Jurisdiction Over Patent Ownership Disputes Can Be Tricky

published on 26 Apr 2012

t can be a somewhat complicated process to invalidate patents based on an issue related to entitlement to file a patent application in Taiwan, especially when the true owner cannot prove an employment or contractual relationship with the patentee who filed the application.

The patent law specifies in Article 5 that those possessing the right to apply for a patent may include any inventor, creator or his/her assignee or successor. Article 67 of the patent law also stipulates that one of the grounds for invalidating a patent is related to the situation in which a patentee is found to be someone other than the person entitled to file a patent application on an invention. However, it is not always a straightforward process for the true owner to challenge the validity of a patent granted to someone who had no right to apply for it.

Moreover, for a true owner of a patent, he or she may not want simply a resolution to defeat the patent through invalidation, but may hope to reclaim his or her invention patent. Since the patent law does not allow a direct transfer of patent rights, and the returning of a right to file a patent after it has been granted would be meaningless and illogical, what a true owner of the patent can do under current practice is to initiate an invalidation proceeding within two years after the patent in question is granted. After the patent in question is invalidated, within 60 days the true owner would then be able to file an application for the same patent, in which case the original filing date of the invalidated patent could be restored in the newly filed patent application.

To invalidate a patent, an invalidation proceeding must be initiated before the Taiwan Intellectual Property Office (TIPO). Any appeal against validity decisions from TIPO, after appeal in the administrative appeal committee, should be pursued by administrative litigation in administrative courts. Private interest disputes such as patent infringement matters fall under the jurisdiction of the civil courts. Article 29 of the Intellectual Property Case Adjudication Rules specifically provides that civil litigation with respect to the validity of an intellectual property right should be dismissed, since disputes regarding the existence of an intellectual property right should be resolved in administrative proceedings.

Administrative Resolution

 According to a number of Supreme Administrative Court decisions, civil courts should have the power to decide who has the right to apply for a patent.

Supreme Administrative Court Judgment No. 91-Pan-521 relates to a case in which an inventor had a contractual obligation to his previous employer. The contract stipulated that any invention created within two years after termination of employment should be disclosed to the previous employer, whose consent is to be obtained before the inventor files a patent for such invention. In spite of this contractual obligation, the inventor, after leaving the previous employer, assigned an invention made during later employment to his current employer, who assigned the patent application right to the applicant/patentee. The Supreme Administrative Court ruled that TIPO can only review the documents provided by the parties to determine whether granting of the patent right should be denied; as to the ownership of the patent right, it is a dispute of private right and cannot be decided by TIPO.

In an earlier case of the Supreme Administrative Court, Judgment No. 89-Pan-1752, a ruling was reached in a similar manner. This case involved an invention created during employment, which the inventor did not disclose to his employer but assigned to the patentee/applicant after employment was terminated. The Supreme Administrative Court opined that TIPO should make a factual determination on ownership of the patent right based on the judgment of the court, and render an administrative decision regarding whether invalidation is proper in view of the fact that “the invention or utility model patentee is found to be a person other than a person entitled to file (for a patent).”

In other words, in disputes of patent ownership, the true owner must obtain a judgment from a civil court to ascertain that he/she/it is the owner of the application right, and then initiate invalidation before TIPO based on such judgment to invalidate the patent filed by a non-owner. TIPO’s current practice reflects the Supreme Administrative Court’s rulings.

Looking to the IP court for clarity

 However, lower civil court decisions are indicative of a different view from the Supreme Administrative Court, in that the lower civil courts do not agree that an issue regarding patent inventorship or ownership should be solved through civil proceedings. This situation therefore becomes problematic for a true owner, as without a court judgment, TIPO will not accept invalidation filed based on the ground of a patentee not being a person entitled to file for a patent.

Moreover, if a civil action is the first resort for this issue, it is also unclear how a litigation claim should be made in practice.

As for whether it is possible to seek a declaratory judgment to confirm that the patentee is not a person entitled to file for a patent, some civil courts have also said “no.”

While the IP Court agreed to the Supreme Administrative Court’s view that a declaratory judgment from a civil court should be obtained for use as the basis for invalidation in true ownership disputes, this is only limited to situations where the disputes arise in an employment or contractual relationship. Since the Supreme Administrative Court rendered no judgment on a case where the true owner does not have an employment or contractual relationship with the patentee, the IP Court must leave the “entitlement to file a patent application” issue to TIPO in invalidation proceedings.

The distinction between an ownership dispute and a contractual dispute clouded by the true ownership issue is unclear. A contractual dispute regarding who owns the right to apply for a patent is a private interest dispute, precisely in the same manner that an ownership issue without any contractual relationship is a private interest dispute. In either case, TIPO should not be capable of making substantive determination. We hope that the IP Court will give us clear guidance on this issue soon. 

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