Francisco A. Laguna & Jimmy Wang
Last week, we discussed some general aspects of direct patent infringement cases in Taiwan. Today, we look at the specific issue of remedies.
In Taiwan, two basic remedies exist for patent infringement cases: damages; and injunctive relief. If damages are awarded, the court may calculate the amount applying any of the following methods:
- the method provided by Article 216 of the Civil Code – If the patent holder cannot prove the amount of damages definitively, the owner may claim damages determined by subtracting the profit earned through the legal exploitation of the patent post-infringement from the profit such legal exploitation would normally be expected to generate;
- the profit earned by the infringer; or
- the amount of royalties that may have been collected pursuant to a licensing agreement.
In terms of injunctive relief, both preliminary and final injunctive relief is available. Preliminary injunctions are granted if the plaintiff can show that an injunction is necessary to prevent material harm or imminent danger or other similar circumstances. The court generally considers: 1) the likelihood of success on the merit of the case; 2) whether the plaintiff would suffer irreparable harm; and 3) the balance between the interests of the parties and the public. Final injunctions are granted if the plaintiff can establish that: 1) patent is valid and is infringed by defendant; 2) defendant is participating in infringing activities or is likely to engage in future infringing activities.
Patent litigation in Taiwan is costly and time-consuming. It is crucial for those doing business in Taiwan, or planning to do so, to understand which industries bear a higher risk of patent infringement. In recent decades, high tech companies have been primary victims of infringement activities, including industries that involve electronics, computers, ICs, semiconductors, photonics, LEDs, display/touch panels, precision machines and moldings. Also, since 2006, Taiwan has been aggressively developing its biotechnology sector, and, as such, infringement in this sector has also increased.
Knowing how to avoid or reduce the chance of patent infringement is crucial when doing business in Taiwan. Patent infringement lawsuits can cost companies time and money that they could otherwise dedicate to continued innovation efforts. Industries often assess the possibility of infringement prior to developing a product or designing a business plan (often during the product concept stage), thus, saving them human and financial resources and making them more competitive in the global market.
Call TransLegal to discuss patents and other business-related questions in Taiwan and in Asia, generally.