In intellectual property litigation practice, patent holders often file for provisional remedies—such as provisional attachments or preliminary injunctions—to prevent competitors from continuing to manufacture and sell allegedly infringing products, and subsequently initiate a lawsuit on the merits. However, if the patent holder ultimately loses the main lawsuit, and the affected competitor then sues the patent holder for torts based on Article 184 of the Civil Code and for violations of the Fair Trade Act due to the impact of such provisional remedies, a key point of contention arises: can the patent holder be exempted from liability for damages by claiming that he was merely exercising a legitimately obtained patent right in good faith? Furthermore, according to Article 52, Paragraph 6 of the current Intellectual Property Case Adjudication Act and Article 531, Paragraph 1 of the Civil Procedure Code, when a preliminary injunction is revoked upon a final adverse judgment on the merits, or when the creditor (i.e., the patent holder who requested the provisional remedies) voluntarily revokes the measures, the patent holder shall bear liability for damages. But if the patent holder does not voluntarily revoke the preliminary injunction or the provisional attachment after losing the lawsuit on the merits, how should his liability be determined? Also, when does the statute of limitations for the competitor's claim for damages start to accrue? These are critical legal questions. The Intellectual Property and Commercial Court (the "IP Court") expressed its definitive views on these issues in its Judgment No. 113-Min-Gong-Shang-Geng-Yi-2 (dated April 16, 2026), adopting a stringent stance toward patent holders.

 

Case Background

 

The dispute originated in 2005, when Company A alleged that its invention and utility model patents (hereinafter referred to as the "disputed patents") were infringed by its competitor, Company B. Company A commissioned external agencies to produce patent infringement assessment reports, based on which it subsequently applied to the court for provisional remedies, including a provisional attachment and a preliminary injunction against Company B. Company A also issued press releases and sent warning letters to Company B's foreign customers, severely disrupting Company B's business operations. Ultimately, the court ruled in the patent infringement lawsuit that Company B's products did not fall within the scope of Company A's disputed patents, resulting in a final judgment against Company A.

Company B then sued Company A, alleging torts and unfair competition, and sought damages. Both the first instance (IP Court Judgment No. 108-Min-Gong-Su-4) and the second instance (IP Court Judgment No. 110-Min-Gong-Shang-3) courts ruled against Company B. Company B appealed, and the Supreme Court, in its Judgment No. 112-Tai-Shang-246, overturned the prior rulings and remanded the case. Upon retrial, the IP Court reversed the previous decisions in its Judgment No. 113-Min-Gong-Shang-Geng-Yi-2, ruling in favor of Company B and ordering Company A and its responsible corporate officer to jointly pay damages and publish the judgment's text in a newspaper.

 

Summary of the Retrial Judgment's Key Points

 

1. Tortious Acts and Bad Faith Conduct of Company A

 

The IP Court pointed out that if the creditor's underlying claim preserved by a provisional attachment is indeed valid, the application for such an attachment does not constitute a tort. However, if the claim does not exist, and the creditor applies for a provisional attachment either intentionally or negligently, thereby causing damage to the debtor, the creditor must bear tort liability for damages. The court cited Supreme Court Civil Judgment No. 85-Tai-Shang-2923, noting that if a creditor files for provisional remedies while fully aware that his rights are circumscribed or limited, yet proceeds intentionally—or negligently despite being capable of exercising due care—the debtor may still seek damages for torts under Article 184 of the Civil Code once the creditor loses the main lawsuit on the merits. The core judicial scrutiny should focus on whether the creditor knowingly acted improperly from the inception and insisted on presenting flawed or selective information to the court to obtain an unjustified provisional remedy.

 

In this case, the IP Court found that Company A was well aware that the scope of its disputed invention patent was limited due to amendments or foreign prosecution histories. Nevertheless, Company A failed to provide complete patent prosecution histories to the infringement assessment institutions and never obtained Company B's physical products for actual operational testing. Furthermore, during the prosecution of the utility model patent, Company A deliberately deleted certain core technical features to expand its literal scope to encompass Company B's products, despite the fact that Company B's products clearly lacked those features in physical appearance. Company A then submitted these flawed assessment reports to the court, misleading it into granting provisional attachment and preliminary injunction orders. Such an exercise of rights was deemed intentional and constituted a tort under Article 184, Paragraph 1 of the Civil Code.

 

Additionally, the court found that the false patent infringement news and warning letters issued by Company A constituted unfair competition. Company A knew its rights were limited yet relied on improper assessment reports lacking objective evidence. By failing to disclose its self-admitted limitations during the prosecution process, Company A misled the court and the market. Therefore, Company A's conduct was clearly for anti-competitive purposes, and its dissemination of false statements that damaged Company B's business reputation constituted a deceptive and manifestly unfair act affecting trading order, in violation of the Fair Trade Act.

 

2. Company A's Statute of Limitations Defense Violated the Principle of Good Faith

 

Company A argued that the provisional remedies and attachments occurred between 2005 and 2009, whereas Company B only filed the lawsuit in 2019, thereby exceeding the limitation periods prescribed under the Civil Code and the Fair Trade Act. The court held that while statutes of limitations aim to maintain legal stability, if a debtor's own conduct justifies the creditor's delay in bringing suit, and invoking the limitation defense would violate the principle of good faith, the law will not permit such a defense. Given that the patent infringement litigation lasted 12 years before a final determination, and Company A failed to voluntarily revoke the provisional remedies or withdraw the execution after losing the main case—thereby perpetuating the harm to Company B's property—the court held that Company A's statute of limitations defense constituted an abuse of rights and dismissed it.

 

3. Calculation of Damages

 

Based on Company A's own prior estimation of Company B's commercial profits at the time of filing the provisional attachment application, and comparison with Company B's verified expected profit losses and operational paralysis caused by the improper provisional remedies, the court deemed Company B's claim for damages appropriate and granted the judgment in full, alongside the mandate for newspaper publication.

 

The case is currently under appeal to the third instance and is not yet final. Regardless of the ultimate outcome, patent holders must exercise rigorous caution and conduct thorough verification before seeking provisional remedies to enforce their rights.