Violation of the Fair Trade Law by Dynalab Inc. for the sending of a letter warning of a patent infringement
Chinese Taipei
Case:
Violation of the Fair Trade Law by Dynalab Inc. for the sending of a letter warning of a patent infringement.
Key Words:
font software, patently unfair, warning letter, patent rights
Reference:
Fair Trade Commission Decision of November 4, 1998 (365th Commission Meeting); Disposition Ref. (87) Kung Chieh Tzu No. 250
Industry:
Information Software Service (7501)
Relevant Laws:
Summary:
On November 19 1997, companies including Arphic Technology Co., Ltd., Sheng Tien, Ch'ing Ch'eng, and Hua Ch'i Information jointly introduced the "Super Set" software set. On December 10, 1997, the companies received a warning letter from Dynalab Inc.'s attorney stating that the use of the font technology from Arphic Technology's Lu Ting Font Collection or CFT Card or Dynalab's patent technology (Patent No. 38830) in the software set could be an infringement of Dynalab's patent rights. The act of sending the warning letter might violate relevant provisions in the Fair Trade Law.
Due to the complicated nature of patent rights disputes, most distributors, suppliers, and consumers are unable to self-judge whether or not the products they sell or purchase violate patent rights, unless they are so determined by the competent authority. Therefore, for competitive purposes, an enterprise sending warning letter to claim or to infer from pending patent disputes that other products by its competitors could also infringe on its patent right would cause panic among its competitors’ distributors and suppliers and affect market order. The Fair Trade Law (FTL) is applicable under this situation.
Prior to sending the letter, Dynalab had not obtained the products at dispute, let alone understood the relationship between the products and the coverage of Patent No. 38830. It had not sent the products to a fair and impartial agency for further appraisal either. Therefore, whether its patent rights have been violated or not was still uncertain to Dynalab at the time the letter was sent. Although companies including Sheng Tien were not involved in the suit between Dynalab and Arphic Technology concerning patent infringement at that time, Dynalab, basing its claims on rumors and reports from the newspapers, sent the warning letter to those companies who were cooperating with Arphic Technology without stating that the letter was not an allegation of any patent infringement. Taking into account of those facts, the reaction to the warning letter, and the patent dispute that had taken place between Dynalab and Arphic Technology, the letter was obviously intended to harass Arphic Technology for competitive purposes.
Dynalab, on the other hand, maintained that the letter was intended to serve as a simple notification of facts rather than a warning. A simple notification, however, should contain objective and clear statements on facts rather than subjective judgments on a dispute over rights. Not only was the patent dispute between Dynalab and Arphic Technology referred to in the letter, that the Lu Ting Font Collection and the CFT Card were suspected of patent right infringement was also pointed out therein. Dynalab further cited civil and criminal liabilities related to improper infringement of patent rights in the Patent Law. Taken as a whole, it could be strongly inferred from the letter that the inherent risk for the companies' products to have infringed on Dynalab’s patent rights was high. The companies' reaction upon receiving the letter further evidenced that the letter in fact had been beyond a simple notification of facts.
Judging from the intent of sending the letter and its contents and effects, it is obvious that Dynalab sent the warning letter to harass and prevent its competitors from running their business, and to affect the market order. Such an act has intervened in the function of market competition the essence of which is for enterprises to compete on quality, prices, and services. It is patently unfair to competitors, and is reprehensible under the ethics of commercial competition. It is the view of the Fair Trade Commission that it has violated Article 24 of the FTL and is punishable under the first part of Article 41(1) of the FTL.
Summarized by Liu, Hsi-Rong
Supervised by You, Su-Su
Appendix:
Dynalab Inc.’s Uniform Invoice No.: 22643169