TAIWAN PATENT ACT TO BE AMENDED

09/01/2009

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For purposes of enhancing the ROC's economic and industrial competitiveness, promoting development of biotechnology, green technology, advanced agriculture industry and other critical technologies, as well as raising the quality of the patent examination process, the Intellectual Property Office (IPO) has started to identify topics to be considered for proposed amendments of the Patent Act. As of 2006, the IPO held 15 public hearings to collect comments and suggestions from the general public. Based on the results of the study and the comments and suggestions provided by the public, the IPO has concluded that there is a need to amend the Patent Act. As of February 2009, the IPO held 8 more public hearings and prepared a draft amendment of the Patent Act, which was submitted to the Ministry of Economic Affairs for review on 3 August 2009. The major points of the draft are as follows:
	l	Clarification of "Creations"
		The so-called "creations" belong to a higher level concept of inventions and new utility models. To avoid the misunderstanding that a "creation” means "new utility model" or "design" and to prevent inconsistent use of the expression "creation" in the Patent Act, it is proposed to include both inventions and new utility under the term "creations" (Article 1).
	l	Change of Chinese Title of "Design Patent"
		In consideration of international practices, the Chinese title of "design patent" is to be changed from新式樣專利 (phonetic translation: xin shiyang zhuanli patent) to設計專利 (phonetic translation: sheji zhuanli patent) (Articles 2 & 123).
	l	Definition of "Practice" of a Patent (Invention, New Utility Model or Design Patent)
		The term "practice" includes manufacture, offer for sale, sale, use or import for above-mentioned purposes, and represents a higher level concept of use. To avoid inconsistent use of the terms "practice" and "use," it is proposed to add the definition of "practice" and amend the relevant Patent Act provisions containing the terms "practice" and "use." (Articles 22, 58, 89, 124 & 138)
	l	Amendment of Scope of Applying Grace Period
		It is proposed that disclosure by a patent applicant in publication(s) shall be included as ground for seeking a grace period In addition, the grace period shall, which would apply to both novelty and inventive step requirements (Articles 22 & 124).
	l	Claim(s) and Abstract Shall be Deemed Separate from Specification
		Under the current Patent Act, a specification contains, among others, the claim(s) and an abstract. Considering international practices, it is proposed to amend the current Patent Law so that the claim(s) and abstract shall be separate documents from the specification (Articles 23 & 25).
	l	Plant per se Inventions and Animal per se Inventions Are Allowed for Patent Protection
		To promote development of the local biotech industries, it is proposed to delete Item 1, Article 24 of the Patent Act and expand patent protection to plant per se inventions and animal per se inventions.
	l	New Provisions Regarding Handling Patent Cases Filed with Foreign-language Specifications, Claims and Drawings as Temporary Substitutes
		It is proposed that for a patent application filed initially and temporarily with a foreign-language patent text, amendment of such foreign-language patent text is not allowed. Relevant provisions are to be incorporated into the Patent Act to deal with amendments of translation errors. For example, except for amendment of translation error(s), an amendment shall not exceed the scope of the disclosure of the originally-filed specification, claims and drawings; amendment of translation error(s) shall not exceed the scope of disclosure of the originally filed foreign-language patent text. As proposed, specific regulations shall be promulgated to govern the categories of foreign languages used for filing foreign-language patent texts and the necessary items of such patent texts (Articles 25, 43, 44, 69, 108, 112, 127, 135, 141 & 147).
	l	Reinstatement of Rights
		To encourage innovation and protect R&D results, for a patent case which is deemed to be filed without priority claim because the applicant fails to claim priority at the time of patent filing for reasons other than the applicant's intentional act, or for a patent case which has become extinguished because the patentee fails to pay an annuity for reasons other than the patentee's intentional act, it is proposed to allow the applicant or the patentee to revive the patent case. The patent right of a granted patent which has been revived shall not apply to the practice of the patent by a bona fide 3rd party or the necessary preparation for such patent practice by a bona fide 3rd party during the time period between the date of extinguishment and the date of publishing the patent revival. (Articles 29, 52, 59 & 72).
	l	Relaxation of the Timing Requirement for Patent Division
		It is proposed to relax the timing requirement for making patent division for invention patent cases, in which case a patent applicant would be allowed to apply for patent division within 30 days from the date of receiving a patent allowance decision issued at the 1st substantive examination stage (Article 34).
	l	Amendment of Patent Applications During the Examination Stage
		The terms "supplement" and "amendment" shall be combined into the single term "amendment." The time limitations for making amendments shall be abolished. To avoid delay of patent examination, it is proposed to establish a "final notification" mechanism. Upon receiving final notification, an applicant can only make amendments during the time period specified in the final notification. An applicant who plans to effect amendment of claim(s) when responding to a final notification, the Amendments thus made shall be accepted only is it meets any of the requirements newly proposed (i.e., the amendment is made to delete any claim on file, to narrow down the scope of the claims, to correct the erroneous disclosure, or to clarify the unclear disclosure). For a patent application that violates the above-mentioned requirement, the IPO shall issue a decision accordingly (Article 43).
	l	Patent Term Extension for Pharmaceutical-related or Agrichemical-related Patents
		Under the current Patent Act, one of the requirements for seeking a patent term extension (PTE) for a pharmaceutical-related or agrichemical-related patent is that "the time period during which the concerned patent cannot be practiced due to application for a permit has exceeded two years from the patent grant publication date." It is proposed that the above-mentioned requirement be abolished. A new provision is proposed to state the following: (1) Where a PTE application has not been granted before the original patent term of the concerned patent expires but is granted afterwards, the patent right shall be deemed extended from the day following the expiration date of the original patent term; and (2) During the extended patent term, the patent right shall be limited to the active ingredients and the use(s) identified in the permit. (Articles 53, 54 & 56).
