Two Points That Merit Attention From Foreign Entities Which Consider Initiating Civil Actions to Enforce Their Patent Rights in Taiwan

On June 30, 2010, the Taiwan IP Court delivered a first instance ruling on a patent infringement lawsuit filed by Dr. G.F. Neumark Rothschild (Professor Emerita of Columbia University) against two Taiwanese LED suppliers. The lawsuit was dismissed on grounds that the based-upon Taiwanese Invention Patent No. 41070, entitled “Process for Doping Crystals of Wide Band Gap Semiconductors” (corresponding to USP 4,904,618), was anticipated by a paper published in the May 1969 issue of Physical Review by Crowder et al., entitled “EPR and Luminescence Studies of Er+3 in Acceptor-Doped ZnTe.”

Dr. Rothschild has been quite aggressive in enforcing her patent rights in the United States. Not a few internationally leading LED manufacturers, including Lumileds, Toyota Gosei, and Osram, have been accused of patent infringement. In addition, Dr. Rothschild has filed patent complaints with the ITC against a large number of LED suppliers and even downstream system manufacturers in Taiwan, China, Japan, and Korea, many of which have subsequently reached settlement with, and obtained license from, Dr. Rothschild. 

In the lawsuit filed against the two Taiwanese LED suppliers, the damages claim involved was around US$2 million. According to the current Code of Civil Procedure of Taiwan, for a foreign plaintiff who does not have any assets in Taiwan that may be used to compensate litigation expenses in case the plaintiff’s claim is finally rejected, the court shall order the plaintiff to provide a surety bond at the request of the defendant, which is approximately 4 percent of the value of the damages claim. Accordingly, Dr. Rothschild would have been required to prepay a surety bond of around US$0.1 million. Furthermore, on the basis of a number of prior art references submitted by the defendants, the court ruled that Dr. Rothschild’s patent should be deemed invalid.

With the establishment of the IP Court and the enactment of the Intellectual Property Case Adjudication Rules in July 2008, the IP Court is empowered to rule on patent validity in a patent infringement lawsuit, which ruling is however binding on the specific lawsuit only. This change in practice, as well as the necessity of depositing a surety bond may be worthy of interest to foreign entities which consider initiating civil actions to enforce their patent rights in Taiwan. 

The above contents are intended as general discussion of the subject matter only and shall not be deemed as legal advice to any particular case or issue.