Taiwan: Patent Litigation Comparative Guide

1 Legal framework

1.1 Which laws and regulations govern patent litigation in your jurisdiction?

With regard to procedural issues – such as the burden of proof, jurisdiction and evidence – the applicable laws are:

• the Code of Civil Procedure; and
• the Intellectual Property Case Adjudication Act.

With regard to substantive issues – such as patentability, infringement and damages – the courts apply the Patent Law.

1.2 Which bilateral and multilateral agreements with relevance to patent litigation have effect in your jurisdiction?

While Taiwan is not a member of the Patent Cooperation Treaty, it is a member of the World Trade Organization. As such, the Agreement on Trade-Related Aspects of Intellectual Property Right (TRIPS) is applicable; and it has been one of the driving forces that have shaped Taiwan's IP policies and amendments to the Patent Law. In practice, when interpreting the statutory language, the Taiwan courts sometimes refer to TRIPS for clarification on the legislative intent.

1.3 Which courts and/or agencies are responsible for interpreting and enforcing the patent laws? What is the framework for doing so?

The Taiwan Intellectual Property Office (TIPO) under the Ministry of Economic Affairs (MOEA) is the statutory agency responsible for patent matters, such as the examination of patent applications and patent invalidations. Over the years, TIPO has issued numerous guidelines on patent matters – most notably:

• the examination guidelines for patentability; and
• the guidelines for determination of patent infringement.

These guidelines are crucial references not only for patent prosecution, but also for patent enforcement. While patentability and infringement are matters of law and subject to the court's discretion, guidelines issued by TIPO tend to carry considerable weight and are highly persuasive in patent lawsuits.

2 Forum

2.1 In what forum(s) is patent litigation heard in your jurisdiction? Are patent infringement and validity decided in the same forum or separate forums?

In general, the Intellectual Property and Commercial Court ('IPC Court') has presumptive jurisdiction over patent disputes. However, there are two exceptions:

• Where the parties to a patent litigation have entered into a contract with a jurisdiction clause that designates a district court as the competent court for the first-instance level, the designated district court will have jurisdiction over the patent litigation; and
• Where the plaintiff files a patent lawsuit at a district court and the defendant, instead of objecting to the district court's jurisdiction, argues on the merits of the case, the district court will have acquired implied jurisdiction over this specific patent litigation.

In Taiwan, patent infringement and invalidity can be decided in the same or separate forums. In a patent infringement lawsuit – which is a civil proceeding – the defendant may raise invalidity as an affirmative defence, in which case the court should adjudicate the validity issue in the same civil proceeding. In addition to raising invalidity as a defence, a defendant in a patent infringement lawsuit may simultaneously file an invalidity action with the Taiwan Intellectual Property Office (TIPO) against the patent asserted in the patent infringement lawsuit, which is an administrative proceeding. In such case, the invalidity action and the infringement lawsuit will be handled separately, with the former handled by the TIPO and the latter handled by the IPC Court.

2.2 Who hears and decides patent disputes (eg, a judge, a panel and/or a jury)?

The trial for a patent dispute is a bench trial, not a jury trial. At first instance, the case is heard by a single judge. If the case is appealed to the second-instance level, a three-judge panel will be convened and hear the appeal.

2.3 Are there any opportunities for forum shopping in your jurisdiction? If so, where and how do those opportunities exist?

As the IPC Court has the presumptive jurisdiction over all patent disputes, there is almost no forum shopping in practice. The only chance for the parties to have their patent dispute heard by a district court is through the proceedings mentioned in question 2.1; but given the technical and complex issues underlying a patent dispute, the IPC Court is the go-to court for patent disputes in Taiwan.

3 Parties

3.1 Who has standing to file suit for patent infringement? What requirements and restrictions apply in this regard?

In the context of patent infringement, patent holders and exclusive licensees are entitled to file suit for patent infringement; while non-exclusive licensees are not entitled to do so in their own names. In an infringement lawsuit, the plaintiff must generally show with prima facie evidence that:

• the asserted patent is in force/exclusively licensed;
• the asserted patent has been infringed; and
• the infringement has caused damage.

