Brilliant Tiger Ind. Co., Ltd. improperly issued patent infringement warning letters to trading counterparts of a competitor in violation of Article 24 of the Fair Trade Law
Case:
Brilliant Tiger Ind. Co., Ltd. improperly issued patent infringement warning letters to trading counterparts of a competitor in violation of Article 24 of the Fair Trade Law
Key Words:
warning letters, patent rights
Reference:
Fair Trade Commission Decision of June 27, 2002 (the 555th Commissioners' Meeting); Disposition (91) Kung Ch'u Tzu No. 091107
Industry:
Other Precision Instruments Manufacturing (3019)
Relevant Law:
Article 24 of the Fair Trade Law
Summary:
1. This case originated with a letter of complaint to the Fair Trade Commission (the FTC) alleging that Brilliant Tiger Ind. Co., Ltd. (the respondent) had violated the Fair Trade Law by improperly issuing warning letters to its trading counterparts alleging infringement upon its patented regenerating diesel engine smoke-filtering device. The FTC's investigation found that the complainant was an importer and sales agent of diesel engine smoke-filters while the respondent manufactured and sold a series of smoke-filters. Due to the similarity of their products, the two companies had competed against each other in product quality and price. On 13 November 2000, the respondent unexpectedly issued warning letters to three of the complainant's trading counterparts without providing any specific evidence that the complainant had infringed its patent rights. The three trading counterparts, out of fear of unnecessary litigation, all demanded explanations and guarantees from the complainant. Subsequently, the respondent, ignoring the complainant's previous good-faith notice that such letter-issuing was a possible violation of the Fair Trade Law, on 11 May 200 again issued letters to another two trading counterparts of the complainant alleging that the complainant had infringed its patent rights. The respondent was thus suspected of having violated the Fair Trade Law. 2. The FTC investigated and discovered that the respondent, before issuing the warning letters, had not obtained any judgment delivered by any court of first instance confirming the complainant's patent infringement or an infringement assessment report from the professional infringement assessment institution jointly appointed by the Judicial Yuan and the Executive Yuan. Nor did the respondent attach with its warning letters any assessment report issued by any other assessment institution, or clearly described in its letters the specific content or scope of its patent right or the specific facts of the patent infringement. The investigation found that the respondent followed neither the aforesaid confirmation procedures nor other preliminary notification procedures of contacting the possibly infringing manufacturer, importer, or agent and requesting removal of the infringement before issuing the warning letter. 3. The respondent, upon learning of a possible infringement of its patent rights by the complainant, should have notified the complainant to request the removal of the infringement. Instead, it made repeated allegations of the suspected infringements by letter to the complainant's trading counterparts and raised suspicions in the minds of the trading counterparts, without following proper confirmation or notification procedures. The respondent's acts of issuing warning letters without following preliminary procedures was likely to adversely affect trading order on the market and thus constituted a violation of the Fair Trade Law. The FTC therefore imposed an administrative fine of NT$50,000 on the respondent pursuant to the fore part of Article 41 of that law.Appendix: Brillient Tiger Ind. Co., Ltd.'s Uniform Invoice Number: 22922161 Summarized by Chen, Ying-Ju; Supervised by Shin, Ching-Chun