In Taiwan, if a patent is granted to a wrongful person, the rightful patent right holder has the opportunity to recover his patent right. One method of recovery is through a civil action for confirmation of the rightful patent right holder. Upon a final and binding judgment in favor of the rightful holder, he may apply to the competent authority to recover the patent right from the person not entitled thereto in accordance with the court's ruling. Another method is to seek remedy through invalidation proceedings, whereby the rightful holder files an invalidation action on the ground that the patentee is not the rightful holder. If the rightful holder files such an invalidation action within two years from the publication date of the patent at issue and a new application for the same invention within two months from the date the invalidation decision becomes final and binding, the filing date of the invalidated patent shall serve as the filing date of the new application. However, it remains questionable whether a patent right acquired through invalidation proceedings is identical to one recovered via a civil action. The administrative appeal decision rendered on March 13, 2025 shed some light on the differing interpretations between the Taiwan Intellectual Property Office (the TIPO) and its superior administrative authority, the Board of Appeals.
The facts of the case, simplified, are as follows:
In March 2017, Party A filed a design patent application with the TIPO. Following substantive examination, a design patent was granted and subsequently published in December 2017, under both publication number and patent certificate number X (hereinafter referred to as “the design patent at issue.)
In October 2019 - within two years from the publication date - Party B filed an invalidation action against the design patent at issue on the ground that the patentee was not the rightful patent holder. Upon examination, TIPO rendered a decision holding that “the invalidation action is well-grounded and the design patent shall be revoked.”
Party A, being dissatisfied with this decision, filed an appeal, and in turn, an administrative litigation which, however, was withdrawn at a later time. As a result, the TIPO's invalidation decision finding the design patent at issue invalid became final and binding, which is approximately four and a half years from the date the invalidation action was filed.
Within two months from the date on which the invalidation decision became final and binding, Party B filed a new patent application with the TIPO in accordance with Article 35 of the Patent Act, submitting the same specification as that of the design patent at issue. The TIPO assigned a new application number to this new filing.
In accordance with the provision of Article 35 of the Patent Act, the new application was not subject to publication. Consequently, approximately four months after filing, the TIPO issued a patent certificate to Party B, retaining the same publication number but assigning a new certificate number Y. (hereinafter referred to as the subsequent design patent)
Although Party B was issued a new certificate with a new design certificate number, the TIPO indicated in an accompanying official communication that in view of the lapse of the design patent at issue for failure to pay the annuity before the allowable period for reinstatement, the design patent at issue had been extinguished irrevocably
As such, Party B received only a patent certificate, but - due to the confirmed lapse of the design patent at issue—was unable to actually obtain any enforceable patent right.
An appeal was then filed with the Board of Appeals.
Under Taiwan's Patent Act, annuity payments can be attended to by any person, and such payments shall be made prior to the annuity due date. If an annuity is not paid by the annual deadline, the patentee will be granted a six-month grace period for late payment. If the annuity is still not paid within that grace period, the patentee will further be granted a reinstatement period of one year from the expiry of the grace period to apply for restoration of the patent right. If both the grace period and the reinstatement period expire in the absence of annuity payment for restoration, the patent right shall lapse ipso facto, retroactively from the day immediately following the original due date for payment of the annuity.
The issue raised by the Board of Appeals in this case was the legal relationship between Party A's design patent at issue and Party B's subsequent design patent filed pursuant to Article 35 of the Patent Act. Specifically, would Party A's failure to pay the annuity - resulting in the confirmed lapse of design patent at issue - cause the subsequent design patent to be extinguished as well, thereby precluding Party B from acquiring a valid and enforceable patent right?
The Board of Appeals opined that:
The legislative intent of Article 35 of the Patent Act is to enable the rightful patent right holder to obtain the patent right to which he is lawfully entitled. Furthermore, in order to prevent the rightful patent owner's later-filed application from being denied on the grounds of lack of novelty or inventive step due to prior publication of a patent wrongfully obtained by another person, the statute provides a legal fiction by which the filing date of the invalidated earlier application serves as the filing date of the later-filed application.
In view of the publication of the technical content of the subsequent application through the prior publication, to prevent third parties from mistakenly believing that identical subject matter has been granted patent rights twice, Article 35.2 expressly provides that applications filed under this provision shall not be republished, and that the publication date of the prior case shall serve as the date of grant of the new case.
In the present case, although the filing date and publication date of the subsequent design patent were both derived from those of the design patent at issue, the two did not constitute the same patent. While the existing and already invalidated design patent at issue did not involve a direct transfer, the subsequent design patent was a separate and independently filed application by the applicant (i.e., the appellant in this case), who was the rightful patent holder. Accordingly, even though the design patent at issue had lapsed, such lapse had no bearing on the validity or subsistence of the subsequent design patent. To hold otherwise would mean that a rightful applicant, even after successfully invalidating a patent wrongfully obtained by another person, might still be left with a patent right that is either impaired or extinguished—due to the bad faith action of the wrongful patent right holder(e.g., failure to pay annuities). Such an outcome would go against the intent of Article 35 of the Patent Act, which is to safeguard the interests of the rightful holder to obtain a patent.
The TIPO argued that the rightful holder himself had the opportunity to pay the patent annuity to preserve the patent right but failed to do so. The Board of Appeals counter-claimed that the obligation to pay annuities actually rests with the patentee. Before the invalidation decision on the design patent at issue became final and binding, the petitioner of the invalidation action was only a third party. It is questionable as to whether such third party is obliged to proactively pay the annuities for the design patent at issue, and consequently be held liable for the loss of rights due to non-payment.
Accordingly, the Board of Appeals revoked the decision rendered by the TIPO and requested that TIPO issue another decision. In response to the appeal decision, TIPO reissued a new decision in June 2025. However, it maintained its position that the subsequent design patent, like the design patent at issue, has lapsed due to failure to pay the required annuity in a timely manner.
The TIPO reasoned that the subsequent design patent is indeed an independent case that adopts the filing date and publication date of the design patent at issue, as the Board of Appeals alleged. Given that the publication date of the design patent at issue served as that of the subsequent design patent, it is without saying that the second-year annuity of the subsequent design patent was not paid within the applicable grace period. As such, the TIPO maintained that the patent right in the subsequent design patent had irrevocably lapsed.
The subsequent design patent holder remained dissatisfied and filed a further appeal. The matter is currently under examination. It has yet to be determined whether the rightful design patent holder may ultimately secure a valid and enforceable patent right.
However, in disputes concerning entitlement to ownership, it is noteworthy that annuity payments can be attended to by any person. Thus, regardless of whether the rightful holder seeks to recover his patent right through a civil action or an invalidation action, the patent right at issue should be kept in force. Typically, invalidation or litigation proceedings are protracted and in the course of these time-consuming proceedings, the nominal patentee - who is not in fact the rightful holder - may have no incentive to maintain the patent, and may passively allow the patent to lapse by failing to pay annuities. Such inaction will inevitably result in the irrevocable extinguishment of the patent right, thereby depriving the rightful holders of the opportunity to recover their rightful interest.