In practice, upon receiving a warning letter from a patent holder, the alleged infringer may consider filing a declaratory action, requesting the Intellectual Property and Commercial Court ('IPC Court') to declare through a judgment that the asserted patent is not infringed (see Article 247 of Code of Civil Procedure). When filing a declaratory action, the alleged infringer must make a prima facie showing that:

• the threat from the patent holder or exclusive licensee has compromised its legal status; and
• this situation can be properly remedied by a court declaring non-infringement.

3.2 Can a patent infringement suit be brought against a defendant who is a foreign entity with only a residence or place of business outside the jurisdiction?

Generally speaking, in deciding whether Taiwan is a proper forum for a specific patent infringement lawsuit, the Taiwan courts consider connecting factors such as:

• the parties' nationality, domicile or place of incorporation;
• the location of the alleged infringing act; and
• the location of the resulting damages.

If the defendant is a foreign entity and has no residence or place of business in Taiwan, the Taiwan court may still have jurisdiction if the location of the alleged infringing act or the resulting damages is in Taiwan.

3.3 Can a single infringement action be brought against multiple defendants? What requirements and restrictions apply in this regard?

In Taiwan, a patent holder can bring a single infringement suit against multiple defendants. The IPC Court will usually permit the joinder of multiple defendants if the alleged facts and laws against these defendants show that the dispute has arisen from the same transaction or occurrence.

3.4 Can a third party seek a declaration of non-infringement or invalidity in your jurisdiction? If so, how?

While anyone can file a patent invalidation action with the Taiwan Intellectual Property Office, seeking a court's declaration judgment of invalidity of a patent per se is not allowed in Taiwan; although an alleged infringer can seek a declaration judgment of non-infringement based on invalidity. On the other hand, we have never heard of a case in which a court allowed a third party which was not accused of infringement to seek a declaration judgment of non-infringement. Due to the requirements of Article 247 of the Code of Civil Procedure, as outlined in question 3.1, such third-party filings are very difficult – although not totally impossible – to make. Another possible avenue for a third party to seek a declaration of non-infringement or invalidity is through an intervention based on Article 54 of the Code of Civil Procedure. However, to intervene in a pending patent infringement lawsuit, the third party must:

• demonstrate that its rights or interests are affected by the outcome of the pending patent lawsuit; or
• assert its right to the whole or part of the patent underlying the lawsuit.

In practice, we have found no cases in which a third party has independently intervened and sought a declaration of non-infringement or invalidity.

4 Patent infringement

4.1 What constitutes patent infringement in your jurisdiction?

As per Article 58 of the Patent Law, a patent holder is entitled to exclude others from practising the patent. In the case of a product patent, anyone that makes, offers for sale, sells, or imports the product for the aforementioned purposes without the patent holder's consent may be found to have infringed the patent. In the case of a process patent, anyone that uses the process, or uses, offers for sale, sells or imports a product directly obtained from the patented process, for the aforementioned purposes without the patent holder's consent may be found to have infringed the patent.

However, under Article 59 of the Patent Law, patent rights do not extend to the following:

• acts done privately and for non-commercial purposes;
• necessary acts to exploit the invention for research or experimental purposes;
• acts done by a person that has been exploiting the invention or making all the necessary preparations for doing so in Taiwan before the filing date of the invention; however, this provision shall not apply where the person learned of the invention from the patent applicant less than 12 months previously and the patent applicant has made a statement reserving its right to a patent being granted;
• vehicles merely passing through the territory of the country and any devices on such vehicles;
• where a patent granted to a person that is not entitled to apply for a patent is revoked as a result of an action filed by the patent holder, acts done by a licensee which, prior to invalidation, had been exploiting the invention or making all necessary preparations to do so in good faith;
• the use or resale of a patented product after it has been sold by the patent holder or made with the consent of the patent holder (the making and selling are not limited to acts done domestically); and
• acts by a person that has been exploiting the invention or making all necessary preparations to do so in good faith after an invention patent has been extinguished pursuant to Article 70(1)(3) of the Patent Law, and before it is reinstated and published pursuant to Article 70(2).

4.2 How is infringement determined?

There are two types of patent infringement:

• literal infringement; and
• infringement under the doctrine of equivalents.

Literal infringement occurs when all elements of a patent claim are present in the accused product or method used by the alleged infringer.

