The Executive Yuan completed an amended draft of Patent Law on November 16th, 2009. As for the compulsory licensing system of patents that caused international disputes in the last two years, a more comprehensive revision has been prepared in these law amendments. The provisions of other countries will be referred to in the future, which means simply an unsuccessful negotiation without reaching an agreement is no longer grounds for compulsory licensing, while public use for non-profit purposes should be considered as well. Executive Yuan specified three aspects in the new law as the prerequisites for compulsory licensing, which are completely in line with the international practice.
In addition, the administrative examination meeting for the amended draft of Patent Law held by Executive Yuan determined that the patent protection would be inclusive of animals and plants. This would effectively promote the development of the biotechnology industry in Taiwan. In particular, Taiwan has achieved considerable success in the genetic modification of orchid, in which patent protection will encourage the researchers to take more efforts in their research.
The valid period of pharmaceutical patent protection is 20 years from the date of application. However, if the patent has not received marketing approval and patent rights cannot be implemented, then the patentee can only apply for an extension of up to 5 years with the first license. Moreover, the period of extension should not exceed the period applying for the license from the authority. In other words, the maximum extension is still 5 years even if the period applying for the license is more than 5 years. Therefore, the protection of a pharmaceutical patent will be provided for no more than 25 years.
As for the compulsory licensing of patents, three aspects are specified as prerequisites in these law amendments to initiate a compulsory licensing. This is a result of the crisis that the EU started the WTO trade dispute mechanisms led by the event that the Ministry of Economy approved the patent compulsory licensing for CD-R in 2007. As some foreign businesses may worry there may be too much administrative discretion, the points above will be further explained at a later date in executive orders.
The first of the three aspects of prerequisites for patent compulsory licensing is that international practices are used as a reference; the simple reason being that failure to agree on the amount of technology license funding should not be acknowledged as a reason for compulsory licensing, but public use for non-profit purposes should be considered as well. Secondly, compulsory licensing may arise as soon as the Fair Trade Committee orders the administrative penalty for unfair competition or restriction of competition, regardless of whether the order has become final. The authority may contemplate using compulsory licensing to relieve unfair situations as necessary. The last aspect of prerequisites is to consider imminent dangers within the country, such as H1N1 and avian influenza.
As for the infringement damage compensation, compensation for domestic damages can be easily calculated while that for foreign damages is much more challenging. Therefore, if licenses are proven lawful, the cost of licensing funding will be equal to the amount of damages in the future. In order to keep consistent with the civil law system, the draft deleted the provision that the penalty for intentional infringement is three times the original amount. However, foreign businesses worry this may leave them more unprotected than before.
As for the annual fee of patent, it is currently stipulated to be paid every three years. More often than not, patentees lose their patent rights because they forget to pay the annual fee. The new revision specifies that a patent can be restored by doubling the patent fee within six months after the deadline for the patent fee payment. It also specifies a grace period of one year after the six months exceeding the payment deadline, during which time, the patent fee should be paid three times so as to effectively protect the rights of patentees.
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