Under current regulations, if a party is dissatisfied with an Invalidation Decision rendered by Taiwan Intellectual Property Office (hereunder TIPO), the party can file an appeal with the Ministry of Economic Affairs (hereunder MOEA). If said appeal is dismissed, the party can sue TIPO in an Administrative Litigation before the Intellectual Property and Commercial Court (hereunder IPC Court). The IPC Court would order the opposing party of such invalidation proceeding to join as an intervener, allowing the intervener to independently employ means of attack or defense in the litigation. Also, the intervener will be bound by the administrative judgment. While, under current practices, there are few cases where IPC Court reversed TIPO’s original invalidation decision, the absence of intervener in the administrative litigation may still impact the result of said litigation and even lead to the final revocation of the original invalidation decision. The 110 Xing-Zhuan-Su No. 9 Administrative Decision rendered by IPC Court in September 2021 is one such example.
In said judgment, the patent in dispute is TW I317967 (hereunder ‘967 patent), which is a “Reticle Carrier, And Method For Supporting A Reticle”, owned by ENTEGRIS, INC. (hereunder Entegris), and the invalidation petitioner is GUDENG PRECISION INDUSTRIAL CO., LTD. (hereunder Gudeng). By way of background, the case can be traced back to 2015 when Entegris sued Gudeng for infringement of its ‘967 patent. Entegris won the first-instance litigation and was awarded damages of NT$970 million in March 2019 (104 Min-Zhuan-Su No.36 Judgment of IPC Court), setting a record for high compensation in Taiwan. Thereafter, Gudeng appealed and filed before TIPO several unsuccessful invalidation applications challenging the ‘967 patent until its sixth invalidation application filed in April of 2019 (hereunder N06 decision). Gudeng provided new prior art references and successfully persuaded TIPO to make an invalidation decision in favor of Gudeng in April 2020. The N06 decision not only invalidated the ‘967 patent, but also is widely believed to be the catalyst to a settlement between the two companies involved in civil litigation at the end of 2020.
Even though the two parties had settled in civil litigation, the administrative remedy for the disputed ‘967 patent continued on. To reverse the N06 decision, Entegris filed an appeal to the MOEA, which was then followed by an administrative litigation after the appeal was dismissed. In the litigation, the IPC Court basically agreed with Entegris’ contentions that TIPO’s reasoning was not sufficient to establish obviousness of the claims of ‘967 patent. The IPC Court held that TIPO’s decision did not take into account the purposes of the prior art and the ‘967 patent, nor did it review the ‘967 patented invention as a whole when determining obviousness. Defendant TIPO was given opportunities to provide supplementary arguments on such issues such as insufficient reasoning during the hearings, but it only reiterated its original arguments in the N06 decision. As a result, the IPC Court held that the N06 decision of TIPO is groundless, and revoked its invalidation decision. Further, the IPC Court cited 109 Shang No.722 Judgment of Supreme Administrative Court, and indicated that the administrative court has discretion to inquire into the facts and is not bound by the claims or arguments of the parties, and TIPO has been allowed to submit supplementary arguments to enhance its legal grounds without prejudice to the procedural right of the parties and on the same basis of the result and reason of N06 decision. Yet, TIPO did not do so.
With respect to contentions of technical issues concerning patent validity before the IPC Court, it is definitely most appropriate for the intervener (such as Gudeng in the subject case) as the counterparty against the plaintiff to participate actively and respond vigorously in the litigation. Usually, TIPO as the defendant would simply cite the arguments of intervener in administrative litigation to support or enhance its original invalidation decision. However, in the subject administrative litigation, the IPC Court had ordered Gudeng to join as an intervener, but Gudeng did not show up, perhaps due to the civil settlement with Entegris at that time or for other considerations, resulting in TIPO’s normally passive attitude to provide supplementary arguments, thus leading to the revocation of its N06 decision.
The verdict of this case highlights an important issue of the current administrative litigation framework in Taiwan, namely, the different roles TIPO plays in different stages of the invalidation procedure and its subsequent appeal procedures. On one hand, TIPO is the decision maker in an invalidation procedure, but on the other hand, TIPO becomes the defendant in the appeal procedures (including administrative litigation). If the intervener, who is the real interested party, did not attend the administrative litigation, it is rare that TIPO’s defense would go beyond what was presented in the original invalidation decision. As part of the reasons aimed at solving this dilemma, TIPO published a draft Amendment to the Patent Act on December 30, 2020, providing an entirely new legal framework that will turn the litigation regarding patent invalidation into adversarial system and allow invalidation petitioner and patentee to express their opinions exhaustively. For the details of the amendment, please refer to our newsletters in the first quarter of 2021 (link: http://www.saint-island.com.tw/En/Knowledge/Knowledge_Info.aspx?IT=Know_1_3&CID=597&ID=1969).
Under current Patent Act, it is recommended that an invalidation petitioner or patentee as intervener in the administrative litigation should actively attend the litigation and provide opinions to avoid losing the opportunity to attack and defend at that instance of litigation, unless there are other considerations. Otherwise, once the IPC Court reverses the original invalidation decision, the intervener will still be bound by the administrative judgment.