Life Sciences & Pharma IP Litigation 2023 Comparisons

Patent infringement cases are brought by the patent holder; if held jointly, not all joint owners need to be present as the plaintiff. Exclusive licensees may, as the plaintiff, bring an infringement action within the scope of its licence even if they have not been registered as a licensee.

In Taiwan, there is no court proceeding to invalidate a patent. All invalidation petitions must be brought before the Intellectual Property Office of the Ministry of Economic Affairs (TIPO). Only interested parties may file an invalidation petition on the grounds that “the patent application was not filed by all joint owners of the patent” or “the applicant is not the patentee”, while there is no standing requirement for invalidation petitions based on any other legal ground.

Based on the authors’ observations of life sciences/pharma cases in Taiwan, defendants have primarily been generics pharmaceutical companies, with a small minority of generics manufacturers or channel suppliers. A Taiwan court has the right to summon TIPO (as the competent authority) to participate as an intervener in a patent infringement case. However, there is no basis in law for a Taiwan court to require the Ministry of Health and Welfare (MoHW), the health regulatory competent authority in Taiwan, to participate in a life sciences/pharma patent infringement case, nor is there any record of the MoHW appearing in such proceedings.

Preliminary injunctions are available, including on an ex parte basis if the court believes the circumstances warrant such a measure. In a patent infringement action, there is usually a one to two month gap between the petitioner’s preliminary injunction application and argument, and a total time of about three months from the petition to the court’s decision; the actual time required will vary on a case-by-case basis. There is no specific requirement with respect to the earliest point in time a preliminary injunction may be filed. The relevant elements for granting a preliminary injunction in patent infringement cases are no different from those in other civil matters, namely:

• whether the injunction is necessary to prevent imminent and serious harm (or other similar circumstances) to petitioner;
• whether the determination of the injunction will cause irreparable losses to the petitioner or respondent;
• likelihood the petitioner may prevail in the substantive action;
• balance of interests between the petitioner and respondent; and
• impact on the public interest.

Per the wording “imminent” in the first bullet point above, quia timet relief is available in Taiwan if supported by sufficient evidence. There is no consideration specific to preliminary injunctions in life sciences/pharmaceuticals matters.

There is no black-letter law on notice requirements to the respondent. In Taiwan practice, the court handles service to the other party, and in an inter partes preliminary injunction proceeding, the court will generally serve the respondent at the same time it asks both parties to submit their arguments. Service is generally effectuated through mail, and delays in mail delivery would not in principle cause any deadlines to be extended, but the respondent may request to court for an extension at a hearing.

Per 1.1 Claimants/Plaintiffs to an Action, infringement and validity proceedings are completely separate in Taiwan, and the courts do not directly invalidate a patent. If the defendant argues in an infringement action that the patent should be invalidated, the court will consider the argument’s merits on its own but will not stay the infringement proceedings to do so. For the same reason, there are no court nullity proceedings, only patent office opposition proceedings.

Infringement Actions

The relevant statute of limitation periods for initiating an infringement action is two years after the patentee becomes aware of damages incurred and the identity of the infringer liable for such damages, or ten years after the act of infringement. Service is effectuated in the same way as described in 1.3 Preliminary Injunction Proceedings. Statistics from the Intellectual Property and Commercial Court indicate that for the first three quarters of 2022, the average time to resolve a first instance patent-related matter was 247 days.

In Taiwan, once the case is on the court’s docket, the court will hold a series of preparatory hearings in which the judge hears arguments presented by the parties. The judge has discretion to conclude the preparatory hearings once he or she believes there is sufficient evidence to make a decision and convenes oral arguments hearing in which the parties make a summary argument before the proceedings are officially concluded and a decision is rendered soon thereafter. Since the duration of the preparatory period depends greatly on the complexity of the case and the judge’s discretion, there is no data available on the average timeframe of those interim steps.

Invalidation Proceedings

The invalidation proceeding is an administrative proceeding in Taiwan. No statute of limitations apply with respect to bringing an invalidation petition to the TIPO; it is in principle still possible to bring an invalidation petition even if the patent right has already been extinguished if the petitioner has a recoverable legal right from the invalidation.

