Taiwan’s IP Court Will Be Reshaped into a New Forum

On December 17, 2019, Taiwan’s Legislative Yuan (equivalent to a parliament in other democracies) passed a draft bill on creating a “IP and Commerce Court” (IPC Court) which will consolidate the IP Court established since 2008.  The new court, estimated to come into existence in 2021, will be the first special court in Taiwan that comprises two independent special tribunals, namely the IP Tribunal and the Commercial Tribunal, governed by respective adjudication rules. 

The IP Court will morph into the IP Tribunal without much change other than organizational adjustments.  The IP Tribunal will have the same scope of jurisdiction and instance levels as the IP Court does, and will follow the IP Case Adjudication Act which has been governing Taiwan’s IP litigations since 2008.

As such, theoretically speaking, just with a slight modification (as shown in the figures below), an IP lawyer’s knowledge about IP litigations in Taiwan (as reflected in our article “Taiwan IP Overview”) will readily fit in the Judicial Yuan’s blueprint for the IPC Court.  Civil IP disputes will still be heard by one judge in the first instance and by a three-judge panel in the second instance, and lawyers will still find Technical Examination Officers (TEOs) assisting judges with tech issues either in the court room or, for example, on a defendant’s premises where an evidence preservation order is executed.  If the litigation filings remain stationed at the current volume, then very likely the same team of IP Court judges and TEOs will just move in the new court (might be located in a suburb of Taipei) without new members being recruited. 


Fig. 1: Taiwan’s current court system for IP dispute resolution


Fig.2: The IP Court will become the IP Tribunal under IPC Court


Fig. 3: Taiwan’s court system for IP disputes after the IPC Court is established

The Commercial Tribunal, on the other hand, will be established from scratch and will be governed by the newly enacted Commercial Case Adjudication Act. The Commercial Tribunal will have exclusive jurisdiction over a civil commercial dispute in which “either the amount or value of the disputed claim(s) exceeds a minimum of NT$100 million, or the dispute involves a publicly traded company and affects the market order and investors’ interests massively.”  Unlike the IP Tribunal, it will not hear criminal or administrative jurisdiction, and its civil case decisions will be appealed directly to the Supreme Court.  To further enhance the two tribunals’ mutually independent nature, judges at either tribunal will not hear cases falling within the jurisdiction of the other tribunal.

Despite the task division, the IP community generally believes that mutual influence will occur between the two tribunals’ practices.  In fact, some main features of the Commercial Case Adjudication Act are quite familiar to an IP lawyer. The provision allowing the Commercial Tribunal to perform trials via a video conference (Art. 18) is clearly modeled after the counterpart in the IP Case Adjudication Act, so are the provisions regarding the issuance of confidentiality preservation order and preliminary injunction (Arts. 55 & 64).  Very likely the IP Court’s practices (as well as IP lawyers’ practices) in these aspects will be adopted by the Commercial Tribunal, or at least be considered as good starting points to address these matters.

On the other hand, one may presume that some of the rules in the Commercial Case Adjudication Act will be likewise applied by the IP Tribunal at least in an analogous manner. For example, expert witnesses, which some IP Court judges have been proposing to admit into Taiwan’s legal system, now appear in the text of the Commercial Case Adjudication Act, making the first exception to the long-held dichotomy of witness and court-appointed expert.  A party in a commercial dispute will hence be allowed to call its expert witness to testify on a factual issue based on professional knowledge and experience and, more importantly, the expert witness will get cross-examined by the other party’s counsel.  However, whether a likewise scenario will happen in the IP Court/Tribunal is still doubtful, given the strong presence of TEOs, commonly called “court experts.”

Another interesting issue is that there surely will be cases over which either tribunal may exercise jurisdiction.  For example, consider this scenario: if a CTO intentionally divulges his company’s valuable trade secrets to a competitor, the company has both a trade secret case and a corporate law case (based on a breach of fiduciary duty claim, for instance).  Under the newly amended legal framework, an infringement of trade secret claim shall be tried at the IP Court/Tribunal, whilst a breach of fiduciary duty claim shall be tried by the Commercial Tribunal if the claimed damages are NT$100 million or more.  So which tribunal shall have the priority to take this case?  If the tribunal where the case is first filed will have the priority, then which tribunal should the plaintiff choose to file the suit?

These questions have bewildered the author since the IPC court was first proposed, and they still seem to be open questions. The good news is that the IP community will have roughly two years to address such issues before the IPC Court starts to operate possibly in 2021. 

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.