If there is no literal infringement, infringement may still occur under the doctrine of equivalents – namely, if the accused product or method, while being literally different, accomplishes substantially the same function and result in substantially the same way.

Because a patent trial in Taiwan is a bench trial, it will be up to the judge to decide whether infringement exists.

4.3 Does your jurisdiction apply the doctrine of equivalents?

Yes, the doctrine of equivalents is applicable in Taiwan.

4.4 Is wilful infringement recognised? If so, what is the applicable standard?

Where wilful infringement is found, the patent holder is entitled to ask the court to increase, at its discretion, the total damages awarded to up to triple the original amount.

The finding of wilful infringement is subject to evidence that could prove that:

• the infringer knowingly and intentionally caused the infringement to happen; or
• the infringer was aware that its actions would constitute infringement and the infringement did not arise against the infringer's will.

The common practice for a patent holder to establish wilful infringement is to send a warning letter to the infringer. If the infringer does not cease the offending behaviour after receiving such a notice of infringement, this will be deemed to constitute wilful infringement.

5 Bringing a claim

5.1 What measures can a patent holder take to enforce its rights in your jurisdiction? Are interim measures available before receiving a ruling on the merits?

As per Article 96 of the Patent Law, a patent holder is entitled to injunctive relief by demanding a party that is infringing or likely to infringe its patent to cease the infringing act or avoid undertaking an infringing act. If the infringement is based on the negligence or wilfulness of the infringer, the patent holder may request monetary damages caused by the infringement.

As per Article 52 of the Intellectual Property Case Adjudication Act, before obtaining a ruling on the merits, a patent holder may apply for a preliminary injunction to enjoin the infringement if there is sufficient evidence of the need to prevent:

• significant harm;
• imminent danger; or
• another emergency of a similar nature.

5.2 What is the limitation period for patent infringement in your jurisdiction?

The limitation period for patent infringement is two years from the date on which the patent holder learned of the infringement. However, the claim will become time barred after 10 years from the occurrence of the infringement, regardless of whether the patent holder has learned of the infringement or not.

5.3 Must the alleged infringer be notified in advance before a claim is brought?

There is no statutory requirement to notify an alleged infringer before a claim is brought.

5.4 What are the procedural and substantive requirements for bringing a claim for patent infringement? How much detail must be presented in the complaint?

The procedural requirements for filing a claim for patent infringement include the following:

• The plaintiff must pre-pay the court fee when filing the complaint. The court fee will eventually be borne by the losing party. Roughly speaking, the court fee at first instance is approximately 1.1% of the value of the infringement claim.
• In addition to paying the court fee, as per Article 244 of the Code of Civil Procedure, the plaintiff should specify in its complaint:
• • the names of the parties;
  • the legal and factual basis of the claim; and
  • the relief sought (eg, damages, injunction).

The Judicial Yuan provides some standard forms, including for a complaint for patent infringement, for public reference (see https://www.judicial.gov.tw/tw/lp-1372-1-xCat2-11.html). However, there is no prescribed template for a complaint.

The substantive requirements for bringing a claim for patent infringement include the following:

• Generally, to meet the threshold for initiating a patent infringement lawsuit, the plaintiff's complaint should specify:
• • the asserted patent;
  • the accused product/process;
  • the infringed patent claims;
  • a supporting infringement analysis showing literal infringement or infringement under the doctrine of equivalents;
  • the formula for computing the damages; and
  • all supporting evidence proving the aforementioned matters.
• As it may be difficult for the patent holder to assess accurate and definite damages without accessing the defendant's sales records, Article 244 of the Code of Civil Procedure provides that the plaintiff may initially state a minimum amount of damages in its complaint and increase this amount at a later stage.

5.5 Are interim remedies available in patent litigation in your jurisdiction? If so, how are they obtained and what form do they take?

Article 52 of the Intellectual Property Case Adjudication Act provides that a patent holder may seek a preliminary injunction by demonstrating the need to prevent:

• significant harm;
• imminent danger; or
• another emergency of a similar nature.

In practice, the IPC Court weighs the following factors:

• the likelihood of the patent holder prevailing;
• the hardship between the parties;
• whether there will be irreparable harm; and
• the public interest.

If granted, the patent holder may be entitled to injunctive relief before a ruling is made on the merits of the case, such as:

• removal or withdrawal of the infringing products; or
• cessation of use of the patented process.