The TIPO handles the service to the patent holder. Service is also effectuated through mail delivery as in other civil litigation. The patent holder has one month to respond after being served the copy of the invalidation proceeding. There is no statutory time limit for the invalidation proceedings, but TIPO’s published guidance documents on various patent-related petitions indicate that the average invalidation proceeding before the TIPO lasts about 15 months.

The action may be initiated as soon as the patent holder or the exclusive licensee becomes aware of the infringement. As long as the plaintiff is the patent holder or the exclusive licensee, Taiwan law does not stipulate any other prerequisite conditions to meet before initiating the infringement action. There is also no material difference attributable to the type of patents asserted with respect to the procedure to initiate an infringement action.

One notable presumption in Taiwan patent law that affects the burden of proof between the parties is that a product made by the defendant that is “identical to the product made pursuant to the plaintiff’s manufacturing process patent” shall be deemed as made pursuant to such patent, if the plaintiff’s product is not on the market prior to such patent. In such cases, the defendant would have the burden of proof to show that its product was manufactured pursuant to a different method before it can assert a non-infringement defence.

Discovery is not available in Taiwan as an evidence gathering mechanism.

The closest equivalent to a search and seizure order in Taiwan is a “preservation of evidence” order, which is typically a form of preliminary injunctive relief petitioned by the plaintiff before the substantive litigation commences to take the relevant evidence into the protective custody of the court, where in the absence of court action it is likely to be destroyed or altered in the course of the litigation proceeding.

Declaratory relief may be granted by a Taiwan court if requested by a party. In general, declarative relief must take one of the following three forms:

• the confirmation of the (non-)existence of a specific legal relationship under private law;
• the confirmation of the (non-)existence of the facts underlying such legal relationship; or
• the authenticity of a certificate document.

The party seeking declaratory relief must therefore have a definitive legal relationship in dispute, the confirmation of which would either confer a legal benefit on the party or remove a legal threat to the party.

In a life sciences patent proceedings context, declaratory relief sought is often in the form of a court decision that an upcoming pharmaceutical product in the middle of the market authorisation process does not infringe on a specific patent on grounds that the patentee failed to file an infringement action against the applicant of the said pharmaceutical product permit within the stipulated period under the Pharmaceutical Affairs Act.

In Taiwan, the doctrine of equivalents is not expressly recognised in statute. However, in the “Key Points of Patent Infringement Determination” published by TIPO as a guide for adjudicating patent infringement matters, a section is dedicated to the doctrine of equivalents that the courts consult and apply in practice. Thus, the doctrine of equivalents as a concept is often applied and argued in patent infringement actions in Taiwan.

The current tests for the doctrine of equivalents in Taiwan as detailed in the above document include the “triple identity” test, in which equivalency is found if (i) it performs substantially the same function in (ii) substantially the same way for (iii) the same result, as well as the “insubstantial difference” test and the “interchangeability test” (“a person with ordinary skill in the art would have been aware of the differences and the changes still result in the same function”).

Defences to the doctrine include the “all elements rule” (“every element of the claims of the patent or its substantial equivalent must be present in the alleged infringing product”), patent prosecution estoppel, prior art ensnarement (“equivalents cannot cover prior art”) and the contribution principle (“techniques disclosed in but not specifically claimed in the patent application are not protected”).

In applying to the Taiwan Food and Drug Administration (TFDA) for a drug permit for a generic drug, (one that is not a new chemical entity – “non-NCE”) a new drug and a biosimilar in Taiwan, the applicant must make a declaration regarding the status of the patents of the corresponding branded drug and initiate the patent linkage mechanism. One possible declaration is that the “patent rights corresponding to the branded drug shall be revoked, or the generic drug does not infringe on such patent rights” (the “P4 Declaration”). If the P4 Declaration is made, the applicant must follow up with a notice (“P4 Notice”) to the patent holder of the branded drug in which the applicant asserts such declaration in writing, with supporting evidence. The patent holder must then initiate a patent infringement action against the applicant within 45 days of its receipt of the P4 Notice in order to suspend the issuance of the permit for a period of 12 months. If no infringement action is timely commenced, the TFDA may proceed to issue the drug permit to the applicant if the permit application is compliant with the relevant laws and regulations.

