The American company, Genesis Microchip Corporation was accused of improperly issuing patent infringement warning letters, in possible violation of the Fair Trade Law

Case:

The American company, Genesis Microchip Corporation was accused of improperly issuing patent infringement warning letters, in possible violation of the Fair Trade Law

Keywords:

liquid crystal display controller chip, patent infringement warning letters

Reference:

Fair Trade Commission Decision of December 9, 2004 (the 683rd Commissioners' Meeting); Letter Kung Erh Tzu No. 0930009523

Industry:

Electronic and Semi-conductors Production Equipment Manufacturing and Repairing (2548)

Relevant Laws:

Articles 19 (i) and (iii) and Article 24 of the Fair Trade Law

Summary:

1.

Case background: The complainant of the case and Genesis Microchip Corporation (hereinafter referred to as "Genesis") are both manufacturers of liquid crystal display controller chips. Genesis filed an accusation with the U.S. International Trade Commission (hereinafter referred to as " ITC ") accusing that the complainant infringed upon its patented product. During ITC's investigation, Genesis disseminated false information of the product infringement to the complainant's domestic and foreign business partners for several times. On July 1, 2003, in the e-mail dispatched to the sales persons of the company, Genesis alleged that after it won the lawsuit, US Customs would detain any imported technology products of Media Reality Technologies Inc. that infringed on Genesis'patent rights. The said e-mail was also presented to the complainant's trading counterpart, Tatung Co., through the salespersons of Genesis, requesting Tatung Co., not to purchase goods from the complainant. The aforementioned conducts might violate Articles 19 (i) and (iii) and Article 24 of the Fair Trade Law.

2.

Upon the investigation, the Fair Trade Commission (FTC) found that:  (1) The email in question was an internal reporting document of Genesis. The recipients were all interior employees of the company. Genesis did not directly ask or incite its employees to disseminate the said e-mail. In addition, upon the confirmation of the employees of Tatung Co., they did not have direct contact with the employees of Genesis, and they also could not identify the source of the email in question. Therefore, there is no specific evidence showing that Genesis initiated to "externally dispatch" the email in question. Moreover, in the light of the content of the email in question, the full text was to pass on the relevant information regarding the patent right lawsuit to its employees. It is different from the nature of "warning letters" as recognized by the FTC. (2) Additionally, the patent right lawsuit, processed in the USA, was transnational. The complainant had already known about the said lawsuit before the e-mail in question was made. It is difficult to say that the complainant has no chance to make external explanations and necessary defense about the relevant litigation. Also, both on newspapers and the Internet had many relevant reports and comments about the said patent right lawsuit. Therefore, relevant business operators may obtain the information through public channels or inquire with both parties of the case. Furthermore, the reason that Genesis issued the e-mail in question to its employees was to inform its employees about the actual development of the case, so that they would be able to promote the business. The motivation of issuing the e-mail shall not be criticized, and it is difficult to conclude that Genesis intentionally boycotted the complainant or employed improper means to cause the trading counterpart(s) of its competitors to do business with itself. Genesis also did not have any deceptive or obviously unfair conduct that was able to affect trading order.

Summarized by Ma, Ming-Ling;

Supervised by Lin, Gin-Lan

Appendix:

Genesis Microchip Corporation's Uniform Invoice Number: 70785335

Media Reality Technologies Inc.'s Uniform Invoice Number: 70462335