Sunonwealth Electric Machine Industry Co., published false messages in the patent litigation announcement on its website, a deceptive and obviously unfair conduct that is able to affect trading order

Chinese Taipei

Case:

Key Words:

Patent infringement, injunction, network messages

Reference:

Fair Trade Commission Decision of February 16, 2006 (the 745th Commissioners’ Meeting); Disposition Kung Ch’u Tzu No. 095011

Industry:

Other Electronic and Appliances Manufacturing and Repairing (2890)

Relevant Laws:

Article 24 of the Fair Trade Law

Summary:

1. After the Court issued an injunction ruling in favor of Delta, Sunonwealth Electric Machine Industry Co. (hereinafter referred to as Sunonwealth) announced false messages on its US subsidiary company’s website (www.sunonusa.com). The said messages alleged “An injunction filed by Delta Electronics in our own country against selective Sunon fans and blowers was dismissed on July 17, 2003 allowing Sunon to resume production of the products affected by the injunction; (2) A similar case filed by Delta last year in the U.S. was immediately dismissed as having no merit.” On November 28, 2003, Sunonwealth posted on its company website “Delta clearly knows it only has patent number 154690 that is currently under impeachment, and announcement number 488497 and announcement number 501907 that patent certificates are not yet issued and have been challenged. However, Delta referred to the aforementioned numbers and filed an injunction against Sunonwealth with the Kaohsiung District Court without explaining that the said patents have been impeached and challenged. The Kaohsiung District Court did not summon Sunonwealth for its opinion and issued injunction ruling due to misunderstanding. However, the Kaohsiung District Court gave a ruling to rescind the aforementioned injunction on July 15, 2003 after Sunonwealth filed a petition with it.” With regard to messages published by Sunonwealth, a complaint was filed against it for violating the Fair Trade Law.
2. Upon investigation, the Fair Trade Commission (FTC) found that:
   1. The Kaohsiung District Court issued an injunction ruling on May 21, 2003 with regard to the injunction filing made by Delta on the infringement of patent number 154690, announcement number 488497 and announcement 501907. Although Sunonwealth had filed an appeal for this ruling and the Court had approved the rescission of the said injunction on condition that Sunonwealth provided guarantee, but Delta again had filed an appeal against this ruling of injunction rescission. Therefore, the injunction was still valid at that time. In addition, Sunonwealth admitted that there were mistakes in the statement “A similar case filed by Delta last year in the U.S. was immediately dismissed as having no merit”.
   2. The investigation found that the announcement number 488497 and announcement number 501907 of Delta were actually being challenged and put under trials before the Kaohsiung District Court’s injunction ruling made on May 21, 2003. There was no impeachment on the new patent number 154690 before Sunonwealth impeached it on June 19, 2003. Therefore, there were actually no impeachment cases before Delta filed injunction and the Kaohsiung District Court issued the injunction ruling on May 21, 2003. The circumstances were not consistent with the statements made by Sunonwealth against Delta, alleging that Delta with respect to the aforementioned three numbers “has not explained the said patents have been impeached and challenged, and filed an injunction against Sunonwealth with the Kaohsiung District Court.”
3. Grounds of Disposition:
   1. The investigation showed the messages in webpage of www.sunonusa.com, announcing that Sunon was allowed to resume production of fans and blowers at issue was not only inconsistent with the facts, but also might mislead the public or the trading counterparts into believing that the lawsuit between Sunonwealth and Delta has been revoked, the patent rights of Delta were suspicious. Such messages were deceptive to the possible receivers of the relevant messages, whereas, obviously unfair to the competitor Delta. The acts of Sunonwealth had harmed fair market competition and violated the provision of Article 24 of the Fair Trade Law.
   2. In addition, the messages on www.sunon.com.tw website would mislead the public or the trading counterparts into believing that Delta has won the injunction because it did not explain about the challenges and impeachment. In addition, the said injunction has been dismissed after Sunonwealth filed an appeal and the patent rights of Delta were suspicious. The acts of Sunonwealth had harmed fair market competition and violated the provision of Article 24 of the Fair Trade Law.
   3. Taken into consideration the motivation, purpose and expected improper benefit of the unlawful acts of Sunonwealth; the degree and duration of the act’s harm to market order; benefits derived on account of the unlawful act; scale, operating condition, sales volume and market position of the enterprise; past violations; and attitude after violating the laws, therefore, Sunonwealth is ordered to cease the unlawful acts and a fine of NT$ 200,000 is imposed.

Summarized by Chiou, Shwu-Fen;
Supervised by Wu, Pi-Ju

Appendix:
Sunonwealth Electric Machine Industry Co.’s Uniform Invoice Number: 81448796