2017-02-14 Giant Group/Tom HSIEH
In the event of patent infringements, patentees may file an action against infringers. However, before a patentee files an infringement action, an alleged infringer still manufacturing or selling the infringed product risks assuming the liability for infringement and thus is predisposed to an uncertain legal status in connection with any commercial activities the alleged infringer is involved in. Taiwan’s Code of Civil Procedure, Article 247 provides: An action for a declaratory judgment confirming a legal relation may not be initiated unless the plaintiff has immediate legal interests in demanding such judgment. The aforesaid provision permits the alleged infringer to file an action for declaratory judgment against the patentee in order to be immune from any uncertain legal status which might otherwise happen to the alleged infringer when the alleged infringer receives a warning letter or is subjected to a means of warning before being sued. The practice of litigations for declaration of non-infringement, in Taiwan as a nation, is hereunder discussed with reference to possible disputes arising from litigations for declaration of non-infringement pursuant to Article 16 of the Intellectual Property Case Adjudication Act and case laws made by Taiwan’s Intellectual Property Court.
May I initiate an action for declaration?
An action for declaration is mainly intended to confirm a legal relation and premised on the need to confirm legal interests. The legal interests have to be confirmed in order to eliminate existing risks the plaintiff is exposed to in terms of the plaintiff’s legal rights and legal status. Hence, the Taiwan Code of Civil Procedure provides: An action for a declaratory judgment confirming a legal relation may not be initiated unless the plaintiff has immediate legal interests in demanding such judgment (Paragraph 1 of Article 247); and declaratory judgments are supplementary and thus the plaintiffs are restricted to parties denied access to other remedies (Paragraph 2 of Article 247.)[1]
The verdict rendered to Year 2008 Min-Zhuan-Su-Zi 15 states: the plaintiff’s legal interests (subjected to a declaratory judgment) in acquisition of a contract depends on whether a legal relation exists. However, the court rejected the plaintiff’s claim, because the plaintiff failed to prove that the defendant had committed libel.[2]
The verdict of Year 2008 Min-Zhuan-Su-Zi, No. 55 rules as follows: the defendant compromised the plaintiff’s commercial operation by sending a warning letter to the plaintiff; although the defendant complained of patent infringement, the defendant did not sue the plaintiff, thereby causing uncertainties as to whether the plaintiff had infringed upon the defendant’s patent; as a result, the plaintiff ended up with the likelihood of having its legal status infringed upon under a private law; the likelihood may be precluded with a declaratory judgment; hence, the plaintiff has immediate legal interests in demanding a declaratory judgment; for the aforesaid reasons, the court accepts the action for declaration.[3]
The verdict of Year 2010 Min-Zhuan-Su-Zi, No. 166, is summarized as follows: on May 17, 2011, the plaintiff applied to the Court for perpetuation of evidence on the grounds that the defendant’s manufacturing process of producing Taiwan’s Docetaxel Trihydrate “SPT” (hereinafter referred to as the product manufacturing process at issue) had infringed upon the plaintiff’s patent at issue; pursuant to the Court’s civil verdict of Year 2010 Min-Sheng-Zi, No. 8, perpetuation of evidence was carried out on May 17, 2011 at the plaintiff’s office on Taiwan’s Docetaxel Trihydrate “SPT” (hereinafter referred to as the product at issue ). The plaintiff surrendered, as instructed by the Court, the product at issue for perpetuation of evidence, and in consequence the plaintiff could no longer use or sell the surrendered product at issue. Expectedly, the defendant initiated an action for patent infringement against the plaintiff on the patent at issue, and the action for patent infringement was heard by the Court in Year 2010 Min-Zhuan-Su-Zi, No. 159. Therefore, it is necessary to confirm whether the defendant’s patent at issue was infringed upon by the plaintiff’s product manufacturing process at issue. Accordingly, the plaintiff aims to confirm whether there is a legal relation of infringement between the two opposing parties. The plaintiff has legal interests in connection with the legal relation whose existence is required for the plaintiff to continue manufacturing, using or selling the product at issue and precluding any interference act (including filing a civil action) which might otherwise be committed by the defendant in the name of exercising a patent right. Therefore, the plaintiff’s risky status under the private law can be eliminated with a declaratory judgment rendered against the defendants, and in consequence the plaintiff has immediate legal interests in demanding a declaratory judgment. Accordingly, an action for declaration filed by the plaintiff is legally justifiable and thus has to be allowed.[4]
The verdict of Year 2013 Min-Zhuan-Su-Zi, No. 102, states that having immediate legal interests in demanding a declaratory judgment is justified by any uncertainty in the presence of a legal status. Hence, in the situation where the two opposing parties dispute over the presence of a legal status and the likelihood that the plaintiff will have a legal status thereof infringed upon under a private law, and the likelihood may be precluded with a declaratory judgment (see the verdicts rendered by the Supreme Court in Year 1938 Shang-Zi No. 316, and Year 1953 Tai-Shang-Zi No. 1031), that is, when the plaintiff believes that a legal status thereof is confronted with an uncertainty which can be eliminated by a declaratory judgment, it will not be justifiable for the court to rule that the plaintiff has immediate legal interests in demanding a declaratory judgment, if the uncertainty is unlikely to be eliminated despite a court’s ruling which confirms the legal relation (see the verdict rendered by the Supreme Court in Year 2001 Tai-Shang-Zi No. 961.) In a letter it sent the plaintiff, the defendant accused the plaintiff of importing and selling the product at issue and thus infringing upon the patent at issue. Then, the plaintiff denied the accusation in a letter it sent the defendant. Unexpectedly, the defendant sent warning letters to the plaintiff and the plaintiff’s business partners; as a result, odds are the plaintiff’s business partners will stop selling the product at issue and trading with the plaintiff, thereby annoying the plaintiff or even causing a huge economic loss to the plaintiff. Although the defendant asserts that the plaintiff infringes upon the patent at issue, the defendant has hitherto not sued the plaintiff; as a result, it remains unclear as to whether the plaintiff’s product at issue infringes upon the defendant’s patent at issue. Accordingly, the plaintiff ended up with the likelihood of having its legal status infringed upon under a private law; the likelihood may be precluded with a declaratory judgment. In view of this, under Taiwan’s Code of Civil Procedure, Article 247, Paragraphs 1, 2, the plaintiff may initiate an action for declaration.[5]
As revealed in the aforesaid judicial opinions, if a patentee sends a warning letter to an alleged infringer or releases messages which allude to patent infringement but hesitates to initiate an infringement action against the alleged infringer, the alleged infringer will have a legal status thereof infringed upon under a private law as well as a legal relation shrouded in uncertainties, and the likelihood may be eliminated with a declaratory judgment. Hence, the alleged infringer is deemed having immediate legal interests in demanding a declaratory judgment and thus may file an action for declaration pursuant to Taiwan’s Code of Civil Procedure, Article 247.
