Abuse of power or rights is an important topic in American law. There are considerable legal precedents on the abuse of patent rights. Some common forms of abuse of patent rights in practice are refusal to grant licenses, inclusion of patents that are invalid or expired within a patent pool, and malicious litigation. In the broad sense of the term, malicious litigation includes abuse of patent application strategies, indiscriminate litigation, indiscriminate use of preventive injunction procedures, and improper use of provisional attachment or preliminary injunction.

 

Patent holders have begun to pay greater attention in recent years to upholding and protecting their intellectual property rights. As a result, potential defendants of litigation over patent infringement have taken to somewhat aggressive defenses, such as filing cancellation actions, claiming invalidity of the patent during a civil litigation, and instituting separate litigation or counterclaim on the grounds of abuse of patent rights or hindrance of fair competition. Separate litigations or counterclaims initiated by the defendant of a patent infringement case are often seen in practice in the form of the defendant claiming that the patentee is aware the patent is invalid or no infringement has been committed by the defendant but still insists on applying for protection measures such as preliminary injunction or provisional attachment, and that such an action would amount to abuse of rights and thus infringement as stipulated in Article 184 of the Civil Code or unfair competition prescribed in the Fair Trade Act, thus making the patentee liable for damages.

 

The Taiwan Taipei District Court stated in its Judgment No. 2004 Zhi-7 that: "The question of whether the right holder's application for preliminary injunction or provisional attachment is improper or should not be an issue for the court that deals with such application to determine.  One should not single out the application for preliminary injunction or provisional attachment as instance of improper exercise of rights"; and "a decision with respect to the application for preliminary injunction or provisional attachment is in essence not premised on the submission of an assessment report. In addition, whether or not the views in such assessment report are accepted is within the jurisdiction of the court that deals with the application for provisional attachment or preliminary injunction. However, even with identical standards, different professional assessment institutions may come to different conclusions."  The court furthermore took the stand that: "It is relatively difficult to arrive at a conclusion that the patentee has intention to abuse its patent rights by applying for judicial means such as preliminary injunction or provisional attachment in a manner as to infringe the rights of the party that is alleged to have infringed the rights of the patentee."

 

The Intellectual Property Court (IP Court) said in its judgment dated December 2, 2010 under Judgment No. 2010 Min-Gong-Shang-3 that the patentee involved a negligent infringement conduct in his applying for preliminary injunction because the comparison for literal infringement had been incomplete in the assessment report furnished by the patentee in its application for preliminary injunction.  However, the court stopped short at giving its ruling on whether the patentee had abused its patent right, as alleged by the defendant in its claims.

 

With respect to the burden of proof in the case of a defendant in a patent infringement suit in relation to its claim of abuse of rights by the patentee, the IP Court stated in its judgment dated September 21, 2012 under Judgment No. 2011 Min-Gong-3 that the defendant should prove that at the time of the patentee's application for provisional attachment, the patentee had clearly known about constraints in its right or that it was prevented from asserting its right against the alleged infringer, i.e. the defendant. The IP Court also pointed out in the said judgment that even if the patent was ruled to be invalidated, one could not rely on this to infer that at the time of application for provisional attachment the patentee had obviously known there existed reasons for revocation of the patent. That is, one could not on this basis allege that the patentee had intentionally or negligently infringed the defendant's right by improperly exercising its own rights.

 

The aforesaid judgment under Judgment No. 2011 Min-Gong-3 was upheld by the IP Court during appeal (see Judgment No. 2012 Min-Gong-Shang-5 dated January 22, 2014). In the appeal judgment, the IP Court reiterated its view that the patent in question remained valid, and that even if upon subsequent administrative litigation there existed reasons for its invalidation, one could still not infer that the patentee had known about the reasons for it to be revoked at the time of its application for provisional attachment.