Other than as described above, there is no other “clear the way” obligation in Taiwan.

During the court proceedings, a party may submit a written opinion provided by an outside individual, or an individual may be summoned by the court to provide testimony. However, Taiwan civil procedure does not distinguish between lay witnesses and expert witnesses, so no preferential value is attached to such written opinion or witness testimony, even if they are supposedly from an expert in the field. In fact, for fact determinations in highly technical cases, Taiwan courts generally rely on their internal “technical officers” who assist the court’s judges in understanding those technical issues, or from assessments, as detailed in 1.13 Use of Experiments.

There is, however, a draft amendment to the Intellectual Property Case Adjudication Act, which is still under review that would bring the use of experts in intellectual property disputes in line with the practices in other jurisdictions, such as allowing the parties to directly present expert testimony, and allowing one party’s expert to interact with and question the other party’s expert upon the approval of the court. As of the date of this writing (January 2023), the draft amendment has passed the legislature but has not yet become effective.

Civil litigation in Taiwan has an evidence “assessment” mechanism in which upon petition by a party (or the court on its own initiative), the court will select an individual, who is typically an expert in the field, to assess the relevant evidence and render an (expert) opinion. In a patent infringement action context, this assessment may be carried out by way of experiment(s) to assist the court in understanding the infringement/patent validity issues at dispute. Petitions for an assessment are often granted by a court when the infringement action involves highly technical knowledge or a large amount in controversy, but the court is not bound by the findings of the assessment.

As mentioned in 1.7 Pre-action Discovery/Disclosure, discovery is not available in Taiwan as an evidence gathering mechanism. The draft amendment to the Intellectual Property Case Adjudication Act mentioned in 1.12 Experts would allow a party to apply to the judge for appointing an “investigator” who will audit the documents or facilities held or managed by the other party or a third party.

Common defences asserted in a patent infringement action in Taiwan include invalid patent, prior use, patent exhaustion, experimental use and prior art. In actions involving life sciences cases, some of the more notable arguments in defence include whether a generic is able to evade a patent for a specific pharmaceutical purpose by excluding specific indications, and whether a different crystalline structure of a prior art compound is considered an inventive step.

Per 1.4 Structure of Main Proceedings on Infringement/Validity, it is possible for the infringement proceedings to exist in parallel with the invalidation proceedings, as the infringement court is not obliged to wait on or be bound by the results of the invalidation proceedings. In actual practice, however, the lagging proceedings may nevertheless give some deference to the reasoning of other proceedings that have reached a decision earlier in order to prevent inconsistent results.

It is a relatively common tactic in Taiwan for a patent holder in patent litigation to apply to amend the claims of the patent in question as a defensive measure against invalidation arguments. In such cases, the court will generally wait for the results of the amendment application unless the amendment application is improper as a matter of law or there is no longer any infringement under the amended patent.

Although Taiwan has established the Intellectual Property and Commercial Court for adjudicating civil intellectual property rights disputes, it does not have exclusive jurisdiction in those cases; a party may also file the dispute before any district court with jurisdiction to hear the case. However, trends in recent years have shown a clear preference for resolving life sciences/pharma patent infringement cases before the Intellectual Property and Commercial Court due to the expertise and experience of its judicial personnel.

Small Molecule Pharmaceutical Products

With respect to the relevant conduct for filing a patent infringement action, no special treatment is provided for small molecular pharmaceutical products in Taiwan. In other words, any conduct that falls within the scope of exclusive rights granted to the patent holder – such as manufacture, sales, offer for sale, use and import for the aforementioned purpose – can in principle give rise to a patent infringement action.

The research, testing and other practices of the patent for obtaining a drug registration are considered outside the scope of exclusive patent rights, but those acts may be deemed infringing if they were conducted for any other purpose, such as hospital clinical trials.

Filing a permit application for non-NCE new drugs (including generics) is also in principle not considered an infringing act. However, the analysis may change depending on the circumstances. For example, if a generic drug maker has already obtained the permit and completed the pricing procedure, a court may grant an injunction to prevent continued infringement of the patent.