5.6 Under what circumstances must security for costs and/or damages incurred by the other party be provided?

As per Article 96 of the Code of Civil Procedure, if the plaintiff has no place of business, domicile or residence in Taiwan, the court may, at the request of the defendant, order the plaintiff to provide a bond as security against the court fee to be incurred by the defendant due to the lawsuit.

As per Article 52 of the Intellectual Property Case Adjudication Act, the court may also order that a bond be provided by the moving party as security for potential damages suffered by the other party when granting a motion for preliminary injunction.

6 Disclosure and privilege

6.1 What rules on disclosure apply in your jurisdiction? Do any exceptions apply?

During the civil litigation proceedings, either party may move for a court order that requests the opposing party or a third party to disclose documentation for the purpose of proving infringement, calculating damages or proving other relevant facts. Under Article 344(1) of the Code of Civil Procedure, a party-in-suit must produce the following documents:

• documents to which it has made reference in the course of the litigation;
• documents of which the opposing party may require delivery or inspection pursuant to applicable laws;
• documents that were created in the interests of the opposing party;
• commercial accounting books; and
• documents that were created regarding matters relating to the action.

Under Article 345 of the Code of Civil Procedure, where a party disobeys an order to produce documents without justifiable reason, the court may, at its discretion, take as the truth the opposing party's allegation with regard to such documents or the fact to be proved by such documents.

A major amendment to the Intellectual Property Case Adjudication Act passed through three readings at the Legislative Yuan on 12 January 2023 and was promulgated by a presidential decree of 15 February 2023. The newly amended Intellectual Property Case Adjudication Act, which consists of 77 articles in total, will take effect on 30 August 2023.

According to Articles 19 to 26 of the amended Intellectual Property Case Adjudication Act, an 'investigator system' has been newly introduced for patent infringement cases. This system is modelled on the Japanese Patent Law and establishes a legally mandated procedure for gathering evidence. The purpose of this amendment is to address the challenges posed by advancements in technology, where relevant documents or information-bearing devices are often held or possessed by the defendant or third parties, making it difficult for the patent holder to prove patent infringement.

Under this system, patent holders may apply to the court for the appointment of an investigator by demonstrating:

• that their rights or legal interests have been or are likely to be infringed; and
• the reasons why they are unable to obtain evidence on their own or through other means.

If granted, the appointed investigator, with the court's permission, can access the matter to be examined and inspect the relevant documents or devices held or managed by the party under investigation or a third party. The investigator also has the authority to question the party under investigation and request the production of necessary documents. If the party under investigation unjustifiably refuses or obstructs the investigation, the court may, as sanction, presume the disputed fact asserted by the patent holder to be true.

6.2 What rules on third-party disclosure apply in your jurisdiction? Do any exceptions apply?

Under Article 348 of the Code of Civil Procedure, Article 344(1)(2) ~ Article 344(1)(5) shall apply mutatis mutandis to third-party disclosure of documents, which include the following:

• documents of which the opposing party may require delivery or inspection pursuant to applicable laws;
• documents that are created in the interests of the opposing party;
• commercial accounting books; and
• documents that are created regarding matters relating to the action.

Under Article 349(1) of the Code of Civil Procedure, if a third party disobeys an order to produce documents without justifiable reason, the court may issue a ruling imposing a fine of up to NTD 30,000.

6.3 What rules on privilege apply in your jurisdiction? Do any exceptions apply?

Taiwan has no specific statute on attorney-client privilege. Article 36 of the Attorney Regulation Act provides that "an attorney shall have the rights and obligation to keep confidential any secret coming to his/her knowledge as a result of performing his/her duties, unless otherwise provided by law". Thus, an attorney is obliged to keep information from the client confidential. However, it remains unclear whether a lawyer may refuse to produce evidence solely based on the Attorney Regulation Act.

Article 307 of the Code of Civil Procedure further prescribes that a witness may refuse to testify in a case where he or she is to be examined with regard to a matter which he or she is obliged to keep confidential in the course of performing his or her official duties or conducting business. Accordingly, when an attorney is asked to testify on information in connection with his or her legal representation, the attorney may refuse to testify. However, based on Article 307 of the Code of Civil Procedure, it seems that it is only the lawyer who can assert such privilege, not the client. Thus, when it is the client who is taking the witness stand, it is not clear whether a lawyer could invoke such privilege and stop the opposing counsel from questioning on the communication between the lawyer and the client-witness.

