Disputed Design Patent on Japanese CD Player Confirmed Valid in Good Standing. Slowly-paced Proceeding of Patent Lawsuit Offers No Timely Remedy.

Quanta Storage Inc. filed invalidation action with TIPO against the design patents issued on TEAC Corporation’s slim type optical disk player alleging lack of novelty and inventiveness.  The Supreme Administrative Court (SAC) dismissed one of Quanta Storage’s relevant administrative actions.  This means Quanta Storage’s invalidation action in respect to that specific design patent is unsuccessful.

 

TEAC filed patent lawsuit against Quanta Storage in 2001 alleging infringement of its design patent by the slim type CD-ROM disk player manufactured and sold by Quanta Storage.  Quanta Storage subsequently challenged the validity of TEAC’s design patent in question alleging lack of novelty and inventiveness.  TIPO dismissed Quanta Storage’s invalidation action.  Quanta Storage appealed and the Appeal Review Board let stand TIPO’s dismissal decision.  Quanta Storage thus brought an administrative suit.

 

In Taiwan, a patent infringement action generally involves two proceedings:  the civil proceeding and the administrative proceeding.  The civil aspect of the action will be tried by the district court, and, on appeal, the High Court and then the Supreme Court.  However, if the validity of the patent(s) in issue is challenged, the validity issue shall be determined by TIPO upon petition for invalidation from the challenging party, and the Appeal Review Board, MOEA on appeal, and may move on to the High Administrative Court, and then the SAC on appeal.

 

Validity issue is often the key dispute in the civil aspect of a patent lawsuit and the civil court judge generally will suspend the proceeding pending a conclusive and irrevocable administrative decision on the validity issue.  As a result, the patentee is often prevented from obtaining timely protection of its rights and interests.

 

The patent dispute between Quanta Storage and TEAC is one typical example.  Over five years has passed since TEAC issued the first warning letter to Quanta Storage in 2001.  The SAC’s dismissal decision, however, has determined the validity issue for only one of the six TEAC patents challenged by Quanta Storage.  This means, Quanta Storage still has five invalidation actions against TEAC’s patents pending a final say.  As to the proceeding of the relevant civil actions TEAC initiated, some have progressed to the High Court and the others are still pending a decision by the district court.

 

The problem with the slowly-paced proceeding of IPR lawsuits will not be resolved before the Intellectual Property Court commences operation when the civil, criminal and administrative aspects of an IPR dispute will be consolidated for speedy and efficient trial and decision.  (2006.08)

/EMA