Taiwan to structure
an IP and Commercial Court¹²

        Taiwan set up its Intellectual Property Court (“IP Court”) in July 2008, whose jurisdiction covers IP disputes in relation to Patent Act, Trademark Act, Copyright Act, Fair Trade Act, Trade Secret Act, and so on. For criminal actions related to the intellectual property matters, the IP Court as the appellate level is reckoned as the available forum for adjudication. The IP Court was the first specialized court formed in Taiwan, and it is specially provided with Technical Examination Officers to identify technical issues and scientific context embedded in any given cases, so that these officers should assist the judges in the course of fact finding. More noteworthy, the establishment of IP Court has integrated three tribunals from the traditional judiciary mechanism that is bifurcated into civil, and criminal courts as well as administrative courts. As viewed, IP Court is vested with the authority to try any of the civil, criminal, or administrative cases related to IP.

In view of the success made by the IP Court, the Judicial Yuan took a further step on June 21, 2019 for it passed several draft bills to establish a specialized commercial court. In fact, there have been voices to create a new and specialized adjudicative forum specifically designed for commercial disputes. As the occurrence of a material commercial dispute may not only impact upon the rights and interests of company shareholders or creditors, but also that of investors in the public market,  and even compromise good business investment and economic competitiveness. As of it, the Judicial Yuan has acknowledged the need for a professional court to adjudicate any significant business disputes. Therefore, the new commercial court will incorporate the existent IP Court as it is turned into the IP and Commercial Court (“IPCC”).

 10 features of the new IPCC are thus summarized as follows:  

1.　High Court Level

The IPCC remains instituted with its two-instance court and three tribunals (civil, criminal, and administrative) as that of the current IP Court. A litigating party for a civil matter is eligible for the first and second instance of trial at the IPCC before filing an appeal to the Supreme Court. However, If a civil litigation is found attached to a criminal action for a commercial matter, such matter in dispute would, therefore, fall within the jurisdiction of IPCC, and the criminal court shall rule to transfer the case to IPCC (Article 3 of the draft of the Commercial Matter Adjudication Law).

2.　Jurisdiction

The IPCC shall enjoy the jurisdiction over commercial matters of significance, including litigious and non-litigious matters. A commercial litigious matter is the one that involves an amount in dispute over TWD 100,000,000 (equiv. to USD 333,333), or involves a publicly listed company, which severely impacts upon the exchange market and the rights and interests of investors. The IPCC will then be vested with the jurisdiction to adjudicate disputes incurred between a company and the company representative when performing his/her duty, matters in violation of the Futures Trading Act, the Securities and Exchange Act, the execution of rights by shareholders, and the validity of resolution from the board meeting or the general shareholders' meeting.

3.　Mandatory Representation

The parties shall retain an attorney for their representation in court proceedings. The draft of Commercial Matter Adjudication Law stipulates that legal representatives is mandatory to enhance trial efficiency; in the meantime, an attorney will effectively safeguard the legal interests of any parties who join the proceedings.

4.　Mediation

As recommended by government agencies or other public organizations, the judge of IPCC may recruit one to three technical experts as the mediators to the commercial mediation committee for a specific case (Article 24 of the draft of the Commercial Matter Adjudication Law). Mediation shall be concluded within 60 days after a mediator(s) assumes position, while the parties, legal representatives, and their representing lawyers must be present at the court on the day of mediation.

5.　E-facility at Courtroom

The court receives legal documents through online system, and it may, at its discretion or upon request, use audio visual facilities in aid of hearing when necessary.  

6.　Litigating Party’s Inquiry System

To prepare the arguments and supportive evidence in better terms, each party may enquire for statements from the other party. To allow for inquiries may expedite court proceedings and aid the parties to assess their litigation strategy.

7.　Expert Witness

Litigating parties may request for expert witness and further enquire about the opinion made by expert witnesses from the other party. Further, the IPCC may, as well, summon experts to present themselves to the court when necessary.

8.　Secrecy Order

For any documents, evidentiary substances, or information in need of appraisal that are related to trade secret, the secret owner may request the court to issue  an order of secrecy, and anyone in violation of the order are liable for criminal penalty.

9.　Preservation of Evidence

Evidence preservation and the proper procedures to preserve evidence in a commercial matter should highly entail in-depth commercial know-how for determination. Thus, the IPCC will be vested with the jurisdictional right to review the request for evidence preservation. But requests can also be made to the district court in occasions of emergency. 

10.　Non-litigious Proceedings

Prior to the court’s decision over a non-litigious matter, the court shall endorse the requesting party and the counter-party to produce their respective statements, and the court may further interrogate the other interested parties if necessary.

As retrospection to the history of the IP Court, a myriad of achievements can be found throughout the judicial history of Taiwan.³ For each year, the IP Court will docket about 1,260 cases, 660 for civil matters, 280 criminal matters, and the rest 320 administrative matters. For civil matters, almost 50% of the cases filed are related to patent, out-numbering other kinds of disputes. As a whole, the winning rate for plaintiffs is 53.60% in trademark cases, whereas the winning rate for plaintiffs drops to only 20.78% for patent cases. In view of the difference, the success rate of invalidity defense during a patent litigation case is 54.55%, which may well explain the slimmer chance of case-winning by plaintiffs. However, it is rather noticeable that the chance to settle in the IP Court is 12%, almost twice to that in regular district courts as 6.74%. Now that the draft of the Commercial Matter Adjudication Law and the revised IP and Commercial Court Organization Act are sent to the Legislative Yuan for review, it is, therefore, hoped that a speedy, appropriate, and professional adjudication procedure for commercial matters may be further structured in combination of a well-functioning IP Court.

for any questions relating to this topic, please contact us at cjchen@tsailee.com.tw