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10 January 2014Patents

Taiwan beefs up customs measures

Taiwanese patent owners can ask customs authorities to detain goods suspected of infringing their patents, under provisions approved by the country’s Legislative Yuan.

The amendments to the country’s Patent Act, passed on January 3, require patent owners to provide a bond equal to the goods’ value when filing a detention request.

Complainants must also file a civil lawsuit against the goods’ owners within 12 days of requesting their seizure. If they do, customs will retain the goods until a court reaches its decision on infringement.

Detention requests will be repealed if the 12-day target is missed, while owners of detained goods can appeal against detentions. If respondents post a counter bond that is worth double the goods’ value, customs will release the goods.

Complainants can be liable for damages if a court clears goods of patent infringement. As there is no specific wording on damages, Taiwanese civil law will be used to calculate them, said Peter Dernbach, partner at Winkler Partners in Taiwan.

“Under Taiwanese civil law, the principle is that damages will amount to the injury actually suffered and the interest that has been lost. The actual calculation of damages will vary from case-to-case.”

Dernbach said that overall the amendments are widely welcomed because they broaden the scope of IP protection in Taiwan.

He added: “In Taiwan, patents are increasingly seen as critically important strategic assets for IP owners. IP rights have continued to get increased attention over the past several years, notably with the establishment of the Intellectual Property Court in 2008. Its caseload has been gradually rising.”

Until now, customs have been cautious about detaining goods, said Joyce Ho, partner at Tsar & Tsai Law Firm, as they find it much more difficult to rule on patent infringement compared with trademark or copyright breaches.

If customs take a “loose standard” on granting detention requests, she added, patent owners with a “deep pocket” will be able to easily detain products imported by their competitors.

While interfering with the fair trade of competitors is a typical concern arising from border protection measures, said Dernbach, the amendments do deter this type of behaviour.

“We believe that the new regulations reduce the likelihood that they will be abused in that manner by requiring a bond equal to 100 percent of the value of the allegedly infringing goods,” Dernbach said.

The government hopes to implement the procedures within two months, which means they should be in place by late March or April 2014.

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