Contour Optik Inc. allegedly violated the Fair Trade Law by sending warning letters and publishing magazine advertisements under the pretext of patent infringement

Contour Optik Inc. allegedly violated the Fair Trade Law by sending warning letters and publishing magazine advertisements under the pretext of patent infringement

Chinese Taipei

Case:

Contour Optik Inc. allegedly violated the Fair Trade Law by sending warning letters and publishing magazine advertisements under the pretext of patent infringement

Key Words:

patent infringement, assessment report, warning letters

Reference:

Fair Trade Commission Decision on September 12, 2002 (the 566th Commissioners’ Meeting); Letter Kung Erh Tzu No. 091000903

Industry:

Spectacles and Lens Manufacturing (3022)

Relevant Law:

Article 24 of the Fair Trade Law

Summary:

1. This case originated with letters sent by the respondent Contour Optik Inc. to Chuang Pao Company, Tung Shun Company, Youngman Glasses Trading Co., Ltd., and the Roosevelt Road Branch Office of Grace Optical Co., Ltd. on 13 September 2001, to the southern district audit center of Jeng Ai Glasses Co., Ltd. and Cheng Li-Chen (who operates under the name of Chia Shih To Glasses Firm) on 28 September 2001, and to Hong Shih Yao (who operates under the name of Chu Chung Glasses) on 5 October 2001, alleging that these companies manufactured or sold products substantially identical to its Utility Model Patent No. 173282 “Improvement to the Connecting Structure of a Spectacle Accessory Frame” and demanding these companies promptly cease infringing such said utility model patent. Contour Optik Inc. also enclosed in the letters one photocopy each of the patent certificate, Patent Gazette, and patent infringement assessment report.

The complainant claimed that its products were manufactured based on a patent for which it had duly obtained licensing, and that the respondent took advantage of a heavily debated interpretation concerning “reinventions” and the findings of an infringement assessment as a pretext to widely send warning letters. As a result, glasses firms were reluctant to order the complainant’s products, causing the complainant to suffer an inestimable loss of business opportunity and injuring its reputation. The complainant therefore filed a complaint with the Fair Trade Commission (FTC) alleging the respondent had violated Article 24 of the Fair Trade Law.
　
2. Upon investigating the case, the FTC discovered that the above letters were sent together with one photocopy each of the patent certificate, Patent Gazette, and a patent infringement assessment report issued by National Chung Cheng University. It was thus evident that the respondent had submitted the suspected infringing object to one of the professional patent infringement assessment institutions jointly designated by the Judicial Yuan and the Cabinet and had obtained an assessment report.

In addition, although the complainant claimed that the recipients of the warning letters were all its downstream distributors, it was found that the respondent had sent a written notice to Cheng Li-Chen (who operates under the name of Chia Shih To Glasses Firm) on 28 September 2001 to demand the elimination of the patent infringement. Upon receiving a response letter on 9 October 2001 and learning that the supplier was T’ai Ying Industry Corporation, the respondent immediately sent a warning letter to the latter company on 17 October of the same year. Judging from prima facie evidence, the complainant was not the only supplier of the kind of goods at issue. Furthermore, the respondent's efforts to trace the origin of the contested goods to the source based upon the evidence it obtained indicated that the respondent's sending of warning letters was not aimed at causing damage to one specific competitor (namely the complainant).

Furthermore, the complainant claimed the spectacle frames under the brands of “G&B,” “Giacoma Puccini,” “MOD,” “ALAIN DELON,” and “NEVUE” referred to in the above patent infringement assessment reports were goods manufactured by working Utility Model Patent No. 145922 and were all registered trademarks held by the complainant. However, the fore part of Article 26(2) of the Trademark Law provides that “the licensing referred to in the preceding paragraph shall be recorded with the trademark authority; if the license is not recorded, it may not be asserted against third parties.” The owners of the exclusive rights to use the trademarks “G&B” and Giacoma Puccini” were discovered to be Huang Wen-Tse and T’ung Shun Company respectively, while the trademark “ALAIN DELON” had not been registered in Class 9 under Article 49 of the Trademark Law Enforcement Rules. In addition, no licensing of these trademarks had been recorded, and only “NENUE” was a registered trademark of the complainant. The respondent could hardly have been expected to know or determine that goods of the kind were all distributed or imported by the complainant. Thus, the complainant exercised all reasonable diligence before sending the warning letters, so its conduct in this case could be deemed a proper exercise of rights.