The courts have generally deemed a submission or award of tender as insufficient to constitute an offer for sale, but the facts of an individual case may lead to a different result.

For an offer to supply after patent expiration, since the patent would have expired and the patent protection have been extinguished, it is very likely that a court will deem such offer as not infringing.

Skinny Labelling & Parallel Imports

A generic drug permit applicant may exclude indications of the corresponding branded drug that is still under (second medical use) patent protection to prevent infringing on such patents. However, the act of skinny labelling does not by itself create any presumption of non-infringement, and the court will examine whether the revised labelling of the generic drug is medically reasonable as well as the clinical test results to determine on a case-by-case basis whether the generic drug is infringing.

For parallel imports, Taiwan recognises “international patent exhaustion”, so the patent holder may no longer assert its patent rights over any product that it has manufactured or otherwise agreed to circulate in the market, regardless of which country’s market the product first appeared in. Regardless of patent status, a firm looking to import a pharmaceutical product into Taiwan must still apply to the MoHW for registration of the drug and obtain a permit before importing.

Generics Sales Exclusivity

The first generics manufacturer who makes a P4 Declaration and successfully prevails in an infringement challenge or otherwise successfully avoids a patent is entitled to a 12-month sales exclusivity period. However, sales exclusivity is not granted to a generic drug that only differs from the branded drug in (skinny) labelling.

Orphan Drug Sales Exclusivity

The permit for a registered orphan drug has a term of ten years, during which the MoHW will refuse the registration of the same type of orphan drug. If manufacturing or import of the orphan drug is still needed after the expiration of the permit, the permit may be extended beforehand for up to five years per extension. However, during the extended term, the MoHW will start to accept applications to register the same type of orphan drug.

New Chemical Entity (NCE) Drug Data Exclusivity

NCE drugs are entitled to a three-year data exclusivity period starting from the date the NCE permit is issued, during which all other pharmaceutical firms (including generic firms) may not cite the data in the NCE drug’s permit application for their own registration without the NCE permit holder’s consent. After the three-year data exclusivity term expires, the MoHW will accept registrations from other firms and issue permits starting from the day after the fifth anniversary of the issuance of the NCE permit.

A NCE drug that has obtained market authorisation overseas may obtain data exclusivity in Taiwan if registered with the MoHW within three years of obtaining such market authorisation.

New Indication Data Exclusivity

For a period of two years after the MoHW’s approval of an added or changed indication for a pharmaceutical product, no other pharmaceutical firm will be allowed to cite the data for their own permit application for the same indication. The MoHW will accept applications after the two-year period and issue permits starting from the day after the third anniversary of the approval of the added or changed indication. If the holder of the permit for the pharmaceutical product with the added or changed indication will be engaging in clinical trials in Taiwan with respect to the new indication, permits for other firms will only be issued from the day after the fifth anniversary of the approval.

A new or changed indication that has obtained market authorisation overseas may obtain data exclusivity in Taiwan if registered with the MoHW within two years of obtaining such market authorisation.

Taiwan law currently has no specific rules for data/sales exclusivity of paediatric drugs, combinations and reclassifications, nor have the authors found any precedents in Taiwan that challenged the data/sales exclusivity conferred on a product.

As mentioned in 2.1 Infringing Acts, patent rights do not reach any act that was conducted solely for the purpose of registration of the product or market authorisation in a foreign market. This includes pre-clinical and clinical trials and any directly related manufacturing, offers for sale, sales, uses and imports of the product.

The TFDA has established the Patent Linkage Lookup System, a pharmaceutical products database that enable generics firms to time their market launch and challenge patents if needed. Branded drug firms may also stay updated on the use of their patents by others and timely act to protect their patent rights.       

The following information is currently publicly available in the database: information about the drug (name, indication, active ingredient, dosage type, etc), market authorisation information, holder of the drug permit and patent information.

Per 1.11 Clearing the Way, the branded/reference drug firm typically becomes aware of generics or biosimilar permit applications through the P4 Notice provided by the generics firm.

