IP Case Adjudication Act 2023

On January 12 of 2023, at the outset of the New Year, the IP Case Adjudication Act (“IPCAA”) was given the largest overhaul since its enactment in 2007 and coming into effect in 2008. A total of 77 articles were changed: 36 were added and 41 revised. A collaborative effort from almost all sectors of the legal community—including court judges, attorney associations, criminal prosecutors, academics and other interested parties—was invested to accomplish this legislation. The scope of the IPCAA’s regulatory function following the amendment was significantly expanded, with an emphasis on enhancing the degree of trade secrets protection and on renovating a more efficient and up-to-date IP litigation system.  

The essential aspects of the amendment are as follows.

1.      Subject matter jurisdiction over trade secret-related cases

For civil matters of trade secret infringement in the first instance, the IP and Commercial Court (“IPCC”) has exclusive jurisdiction unless both parties in the dispute mutually agree on another forum.[1] The exclusive jurisdiction for trying general criminal offenses to trade secrets in the first instance, including those supplemented with civil actions, is vested to the first instance court of the IPCC instead of the district courts. Furthermore, in parallel to the newly amended National Security Act that introduces penalties against crimes of undermining significant trade secrets relating to national core technologies, the trials for such offenses are under the jurisdiction of the second instance court of the IPCC, which is equivalent to a high court.[2] Moreover, the Supreme Court shall establish a dedicated tribunal or division for hearing a case as mentioned above that is appealed from the IPCC.[3]

The rights of access to dossier information and the de-identification measures to remove the use of code names and code signs in documents of litigation cases involving trade secrets have been introduced.[4]

Activities in breach of a secrecy protective order are subject to heavier penalties, especially for those against national core technologies. They become a type of indictable offense since such a breach undermines not only personal but national interests. The crime of breaching an order committed beyond the Taiwanese border is codified for the sake of offering a territorially comprehensive protection measure for deterring said crimes.[5]

On a separate note, victims are able to participate in cases of IP crimes in the hope of protecting the victim’s interests more effectively.[6]

2.      Mandatory representation and concentrated review

In order to safeguard the disputing parties’ interests in IP civil matters and enhance the efficiency of case reviews in the court, several cases in particular require compulsory representation by an attorney-at-law. Examples are: litigation in the first instance with a claim for a higher amount; litigation in the first instance involving patents, computer program copyrights and trade secrets; litigation in the second instance; both litigious and non-litigious cases in the third instance; and retrials of remanded cases.[7]

In compulsorily represented civil matters and other complicated cases, the court may formulate a trial schedule in conjunction with the disputing parties.[8] A trial schedule must, at the very least, have the dates or timeframe for identifying the issues of a case together with the means and dates or timeframe for investigating evidence. Additionally, it is recommended that a trial schedule includes the timeframe for parties to propose arguments against a particular issue identified. In the absence of a superior procedural interest, an argument presented outside the timeframe will not be given consideration.

3.      Inspection and expert witnesses

An “inspection” system has been added as a means of evidence investigation.[9] In some cases involving emerging technologies, it happens that most of the evidence lies with one particular party or a third person. Sometimes even after ordering a party to present evidence or conducting an on-site investigation, the court would not able to ascertain the complete picture of the facts due to the one-sided possession of evidence. It is possible that the procedural principle of the equality of arms would be compromised. In order to avoid or minimize the unfairly preferential advantage arising from such evidence bias, the court may, at a party’s request, select a neutral technical specialist who would be permitted to enter a defendant’s premises to collect evidential material during a pending litigation. This instrument of evidence collection will be especially beneficial in cases of infringement of software-related inventions; for example, at the site of the accused infringement’s occurrence, an inspector will be able to run the computer program using the same device in order to determine whether the steps of the claimed method are executed one after another. To give a second example, an inspector is able to enter a factory to observe with his or her own eyes the systematic operation of a large production line during the machinery’s normal manufacturing procedure in order to compare it fully with the invention process as claimed.

Similarly to the Commercial Case Adjudication Act, an “expert witness” is appointed to offer professional analysis and clarify the questions of fact.[10]

4.      Information exchange between the proceedings of administrative reviews and judicial trials

Under a bifurcated litigation system, an IP right can be determined as invalid, either in an invalidation/revocation proceeding as an administrative review or in a court proceeding in a judicial trial for infringement. When both administrative and judicial proceedings are instituted in parallel, however, there is a risk of ultimately reaching divergent and even conflicting judgments regarding the validity of the same IP right. In order to avoid a contradictory finding, when the defendant in an infringement suit raises a defense of invalidity or revocation or when a lawsuit is closed, the court shall notify the TIPO of the same. The TIPO shall then give a response as to whether it has a co-pending proceeding regarding the litigated IP right, even if a decision has already been made or the challenging party has withdrawn the proceeding. The update of the case status incorporates a transfer of document copies so that the recipient court or TIPO can save the unnecessary effort of working on identical sets of facts from the start. The establishment of an information exchange mechanism between the administrative and the judicial branches may help to expedite case reviews while also maintaining unity of opinions.[11]

When the defendant raises a defense of invalidation, the plaintiff may make a request to the TIPO for a post-grant amendment to narrow the claimed scope. According to the new IPCAA, the plaintiff is required to report the post-grant amendment request to the court so that the court may judge the case based on the amended scope of the patent.[12]

In addition, the possibility of a retrial is restricted. Let us suppose that the TIPO firstly makes a decision regarding invalidity or revocation. The court subsequently makes a judgment of infringement based on the TIPO’s decision. Later, however, the TIPO overturns and finalizes the case of invalidity or revocation with a reversed decision; unfortunately, the new decision declaring an inconsistent validity finding or scope of the right cannot be used to initiate a retrial in court.[13]

Transparency of case status is not only required between government branches. Additionally, for an IP right or trade secret that is exclusively licensed and then litigated, the licensor or the licensee who litigates the IP or trade secret bears an obligation to update the other party in the proceeding before the conclusion of the oral argument.[14]

5.      Openness of Technical Examination Officer’s report and reduced burden of proof

The IPC Court is equipped with Technical Examination Officers (“TEO”) to assist judges in investigating the technical issues in a given case. The court may order the TEO to produce an advisory report giving details of the technical analysis. When necessary, the court may publish the entirety or a section of the advisory report. Furthermore, a piece of technical knowledge acquired by the court solely as a result of the advisory report shall be made available for both parties’ arguments before entering the court’s deliberation.  

Furthermore, the burden of proof for a patentee or computer software copyright holder is reduced when making an accusation. As the plaintiff, the owner of the right only needs to make a preliminary identification of the facts of the infringement; the burden then shifts to the defendant, who must refute the accusation with specific arguments in order to produce an effective denial.[15]

6.      Adoption of IT in justice

In an effort to foster the development of “e-justice”, the scope of utilization of technological equipment in court rooms has been enlarged. Furthermore, the original copy of a judgment can be served electronically.[16]

The legislative snubs

The passed amendment does not include all the proposed changes as they were in the draft bill of the amendment. The introduction of an amicus curiae system permitting individuals, societies or organizations to submit written advisory opinions was rejected. In the view of some dissenting parliament members, the amicus curiae system derived from the common law system has not yet been widely applied to all aspects of the law in Taiwan, yet except the constitutional procedures. There is some doubt as to whether it would be compatibly effective in IP cases or whether it would be tainted by arbitrary or—in worse cases—manipulated submissions.

A number of supplementary rules for the “adversary” system - the transition of remedial appeals for patent and trademark cases from administrative litigation procedures to civil litigation procedures - were likewise not included in the amendment.

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