be appointed as representatives with the consent of the presiding judge. The compulsory legal representation system may apply mutatis mutandis to interveners, and yet the remuneration of their representative(s) is not calculated into the costs of the litigation or proceedings (Amended Articles 11-17).

III. Expanding Intervention by Experts

  1. Adding Inspection System- After a lawsuit for patent infringement is initiated, the parties may petition the court to select and appoint an “inspector” to carry out the procedure of evidence collection. According to the Draft, the inspector should be a neutral expert with professional knowledge, and should be allowed to take evidence on site, for example, by confirming the structures and operation of large equipment at the factory, so the system will be a mandatory method for collecting evidence.  The regulations apply mutatis mutandis to infringement upon computer program copyright and misappropriation of trade secrets (Amended Articles 19-27 and 78).
  2. The expert witness system stipulated in the Commercial Case Adjudication Act applies mutatis mutandis to the Draft (Amended Article 28).
  3. Amicus Curiae- The Draft states that with regard to application of law, technical or other essential issues in intellectual property civil matters, the court may, upon request of the parties and after listening to the opinions of the adverse party, publicly call on its website for written opinions from citizens other than the parties, institutes, or groups when it deems necessary (Amended Article 29).

IV. Adding Provisions on “Proceedings of Patent or Trademark Review and Disputes”

In response to the “Draft Amendment to Partial Provisions of the Patent Act” and the “Draft Amendment to Partial Provisions of the Trademark Act” proposed by the Ministry of Economic Affairs, in which the remedies for patent or trademark infringements are to be changed from the current administrative litigation proceedings to civil litigation proceedings, the Draft stipulates provisions for “proceedings of patent or trademark review and disputes cases.”

  1. The Draft stipulates standards for judicial fees: litigation involving patent/trademark review is to incur a judicial fee of NT$7,000; for litigation involving disputes, an additional amount of NT$2,000 per claim will be charged; and in the absence of claims, the amount/value of litigation claim(s) and the judicial fee will be determined in accordance with Taiwan Code of Civil Procedures (Amended Article 55).
  2. The Draft clearly states that the parties in a patent/trademark dispute cases may present new evidence only when (1) the submission of evidence fails due to a violation of laws/regulations made by the Competent Authority in charge of intellectual property matters; (2) the evidence is derived or is combined from that once presented in a patent/trademark invalidation action; or (3) it is with the adverse party’s consent or the adverse party has proceeded orally on the merits without objection (Amended Article 56).
  3. The Draft clearly states that provisions governing the proceedings of intellectual property civil matters, as set out in the Second Chapter of the Act, may apply mutatis mutandis to patent or trademark review and disputes (Amended Article 58).

V. Promoting Electronic Judicial Services

  1. The Draft expands the use of technological equipment to participants of litigation proceedings, including interveners, expert witness, inspector, and the like (Amended Article 5).
  2. According to the Draft, the original copy of a judgment may be served electronically with the consent of corresponding recipient(s). Such provisions may apply mutatis mutandis to patent or trademark review and disputes cases, as well as certain criminal cases or incidental civil actions thereof (Amended Articles 54, 58 and 71).

VI. Adding a System Allowing Participation in Proceedings by Victim

The Draft clearly states that provisions governing participation in proceedings by victim, as set out in Taiwan Code of Criminal Procedure, may apply mutatis mutandis in intellectual property criminal cases (Amended Article 71).

VII. Reinforcing Concentrated Trial of Intellectual Property Cases

The court should negotiate with the parties and determine a trial plan in the following situations: (1) the certain cases in which compulsory legal representation is required; (2) the case is rather complicated; (3) the situation that the court deems it necessary. The trial plan should specify “the date or a period for sorting out disputed issues” and “methods, sequence and dates or periods to investigate evidence,” along with “periods for initiating attack or defense against particular issues” or “dates or periods for other matters necessary to advance litigation proceedings as planned.” Matters concerning the aforesaid trial plan should be recorded in the transcript (Amended Article 18).