7 Evidence

7.1 What procedure(s) exist for collecting and presenting evidence in patent infringement litigation?

In general, evidence commonly raised in patent infringement lawsuit includes:

• documentary evidence;
• testimonial evidence; and
• inspections.

The collection and presentation of documentary evidence are discussed in questions 6.1 and 6.2.

A party may ask the court to summon a witness to prove or disprove a disputed matter. The witness is subject to examination by both parties. As per Article 311 of the Code of Civil Procedure, a court may impose a fine of up to NTD 30,000 if a witness refuses to testify without justifiable reason.

As per Article 352 of Code of Civil Procedure:

• a public document must be produced in its original form or in a notarised written copy or photocopy form;
• a private document must be produced in its original form. This notwithstanding, where only the effect or explanation of such document is disputed, it may be produced in a written copy or photocopy form; and
• where the court considers it necessary to serve a public or private document, it may order the party to provide written copies or photocopies of the document.

Some documentary evidence, such as prior art reference, may be submitted in a foreign language. As per Article 99 of the Court Organisation Act, the party that wishes to submit such documentary evidence should prepare a proper translation thereof.

If a judge's inspection is necessary (eg, to determine the specific condition of the infringing product), a party may move the court to inspect the object during the court proceedings (see Article 364 of the Code of Civil Procedure). Where necessary, the inspection should be represented in drawings or pictures which are annexed to the transcript; tapes, videotapes and other relevant objects in connection with the inspection may also be annexed to the dossier (see Article 366 of the Code of Civil Procedure).

As there is limited discovery in court, patent holders may apply to the court for an evidence preservation order in order to collect evidence that is possessed by the infringer or a third party. This procedure – which is similar to the French saisie-contrefaçon – is an option but is not common practice; and it is more often applied before the lawsuit is filed than after.

The evidence preservation order proceeding is designed to safeguard or preserve such evidence that would otherwise be likely to be destroyed or whose use in court would be difficult. As per Article 46(4) of the amended Intellectual Property Case Adjudication Act, where an opposing party refuses to cooperate with an evidence preservation order, the court:

• may enforce the order by force, but only to the extent necessary; and
• may request assistance from the police to execute such order, if necessary. In practice, however, police intervention is rare.

7.2 What types of evidence are permissible in your jurisdiction? Is expert evidence accepted?

In general, evidence that is commonly raised in patent infringement lawsuit includes:

• documentary evidence;
• testimonial evidence; and
• inspections.

(See questions 6.1, 6.2 and 7.1.)

The courts are amenable to the admissibility of evidence. Therefore, evidence usually need not be notarised or certified to be admissible in the Taiwanese courts.

The Intellectual Property and Commercial Court ('IPC Court') has a panel of technical examination officers (TEOs). Aside from providing necessary technical assistance, including preparing written reports for the judges, TEOs may also attend hearings and make inquiry to the parties, witnesses and expert witnesses. While the parties may prepare their own expert witnesses, testimony from expert witnesses – usually in the form of a written report – is for the judge's reference only. Sometimes it is difficult to tell how much weight such expert reports may carry, as the IPC Court already has the assistance of TEOs in reviewing technical matters arising from a patent litigation.

7.3 What are the applicable standards of proof?

According to the rules of evidence, in general, the standard of proof is 'a preponderance of the evidence', under which a party must present evidence showing that the existence or non-existence of a certain matter is more likely to be true than not. To prove the invalidity of a patent in an infringement lawsuit, the defendant must provide 'clear and convincing evidence', which is a higher standard that is more difficult to meet.

7.4 On whom does the burden of proof rest?

According to Article 277 of the Code of Civil Procedure, a party bears the burden of proof with regard to the facts which it alleges in its favour, unless:

• the law provides otherwise; or
• the circumstances would render this manifestly unfair.

In practice, the plaintiff bears the burden of proving:

• that the accused product or process falls within the patented scope; and
• the amount of the resulting damages.

As an issued patent is presumed to be valid, the defendant bears the burden of proving that the disputed patent lacks any requirements of patentability.