Relationship Between Patent Status and the Drug Permit

In Taiwan, the issuance of the permit for a generic drug is not directly linked with the patent status of the corresponding branded drug. Per 1.11 Clearing the Way, when applying for the permit for a new generic drug, the applicant firm must make the declaration regarding the patent status of the corresponding branded drug, including:

(i) the branded drug has no patent on record;

(ii) the patent(s) for the branded drug have expired;

(iii) recognition that the patent(s) for the branded drug are currently in effect, and the application is requesting the issuance of the permit after the patent(s) have expired; or

(iv) the P4 Declaration.

The permit will be issued immediately if (i) or (ii) is declared and the application is in order. For a (iii) declaration, the MoHW will wait until the relevant patents have expired before issuing the permit.

Relationship Between Patent Status and Listing and Pricing

The primary considerations for listing and pricing as made by the National Health Insurance Administration (NHI) in Taiwan is primarily focused on health, medical ethics, medical cost benefits and the finances of the national health insurance programme rather than the patent status of the drug in question.

In principle, the permit for the generic drug must be obtained first before applying to the national health insurance programme for pricing considerations. If the P4 Declaration and P4 Notice results in a patent infringement action between the generic drug firm and the branded drug firm, even though the MoHW will suspend the permit issuance process, the MoHW will nevertheless notify the generic firm that it has fully reviewed the application and the generic firm may proceed to submit the listing and pricing application to the NHI.

In contrast to the permit application process, the generic drug firm has no obligation under Taiwan law to inform the corresponding branded drug firm that it is applying for listing and pricing of the generic drug.

Listing and Pricing for Second Medical Use Patents

In applying for a new listing and pricing for the second medical use of an already listed drug with the NHI, the permit holder will need to present either:

• a head-to-head comparison of the efficacy of the second medical use versus the most commonly prescribed and effective drug on the market; or
• an indirect comparison through clinical test results that show the second medical use has a marked improvement in clinical efficacy.

A rejection of the listing and pricing application for the second medical use may in principle be contested via initiating administrative litigation against the NHI. However, as mentioned above, the NHI is granted a level of discretion in its listing and pricing decisions, and an administrative court will only vacate the NHI’s rejection if there is a clear violation of law or error of fact committed by the NHI. As a result, litigation against the NHI for the rejection of listing and pricing for the second medical use is quite rare in practice.

Biologics or biosimilar patents are not treated any differently in terms of patent litigation, thus all relevant rules are as indicated per 2.1 Infringing Acts.

Data exclusivity for biologics is identical to that for NCE drugs (a three-year period).

Biosimilars in Taiwan are generally subject to the same patent linkage mechanism as generics. As such, they may be entitled to the same 12-month sales exclusivity period per 2.2 Regulatory Data and Market Exclusivity.

There are no relevant differences between biosimilars and generics in this regard – see 2.3 Acceptable Pre-launch Preparations.

There are no relevant differences between biosimilars and generics in this regard – see 2.4 Publicly Available Drug and Patent Information.

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There is no material difference in the listing and pricing for biologics. For biosimilars, the NHI applies an accelerated “new category model” system that, in practice, shortens the overall listing process by about three months. All the other NHI pricing considerations per 2.5 Reimbursement and Pricing/Linkage Marketsare also applied to biosimilars.

A one-time patent extension may be granted with respect to the first permit granted to a medical drug or its manufacturing process in consideration of the time taken up by the permit approval process. The extension may only be as long as the time that the patent could not be enforced due to the permit approval process and in any case up to a maximum of five years. The application should be submitted by the holder of the patent three months after obtaining the first permit but no later than six months before the expiration of the patent.

In the case of a single patent covering multiple product permits (eg, a permit for product A based on claim 1 and a permit for product B based on claim 2), if an extension based on the permit for product A is approved, the patent may no longer be extended based on the permit for product B. In the case of a single product (permit) that covers multiple patents, only one of the patents may be chosen for extension. Finally, only the objects, purposes or methods claimed in relation to active ingredient and its indication as stated in the permit are extended; all other objects, other purposes or methods claimed in the patent that are not included in the permit are not extended.

Taiwan does not have a system specifically for extensions of paediatric drugs. Those drugs in principle must follow the same patent extension process per 4.1 Supplementary Protection Certificates.