VIII. Easing burden of proof and enhancing trial efficiency

  1. With respect to the technical report provided by a technical examination officer– The Draft clearly states that the court may, when it deems necessary, fully or partially disclose the technical report provided by a technical examination officer. Additionally, regarding the special expert technical advice that the court acquired from the technical examination officer, the court should provide the parties with an opportunity for oral argument before adopting the advice as a basis for a judgement (Amended Article 6).
  2. Expanding applicability of provision that eases burden of proof in infringement actions– The current Act provides in Article 10-1 that in actions against misappropriation of trade secrets, if one party has made a preliminary showing of misappropriation and yet the other party still denies such allegation, the court should order the other party to raise a specific defense, so as to ease the burden of proof in infringement actions. In addition to renumbering the provision, the Draft further expands the applicability of the aforesaid provision to patent or computer program copyright infringement actions (Amended Article 36).

IX. One-time resolution to disputes

  1. Creating an information exchange system between the court and the competent authority– To keep the court and the parties abreast of the progress of deliberation by the competent authority in charge of intellectual property matters, in the event that a party states that there is a reason for the intellectual property rights at issue to be revoked or abolished, the court should immediately notify the competent authority; upon receiving the notification, the competent authority should immediately apprise the court of whether any requests to revoke or to abolish the intellectual property rights at issue has been accepted thereby. If so, the court may then ask for access to the case files kept by the competent authority at the request of the parties (Amended Article 43).
  2. Adding duty to disclose ongoing litigation to concerned parties of exclusive license Where intellectual property rights at issue have been exclusively licensed, one of the proprietor(s), the owner(s) of the trade secrets or the exclusive licensee(s) should proactively and timely disclose the ongoing litigation and its progress to the concerned parties of the intellectual property rights at issue, so that the concerned parties may decide whether or not to participate in the litigation or exercise their rights in accordance with other legal proceedings (Amended Article 46).
  3. Imposing restrictions on rehearing of discrepancies in patent validity judgment Under current regulations, in the event that the court rules in favor of the validity of rights in a final judgment with binding effect rendered with respect to a civil action involving infringement upon patent, trademark or plant variety rights, and yet the Competent Authority invalidates the same rights in a subsequent decision made with respect to a subsequently established patent invalidation case, trademark invalidation or revocation case, or plant variety right nullification or revocation case, the parties may initiate a rehearing action due to a subsequent amendment to the administrative disposition which served as basis for the aforesaid final judgment rendered in connection with infringements upon patent, trademark or plant variety rights (see Article 496.1.11 of Taiwan Code of Civil Procedure). Under Amended Article 50 of the Draft, however, the parties in the above-identified situation are no longer allowed to initiate a rehearing action in light of a final decision with binding effect made with respect to such subsequently established patent invalidation case, trademark invalidation or revocation case, or plant variety right nullification or revocation case, so as to ensure the stability of a final judgment with binding effect (Amended Article 50).

X. Resolving disputes in practice

  1. Stipulating how to deal with a “re-defense based on correction of claims against patent invalidity defense” The situation where a patentee files a post-grant amendment to patent claims against the reasons for invalidation asserted by the adverse party is known as “re-defense based on correction of claims against patent invalidity defense.” The Draft clearly states that, where a patentee makes a request for re-defense based on correction of claims, the patentee should, in principle, file with the competent authority a post-grant amendment to claims, and then explain to the court what is to be claimed or sought based on the amended claims (if the patentee fails to file a post-grant amendment with the competent authority due to reasons not attributable to him/herself and the rejection of post-grant amendment is obviously unjustifiable, the patentee may directly provide the court with the amended claims and the argument based on the same). The legality of the post-grant amendment to the claims is at the court’s discretion (Amended Article 44).
  2. The Draft amended provisions pertinent to “incidental civil proceedings” and the like (Amended Articles 68-70)

For more details on the amendments proposed in the Draft, please refer to the general explanation to the Draft and comparison table of clauses published by the Judicial Yuan on its website (https://www.judicial.gov.tw/tw/cp-1887-664467-a7323-1.html).

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