Amendment to Taiwan’s IP Case Adjudication Act Was Implemented on August 30, 2023

The Amendment to Taiwan’s IP Case Adjudication Act, which was passed by Taiwan’s Congress in January 2023, has come into effect today on August 30, 2023. This Amendment represents the most significant overhaul of the act since its inception in 2008.

The main features of the Amendment are as follows:

1. Mandatory representation and a specialized Division at the Supreme Court

Basically speaking, civil disputes relating to patents, software copyrights, and trade secrets shall all be mandatorily represented by lawyers since today. The same is true with other civil IP disputes unless the value of the plaintiff’s claims is low.

Simultaneously, the Supreme Court has established a specialized tribunal within one of its Divisions to handle appeals related to IP disputes.

2. Enhanced protection of trade secrets

According to the Amendment, the IP & Commercial Court (IPC Court) now possesses exclusive jurisdiction over both criminal and civil lawsuits involving trade secret infringement. If the infringement involves state-level key technologies, the criminal lawsuits should start from the appellate instance IPC Court instead of a district court. In addition, the Amendment has introduced the offence of “breach of trade secret maintaining order abroad” to further protect trade secrets in lawsuits.

3. Augmenting the efficiency of civil proceedings

According to the Amendment, the court should engage in discussions with parties in a civil lawsuit through their lawyers regarding trial planning. This is applicable unless the case either does not require legal representation or pertains to relatively straightforward matters.

In patent litigation cases, judges is expected to disclose their interpretation of the disputed claim terms in a timely and appropriate manner, ex officio or upon the request of a party.

4. More transparency and increased burden of proof on the defendant’s side

Prior to the Amendment, reports formulated by court experts, formally referred to as Technical Examination Officers (TEOs), were not disclosed to any party. However, effective today, judges may choose to disclose all or a portion of the content in the TEO Reports if they deem it necessary. Subsequently, the parties are allowed to express their views on the Reports.

In lawsuits pertaining to patent rights, software copyrights, or trade secrets infringement, once plaintiffs have established a prima facie case, defendants are now obligated to provide facts and evidence supporting their denial of infringement. Mere passive denial of infringement will be considered as failing to meet their burden of proof. This change is intended to alleviate the burden placed on the plaintiff.

Incidentally, the Amendment has introduced new mechanisms to reduce duplication of lawsuits and risks of inconsistent judgments. Where an IP right under litigation has been exclusively licensed, the patentee plaintiff should timely notify the exclusive licensee so as to enable the latter to secure opportunities for intervention in the litigation.

5. Regarding post-grant patent amendments made during infringement litigations

Patent infringement lawsuits used to become very complex when the disputed patent claims were amended, especially when the amendment took place not within the lawsuit itself, but within a parallel invalidation action. The Amendment now provides a comprehensive solution as follows:

(1) When patentees/plaintiffs have amended the patent claims before the IP Office (usually in a parallel invalidation action), they should make a report to the court. Otherwise, they can only claim their rights based on pre-amendment claims.

(2) If a patentee has missed the opportunity to amend claims at the IP Office (e.g. the patent has been held invalid by the IP Office in a decision being appealed), the intended amendment can be raised and considered in an infringement litigation, but only on the premises that “not allowing the amendment is manifestly unfair” and the miss is due to a cause not attributable to the patentee. In this scenario, judges may, at their own discretion, determine whether the amendment is legitimate or not or seek the IP Office’s opinion on the amendment. In the latter case, the IP Office may present its opinion in writing or by appointing an examiner to present before the court.

6. More experts in IP litigations

By making reference to the Japanese Patent Law, the Amendment mandates that the court may, upon request, designate a neutral technical expert to carry out the “verification” task in evidence gathering proceedings. In addition, an expert witness system has been introduced into the Amendment with reference to the US litigation practice.