萬國法律事務所

On 10 December 2021, a Taiwan legislator proposed to the Legislative Yuan, Taiwan's law-making body, a revision bill aiming to include an exemption for vehicle parts maintenance / repair.  Said proposed bill was submitted to the Legislative Yuan with the signatures of 15 other legislators.
 
Under Taiwan's current Patent Act, no such exemption is available to protect local auto vehicle parts makers from patent infringement liabilities for making auto vehicle parts that are compatible with brand name vehicles made by international automakers.
 
In 2019, several high-profile court rulings have been reported, in which Taiwan's Intellectual Property Court ("IP Court") rendered verdicts in favor of design patent owners against a Taiwanese maker of vehicle headlights.  In these cases, the defendant alleged infringer argued that competition law should bar plaintiff design owners from bringing patent infringement claims, because the design owners have been abusing their patent rights by excluding competition from the vehicle after-sale market.  The IP Court, however, did not accept this argument and found the headlight makers liable for infringing several design patents owned by international automakers.
 
While the reported cases are now pending in the IP Court's appellate proceedings, the cases have triggered public debate on whether Taiwan should include into its Patent Act an exemption that exempts vehicle parts makers from patent infringement liability. 
 
The revision bill dated 10 December 2021 aims to promote competition within the vehicle after-sale market and to further ensure consumers' right in obtaining maintenance / repairs at reasonable costs.  To achieve these goals, the bill adds a clause into Article 136 of the current Patent Act, which provides, "effects of design patent rights shall not extend to vehicle parts that are used to repair vehicles by restoring to the original appearances of said vehicles."  According to the bill, adding the exemption clause will help consumers who are looking for vehicle maintenance services find vehicle auto parts that best fit their own needs.  It is noted, however, that the bill exclude the applicability of said exemption to any motorcycles or scooters.  The bill is still pending further review by the Legislative Yuan.
 
Many countries (such as the US) have been or are now considering whether to follow the approach adopted by the EU's Design Directive, which grants a broad exemption from infringement liabilities for repairs.  Future development in this regard in Taiwan, as well as in many other countries, will be of critical importance to the global auto market.  It will thus be prudent to develop and have ready new IP strategies for responding to potential relevant changes in the patent laws.