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LITIGATION NOT STAYED DUR-ING PATENT CANCELLATION OR TRADEMARK INVALIDATION PROCEEDINGS
Under the old Trademark Act, an interested party who believed that a trademark registration vio-lated Article 37 of the Act could petition the trademarks authority for invalidation of the reg-istration, while Article 52 Paragraph 1 and Arti-cle 60 required that during invalidation pro-ceedings, any civil or criminal proceedings concerning the exclusive right of use of a trademark should be stayed until an irrevocable outcome was reached in the invalidation action. The old Act did not address the legal effect of a judgment if the court did not suspend proceed-ings, but in a 2003 extraordinary appeal the Su-preme Court held that Article 60 allowed the courts no discretion as to whether to suspend proceedings, and therefore if a court failed to suspend proceedings and delivered a judgment, the judgment would be unlawful under Article 379 Subparagraph 9 of the Code of Criminal Procedure.
However, in proposing amendments to Articles 49 and 56 of the Trademark Act, which took ef-fect on 28 November 2003, the Executive Yuan stated that if a judgment in civil or criminal proceedings rests on the issue of whether a trademark registration is valid, and the trademark in question is currently the subject of an opposi-tion or invalidation action, the decision as to whether to suspend legal proceedings pending the outcome of that action is best left to the dis-cretion of the judiciary. Accordingly, the amended Trademark Act allows litigation to be suspended pending the irrevocable outcome of an opposition or invalidation action, but does not make suspension mandatory.
The Patent Act includes similar provisions on the suspension of litigation. Article 94 of the current Act (equivalent to Article 90 of the amended Act, due to take effect on 1 July 1994) allows inves-tigation or trial proceedings in civil and criminal cases over invention patent rights to be sus-pended pending the irrevocable outcome of an application, opposition, cancellation, or revoca-tion case. Articles 105 and 122 apply the provi-sions of Article 94 mutatis mutandis to utility model and design patent cases.
In a 2002 ruling, the Supreme Court held that as the Patent Act merely allows such proceedings to be suspended, the decision whether to suspend proceedings lies within the discretion of the courts, and suspension is not compulsory. In a 2003 ruling, the Supreme Court further stated that to prevent parties from exploiting Article 94 to delay investigations or trial proceedings un-necessarily the courts should duly consider whether suspension is appropriate, and may re-ject petitions for suspension.
Nevertheless, Article 12 of the Code of Admin-istrative Procedure (CAP) provides that when the judgment in a civil or criminal case rests on whether an administrative disposition is ineffec-tive or unlawful, the issue should be determined by administrative dispute resolution procedures (i.e. an administrative appeal and/or administra-tive litigation). If such procedures have com-menced, the civil or criminal trial should be suspended until the outcome of the procedures becomes irrevocable.
In a 2001 judgment, the Supreme Court also stated that in a civil litigation in which the judgment rests on whether an administrative disposition is ineffective or unlawful, the court should await the irrevocable judgment of the administrative court on the matter at issue, and base its own judgment on the facts as determined by the administrative court, so as to avoid con-flicting judgments. From this Supreme Court ruling, it would appear that if the validity of a trademark registration or a patent is disputed in an infringement case, then the civil or criminal court has no choice but to suspend its proceed-ings, because it should not determine the issue of validity.
In view of the stark contrast between the provi-sions of CAP Article 12 and those of the current Trademark Act and Patent Act regarding the suspension of court proceedings, a highly con-troversial issue is whether the provisions of the CAP, or those of the Trademark or Patent Act, should take precedence when judges decide whether to suspend proceedings in trademark or patent infringement cases. This issue remains to be clarified.