8 Claim construction

8.1 Is there a procedure for construing claims during a patent infringement action? If so, when and how is it performed?

There is no specific procedure like a Markman hearing for construing claims during patent infringement litigation in Taiwan. In principle, the Intellectual Property and Commercial Court ('IPC Court') will interpret the claim language based on its plain meaning. If there is a specific dispute between the parties over certain terms of the patent claim, the IPC Court will conduct claim construction for such specific terms. However, claim construction is considered a matter of law that is subject to the judge's discretion. As such, both parties' arguments are for the judge's reference only.

8.2 What is the legal standard used to define disputed claim terms?

Article 58(4) of the Patent Law provides that:

• the scope of a patent shall be determined by its claims; and
• the description and drawings presented in the specification may be considered as a reference when construing the claims of the patent.

In practice, the Important Notes on Patent Infringement Assessment issued by Taiwan Intellectual Property Office (TIPO) are commonly cited by the parties and the IPC Court when interpreting the claim terms. Although TIPO presented the notes as a 'reference document', they carry considerable weight for the IPC Court. The notes provide a clear distinction and a list of intrinsic and extrinsic evidence.

The Enforcement Rules of the Patent Law and the TIPO Patent Examination Guidelines also contain claim construction rules for issues such as:

• means-plus-function language or step-plus-function language;
• two-part claims;
• definitions of transitions; and
• the relationship between the preamble and technical features.

The case law of the IPC Court has also been a significant driving force in the development of claim construction rules such as the doctrine of claim differentiation and the interpretation of preambles.

8.3 What evidence does the court consider in defining the claim terms?

According to the Important Notes on Patent Infringement Assessment issued by TIPO, evidence used in construing claims includes intrinsic evidence and extrinsic evidence. Intrinsic evidence includes the patent's specification, claims, drawings and application file history. Extrinsic evidence refers to evidence other than intrinsic evidence. The most frequently cited evidence includes:

• other papers or publications of the inventor;
• other patents of the inventor;
• related prior art cases (eg, parent application in an additional patent, basic application);
• opinions of expert witnesses;
• the views of a person with ordinary knowledge in the art to which the invention pertains; and
• authoritative works, dictionaries, professional dictionaries, reference books, textbooks and so on relating to the art to which the invention pertains.

If the intrinsic evidence itself is sufficient to make the claims clear, it is not necessary to consider the extrinsic evidence. If the extrinsic evidence and the intrinsic evidence are in conflict or inconsistent with respect to the interpretation of the claims, priority will be given to the intrinsic evidence.

8.4 Can the claims of a patent be amended in the course of the proceedings?

Yes, in the course of court proceedings – especially where the validity of the patent is disputed – the patent holder may apply to TIPO for the amendment of the asserted patent.

9 Defences and counterclaims

9.1 What defences are typically available in patent litigation?

Aside from the non-infringement defence, the defendant may:

• challenge the validity of the patent by alleging the invalidity of the patent as a countermeasure in the infringement litigation; and
• raise any of the exceptions provided under Article 59 of the Patent Law (see question 4.1).

9.2 Can the defendant counterclaim for revocation or invalidation of the patent? If so, on what grounds and what is the process for doing so?

The defendant can challenge the validity of the asserted patent during the procedure of a civil action. The defendant may also file an invalidation action with the Taiwan Intellectual Property Office (TIPO). However, judges are not allowed to stay an infringement lawsuit pending the outcome of an invalidation action; rather, they must decide on the defendant's validity defence if there is one. In addition, an Intellectual Property and Commercial Court ('IPC Court') judge's decision on the validity of a patent is legally binding only on the parties in suit. In other words, the power to ultimately nullify a patent lies solely with TIPO through invalidation proceedings.

9.3 Are there any grounds on which an otherwise valid patent may be deemed unenforceable against a defendant?

Defences based on equity law – such as inequitable conduct, laches or unclean hands – are not available in patent litigation in Taiwan. While there are cases in which defendants have argued that the patent was being misused and that the patent holder should be prohibited from exercising its patent rights, it is still unclear whether the IPC Court would uphold such a defence in a patent infringement lawsuit.

10 Settlement

10.1 Are mediation and/or other forms of settlement discussions required by the court in your jurisdiction or merely optional to the parties?

