【Patent】Dispute Regarding the Right to Apply for a Patent – Legal Insights from the 2023 Min Zhuan Su Zi No. 26 Civil Judgment
To obtain rights of exclusive use of a patent, it is necessary to file a patent application with the Specific Patent Agency and complete the examination and registration process. In this regard, Article 5 of the Patent Act prescribes that “the term ‘right to apply for a patent’ shall mean the right to file a patent application in accordance with this Act. Subject to provisions of this Act otherwise prescribed or the covenants otherwise set forth in an agreement, the term ‘the owner of the right to apply for a patent’ shall mean an inventor, a utility model creator, a designer, or the assignee or successor thereof.” Hence, it can be understood that the right to apply for a patent and the patent right are conferred in respect of the same creation, and the inventor, the utility model creator, the designer, or his/her assignee or successor is entitled to the right to apply for a patent before the patent right is granted by the Specific Patent Agency. Further, in accordance with Paragraph 1 of Article 6 of the same Act, both the right to apply for a patent and the patent right are assignable or inheritable. Therefore, the right to apply for a patent should also be considered to be a private right.
When a dispute arises over patent ownership, can the court declare the plaintiff to be the patentee if they successfully prove themselves to be the true inventor, creator, or designer? Alternatively, can the court order the defendant to transfer the patent rights to the plaintiff? The Intellectual Property and Commercial Court (IPCC) adopted an opposing view in its 2023 Min Zhuan Su Zi No. 26 Civil Judgment, issued on May 8, 2024.
In this case, the plaintiff asserted that the pudding tray at issue was designed by its legal representative, A and that the right to apply for a patent had been assigned to the plaintiff. However, the defendant allegedly submitted an application to the Taiwan Intellectual Property Office (TIPO) using the design of the disputed patent without authorization. As a result, the plaintiff filed an action for a declaratory judgment to confirm itself as the true owner of the right to apply for a patent and the patent right, further claiming that the defendant must transfer the patent right to the plaintiff. The defendant, however, denies these allegations.
The issues have been simplified as follows[1]:
1. Does the plaintiff have an immediate legal interest in demanding this declaratory judgment?
2. Is A the designer of the patent at issue and, as such, entitled to the right to apply for a patent? Did A transfer this right to the plaintiff?
3. Is the plaintiff’s claim valid that it is the true owner of both the right to apply for the patent and the patent right?
4. Does the plaintiff have legitimate grounds to demand that the defendant transfer the patent right?
2. Is A the designer of the patent at issue and, as such, entitled to the right to apply for a patent? Did A transfer this right to the plaintiff?
3. Is the plaintiff’s claim valid that it is the true owner of both the right to apply for the patent and the patent right?
4. Does the plaintiff have legitimate grounds to demand that the defendant transfer the patent right?
Upon the conclusion of oral arguments, the IPCC rendered a judgment indicating the main text as follows: “The right to apply for the design patent under Certificate No. D219201, titled ‘Pudding Roll Mold,’ is confirmed as belonging to the plaintiff. The remainder of the plaintiff’s claims are dismissed.” The summary of the judgement is outlined below[2]:
I. The plaintiff has an immediate legal interest in demanding this declaratory judgment.
According to Article 247 of the Code of Civil Procedure, an action for a declaratory judgment confirming a legal relation may not be initiated unless the plaintiff has an immediate legal interest in demanding such a judgment. Upon review, the patent application filed by the plaintiff was deemed by the TIPO to create a confusing overall visual impression similar to the patent at issue, thereby failing to comply with Article 123 of the Patent Act and consequently being deemed to lack novelty. Following this decision, the plaintiff filed an invalidation action against the patent at issue; however, the TIPO concluded that the invalidation action was groundless. In this case, the plaintiff claims ownership of both the right to apply for the patent and the patent right, while the defendant denies these claims. This unresolved dispute over ownership affects the plaintiff’s ability to assert legal rights over the patent, resulting in uncertainty regarding its legal position. Since this uncertainty can be resolved through a declaratory judgment, the plaintiff’s legal interest in pursuing such an action is established.
II. If a dispute arises over the ownership of the right to apply for a patent, it must first be adjudicated by a civil court.
Subject to provisions of this Act otherwise prescribed or the covenants otherwise set forth in an agreement, the owner of the right to apply for a patent should mean an inventor, a utility model creator, a designer, or their assignee or successor. Both the right to apply for a patent and the patent right are assignable or inheritable. These regulations are explicitly stipulated in Article 5 and Paragraph 1 of Article 6 of the Patent Act. Therefore, the right to apply for a patent should be regarded as a private right. The determination of private rights in ownership disputes falls outside the authority of the Specific Patent Agency. Hence, if a dispute arises over the ownership of right to apply for patent, the concerned parties may file a civil action. Once the civil court determines ownership, the true owner may submit a request along with relevant documents of proof with the Specific Patent Agency to amend the ownership of the right involved. In the present case, A conceived and created the design of the patent at issue and assigned the right to apply for the patent to the plaintiff. These facts are substantiated by the plaintiff’s submitted documentary evidence and witness testimony, which can be deemed valid. Accordingly, the right to apply for the patent at issue is recognized as belonging to the plaintiff. The plaintiff’s claim for confirmation of ownership of the right to apply for the patent at issue is therefore meritorious and should be granted.
