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Strategies for protecting Taiwanese businesses from cross-border risks

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Current approaches for managing global growth

Executive summary

Managing efficient global growth requires Taiwanese corporate leaders to make a series of strategic decisions. Understanding key legal developments worldwide can help you plan your company's next steps.

For technology companies focused on cross-border growth and expansion, vital issues often include defending business innovations that you invested time and money to develop and avoiding problems with global regulatory authorities.

We have chosen topics for this publication to reflect key changes in multiple jurisdictions that offer new opportunities for Taiwanese businesses, along with updated guidance on how to manage potentially damaging legal issues.

Protecting your innovations has never been more important. Since the US market serves as a vital source of revenue for many Taiwanese businesses, this makes it critical to understand how the patent system is evolving in the United States. "A patent system at an inflection point: Start of a new era at the USPTO" reviews how changing rules may create stronger patent rights in the US and affect patent litigation strategies for Taiwanese companies. "Using US trade secret litigation to protect your business innovations" explains how the 2016 US Defend Trade Secrets Act and trade remedies at the US International Trade Commission can provide powerful remedies to help Taiwanese companies with business in the US protect their proprietary information.

As any company's business grows globally, inevitably the company becomes subject to regulatory oversight and litigation in a variety of countries for anti-corruption, antitrust and many other aspects of its business operations. "How to manage multijurisdictional compliance investigations" shows practical steps that Taiwanese businesses operating in a global context can take to conduct complex compliance investigations in multiple jurisdictions effectively. "Seeking amnesty internationally for cartel allegations" discusses whether, when and how Taiwanese corporations should request leniency from government prosecutors for potential antitrust violations and cartel conduct allegations. "European Commission fines for resale price maintenance in e-commerce" describes the risks for Taiwanese businesses when imposing fixed or minimum resale prices on distributors in Europe. Finally, "Trends in international arbitration for Taiwanese companies" highlights several results from a 2018 White & Case survey for Taiwanese companies interested in international arbitration as a dispute resolution mechanism.

We look forward to discussing these and other issues with you.

A patent system at an inflection point: Start of a new era at the USPTO

Changing rules may start moving the pendulum toward stronger patent rights and affect patent litigation strategies for Taiwanese companies

Woman usng Virtual Reality technology

Using US trade secret litigation to protect your business innovations

Powerful US remedies can help protect valuable proprietary information, even if your business is headquartered in Taiwan

transistor

How to manage multijurisdictional compliance investigations

Taiwanese businesses operating in a global context need strong mechanisms to investigate and manage potential cross-border misconduct

server room

Seeking amnesty internationally for cartel allegations

Whether, when and how Taiwanese corporations should request regulatory leniency for potential antitrust violations

Cryptocurrency Mining Machine

European Commission fines for resale price maintenance in e-commerce

The risks for Taiwanese businesses when imposing fixed or minimum resale prices on distributors

large distribution warehouse

Trends in international arbitration for Taiwanese companies

Highlights from White & Case's recent survey results

manufacturing equipment

A patent system at an inflection point: Start of a new era at the USPTO

Changing rules may start moving the pendulum toward stronger patent rights and affect patent litigation strategies for Taiwanese companies.

Insight
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6 min read

The US market is a vital source of revenue for many Taiwanese businesses.

Protecting your innovations has never been more important, which makes it critical for Taiwanese companies to understand how the patent system is changing in the United States.

In the words of Andrei Iancu, the recently appointed Director of the US Patent and Trademark Office (USPTO), the US patent system is "at an inflection point," and the USPTO "will not continue down the same path"1

What path was the US patent system on? Where will the Director lead it from this inflection point? And how will upcoming policy changes affect business strategies for patent prosecution, post-grant challenges and patent litigation?

Taiwanese companies can benefit from the renewed focus on patent-eligible subject matter and its impact on patent prosecution and patent litigation strategies.