This is merely optional for the parties. Mediation and/or other forms of settlement discussions are not mandatory in patent litigation in Taiwan.

10.2 Can the proceedings be stayed or discontinued in view of settlement discussions?

In view of settlement discussions, the parties may file a joint motion to stay the proceedings (see Article 189 of the Code of Civil Procedure). If the plaintiff fails to resume the proceedings within four months after the proceedings have been stayed due to such a joint motion, the action or appeal will be deemed voluntarily dismissed.

10.3 Is it necessary to report the results of settlement discussions to the court? If so, how; and what are the implications?

There is no statute that directly addresses this issue. However, based on his or her administrative power, the judge may ask both parties to report on the status and results of the settlement discussion. This is particularly common before the judge renders a decision on a joint motion to stay the proceedings.

11 Court proceedings for infringement and validity

11.1 Are court proceedings in your jurisdiction public or private? If public, are any options available to the parties to keep the proceedings or related information confidential?

In general, court proceedings are public. However, under certain circumstances, the courts may conduct hearings in private. For example, Article 195-1 of the Code of Civil Procedure provides that:

11.2 Procedurally, what are the main steps in patent infringement proceedings in your jurisdiction? Is patent validity handled in the same proceedings as infringement or is it handled separately? If separate validity proceedings are available, what are the main steps in those proceedings?

Procedurally, patent infringement proceedings are divided into three stages:

• In the first stage, which focuses on case management, the court will:
• • review the formality of the plaintiff's complaint;
  • set a date for the defendant to provide its defence; and
  • assist the parties in clarifying the disputed and non-disputed matters.
• In the second stage, which focuses on pre-trial preparation, the court will:
• • investigate the evidence (eg, sales records);
  • determine the admissibility of the evidence (eg, the admissibility of prior art or product samples); and
  • establish a schedule for both parties to submit their respective arguments and supporting materials (eg, the cut-off date for submitting prior art or infringement contentions).
• In the third stage, which focuses on oral argument, the parties will make oral presentations and raise contentions based on the plan formed in the second stage.

As discussed in question 9.2, the defendant may raise invalidity as defence, which will be handled in the same infringement proceeding by the same judge. As such, it is quite common for defendants in a patent infringement proceeding to raise invalidity as a defence.

Alternatively, a defendant in a patent infringement proceeding may separately file an invalidation action against the asserted patent with the Taiwan Intellectual Property Office (TIPO).

11.3 What is the typical timeframe for patent infringement proceedings? If separate patent validity proceedings are available, with is the typical timeframe for those proceedings?

At first instance, based on our experience, it will take the Intellectual Property and Commercial Court around eight to 12 months to complete its review and render a decision on the merits of the case. On the other hand, it usually takes around 15 months for TIPO to render a decision in an invalidation action.

11.4 To what extent do the decisions of national or foreign courts or bodies influence the court's decision?

While Taiwan is a civil law country, decisions of the higher courts – especially the Supreme Court and the Supreme Administrative Court – have a significant influence on the lower courts. Decisions of foreign courts are not binding but may be persuasive materials that could be submitted as part of the supporting documentary evidence.

12 Remedies

12.1 What remedies for infringement are available to a patent holder in your jurisdiction?

According to the Patent Law, the remedies for a patent holder include:

• injunctive relief;
• damages;
• destruction of the infringing products, as well as of materials and tools used to make the infringing products; and
• necessary measures to recover the plaintiff's goodwill (see Article 96 of the Patent Law).

12.2 Are punitive or enhanced damages available in your jurisdiction? If so, how are they determined?

As per Article 97 of the Patent Law, where the infringement was intentionally committed, the court may – upon request and on the basis of the severity of the infringement – award the patent holder damages that are greater than the loss suffered but do not exceed three times the proven loss.

12.3 What factors will the courts consider when deciding on the quantum of damages?

Article 97 of the Patent Law provides several measures for evaluating the damages, including:

• the infringer's profits due to the infringement;
• the patent holder's lost profits due to the infringement; and
• an amount calculated on the basis of reasonable royalties that may be collected from exploiting the invention patent being licensed.

In practice, where the exact amount of damages is too difficult to prove, the judge may determine the amount after taking into consideration all circumstances of the case (see Article 222 of the Code of Civil Procedure).

