Totem Technology Co., Ltd. was complained for improper issuance of patent infringement warning letters and publication of warning notices as a possible violation of the Fair Trade Law
Chinese Taipei
Totem Technology Co., Ltd. was complained for improper issuance of patent infringement warning letters and publication of warning notices as a possible violation of the Fair Trade Law
Key Words:
warning letter, motherboard
Reference:
Fair Trade Commission Decision of May 8, 2003 (the 600th Commissioners' Meeting); Disposition Kung Ch'u Tzu No. 092060
Industry:
Electronic and Semiconductor Production Equipment Manufacturing and Repairing (2548)
Relevant Law:
Article 24 of the Fair Trade Law
Summary:
1. This case originated when Asustek Computer Incorporation (Asustek) filed a complaint against Totem Technology Co., Ltd. (Totem) for issuing a letter through their lawyer on 15 May 2002 to Asustek's trading counterparts, Pacific T-Zone Co., Ltd. (Pacific) and Chuan Wang Technology Co. Ltd. (Chuan Wang), alleging that Asustek's P4S333 and P4S533 motherboards infringed the new utility model patent No. 177431 owned by Lu Hsin-tsan. The same charges were also alleged in a very large ad notice taken out on page 6 of the 31 July 2002 issue of DigiTimes. Winbond Electronics Corporation (Winbond) also filed a complaint against Totem, alleging violation of Article 24 of the Fair Trade Law due to an ad notice appearing on page 25 of the 23 July 2002 issue of the Commercial Times which claimed that Winbond's provision of its 83971SD and W55F10 language control chipsets as key component's of Asustek's “Post” netcaster motherboard infringed the respondent's Chinese Taipei new utility model patent No. 177431 for its “language control for elimination of motherboard problems” device.
2. In its investigation the Fair Trade Commission (FTC) found as followings:
(1) The FTC found that Totem had in fact issued letters to Pacific and Chuan
Wang, the trading counterparts of its competitor, Asustek, alleging infringement
of its patent by Asustek's P4S333 and P4S533 motherboards. The respondent, claiming
to have assessment reports on the P4B266, P4B, P4S333, and P4S533 motherboards,
was nevertheless unable to provide evidence showing that it had attached those
reports when the letters were issued; in support of the testimony of Pacific
and Chuan Wang, however, no attachments were provided in the letters in question.
(2) While Totem issued letters to Asustek on 9 January, 1 February, 6 May, and
8 May demanding elimination of infringement, the product referred to in those
letters was the P4B motherboard, whereas the letters it issued to Pacific and
Chuan Wang referred to the P4S333 and P4S533 motherboards. The two are not the
same.
(3) Totem did indeed take out ad notices on page 25 of the 23 July 2002 issue
of the Commercial Times and on page 6 of the 31 July 2002 issue of DigiTimes
alleging that Asustek and Winbond had infringed its patents.
3. Reasons for disposition:
(1) When Totem on 15 May 2002 issued warning letters to the trading counterparts
of the complainants, it had not obtained an affirmation of the fact of patent
infringement from a court of first instance, nor had it submitted the object
of the possible infringement to the Judicial Yuan or the Cabinet for assistance
in obtaining an assessment report from a designated professional institute assessing
patent infringement matters.
(2) In addition, it was found that the four assessment reports submitted by
Totem in regard to the P4B266, P4B, P4S333, and P4S533 motherboards had been
done by the Chang Jiang International Patent and Trademark Office, and while
Totem claimed that the warning letters had included the patent assessment reports,
the interested parties, Pacific and Chuan Wang, both stated that they had not.
Further, when Totem issued letters to the complainants' trading counterparts
on 15 May, the texts of the letters only referred to the complainant's not having
been licensed to use the specifics of the new utility model patent No. 177431
in the P4S333 and P4S533 motherboards, but without providing any description
of the content of the patent, its scope, or the particulars of infringement.
No patent certificate or copy of the patent's publication in the Patent Gazette
was attached, so that letters provided insufficient information to allow the
recipients to make an informed judgment.
(3) In addition, while Totem issued multiple notices of patent infringement
to the complainants prior to its issuance of the May 15 2002 warning letter,
that letter referred to the P4B motherboard as the infringing product, whereas
the warning letters to the complainants' trading counterparts referred to the
P4S333 and P4S533 motherboards as the infringing products. The two different
sets of products are not the same, and it is difficult to maintain that prior
to issuance of the warning letter Totem had carried out its obligation to give
prior notification to the complainants of its request for removal of the infringement.
(4) In conclusion, in the act of issuing warning letters, Totem failed to complete
the relevant prior procedures, which constitutes an obviously unfair practice
sufficient to affect the trading order and was therefore a violation of Article
24 of the Fair Trade Law.
Appendix:
Totem Technology Co., Ltd.’s Uniform Invoice Number: 97074800
Asustek Computer Incorporation’s Uniform Invoice Number: 23638777
Winbond Electronics Corp.’s Uniform Invoice Number: 22099218
Summarized by Lai, Shu-Ching; Supervised by Shih, Chin-Tsun