Commercial Success Recognized by IP Court to Support Patent’s Non-Obviousness

For years patentees had been looking forward to a Taiwan IP Court decision affirming a patent’s non-obviousness (or inventive step in local legal terms) on the ground of commercial success, or other objective indicia categorized as “auxiliary considerations,” and now they received a heartening response from the IP Court.  Wan-Sheng Trade Corp. v. IP Office, 107 Shing-Zhuan-Su 75, Taiwan IP Court (February 2019).

The seminal decision was rendered in late February 2019 for a patent invalidation dispute, in which a utility model patent for “a heat preservation cover for food” had been challenged, and later declared by the IP Office, as obvious in view of two prior art patents.  As in many invalidation actions, the main issue contended by the parties before the IP Office was whether there would have been adequate motivation to combine the prior art features to arrive at the disputed UM (and the IP Office’s answer was in the affirmative.)  It was only after appealing the case to the IP Court that the patentee brought forth the commercial success argument, which the IP Court found convincing.  The IP Office’s ruling was reversed and remanded.

Commercial success is one of the four objective indicia termed as “auxiliary consideration” by the Patent Examination Guidelines (2017) for the test of non-obviousness, the other three being unexpected result, resolving a long pre-existing problem, and overcoming a technical bias.  Notwithstanding the word “auxiliary,” the Guidelines provide that commercial success and other objective indicia are in the class of “positive factors for inventive step” which “shall be considered together and weighed against negative factors against inventiveness” (i.e. prior art disclosure, motivation to combine, etc.)  As the IP Court pointed out in Wan-Sheng v. IP Office, acknowledging these positive factors in the test of inventive step is for the purpose of “avoiding hindsight caused by arbitrary combination of segments of prior art references.”  However, before Wan-Sheng, never was any commercial success argument known to be found convincing by the IP Court, the chief obstacle being the causal connection test—whether there was a reasonable causal link between the asserted commercial success and the patented features.

What makes Wan-Sheng even more remarkable is that the patentee told a simple story for his commercial success, centering on the proliferation of counterfeits. 

According to the IP Court’s decision, the disputed UM was actually a modification of the patentee’s old product, the major difference being that the disputed UM was foldable while the old product was not.  The old product was first sold in 2012 and enjoyed a long on-sale duration and good market exposure, but was never copied by counterfeiters.

In 2014, the foldable product covered by the UM in dispute was introduced to the market. From 2014 through 2015, the UM dominated the market, and no other foldable covers were found. However, as soon as it was sold online in 2015, copycats started to appear, and counterfeits went rampant in 2017.

Based on the above, the court was convinced that the commercial success of the UM was not only real but resulted from the patented feature (foldability) over prior art. The interesting part is that the main body of the patentee’s evidence consisted of nothing else than a dozen printouts of Google image search results.

While the patentee was fortunate enough to help turn a historical page for the development of Taiwan patent law, this was not a total victory, as the patentee did not win solely on the battle front of commercial success.  Its defense against the “negative factors” turned out likewise effective as the IP Office’s holding for the asserted motivation to combine the prior art was reversed by the IP Court.  However, it is the writer’s belief that with Wan-Sheng as a firm bridgehead, increased confidence will be found in patentees as well as judges to advance into cases where patents’ inventive step can be solely proved by commercial success and/or other objective indicia of non-obviousness in Taiwan.