The common elements to the grant of a preliminary injunction are as stated in 1.3 Preliminary Injunction Proceedings. There is no basis in Taiwan to obtain a preliminary injunction solely based on a damages undertaking.

A preliminary injunction order in an intellectual property right case that was granted without inter partes arguments is immediately enforceable at the time of the court’s decision. Details regarding service of the preliminary injunction order to the respondent are as stated in 1.3 Preliminary Injunction Proceedings. The respondent may contest the preliminary injunction order by filing an appeal within ten days of service. The petitioner must also initiate the main action within 30 days of service of the court’s decision to grant the preliminary injunction, otherwise the court may, upon application or on its own, revoke the preliminary injunction order.

A patentee may be required to pay a bond before the court will grant the requested preliminary injunction order if the court believes the patentee’s arguments were not sufficient.

In general, the appeal does not stay the compulsory enforcement proceeding of the preliminary injunction order. However, where stipulated exceptions exist, such as petition for a recovery of status quo ante, the court may suspend the compulsory enforcement if necessary or upon the provision of an adequate and full security bond. The respondent may also pay an amount to obtain a stay of the enforcement of the preliminary injunction order if the preliminary injunction order will cause irreparable losses to the respondent or the losses that the petitioner suffered may be covered by monetary reimbursement. As the purpose of the bond is to protect the other party from the harm caused by a (meritless) preliminary injunction order, the amount is typically set by the court based on an estimated valuation of such harm incurred by the other party.

Final injunctions are often granted alongside a decision in favour of the patent holder, in which the defendant may be forever enjoined from directly or indirectly, either by itself or with another, manufacturing, offering for sale, selling, using or importing the relevant product, among other appropriate forms of injunctive relief.

In principle, a final injunction can only be enforced when the court decision in favour of the patent holder is also final – ie no further appeals are possible. Accordingly, there is no stay of a final injunction. The patent holder does not need to pay any bond or take any other legal action to enforce a final injunction or keep it in force.

The court may not order relief that a party has not requested. Per 1.3 Preliminary Injunction Proceedings, public interest and proportionality are both concerns considered by the court in granting preliminary injunctive relief regardless of subject matter. In the context of life sciences and pharma patent litigation, the court may deny the patent holder’s request for the (preliminary) suspension of sales of an allegedly infringing drug on public interest grounds if such drug is shown to be essential to the health and treatment of certain patients.

However, as the grant for final injunctive relief is based on whether infringement was found, the court does not have to consider the balance of interests between the parties and the impact on the public interest.

Pursuant to the Taiwan Patent Act, only the patent holder or the exclusive licensee may claim damages as a result of intentional or negligent infringement of patent rights by the defendant. Third parties, including government bodies such as the MoHW, do not have a right to claim damages; the court will reject any claim of damages that is not from the patent holder or the exclusive licensee.

Calculation of Damages

The Patent Act stipulates a number of options for the calculation of infringement damages:

• Damages pursuant to the Taiwan Civil Code – this includes provable actual damages and lost profits. If the amounts cannot be proved, the patent holder may subtract the actual profits from the practice of the patent with the alleged infringement from the expected profits from the practice of the patent to estimate its damages.
• The defendant’s unjust enrichment from the infringement.
• A reasonable royalty that the defendant would have paid for a licence to practise the patent.

The court may grant a plaintiff’s request for the defendant to pay treble damages if the infringement is determined to be intentional.

Interest on damages

There is generally no time limit imposed on when the damages must be paid, but the plaintiff may claim interest accrued starting from the date the complaint is served on the defendant.

Amount of Damages

In the life sciences and pharma litigation context, for damages claimed based on the unjust enrichment of the defendant, the Intellectual Property and Commercial Court have taken a variety of approaches in determining the amount. For example, in one case, the court used the annual sales turnover of the drug as submitted by the patent holder; and in another case, the court agreed with the patent holder using the NHI-approved price of the drug as sold to hospitals as a basis to calculate the damages amount. For reasonable royalties, even if the patent holder has never licensed another party to practise the relevant patent, the court will determine the amount through considering a number of factors, such as royalties for similar patents, the nature and scope of a reasonable licensing agreement based on the facts of the infringement, the market position of the patent holder and the licensee, the degree of contribution of the patent to the infringing product, and the market share of the infringing product, among others.