May one assert invalidity of a patent by initiating an action for declaration of no infringement?
The verdict rendered to Year 2008 Min-Zhuan-Su-Zi No. 15 states: Unless a patentee initiates an infringement action, the plaintiff (alleged infringer) may not enter a plea arguing for the invalidity of the patent by filing an action for declaration of no infringement thereon, because the plea, when allowed by the court, will approximate to complaint proceedings in administrative litigations and thus jeopardize the role played by complaint proceedings. However, Taiwan’s judiciary opine that invalidity pleas entered during infringement litigations bring only a relative legal effect, as opposed to the absolute legal effect of complaint proceedings, and thus Taiwan’s judiciary is of the opinion that invalidity pleas are not equivalent to complaint proceedings in administrative litigations.
The purpose of confirming by verdicts of both Year 2008 Min-Zhuan-Su-Zi, No. 55 and Year 2013 Min-Zhuan-Su-Zi, No. 102 that the defendants were not entitled to related rights under the private law is different from the purpose of an administrative litigation in confirming whether the patent at issue is valid. The outcome of the civil proceeding by which the plaintiff seeks confirmation as to whether the defendant is not entitled to a related right under the private law remains unaffected, regardless of whether the plaintiff questions the validity of the patent at issue and initiate an administrative lawsuit on the patent at issue. Considering that Article 16-1 of the Intellectual Property Case Adjudication Act provides that the validity of a patent may be directly confirmed pursuant to the Code of Civil Procedure and the Patent Act, it is practical for the plaintiff to initiate this lawsuit and assert that the defendant’s patent at issue is invalid and thus is not entitled to any right of recourse with respect to the plaintiff’s infringement upon the patent at issue. Article 16 of the Intellectual Property Case Adjudication Act is not intended to restrict the plaintiff’s right of recourse to an administrative proceedings for ruling on the validity of the patent at issue and thus leave the plaintiff unprotected in the face of the defendant’s accusation against the plaintiff of infringing upon the patent at issue. Therefore, the question whether the plaintiff is going to revoke the defendant’s patent by an administrative proceedings has nothing to do with the plaintiff’s attempt to seek confirmation as to whether the defendant is entitled to a right of recourse against the plaintiff under the private law. The rights of recourse for eliminating infringement and claiming damages by confirming the validity of the defendant’s patent are no different from an action for performance in terms of the process flow of rendering a judgment, because both requires confirming whether the patent at issue is valid, then determining whether a subject matter under investigation falls within the scope of the claims of the patent at issue, and then eventually looking into the infringer committed the infringement on purpose or by negligence.
Article 16 of the Intellectual Property Case Adjudication Act provides: when a party claims or defends that an intellectual property right shall be cancelled or revoked, the court shall decide based on the merit of the case, and the Code of Civil Procedure concerning the stay of an action shall not apply.
While an action for a negative declaration is underway, it is lawful for the plaintiff to assert that the grounds for not being entitled to any right of recourse include disputed issues, such as the validity of a patent, whether the patent was infringed upon, and the practicability of the invention claimed by the patent. The provision “the court shall overrule any independent action filed by a party or any counter-claim by said party over the validity of an intellectual property right or over whether an intellectual property right shall be cancelled or revoked” in Article 29 of the Intellectual Property Case Adjudication Rules has nothing to do with an action for negative declaration; hence, when filing an action for negative declaration over a patent, a party may assert that the patent is invalid.[6]
Conclusion
During patent infringement litigations, alleged infringers are often forced to take a defensive approach. Actions for declaration of no infringement have been put into practice for years in Taiwan, albeit scantily. Nonetheless, the Taiwanese judiciary is of the opinion that alleged infringers are entitled to the right of initiating an action for declaration of no infringement and using the invalidity of a patent as a means of defense. Therefore, if patentees send warning letters or the like to alleged infringers and predispose the alleged infringers to an uncertain legal status under a private law, the alleged infringers may take an initiative in filing an action for declaration of no infringement to thereby confirm and eliminate the likelihood of committing a patent infringement.
[1] Liu, Guozan, “Civil Litigations,” On Verdicts made by the Intellectual Property Court
[2] Year 2008 Min-Zhuan-Su-Zi, No. 15
[3] Year 2008 Min-Zhuan-Su-Zi, No. 55
[4] Year 2010 Min-Zhuan-Su-Zi, No. 166
[5] Year 2013 Min-Zhuan-Su-Zi, No. 102
[6] Question No. 10, the minutes taken of the “Seminar of the Intellectual Property Court’s Judges, Lawyers, Patent Attorneys, and Patent Agents” held in 2009.
