Some Intellectual Property Litigation Issues in Taiwan

Yu-Li Tsai, Patent Attorney

¡½ Bachelor of EE from National Taiwan University

¡½ Master from Telecommunications from National Taiwan University

¡½ IP Master from New Hampshire Law School (Franklin Pierce)

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1.      Reflecting on the last 12 months or so, are you seeing an increase in intellectual property litigation in your region? What are some of the common causes of these conflicts?

Answer: According to statistics from the Intellectual Property Court (IP Court) for 2015, there were totally 1,012 new cases filed at the IP Court, including 445 civil cases, 254 criminal cases, and 313 administrative cases. In comparison to those of 2014, where the respective numbers were 514, 286, and 294, the total number of cases decreased. 

The causes or claims of these cases are IP infringement, injunctive relief, royalty disputes, declaratory judgment for rights ownership, criminal offense for violating the IP laws, opposition proceedings, invalidation proceedings, cancellation proceedings, etc.

2.      Are there any particular sectors which seem to be more susceptible to IP litigation in your region?

Answer: IP infringement-related disputes seem to be more susceptible to IP litigation because infringements always directly damage the rights owner¡¦s interests.  In addition, IP infringement-related disputes or issues often provoke other IP litigations such as criminal offenses or invalidation cases.

3.      Why is it so important for today¡¦s companies to develop a strategy for IP litigation? In your opinion, are companies paying enough attention to this issue?

Answer: IP litigation involves substantial expertise which directly determines the results of the litigation.  A number of factors are involved in, for example, how to discover an infringement activity, what rights are infringed, when and where should a right owner file a lawsuit, especially when the owner has a worldwide IP rights, whom should a right owner file a lawsuit against, ¡Ketc.  Therefore, developing a strategy for IP litigation is absolutely necessary and important for protecting IP rights.

For large-sized companies, their managers may pay more attention to this issue because according to the statistics, they usually have a reasonable success rate in IP litigations.  In addition, large-sized companies are often the first targets of patent trolls, so they may be forced to pay more attention to this issue.  For small-sized companies, costs are usually the main concerns, so they have less willingness in spending budget for developing a strategy for IP litigation.

4.      What advice would you give to companies on effectively protecting their IP through monitoring potential infringements and enforcing their IP rights?

Answer: Companies should establish a team with members having expertise in IP-related law, e.g. patents, trade secrets, plant varieties, or lay-out designs for integrated circuits.  The team should include members having relevant technical backgrounds, and has abilities to develop effective strategies, manage the company¡¦s IP portfolios, negotiate IP assignment or licensing, mobilize the company¡¦s resources to conduct periodic market investigations, and maintain proper cooperation with outside counsels.

5.      What general preparations and procedures should companies undertake when pursuing the best possible outcome from litigation?

Answer: The companies should undertake general preparations and procedures such as (1) make sure the IP rights are valid with a certain level of invincibility, preferably confirmed by an outside counsel; (2) identify which IP rights are infringed with at least a preponderance of evidence, preferably confirmed by an outside counsel again; (3) collect sufficient evidence before filing a lawsuit; (4) if there are outside counsel involved in, maintain effective communication therewith to ensure consistent information; and (5) hold a timely conference to solve any outstanding issue.

6.      Could you outline any recent legal and regulatory developments that may have important implications for the treatment of IP in your region?

Answer:

(1)    On June 29, 2016, the TIPO promulgated that a foreign applicant can directly use the patent gazette or a priority document in foreign language, which complies with the basic formal requirements to serve as the foreign text for filing a patent application.  A specific foreign text specification for filing purpose is no longer required.

(2)    On March 7, 2016, the TIPO promulgated that when an applicant has a need to postpone the post-grant publication of a patent, the maximum term of postponement can be extended from 3 months to 6 months in order that the patentee has more time to deploy the market strategy for its patented product to better stay away from unfair competition or unfaithful exploitation by a potential infringer or malicious competitor.

7.      What advice would you give to companies on contractual issues surrounding IP rights? What key clauses should be included in contracts to account for the possibility of future disputes arising from an agreement?

Answer:

(1)    Try to specify the IP rights with application or registration numbers in the contract.

(2)    If the IP rights cannot be immediately identified by a specific reference, in the agreement, such as a technique transfer contract, specify the contracted subject matter by delineating the technique with all of its characteristics and all possible details.

(3)    Specify the field and territory where the contract takes effect.

(4)    Specify the effective period of the contract.

(5)    Specify how fees are evaluated.  Taking assignment agreements for example, specify that the patents¡¦ value is evaluated according to cost-based method, market-based method, discounted cash flow business valuation method, or a certain kind of combination thereof.

(6)    Specify the liability if found infringing.  Taking a licence for example, clarify whether a licensor or a licensee should undertake all liabilities and/or compensate aggrieved parties, or if the licensor and the licensee should jointly undertake the liabilities.

(7)    Specify the jurisdiction and governing laws when a potential dispute arises.

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