Claiming Damages for a Vacated Injunction

As to damages based on a vacated preliminary injunction order, the Code of Civil Procedure only requires the petitioner to pay damages to the respondent in the following three circumstances:

• the preliminary injunction was vacated because it was improper to grant ab initio;
• the preliminary injunction order was vacated because the petitioner failed to timely initiate the main action; or
• the petitioner requested to withdraw the preliminary injunction order

In practice, the courts have interpreted “improper to grant ab initio” as “improper for a court to grant the preliminary injunction order based on the objective circumstances at that time”. No damages claim will be granted for a preliminary injunction order that is vacated due to the petitioner’s loss in the main action.

In Taiwan, the losing party of a civil action bears the “litigation costs”, which, pursuant to the Code of Civil Procedure, include (i) the court fees, which are calculated based on a percentage of the amount in controversy; and (ii) all other necessary expenses for the litigation, such as photocopies, translations and witness/court-appointed expert fees. If both parties prevail in part and lose in part, the court may choose to allocate the litigation costs proportionally between the parties, or order each party to bear their own respective litigation costs. Notably, attorney’s fees are only awarded in the third and final instance, in which attorney representation is required.

In practice, the court does not detail in the decision how the litigation costs are determined. The calculation is generally only carried out when the decision is confirmed as final (ie, where there is no appeal from the losing party/no further appeals are possible) and the prevailing party requests the court to determine the litigation cost amount.

(Negative) plaintiff conduct is taken into consideration in the court’s deliberation on whether to reduce or even deny relief in an infringement action. Actual discussions by the courts on the impact of plaintiff conduct on relief granted have involved the following:

• Plaintiff’s failure to indicate the patent number on the patented object – Taiwan’s Patent Act requires the patent number to appear in a conspicuous place on the patented object. Pursuant to the Intellectual Property and Commercial Court’s holdings, a failure to indicate the patent number would cause the plaintiff to have to further demonstrate that the defendant was aware or should have been aware that the object in question was patented.
• Constructive waiver and “laches” – In principle, a patent holder’s excessive delay in exercising its rights and engaging in conduct that gave others a reasonable understanding that it did not intend to exercise its rights may result in the court disallowing the patent holder’s claim against the alleged infringer on violation of good faith grounds. However, in the relatively few Intellectual Property and Commercial Court cases in which the defendant has raised such a defence, the court has not found the argument persuasive because the defendant could not substantiate that the plaintiff had acted in a way that caused the defendant to properly form a good faith belief the plaintiff did not intend to exercise its patent rights.

Finally, per 1.1 Claimants/Plaintiffs to an Action, exclusive patent licensees need not be registered as a licensee in Taiwan in order to initiate an infringement action against a third party.

Trade mark disputes in the life sciences and pharma sector are very common in Taiwan, in particular counterfeit trade mark civil and criminal cases, with over 30 cases over the past five years.

The trade mark-related laws that a life sciences/pharma dispute may involve include but are not limited to the Trademark Act and the Enforcement Rules of the Trademark Act, the Implementation Regulations for Customs to Detain Articles Infringing the Rights in the Trademark, the Regulations Governing Customs Measures in Protecting the Rights and Interests of Trademarks, as well as the TIPO’s trade mark review standards. There is no standard or special consideration, however, that is specifically stipulated for the life sciences and the pharma sector.

Copyright disputes in the life sciences and pharma sector are relatively rare in Taiwan. There have been a few disputes in recent years regarding the packaging design of pharmaceutical products, or alleged copyright infringement of the package insert.

The relevant laws are the Copyright Act and the Implementation Regulations for Suspension of Release of Goods Infringing on Copyright or Plate Rights by Customs Authorities.

While public searches do not reveal any life sciences and pharma sector trade secret dispute cases in the past five years in Taiwan, there have been an increasing number of trade secrets disputes in the Taiwan hi-tech sector in recent years arising from the movement of high-level personnel. It is therefore anticipated that such disputes will arise in the life sciences and pharma sector. The primary source of law for trade secrets in Taiwan is the Trade Secrets Act.