	l	Patent Right Limitation & International First Sale Exhaustion Principle
		It is proposed that patent right is also subject to the following limitations: (1) non-public acts made for non-commercial purposes; (2) a bona fine 3rd party's practice of a patent which has been revived pursuant to Paragraph 2, Article 72, or the 3rd party's necessary preparations for practicing the patent, which are made before publication of the revival of patent; (3) acts of research, testing or other necessary acts made for purposes of obtaining pharmaceutical inspection and registration permit(s) under the Pharmacy Act or for the purpose of obtaining permits for marketing foreign drugs. As to First Sale Exhaustion principle, it is proposed that such principle shall be international in nature (Articles 59 & 60).
	l	Definition of Exclusive Patent Licensing
		Patent licensing is categorized as exclusive or non-exclusive. Subject to the licensing scope, an exclusive licensee shall be entitled to exclude the patentee or a 3rd party from practicing the licensed patent; however, where there is an agreement providing that the patentee can also practice the patent, such agreement shall govern. An exclusive licensee may sub-license the patent to a 3rd party for practice; where there is an agreement providing otherwise, such agreement shall govern. A non-exclusive licensee shall not sub-license a 3rd party his right to practice the patent without consent of the patentee. A sub-licensing arrangement shall have no legal standing against 3rd parties unless it is recorded with the IPO. (Articles 64 & 64).
	l	Patent Cancellation (Invalidation) Actions
		It is proposed to abolish the practice of revocation actions initiated by the IPO. The grounds for filing cancellation (invalidation) actions against granted patents will be amended. It will be clearly stated that the grounds for filing a cancellation action against a granted patent shall be based on the Patent Act provisions in effect at the time when the patent was granted. The newly added grounds for filing cancellation actions (such as where a patent division, patent conversion or patent amendment exceeds the scope of original disclosure of a patent, or where an amendment has substantially expanded or altered the originally granted claim(s) of a patent) apply to patent cases granted before the date of implementing the proposed Patent Act amendment. It is also proposed that a cancellation action can be filed against a part of the granted claims, and that examination of a cancellation action may be based on discretional investigation. Practices related to combined examination, combined decision, and withdrawal prior to decision on a cancellation case are also clearly stated in the draft. (Articles 73, 75, 77 and 80-84).
	l	Amendment of Compulsory Patent Licensing Practice
		The Chinese term for "compulsory licensing" shall be amended from "特許實施 (specially approved practice)" to "強制授權 (compulsory licensing)." The grounds for seeking compulsory licensing are to be amended as well, For example, where the owner of a plant variety right , when practicing his (her) plant variety right, cannot avoid practicing a bio-tech patent granted to another person, and where, as compared with the said bio-tech patent, the above-mentioned plant variety right contains important technical improvement with considerably economic significance. It is clearly stated that a decision on the compensation fee shall be made at the time when issuing a decision granting compulsory licensing. (Articles 89 to 91).
	l	Newly Added Compulsory Licensing Ground –Public Health Ground
		To adapt to the WTO's objection, it is proposed to add a new ground for seeking compulsory patent licensing to assist developing countries and lower-tier developed countries acquire needed pharmaceuticals under patent protection so as to alleviate public health crises afflicting these countries. The draft also proposes the scope of compulsory licensing as mentioned above. (Articles 92 & 93).
	l	Amendments Regarding Enforcement of Patent Rights
		The draft sets forth subjective elements of a patent infringement act (i.e., a patent owner may claim damage from another person who infringes on the patent with intent or out of negligence). There are proposed changes with respect to calculation of damages ("royalty rate" is added as one of the methods), and method of making patent marking (the following is newly added: "where patent marking cannot be made on the patented product, patent marking can be made on the label of the packaging of the product, or can be made in another apparent manner which may cause others to recognize it"). (Articles 98 to 100).
	l	New Utility Model Patent Practice
		As newly proposed, where an amendment of a new utility model patent case exceeds the originally filed scope, the new utility model patent case shall be rejected. When the same person files an invention patent case and a new utility model patent case for the same creation on the same day, the patent applicant will have to make a selection prior to issuance of a decision on the invention patent case. Where the applicant selects the invention patent cases, the new utility model patent case shall be deemed non-existent from the outset; where the new utility model patent case is selected, the invention patent case will be rejected. To make the burden of proof more precise, in addition to the requirement for enforcing patent right based on the contents of the new utility model patent technical report(s), the plaintiff shall exercise considerable due diligence. It is proposed that amendment of a new utility model patent shall follow formality examination, where "substantive examination" and "combined decision" shall apply if the amendment is examined together with a cancellation action against the same new utility model patent. (Articles 32, 114, 119 & 120).
	l	Amendments Regarding Design Patent Practice
		Design patent protection will be expanded to cover partial designs, icon designs, GUI designs as well as designs of products supplied as a set. "Derivative design patent" will brought into the patent system (i.e., where the same person or entity has two or more similar designs, an original design patent case and derivative design patent case(s) can be applied). Conversely, "associated design patent" practice shall be abolished. (Articles 123, 129 & 131).
	l	Transitional Clauses
		Considering that some proposed changes involve significant changes in patent practice (such as patent protection on plant per se inventions and animal per se inventions, newly-added ground for asserting novelty grace period, division of an invention patent case after approval at the 1st examination stage, formality examination of an amendment of a new utility model patent, changes with respect to cancellation actions, patent amendment and design patents, etc.), transitional clauses are proposed to govern application of such changes. (Articles 151 to 160).
We will keep our readers informed of further developments.