 

What should be patentable? The new USPTO director pushes to clarify the scope of patent-eligible subject matter through administrative guidance and support for legislative reform

Four independent categories of inventions or discoveries are patent-eligible under US law: "processes;" "machines;" "manufactures;" and "compositions of matter."2

While US patent laws historically have been given wide scope to encourage ingenuity,3 the US Supreme Court has created three categories of discovery that are not patentable: laws of nature; physical phenomena; and abstract ideas—what the Court has termed the "building blocks" of human ingenuity. But in trying to distinguish between claims that are merely "building blocks" of human ingenuity—and thus not patentable—from those that transform building blocks into a patent-eligible invention, recent Supreme Court rulings on the issue are "causing significant confusion," according to USPTO Director Iancu.4

In an effort to relieve the uncertainty, in 2018 the USPTO began issuing a series of guidance memoranda to its patent examination corps seeking to clarify the contours of patent-eligible subject matter. For example, in an April 2 memorandum discussing subject-matter eligibility case law developments, the USPTO reiterated that claims reciting certain software-related inventions that improve computer functionality are patent-eligible subject matter. In an April 19 memorandum, the USPTO cautioned patent examiners that just because something is disclosed in one prior art document does not mean that it is a well-understood, routine or conventional activity practiced by those in the field— placing an additional onus on US patent examiners to justify rejections under Section 101 of the US patent code. Finally, in a third memorandum published on June 7, the USPTO reinforced the majority holding from a 2 to 1 decision by the US Court of Appeals for the Federal Circuit, which had found method-of-treatment claims that include a diagnostic assay step to be patent-eligible subject matter under Section 101.

The USPTO also has welcomed an opportunity to collaborate with Congress on a legislative fix to subject-matter eligibility. One leading proposal would rewrite Section 101 in a manner that would legislatively overrule the recent Supreme Court holdings to inject certainty in the process by which patents are obtained.

Taiwanese companies can benefit from the renewed focus on patent-eligible subject matter and its impact on patent prosecution and patent litigation strategies. For example, they should preserve all available options through continuation applications, because the scope and interpretation of Section 101 seems likely to be modified.

 

How will the PTAB apply the narrower claim construction standard in post-grant proceedings?

In October of 2018, the USPTO published a final rule changing the standard by which claims of unexpired patents are construed in inter partes review (IPR), post-grant review (PGR) and covered business method (CBM) proceedings at the Patent Trial and Appeal Board (PTAB). The USPTO had proposed the new rule in May of 2018, shortly after the new Director took office.

In these post-grant proceedings, any party may challenge the patentability of claims in an already-issued patent. And if a panel of PTAB judges finds any claim to be unpatentable, then those claims are deemed unpatentable and canceled. Of course, to determine whether a claim is patentable, the first step is to construe the meaning of the claim.

The final rule replaces the broadest reasonable interpretation (BRI) standard with the claim construction standard used by US federal courts and the International Trade Commission (ITC)—the standard applied in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) and its progeny. Under the final rule, the PTAB will take into consideration any prior claim construction determination that has been made in a civil action or a proceeding before the ITC, so long as the prior claim construction is properly entered into the record.

Moving to this type of standard would align the PTAB's review standard with the standard employed by US federal courts and the ITC.

Taiwanese companies can prepare for this change to the claim construction standard in PTAB proceedings and its impact on patent litigation strategies by keeping in mind that a new standard will affect strategy in any pending or soon-to-be filed challenges.

 

What does the future hold?

For Taiwanese companies, the implications of these changes to the US patent system are noteworthy.

Any new patent subject-matter eligibility standards that emerge from the USPTO will require careful assessment. Still, the fact that the Director is seeking clarity and predictability may enable Taiwanese businesses engaged in the US market to plan their cross-border business strategies with greater confidence.

Reforms to PTAB procedures, including the new rule for claim interpretation, are an effort to improve the system in view of more than five years of post-grant challenges.

The USPTO's initiatives and rulemaking may soon start moving the pendulum back toward stronger patent rights and affect patent litigation strategy, due diligence investigations, licensing negotiations and portfolio monetization.

 

1 Andrei Iancu, Director, United States Patent and Trademark Office, Speech to U.S. Chamber of Commerce (Apr. 11, 2018).
2 35 U.S.C. § 101 (2012).
3 Diamond v. Chakrabarty, 447 U.S. 303, 308–309.
4 Oversight of the U.S. Patent and Trademark Office, Hearing Before the S. Comm. on the Judiciary, 115th Cong. (April 18, 2018) (response of Andrei Iancu, Director, United States Patent and Trademark Office, to question of Kamala Harris, United States Senator).

This publication is provided for your convenience and does not constitute legal advice. This publication is protected by copyright.
© 2018 White & Case LLP

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