On April 19, 2022, the Taiwan IP Office (TIPO) submitted to the Executive Yuan (Taiwan’s highest executive branch of the Government) the draft Patent Law Amendment which has undergone several rounds of public hearings in the past 12 months. Unlike the recently passed amendment pertaining to just the patent linkage system, this new Amendment, if passed as proposed, will bring about an overhaul change to the entire patent regime, especially with respect of prosecution and invalidation.
The key points in the Amendment are as follows:
1. Establishment of a Patent Trial and Appeal Board (PTAB)
At the organizational level, the most significant change introduced by the Amendment is the proposed establishment of a Patent Trial and Appeal Board (PTAB) within the TIPO. Officially named “The Patent Committee for Review and Dispute Resolution,” this new agency will review/examine the following types of cases:
- Appeals of TIPO’s rejections of patent applications;
- Appeals of TIPO’s procedural decision;
- Request for patent term extension (PTE);
- Request for post-grant amendments;
- Request for compulsory license or for abolishing the granted compulsory license; and
- invalidation actions.
The PTAB will be composed of senior patent examiners and legal experts, and will form a panel consisting of three or five members to hear each case, one of the members acting as the presiding panelist. If the case relates to an appeal of the TIPO’s procedural decision of simple nature, it will be reviewed by a single-member panel.
2. Delayering the administrative appeal system
For the present, Taiwan adopts a two-stage examination system in terms of patent prosecution: (i) preliminary examination by one Examiner; and (ii) re-examination by a second Examiner. Afterward, a three stage appeal process is available, starting from a review by the Petitions & Appeals Committee within the Ministry of Economic Affairs, whose rulings can be appealed to the IP & Commercial Court (IPC Court), and then to the Supreme Administrative Court. The same three-stage appeal process applies to invalidation actions. At the TIPO level, an invalidation action is examined by examiners under a partially adversary system, although the proceeding is always inter partes, and no re-examination within the TIPO is available.
Now, it is proposed to remove the Petitions & Appeals Committee from the appeal system. Appeals of the PTAB’s decisions will be heard by the IPC Court directly. Furthermore, the PTAB will replace the existing re-examination mechanism within the TIPO, and will become the first tribunal to hear an invalidation action. Please see the following flowcharts below.
To strengthen the legitimacy of this delayering, the PTAB will examine invalidation actions on the basis of adversary system, and holding oral hearings will be the default rule. When a party appeals the PTAB’s decision to the IPC Court, it will be the opposite party rather than TIPO to be named as the defendant.
While the court system for judicial review remains to be a two-instance system, the litigation will shift from administrative to civil proceedings, and the court of final appeal on patent disputes will be the Supreme Court instead of the Supreme Administrative Court.
3. Adjusting the time limit for filing divisional applications
Under the current practice, an applicant may file a request for dividing an invention patent application or utility model application into two or more applications:
- before issuance of the re-examination decision on an invention application; or issuance of the decision on an utility model application
- within three (3) months from the date of receipt of a Notice of Allowance issued to an invention or utility model application .
However, for design applications, the applicant may file divisional applications only before issuance of the re-examination decision.
According to the draft Amendment, the time limit for filing a divisional application will be adjusted as follows:
- before issuance of the PTAB decision on an application; or
- within three (3) months from the date of receipt of a Notice of Allowance issued to an application (allowed either at the TIPO stage or at the PTAB stage).
4. Extension of grace period for design applications
The current grace period of six (6) months after the disclosure of the design in a printed publication or an exhibition and before filing will be extended to twelve (12) months.
5. Consolidating the proceedings for resolving entitlement disputes
Under the current practice, when a patent entitlement dispute arises, an interested party may initiate an invalidation action to cancel the concerned patent. On the other hand, the entitled person may file a new patent application for the same invention within two (2) months from the date the concerned patent is canceled while the new application can take advantage of the filing date of the canceled patent. In lieu of filing an invalidation action, the entitled person may attempt to resolve the issue via the route of obtaining a confirmatory judgment.
However, as patent entitlement issues almost always involve private right disputes (e.g. contractual disputes), the Government now proposes that entitlement disputes shall be heard exclusively by the court. According to the draft Amendment, a court decision in favor of the entitled person can be based on to conduct a change-of-name recordal with the TIPO, and the entitled person will no longer need to file a patent application after the concerned patent is canceled.
Further, upon a showing of a duly filed petition for preliminary injunction, a party in an entitlement dispute may request for a three-month suspension of any TIPO or PTAB proceedings concerning the patent/application as long as continuation of such proceedings may impair the party’s interests.