Appeal Against a Preliminary Injunction Decision

As mentioned in 5.1 Preliminary Injunctive Relief, the respondent has a fixed ten days after service of the preliminary injunction decision to contest it. In principle, the appeal would not suspend the enforcement of the preliminary injunction. In reviewing the grant of the preliminary injunction, the appeals court will consider the matter de novo without deference to the lower court’s findings, including factors such as the enforceability of the preliminary injunction and the scope/extent of the injunction imposed. If the appeal is found to be persuasive, the preliminary injunction decision may be reversed or amended; a decision to reject the appeal may not be further appealed.

If the basis for the preliminary injunction is extinguished as a result of an appeal or the petitioner’s loss in the main action, the respondent must still petition the original court that issued the preliminary injunction to lift the preliminary injunction order.

Appeal Against a First Instance Patent Infringement Decision

In general, an appeal of a first instance decision in a patent infringement dispute should be made to the Intellectual Property and Commercial Court within a fixed 20 days of the service of the decision. The second instance is considered a de novo review that covers questions of facts and questions of law without deference to the first instance court’s fact findings. Per the Intellectual Property and Commercial Court’s internal rules, second instance proceedings should be concluded within two years from the date the case is assigned to a judge, or such case will be recorded as a delayed case. The losing party in the second instance may further appeal the matter to the Supreme Court for a third instance proceeding. 

Appeal Against a TIPO Invalidation Decision

Per 1.5 Timing for Main Proceedings on Infringement/Validity, the invalidation proceeding is an administrative proceeding. To contest the TIPO’s decision on an invalidation petition, a party will need to file for an administrative appeal with the Ministry of Economic Affairs (of which the TIPO is a part), and a decision is generally rendered within three months. A party can contest the administrative appeal decision by initiating administrative litigation, the first instance of which will be before the Intellectual Property and Commercial Court. Statistics from the Intellectual Property and Commercial Court for 2022 Q1 to Q3 indicate that administrative litigation generally lasts an average of 207 days. If necessary, the second and final administrative litigation instance will be before the Supreme Administrative Court.

The second instance of a civil patent litigation case is adjudicated by a panel of three judges. As mentioned in 1.12 Experts, if the appeal is brought before the Intellectual Property and Commercial Court, the court has technical officers assisting the judges in understanding the technical issues of the dispute, collecting information and providing analysis. 

The third and final instance of a civil patent litigation case is before the Supreme Court and adjudicated by a panel of five judges.

The Intellectual Property Case Adjudication Act stipulates procedural rules for IP rights disputes that take precedence over the general civil/criminal/administrative procedure rules (although those rules still apply for procedural matters not specified in the Intellectual Property Case Adjudication Act). There is, however, no procedural rule dedicated to handling IP rights disputes in relation to life sciences and pharmaceutical products.

A patent holder may request the customs authority in Taiwan to seize inbound goods that the patent holder believes to be infringing by substantiating its allegations in writing and providing a bond equivalent to the estimated value of the imported goods after customs tax. The other party may stay such seizure by providing an amount double that of the bond provided by the patent holder. However, no special rules for life sciences and pharma IP litigation are stipulated for the above customs seizure application.

While arbitration and mediation are available in Taiwan for resolving life sciences disputes, based on the authors' public searches, in practice, a large majority of those disputes are still resolved through court actions.

Settlement or other kinds of agreements entered into by an applicant/holder of a drug permit, a drug patent holder or exclusive licensee that involve the manufacturing, sales or exclusive sales of pharmaceutical products shall be reported to the Taiwan Fair Trade Commission (the authority for competition law) in addition to the MoHW if such agreement involves reverse payments. As such, it is recognised that certain agreements between the aforementioned parties carry antitrust concerns

Although the authors have not found any precedent for antitrust investigations initiated over settlement agreements between the aforementioned parties in public searches, in May 2021, the Taiwan Fair Trade Commission ruled that there was concerted action by two pharmaceutical companies in their use of an “exclusive distributor agreement” to cause one company to pay royalties and become the exclusive distributor of the other company as the distributor has never sold the other company’s products.