Appendix:

Contour Optik Inc.’s Uniform Invoice Number: 34276884

Summarized by Lin, Hsiao-Hung;
Supervised by Lin Gin-Lan

＊＊: For information of translation, click here

1.	This case originated with letters sent by the respondent Contour Optik Inc. to Chuang Pao Company, Tung Shun Company, Youngman Glasses Trading Co., Ltd., and the Roosevelt Road Branch Office of Grace Optical Co., Ltd. on 13 September 2001, to the southern district audit center of Jeng Ai Glasses Co., Ltd. and Cheng Li-Chen (who operates under the name of Chia Shih To Glasses Firm) on 28 September 2001, and to Hong Shih Yao (who operates under the name of Chu Chung Glasses) on 5 October 2001, alleging that these companies manufactured or sold products substantially identical to its Utility Model Patent No. 173282 “Improvement to the Connecting Structure of a Spectacle Accessory Frame” and demanding these companies promptly cease infringing such said utility model patent. Contour Optik Inc. also enclosed in the letters one photocopy each of the patent certificate, Patent Gazette, and patent infringement assessment report.
1.	The complainant claimed that its products were manufactured based on a patent for which it had duly obtained licensing, and that the respondent took advantage of a heavily debated interpretation concerning “reinventions” and the findings of an infringement assessment as a pretext to widely send warning letters. As a result, glasses firms were reluctant to order the complainant’s products, causing the complainant to suffer an inestimable loss of business opportunity and injuring its reputation. The complainant therefore filed a complaint with the Fair Trade Commission (FTC) alleging the respondent had violated Article 24 of the Fair Trade Law.

2.	Upon investigating the case, the FTC discovered that the above letters were sent together with one photocopy each of the patent certificate, Patent Gazette, and a patent infringement assessment report issued by National Chung Cheng University. It was thus evident that the respondent had submitted the suspected infringing object to one of the professional patent infringement assessment institutions jointly designated by the Judicial Yuan and the Cabinet and had obtained an assessment report.
	In addition, although the complainant claimed that the recipients of the warning letters were all its downstream distributors, it was found that the respondent had sent a written notice to Cheng Li-Chen (who operates under the name of Chia Shih To Glasses Firm) on 28 September 2001 to demand the elimination of the patent infringement. Upon receiving a response letter on 9 October 2001 and learning that the supplier was T’ai Ying Industry Corporation, the respondent immediately sent a warning letter to the latter company on 17 October of the same year. Judging from prima facie evidence, the complainant was not the only supplier of the kind of goods at issue. Furthermore, the respondent's efforts to trace the origin of the contested goods to the source based upon the evidence it obtained indicated that the respondent's sending of warning letters was not aimed at causing damage to one specific competitor (namely the complainant).
	Furthermore, the complainant claimed the spectacle frames under the brands of “G&B,” “Giacoma Puccini,” “MOD,” “ALAIN DELON,” and “NEVUE” referred to in the above patent infringement assessment reports were goods manufactured by working Utility Model Patent No. 145922 and were all registered trademarks held by the complainant. However, the fore part of Article 26(2) of the Trademark Law provides that “the licensing referred to in the preceding paragraph shall be recorded with the trademark authority; if the license is not recorded, it may not be asserted against third parties.” The owners of the exclusive rights to use the trademarks “G&B” and Giacoma Puccini” were discovered to be Huang Wen-Tse and T’ung Shun Company respectively, while the trademark “ALAIN DELON” had not been registered in Class 9 under Article 49 of the Trademark Law Enforcement Rules. In addition, no licensing of these trademarks had been recorded, and only “NENUE” was a registered trademark of the complainant. The respondent could hardly have been expected to know or determine that goods of the kind were all distributed or imported by the complainant. Thus, the complainant exercised all reasonable diligence before sending the warning letters, so its conduct in this case could be deemed a proper exercise of rights.