CHANGES TO INVALIDATION ACTIONS UNDER THE PATENT ACT

03/01/2011

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Since the announcement of the current Patent Act (the "Current Act") on 6 February, 2003, and its implementation on 1 July, 2004, the Intellectual Property Office (TIPO or the Office) has continued to review the law, including holding several hearings to seek comments from the public. The final product of this effort, the Draft Amendments to the Patent Act (Draft Amendments), was approved by the Executive Yuan on 3 December, 2009, and is now under review by the Legislative Yuan. In the meantime, based on the Draft Amendments, TIPO is working on revising its enforcement rules and standards of review. Under the Draft Amendments announced by TIPO, the law governing invalidation actions, which greatly affects the rights of patent holders, will see significant changes in both design and operation. The major changes to the current regime are listed below:
l	The Draft Amendments remove the power of TIPO to independently revoke patents, but provide TIPO with a more proactive role in reviewing invalidation actions.
	The Current Act allows TIPO to revoke a patent ex officio when it becomes aware of any grounds for revocation, without having to wait for a third party to bring an invalidation action. This creates uncertainties for patent holders, even though TIPO rarely exercises this power in practice. The Draft Amendments remove this power, making the validity of a patent strictly a matter of private dispute.
	On the other hand, the Draft Amendments also add to TIPO's powers in reviewing invalidation actions. Specifically, if TIPO discovers reasons or evidence supporting revocation, or if it finds that the evidence produced by an invalidation petitioner can be used to support grounds for invalidation other than the ones raised by said petitioner, or if it finds that a combination of evidence from different invalidation actions creates grounds for revocation, it may proceed to revoke the patent, provided that TIPO first notifies the patent holder so that he may raise a defense. This approach differs from the Current Act, which limits TIPO to base its review solely on the evidence and reasons raised by the invalidation petitioner.
	During a training class held in March 2011, TIPO indicated that while the Draft Amendments expand the office's scope of review, patent examiners should be conservative, acting only when the new reasons or evidence in support of revocation are clearly identifiable, and should not conduct their own independent investigations like in a patent application case.
l	The Draft Amendments require invalidation petitioners to specify the claims that he is challenging, and prohibit any changes or expansions to the scope of the invalidation action. A petitioner may only reduce the number of claims he seeks to challenge.
	The Draft Amendments require an invalidation petitioner to include in his application an "invalidation statement," specifying the claims that he is challenging. In the past, even though petitioners should clearly state their claims, as well as the grounds and evidence for revocation, applications are often unclear, creating difficulties for the review process. The Draft Amendments make the "invalidation statement" a required component of the application.
	Under the Current Act, if TIPO finds that some of the claims of a patent are invalid, it must revoke the patent entirely. The Draft Amendments allow TIPO to issue partial revocations. Accordingly, under the Draft Amendments, an invalidation petitioner may request TIPO to revoke the patent entirely, or to issue only a partial revocation. Before submitting an application, petitioners should carefully review the scope of their "invalidation statement," and the list of claims that they seek to challenge because they may not later change or expand the scope of the invalidation action. To increase administrative efficiency, petitioners may only reduce the number of claims that they seek to challenge.
	In addition, in order to adequately protect the rights of patent holders, TIPO plans to include in its Draft Enforcement Rules of the Patent Act provisions that will require the invalidation petitioner to obtain the consent of the patent holder to reduce the number of claims that he seeks to challenge if the patent holder has already filed a statement of defense.
	Review of the invalidation action is limited to the scope of the invalidation petitioner's "invalidation statement," although, as explained above, TIPO may consider evidence or reasons for revocation that were not raised by the petitioner.
l	When a patent is the subject of multiple invalidation actions, TIPO may consolidate the invalidation actions.
	The Draft Amendments provide that when a patent is the subject of multiple invalidation actions, TIPO may consolidate the invalidation actions as needed. This will increase administrative efficiency, and allow for the simultaneous resolution of all disputes involving a particular patent.
	Because the consolidation of various invalidation actions may be disadvantageous to the patent holder, who now faces a united group of invalidation petitioners, TIPO plans to consider the interests and opinions of the parties involved prior to any consolidation. However, because the decision to consolidate is not an administrative ruling, parties may not seek administrative remedy.
l	When TIPO grants an application to amend the claims or specifications of a patent during the invalidation action, the decision will be stated in the main text of the written examination decision.
	If the patent holder raises an application to amend the claims or specifications of a patent during an invalidation action, TIPO's current practice is to render the decision on such applications together with the decision on the invalidation action. However, the written examination decision will only state in the explanation section whether TIPO granted such applications. If any party involved is dissatisfied with TIPO's decision on the application to amend, he should appeal the decision together with the decision on the invalidation action in an administrative remedy proceeding. To clarify TIPO's current practice, the Draft Amendments provide that if the patent holder submits an application to amend during an invalidation action, TIPO shall review and decide the application and the invalidation action together.
In addition, based on the Draft Enforcement Rules of the Patent Act, once the Draft Amendments have been passed and implemented, TIPO should specify any decision to approve an application to amend in the main text of the written examination decision. However, if TIPO rejects the application, it only needs to follow the previous practice of stating the decision in the explanation section.