Violation of the Fair Trade Law [FTL] by Farcent Enterprise Co., Ltd. [respondent] for obviously sending attorney letters alleging patent infringement
Chinese Taipei
Case:
Violation of the Fair Trade Law [FTL] by Farcent Enterprise Co., Ltd. [respondent] for obviously sending attorney letters alleging patent infringement
Key words:
cleaning products manufacturers, patently unfair act
Reference:
Fair Trade Commission Decision of 22 April 1998 (the 337th Commission Meeting); Disposition (87) Kung Ch'u Tzu No. 115
Industry:
Cleaning Products Manufacturing Industry (2230)
Relevant Laws:
Article 24 of the Fair Trade Law
Summary:
1 According to the complainant, Chang Lin Enterprise Co., Ltd., the respondent repeatedly issued attorney letters to its trading counterparts alleging that the complainant had infringed the respondent's trademark and patent rights. The complainant believed that the respondent's patent infringement report lacked impartiality and objectiveness. The complainant also sought expert examination, which found no infringement. Therefore, the complainant alleged that the respondent's allegation of infringement was untrue and hindered fair competition, which violated the Fair Trade Law.
2. Regarding the trademark infringement alleged in the respondent's attorney letter, the respondent had already brought a criminal action in court. Since the complainant sustained no damages, and its trading counterparts continued purchasing from the complainant after receiving the respondent's attorney letter, this Commission could not hold the respondent in violation of the Fair Trade Law for this regard. Regarding the patent infringement allegation, the Commission held that the respondent's issuance of the attorney letter was not due exercise of patent right as provided for in Article 45 of the Fair Trade Law. The respondent notified the complainant in writing before the infringement report came out. Without infringement assesment in advance indicating patent infringement how could the respondent maintain that it had complied with the Patent Law to stop infringement by properly notifying the alleged infringer? In addition, the infringement examination report submitted by the respondent was made by the respondent's patent attorney not by an independent third party and therefore could not be deemed impartial and objective. Furthermore, although the respondent indicated the title and registration number of the patent and enclosed a copy of the patent certificate with the attorney letter, the respondent did not state in the letter how the competitors infringed its right or attach the examination report to the letter for the addressees to judge reasonably whether there was infringement. The respondent's attorney letter caused the complainant's trading counterparts to return goods. The attorney letter intimidated trading counterparts and competitors, and consequently blocked the competitors’ distribution and sale of goods, which resulted in unfair competition.
3. Regarding patent infringement remedy available to a patent holder, under current legal remedy procedures, the holder may file a complaint with a public prosecutor, or initiate a criminal action in the court, or file a civil complaint for damages and petition for provisional seizure. If the holder proceeds by sending an attorney letter, as long as the letter complies with the requirement of due exercise of its rights, it is exempt from the application of the Fair Trade Law. Due exercise of rights refers to the cases where an enterprise issues a warning letter after a court at the first instance held that the patent was infringed or after obtaining an examination report finding infringement, which was issued by an impartial and objective institute or in which the description and scope of the patent and the substantial facts the infringement are stated clearly so that the recipient of the letter is able to make a reasonable judgment; thereupon prior to issuance of a warning letter, a notification has been given to the manufacturer, importer or agent suspected of infringement to request for ceasing infringement. The respondent failed to comply with the above requirements and blocked the distribution and sale of good by competitors, which resulted in unfair competition and violated Article 24 of the Fair Trade Law.
Summarized by Hou, Wen-hsien
Supervised by Shih, Chin-ts'un
Appendix:
Farcent Enterprise Co., Ltd.’s Uniform Invoice No.: 07708830