Taiwan’s IP Court Might be Consolidated into a New Court in the Future

Taiwan’s Judicial Yuan (the highest judicial organ of Taiwan) has finalized two draft bills on creating a “Commerce and IP Court (CIP Court)” to consolidate Taiwan’s IP Court, said a news release issued by the Judicial Yuan on June 21, 2019, ten days before the IP Court’s 11th anniversary. 

The two draft bills, namely the Draft Commercial Case Adjudication Act and the Draft Bill to Amend the IP Court Organization Act, if passed as proposed, will create 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 is proposed to convert 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 CIP 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 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

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

The Commercial Tribunal, on the other hand, will be established from scratch and will be governed by the Commercial Case Adjudication Act (which is now still in the form of a draft bill.)  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.”  Like the IP Tribunal, the Commercial Tribunal’s civil jurisdiction covers the first and second instances of a dispute (yet both instances will be tried by a panel of three judges.)  Unlike the IP Tribunal, it will not hear criminal or administrative jurisdiction.  To further enhance the two tribunals’ mutually independent nature, it is proposed that 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 at least in terms of procedural matters, since, after all, they will be operating under the same roof per the Judicial Yuan’s plan.  In fact, some main features of the Draft 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 proposed in the Draft Commercial Case Adjudication Act will be likewise applied by the IP Tribunal at least in an analogous manner (suppose the IP Case Adjudication Act will not follow suit to include these rules.)  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 Draft Commercial Case Adjudication Act, making an exception to the local version of the Continental Law’s 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, also dubbed as “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 proposed 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? 

For the time being, we do not know.  Yet this is only one of the questions that are left unclarified in the two Draft Bills which will soon be submitted to the Legislative Yuan (equivalent to a parliament in other democracies) for review.  The legislatures should have ample time to deliberate the wordings of the two Draft Bills before passing them into laws.