TIPS^®  Taiwan Intellectual Property Special

Granting of Provisional Injunction Will Become More Difficult for Intellectual Property Cases

Since the criminal penalty for patent infringement was abolished almost 2 years ago, the provisional injunction has become a widely used mechanism to stop the accused infringing activities before the litigation.

The Civil Procedure Code requires that, to request a provisional injunction, the petitioner have to demonstrate the reasons why a provisional injunction should be issued; however, if the petitioner fails such demonstration of reasons, it can provide a bond to obtain a provisional injunction. In other words, if the petitioner can afford to pay for the bond, it does not need to show the likelihood to prevail on the merit. As a result, the provisional injunction has been used as a weapon to interrupt the manufacturing or business operation of the competitors. As the product circle in the high tech field is short, once a provisional injunction is executed, even if the court finally finds the accused does not infringe in the litigation, the products is out of the market

To prevent the abusive use of the provisional injunction, the draft of the “Law for Reviewing Intellectual Property Cases” requires that, where a petition request a provisional injunction to sustain a status quo, the petitioner should demonstrate the reasons; if the petitioner fails to demonstrate sufficient reasons for such provisional injunction, the court should deny its request. Moreover, the draft also requires that in determining whether to grant a provisional injunction, the court should take into consideration the likelihood for the petitioner to prevail in the main suit and whether there is irreparable harm should the provisional injunction be denied.

The Draft is still under discussion in the Justice Yuan. Any progress of the legislation will be reported in our newsletter.