Judgment by the Taipei High Administrative Court against Fei Jia-jyun for improper issuance of patent infringement warning letters, constituting an obviously unfair practice capable of affecting the trading order, in violation of the Fair Trade Act
Taiwan
Case:
Judgment by the Taipei High Administrative Court against Fei Jia-jyun for improper issuance of patent infringement warning letters, constituting an obviously unfair practice capable of affecting the trading order, in violation of the Fair Trade Act
Key Words:
infringement warning letter, reasonable judgment
Reference:
Taipei High Administrative Court Judgment (91) Su Zih No. 2144
Industry:
Metallic Furniture and Fixtures Manufacturing（1420）
Relevant Law:
Article 24 of the Fair Trade Act
Summary:
1. A complaint had been made against the plaintiff, Fei Jia-jyun, stating that he was neither the applicant nor the creator of the patent for the "water heater drain pan pressure-release anti-freezing apparatus" (the Patent), that he had not sent the potentially infringing subject apparatus to an impartial and objective assessment institution for assessment as required by the Fair Trade Commission Guidelines for the Review of Cases Involving Enterprises Issuing Warning Letters for Infringement on Copyright, Trademark, and Patent Rights , nor had he clearly stated concrete facts in his warning letters regarding the content, scope, or nature of infringement of his copyright, trademark, or patent in a manner enabling the recipient of the letter to make a reasonable judgment thereon. The letters were also said to claim Fei Jia-jyun as the creator of the patent, and that issuance of the letters to the complainant's cooperating business partners, A-One Industrial Co., Ltd. (A-One) and Hsin Ting Industrial, Ltd. (Hsin Ting), was in violation of the Fair Trade Act. After investigation, the respondent issued a judgment against the complainant for improper issuance of patent infringement warning letters, constituting an obviously unfair practice sufficient to influence the trading order, in violation of Article 24 of the Fair Trade Act, while issuing a disposition pursuant to the fore part of Article 41 of the same Act. The plaintiff did not accept the judgment, and after lodging an appeal that was also rejected later, instituted this administrative action.
2. Article 24 of the Fair Trade Act states: "In addition to what is provided for in this Act, no enterprise shall otherwise have any deceptive or obviously unfair conduct that is able to affect trading order." The owner of the intellectual property rights in this case is in fact entitled under relevant laws and regulations to notify potential infringers with the aim of eliminating infringement. If, however, prior to completion of the preliminary procedures for making a determination on the facts of infringement and providing notice, the rights holder gives either verbal or written notice to its competitor's distributors or consumers (its actual or potential trading counterparts), and such notice is insufficient to allow the recipient to make a reasonable judgment about possible infringement, such notification is deemed an abuse of intellectual property rights resulting in unfair competition. In respect of this issue, the respondent has adopted the Fair Trade Commission Guidelines for the Review of Cases Involving Enterprises Issuing Warning Letters for Infringement on Copyright, Trademark, and Patent Rights, which state that an intellectual property rights holder wishing to eliminate infringement by means of issuing warning letters must complete the following procedures prior to their issuance: (1) confirmation of the fact of copyright, trademark, or patent infringement by a court judgment of first instance; (2) submission of the allegedly infringing article for assessment by a professional infringement assessment institution jointly appointed by the Ministry of Justice and the Cabinet, obtaining an assessment report, and notifying the potentially infringing manufacturer, importer, or agent prior to issuance of the warning letter and requesting removal of the infringement; (3) inclusion in the warning letter of an assessment report by a professional assessment institution other than those appointed jointly by the Ministry of Justice and the Cabinet, and notification of the possibly infringing manufacturer, importer, or agent to request that it remove the infringement prior to issuing the warning letter; (4) inclusion in the warning letter a clear description of the content and scope of the copyright, trademark, or patent upon which infringement is alleged and the facts of the alleged infringement with specificity sufficient to enable the recipient of the letter to make a reasonable judgment, and notification of the possibly infringing manufacturer, importer, or agent to request that it remove the infringement prior to issuing the warning letter. Even where the issuance of warning letters may be considered a proper exercise of rights under the provisions of the Copyright Act, the Trademark Act or the Patent Act, Article 24 of the Fair Trade Act shall apply when the act of issuing such letters directly by the rights holder without completion of the aforesaid procedures is sufficient to influence the trading order.
3. The patent rights claimed in the plaintiff's documented certified letters were those inhering under the application no. 86218165 for a new utility model patent for a "water heater drain pan pressure-release anti-freezing apparatus." The applicant and creator of the said patent was the plaintiff's spouse, Zeng Ci-mei, and while the plaintiff applied with the MOEA's Intellectual Property Office (IPO) for assignment of the patent rights on 7 September 2000, and the IPO issued a letter approving registration of the assignment of rights on 26 October of the same year, the plaintiff could not have been considered the rights holder prior to that date. Further, based on the content of the warning letters issued, as shown in the copies attached in the original disposition against the plaintiff, the plaintiff failed to provide a clear description of the content and scope of the copyright, trademark, or patent upon which infringement was alleged or the facts of the alleged infringement with sufficient specificity to allow the recipients of the letters to make a reasonable judgment. Without being able to determine that Hsin Ting was in fact the manufacturer of the alleged infringing article, the plaintiff also nevertheless hastily issued warning letters to Hsin Ting and related enterprises on 16 July 2000, and only thereafter determined the source of the parts used in the water heater component at issue, after which it issued a warning letter on 8 August to Seven Universe Industrial Co., Ltd., the manufacturer of those parts. In order to guarantee fairness in trading practices, however, the Fair Trade Act lays stress upon whether or not the issuer of warning letters has provided prior notice to its competitor before issuing warning letters. The plaintiff in this case was unable to prove that it had given notice to the potentially infringing manufacturer, importer, or agent to request elimination of the infringement prior to 16 July 2000, and based on the issuance date of 8 August as shown on its documented certified letters, the plaintiff failed to carry out the obligation to complete the preliminary procedures of determination and notification. The plaintiff's action was rejected.
Appendix:
A-One Industrial Co., Ltd.'s Uniform Invoice Number: 07430510
Hsin Ting Industrial, Ltd.'s Uniform Invoice Number: 22688616
Summarized by Lai, Chia-Ching; Supervised by Wang, Rong-Ging