Commercial success recognized for the first time as a factor to determine inventive step by the Taiwan IP Court

The Patent Examination Guidelines prescribed by the Taiwan IPO expressly provides commercial success as a supplementary factor to consider when determining whether or not inventive step exists.  In practice, however, commercial success was never taken into consideration by either the Taiwan IPO or any court. (Taiwan IP Court decision of case 105-Min-Zhuan-Shang-Zi no. 42 [2016]; Supreme Administrative Court decision of case 102-pan-Zi no. 205 [2013]) In 2019, Taiwan IP Court set aside the above two court decisions. (Taiwan IP Court decision of case 107-Xin-Zhuan-Su-Zi no. 75 [2018] rendered on February 14, 2019) For the first time, commercial success is admitted a positive factor supporting the inventive step claimed. 

Plaintiff is the patentee of the no. M480330 patent, “Mask For Keeping Food Temperature” (hereinafter, the ‘330 patent).  The invalidator seeking invalidation of the patent alleged that Claim 1 of the patent is obvious in view of the combination of Exhibit 2 and Exhibit 3 and the patent was invalidated by Taiwan IPO.  Patentee filed an administration action with the Intellectual Property Court (IP Court) alleging, among others, the patent is proven commercial success.  Taiwan IPO in defense argued that commercial success is only a secondary factor to consider when determining the presence of inventive step and where the lack of inventive step is unmistakably manifested by a comparison of the technical content of the ‘330 patent and that of prior arts, it is meaningless to take it into account.  

The IP Court first finds that much as Exhibit 2 and Exhibit 3 both disclose the technical feature of claim 1 of the ‘330 patent .  It remains open to question, however, whether or not a person having ordinary skill in the art will be reasonably motivated to combine Exhibit 2 and Exhibit 3 to achieve the ‘330 patent . 

 

The IP Court further finds that at the time when the second generation of the patented product was launched, there was no similar foldable heat-preserving mask product available on the market.  Therefore, it may be reasonably assumed that the patented product is indeed monopolistic as far as the market is concerned.  Further, counterfeiters did not fabricate and distribute the knock-offs until they saw the second generation of the patented product characterized by its foldability, which is the unique technical feature of the patented product.  In short, the foldability feature of the second generation of the patented product is what led the counterfeiters to fabricate knock-offs.  Therefore, it may be reasonably held that the commercial success of the second generation of the patented product is indeed directly attributable to the foldable design, the technical feature of the ‘330 patent as opposed to sophisticated selling skills or good advertising or promotion.  In view of the foregoing, the undeniable commercial success of the ‘330 patent should be admitted positive factor upholding the presence of inventive step.

In its decision, considering the various imitations of the patented article which fact manifests the patented article a commercial success, Taiwan IP Court finds the key to the commercial success is the foldable design (rather than technique of selling, advertising or promotion) which is exactly the technical feature of the ‘330 patent and hence holds, for the first time, commercial success a positive factor supporting the inventive step claimed.  It should be noted, however, that according to both of the test adopted by Taiwan IP Court and the relevant opinion held by the Supreme Administrative Court in its decisions of 2018-Pan-Zi no. 707 and 2018-Pan-Zi no. 652, the patentee alleging commercial success to overcome challenge of the inventive step of its patent held must satisfy still the burden of proof of the patented product outperforming that of all other products of the same nature in terms of the sales attained or being monopolistic or welcomed replacement of competitors’ products.  Further, the patentee shall also duly prove that the commercial success alleged of the patented product is the result of practice of the technical feature of the patent.