Taiwan Electronic Packaging Co.,Ltd.

Case:

Key Words:

phone camera module, warning letter, patent licensing

Reference:

Fair Trade Commission Decision of January 16, 2008 (the 871st Commissioners' Meeting), Disposition Kung Ch'u Tzu No. 097096

Industry:

Other Optoelectronic Materials and Components Manufacturing (2649)

Relevant Laws:

Article 24 of the Fair Trade Law

Summary:

1. This case originated from the fact that on June 5, 2006, Taiwan Electronic Packging Co., Ltd. (hereinafter referred to as "Taiwan Packaging Company") issued to Motorola, Inc. a warning letter which indicated that the camera module of the two types of mobile phones, Motorola L6 and L7, infringed R.O.C. Invention Patent Number 158761 of Taiwan Packaging Company. Taiwan Packaging Company directly concluded that its patent right was infringed – its act without disclosing the coverage of its patent right in the aforesaid letter; affected normal trade in the market. In addition, Taiwan Packaging Company was not the patentee of the Invention Patent Number 158761. It merely obtained the patent licensing and inappropriately issued the warning letter without completed the registration of the licensing. Such an act violated the Fair Trade Law.
2. Findings of the FTC's investigation: The FTC looked into the case and found out that the patentee of the Invention Patent Number 158761 concluded a patent license agreement with Taiwan Packaging Company on January 1, 2004 and June 30, 2006 respectively, and the duration of the licensing was from June 21, 2002 to June 30, 2006, and from July 1, 2006 to June 30, 2009 respectively, as well as on May 3, 2006, both parties concluded an exclusive licensing agreement. Secondly, the FTC found that in the Taiwan Patent Search system, the announced duration of licensing held by Taiwan Packaging Company was from July 1, 2006 to June 30, 2009, and was recorded in the registration section on implementation of patent right licensing, and this detail could be checked in Letter of Intellectual Property Office of Ministry of Economic Affairs Chih-Chuan-I-(95)-(1)-13017-Tzu No. 09520687860 dated August 25, 2006. Furthermore, the FTC phoned the Intellectual Property Office of Ministry of Economic Affairs, R.O.C. to confirm the fact that there was no other patent licensing registration on the record during the period of licensing period. However, the Commission found that Taiwan Packaging Company claimed in the email sent to Motorola, Inc. on June 5, 2006 that the products L6 and L7 at issue might infringed its company's patent right of Invention Patent Number 158761. Although the Taiwan Packaging Company was licensed exclusively by the patentee, but it had not completed the registration yet. In other words, before the company could legally exercise the patent right against any third party, it issued a letter that claimed the infringement of that the Invention Patent Number 158761.
3. Grounds for Disposition:
   (1) In the email that was sent to Motorola, Inc. on June 5, 2006 by Taiwan Packaging Company in this case. Taiwan Packaging Company claimed that the products, L6 and L7 at issue, might infringe its company's Invention Patent Number 158761. Although it was licensed exclusively by the original patentee at that time, Article 59 of the Patent Act provides that "[t]he assignment, trust or licensing made by the patentee of the patent right of an invention to another person to practice the invention, or the pledge created on the patent by the patentee shall not be asserted against any third party, unless it has been registered with the Patent Authority." Further on the basis of the judgment of the Supreme Court of the Republic of China 96-Tai-Shang-Tzu No. 1658, "the so-called clause, ‘the unregistered licensing of a patent right may not be asserted against any third party,' means that, when the third party infringes the patent right, the patent assignee may not claim his/her/its right against the infringer, provided that the patent licensing has not been registered; …" Before Taiwan Packaging Company had completed registration of the patent licensing to exercise its right against any third party legally, it directly issued a letter against the third party that claimed that the infringement of its Invention Patent Number 158761,. The company's act was reprehensible in terms of commercial competition ethics; it was an obviously unfair act sufficient to affect trading order. Accordingly, the company violated Article 24 of the Fair Trade Law.
   (2) The extent of harm to trading order, which was caused by Taiwan Packaging Company's sending the warning letter, was determined to be small, after the FTC gave weight and consideration of the facts that Taiwan Packaging Company was the exclusive licensee of the patent at issue, and it corrected its act and completed the registration of such patent licensing within one month after the issuance of the letters, and the Commission based on the complainant's statement, which was that the recipient of the letter, Motorola, Inc. was not affected by the letter, and continued dealing the with the complainant. Therefore, in accordance with the fore part of Article 41 of the Fair Trade Law, Taiwan Packaging Company was ordered to cease the unlawful act immediately.

Appendix:
Taiwan Electronic Packaging Co., Ltd.'s Uniform Invoice Number: 89404666
Summarized by Peng, Wei-Cheng; supervised by Wu, Lieh-Ling