III. Patent rights are granted by the Specific Patent Agency through the exercise of administrative authority. While a court may independently determine whether grounds exist for revoking or repealing a patent right, it does not have the authority to directly revoke or repeal the patent right.
When intellectual property cases are tried in civil court, the court should adjudicate only the issues in dispute based on facts and evidence, and must not exercise administrative authority on its own. In accordance with Subgraph 2 of Article 2 of the Intellectual Property Case Adjudication Rules, in disputes over the ownership of a patent or the right to apply for a patent, the civil court may independently determine whether grounds exist for revoking or repealing the patent. However, since the civil court does not have the authority to directly revoke or repeal a patent, such determinations are advisory in nature. In the event of a dispute over the ownership of a utility model patent between the true creator and the utility model patentee, except in cases where Article 10 of the Patent Act allows an employer and its employee to file a request, along with relevant documents of proof, with the Specific Patent Agency for a change in patent ownership, or where the parties involved reach an agreement to assign the utility model patent, the true creator may only filed an invalidation action against a granted patent on the grounds that the utility model patentee is not the true owner of the right to apply for the utility model patent within two years after the publication date of the patent concerned. Subsequently, if the true creator submits a new patent application for the same invention within two months after the invalidation decision revoking the patent has become final and binding, the filing date of the revoked utility model patent should be regarded as the filing date for the newly submitted patent application. This process is governed by Article 35 of the Patent Act, which, according to Article 120, applies mutatis mutandis to utility model patents. However, before being lawfully granted the utility model patent right by the Specific Patent Agency, can the true creator claim damages for the loss of the utility model patent and request the unlawful applicant to return the patent right? Furthermore, unjust enrichment occurs when a party acquires interests without legal ground, thereby causing harm to another party. To establish unjust enrichment, a causal relationship must exist between the interest acquired by the unlawful applicant and the damages suffered by the true creator. Since the utility model patent acquired by the unlawful applicant was granted by the Specific Patent Agency, can the true creator, prior to the official grant of the patent, claim that the damages suffered constitute the loss of the utility model patent right, thereby justifying a request for its return? Accordingly, further discussion on this matter is required (refer to the 2020 Tai Shang Zi No. 2155 Civil Judgment rendered by the Supreme Court).
IV. The plaintiff cannot directly request the court to declare itself as the owner of the patent and demand the defendant to transfer the patent right.
The patent at issue was filed by the defendant and granted by the TIPO following its examination and approval. The defendant did not acquire the patent without legal grounds, as the defendant remains the patentee of the patent at issue. Since the plaintiff neither filed an application with the TIPO nor received an approval decision for the patent, the plaintiff is not the rightful patentee of the patent at issue. Consequently, the plaintiff cannot claim that the damages suffered constitute the loss of the patent at issue. Based on the foregoing reasons, the plaintiff cannot demand the defendant to transfer the patent at issue in accordance with Article 179 or Paragraph 1 of Article 184 of the Civil Code.
According to Article 247 of the Code of Civil Procedure, an action for a declaratory judgment confirming a legal relation may not be initiated unless the plaintiff has an immediate legal interest in demanding such a judgment. Upon review, the patent application filed by the plaintiff was deemed by the TIPO to create a confusing overall visual impression similar to the patent at issue, thereby failing to comply with Article 123 of the Patent Act and consequently being deemed to lack novelty. Following this decision, the plaintiff filed an invalidation action against the patent at issue; however, the TIPO concluded that the invalidation action was groundless. In this case, the plaintiff claims ownership of both the right to apply for the patent and the patent right, while the defendant denies these claims. This unresolved dispute over ownership affects the plaintiff’s ability to assert legal rights over the patent, resulting in uncertainty regarding its legal position. Since this uncertainty can be resolved through a declaratory judgment, the plaintiff’s legal interest in pursuing such an action is established.
II. If a dispute arises over the ownership of the right to apply for a patent, it must first be adjudicated by a civil court.
Subject to provisions of this Act otherwise prescribed or the covenants otherwise set forth in an agreement, the owner of the right to apply for a patent should mean an inventor, a utility model creator, a designer, or their assignee or successor. Both the right to apply for a patent and the patent right are assignable or inheritable. These regulations are explicitly stipulated in Article 5 and Paragraph 1 of Article 6 of the Patent Act. Therefore, the right to apply for a patent should be regarded as a private right. The determination of private rights in ownership disputes falls outside the authority of the Specific Patent Agency. Hence, if a dispute arises over the ownership of right to apply for patent, the concerned parties may file a civil action. Once the civil court determines ownership, the true owner may submit a request along with relevant documents of proof with the Specific Patent Agency to amend the ownership of the right involved. In the present case, A conceived and created the design of the patent at issue and assigned the right to apply for the patent to the plaintiff. These facts are substantiated by the plaintiff’s submitted documentary evidence and witness testimony, which can be deemed valid. Accordingly, the right to apply for the patent at issue is recognized as belonging to the plaintiff. The plaintiff’s claim for confirmation of ownership of the right to apply for the patent at issue is therefore meritorious and should be granted.