13 Appeals

13.1 Can the decision of a first instance court or body be appealed? If so, on what grounds and what is the process for doing so? Please also describe the availability and process for additional levels of appeal.

In a civil proceeding, the first-instance decision of the Intellectual Property and Commercial Court ('IPC Court') may be appealed to the second-instance level, which will be reviewed by a three-judge panel of the IPC Court. If the value of the claim exceeds NT$ 1.5 million, the case may be further appealed to the Supreme Court.

Unlike the proceedings at first and second instance, where the IPC Court has made factual findings, the Supreme Court will review whether the IPC Court committed a legal error in rendering the appealed decision. As per Article 469 of the Code of Civil Procedure, the statutory grounds for appealing to Supreme Court include the following:

• The court was not organised in conformity with the law;
• A judge who should have disqualified himself or herself by operation of law or by decision participated in making the decision;
• The court made an improper determination on whether it had jurisdiction or acted in violation of exclusive jurisdiction, unless the parties failed to object to this during the trial or the law states otherwise;
• The parties were not legally represented in the action;
• The court violated the provision that oral arguments should be open to the public; or
• The judgment does not provide reasons or provides contradictory reasons.

13.2 What is the average time for each level of appeal in your jurisdiction?

At second instance, based on our experience, it will take the IPC Court around eight to 12 months to complete its review and render a decision on the merits of the case. If the case is appealed to the Supreme Court, depending on its complexity, it may take another six to 24 months for the case to be reviewed and adjudicated by the Supreme Court.

14 Costs, fees and funding

14.1 What costs and fees are incurred when litigating in your jurisdiction? Can the winning party recover its costs?

The costs and fees to be incurred when litigating mainly include attorneys' fees and court fees. Court fees are to be pre-paid by the plaintiff when initiating litigation. The pre-paid court fees will be borne by the losing party once the judgment becomes final and irrevocable. As per the Code of Civil Procedure, costs such as witnesses' travelling expenses or fees for an expert witness appointed by the court should also be borne by the losing party under the same rule.

Attorneys' fees, on the other hand, are not recoverable, except those incurred for an appeal to the Supreme Court.

14.2 Are contingency fee and/or other alternative fee arrangements permitted in your jurisdiction?

There are certain cases, such as criminal or juvenile delinquency cases, where lawyers are not permitted to enter into contingency fee agreement with the client. However, in general, as long as the fee arrangement is entered into with the client's informed consent, contingency fee arrangements are permissible.

14.3 Is third-party litigation funding permitted in your jurisdiction?

As per the Code of Ethical Conduct for Lawyers, a lawyer must not take payment of attorneys' fees from a third party unless:

• this has been agreed with the client; and
• the independence and competence of the lawyer remain unaffected.

15 Trends and predictions

15.1 How would you describe the current patent litigation landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

It has been proposed by the Taiwan Intellectual Property Office (TIPO) that an independent Committee for Review and Dispute Resolution be established within TIPO. The main functions of this proposed committee would be:

• to review appeals of TIPO's rejections of patent applications; and
• to adjudicate invalidation actions. This procedure would also become more adversarial in nature, so as to facilitate the involvement of interested parties.

Meanwhile, the Appeal Committee of the Ministry of Economic Affairs would be removed from the administrative appeal system, in order to streamline the proceedings. The amendment bill has been passed by the Executive Yuan and is currently pending review by the Legislative Yuan.

16 Tips and traps

16.1 What would be your recommendations to parties facing patent litigation in your jurisdiction and what potential pitfalls would you highlight?

One unique aspect of patent litigation in Taiwan is the fast-paced timelines it involves. As such, parties should ensure that they conduct sufficient due diligence before initiating or participating in an infringement lawsuit.

In the meantime, since the Patent Law does not provide for discovery, it is relatively more difficult for a plaintiff to collect evidence to prove actual damages. In comparison with the difficulty of proving actual damages, judges in Taiwan are more inclined to award injunctive relief upon finding infringement. As such, seeking injunctive relief will provide the plaintiff with a greater strategic advantage or leverage in an infringement lawsuit. In sum, the plaintiff should carefully weigh up all pros and cons before filing an infringement lawsuit.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.