On August 1, 2023, Taiwan’s new IP Case Adjudication Act came into effect. Among a number of other added or revised clauses, Articles 19 to 27 comprise a new institution known as inspection. Its introduction was intended to serve as a new means of evidence investigation, in seek of upholding the equal-arms principle in an IP lawsuit.

  Inspection purports to solve the issue of evidentiary bias arising from the fact that the majority of evidence or more favorable evidence resides at one side of the litigating party, an imbalanced situation which is otherwise difficult to resolve. Inspection is available in cases of infringement of patents, computer program copyrights, and trade secrets. More specifically, it was designed in the hope that it could be efficiently used in cases involving methods. For example, in a litigation involving computer software or manufacturing processes, an inspector can manually operate a suspect computer program or observe a machinery function on-site in a factory in order to understand whether the claimed steps are performed one after another in accordance with the All Elements Rule in patent law. Notably, not only the defendant but also a third party may have to be inspected at an order of the court, since the evidence may often lie with the third party.

  In order to petition for inspection, the petitioner must submit a preliminary explanatory statement to the court setting forth inter alia the probable cause of the facts or risks of infringement (probability element), the inability of the petitioner to efficiently gather evidence on its own (complementariness element), the necessity of the means and objects to be inspected (necessity element), the physical location of the object, and the relevance between the object and the provable facts. Nevertheless, the court will not make its decision based solely on the statement of the petitioner. Before deciding whether or not to order an inspection, the court shall offer the defendant or the third party restrained by such an order the opportunity to argue as to why an inspection would illegitimately injure their procedural interests if granted.

  Notably, inspection is not a supplementary means of evidence collection. It does not require the petitioner to firstly petition the defendant to proactively present the desired evidence and for the defendant to fail to do so before said petitioner becomes eligible to make use of inspection.

  An inspector is a neutral expert in the field appointed by the court. Upon being ordered to do so, the inspector will enter the property where the suspect objects are located in order to conduct an investigation of documents or mechanical devices by means permitted by the court. The inspector is authorized to question the inspectees and may order them to present documents or materials deemed necessary.

  As a coercive measure, obstruction of inspections will invite negative consequences. In the case of the defendant refusing the inspector’s entry or obstructing the inspection procedure without justifiable cause, the court may assume the facts of infringement in the plaintiff’s complaint to be true. However, even when the inspection is obstructed, the defendant is offered a chance to argue before a negative assumption is formed. Furthermore, if a third party is the inspectee involved in the act of refusal or obstruction, the court may order the payment of a maximum fine of TWD 100,000. Nevertheless, inspection does not require the involvement of police force, which means that a third party’s refusal of entry can ultimately end up with just a monetary fine. Some have suggested that petition for adding the uncooperative third party as another defendant could be a possible solution, despite the chances are that such addition may prolong the time and increase the costs of the legal proceeding.

  At the conclusion of an inspection, the inspector must prepare and submit a report to the court. The inspectee, either the defendant or the third party, will receive a copy of the report from the court. In the case of the report revealing trade secrets to the extent that the revelation of the confidential information brings greater injury than the procedural necessity would have required, the inspectee must petition to the court within fourteen days to conceal said confidential information before a copy of the report can be sent to the plaintiff.

  The cost of inspection forms part of the total expenses of the proceeding, which will be borne by the losing party.

  Inspection as a new system has raised a number of questions nevertheless. Firstly, a decision to grant inspection can only be made before the defendant or the third party is offered a chance to challenge or debate. In other words, the inspectees will be fully aware of a prospective inspection event and hence likely to conceal or destroy any related evidence before it takes place. In the new law, a counteracting mechanism is absent to cope with such potential tampering. Secondly, in contrast to a witness, an inspector is not an irreplaceable figure in a civil proceeding. Since a lawsuit may involve top-tier companies in the same field where elite expert are scarce, a chosen inspector may wish to stay away from a dispute in avoidance of displeasing either party even if the inspection is only a temporary service. What if an inspector chooses to voluntarily quit for any personal reason rather than being recused after his or her appointment? The new law does not appear to address this matter. Thirdly, it is unknown whether the plaintiff and the defendant and their attorneys are allowed to be present at the scene where an inspection is conducted.

  Despite the challenges which lie ahead, it is nevertheless hoped that, by way of empirical practices in the courts, inspection can be leveraged effectively in order to achieve its policy aim for facilitating the equality of arms.

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