III. Patent rights are granted by the Specific Patent Agency through the exercise of administrative authority. While a court may independently determine whether grounds exist for revoking or repealing a patent right, it does not have the authority to directly revoke or repeal the patent right.
When intellectual property cases are tried in civil court, the court should adjudicate only the issues in dispute based on facts and evidence, and must not exercise administrative authority on its own. In accordance with Subgraph 2 of Article 2 of the Intellectual Property Case Adjudication Rules, in disputes over the ownership of a patent or the right to apply for a patent, the civil court may independently determine whether grounds exist for revoking or repealing the patent. However, since the civil court does not have the authority to directly revoke or repeal a patent, such determinations are advisory in nature. In the event of a dispute over the ownership of a utility model patent between the true creator and the utility model patentee, except in cases where Article 10 of the Patent Act allows an employer and its employee to file a request, along with relevant documents of proof, with the Specific Patent Agency for a change in patent ownership, or where the parties involved reach an agreement to assign the utility model patent, the true creator may only filed an invalidation action against a granted patent on the grounds that the utility model patentee is not the true owner of the right to apply for the utility model patent within two years after the publication date of the patent concerned. Subsequently, if the true creator submits a new patent application for the same invention within two months after the invalidation decision revoking the patent has become final and binding, the filing date of the revoked utility model patent should be regarded as the filing date for the newly submitted patent application. This process is governed by Article 35 of the Patent Act, which, according to Article 120, applies mutatis mutandis to utility model patents. However, before being lawfully granted the utility model patent right by the Specific Patent Agency, can the true creator claim damages for the loss of the utility model patent and request the unlawful applicant to return the patent right? Furthermore, unjust enrichment occurs when a party acquires interests without legal ground, thereby causing harm to another party. To establish unjust enrichment, a causal relationship must exist between the interest acquired by the unlawful applicant and the damages suffered by the true creator. Since the utility model patent acquired by the unlawful applicant was granted by the Specific Patent Agency, can the true creator, prior to the official grant of the patent, claim that the damages suffered constitute the loss of the utility model patent right, thereby justifying a request for its return? Accordingly, further discussion on this matter is required (refer to the 2020 Tai Shang Zi No. 2155 Civil Judgment rendered by the Supreme Court).
IV. The plaintiff cannot directly request the court to declare itself as the owner of the patent and demand the defendant to transfer the patent right.
The patent at issue was filed by the defendant and granted by the TIPO following its examination and approval. The defendant did not acquire the patent without legal grounds, as the defendant remains the patentee of the patent at issue. Since the plaintiff neither filed an application with the TIPO nor received an approval decision for the patent, the plaintiff is not the rightful patentee of the patent at issue. Consequently, the plaintiff cannot claim that the damages suffered constitute the loss of the patent at issue. Based on the foregoing reasons, the plaintiff cannot demand the defendant to transfer the patent at issue in accordance with Article 179 or Paragraph 1 of Article 184 of the Civil Code.
On the issue of attribution of rights, the IPCC, in this case, has aligned with the Supreme Court’s position and appears to have taken a conservative stance on the claim for unjust enrichment. The author agrees with the IPCC’s view and maintains that, since the plaintiff had neither filed a patent application nor been granted a patent for the design, the original interest at the time the design was completed was merely the “right to apply for a patent,” not the “patent right.” When comparing these two rights, the scope and value of a “patent right” are greater than those of a “right to apply for a patent.” Hence, the interests acquired by the defendant (i.e., the unjustly enriched party) exceed the damages suffered by the plaintiff. According to current legal practice[3], if the interests acquired by the unjustly enriched party are greater than the damages suffered by the injured party, the recipient is typically obligated to make restitution only to the extent of the injured party’s loss. As a result, the true owner of the right to apply for a patent may, under a claim for unjust enrichment, seek only the return of the “right to apply for a patent,” but not the “patent right.”
Additionally, the author seeks to emphasize that, under current patent practice, in disputes concerning patent ownership, the rightful holder should refer to the Patent Act and strictly adhere to the relevant provisions and time limits[4]. Furthermore, if an invalidation action against a disputed patent is filed by the true owner of the right to apply for the patent, it is advisable to submit supporting evidence such as mediation records, arbitration decisions, or court judgments. Otherwise, the TIPO may likely consider the invalidation action groundless due to its inherent limitations in substantively investigating the facts and evidence involved.
