Shang Xing Bird Shop

1120th Commissioners' Meeting (2013)

Case:

Shang Xing Bird Shop violated the Fair Trade Law for sending patent infringement warning letters without justification

Key Word(s):

Hamster cage, online platform, online seller, warning letter

Reference:

Fair Trade Commission Decision of April 24, 2013 (the 1120th Commissioners' meeting); Disposition Kung Ch'u Tzu No.102051

Industry:

Other Plastic Products Manufacturing (2209)

Relevant Law(s):

Article 24 of the Fair Trade Law

Summary:

The FTC received from Wan Ping Pet Co., Ltd (hereinafter referred to as Wang Ping Co.) a written complaint stating that the turning wheels in hamster cages had been a basic accessories for over a decade and Wang Ping Co. had imported them for more than ten years. However, Shang Xing Bird Shop had sent emails respectively on August 15 and 18, 2012 to warn online sellers Cool Bi Pet Supplies, Angel Cat Pet Shop and A Fei Pet Supplies that the wheels installed in hamster cages offered by Wang Ping Co. had infringed its patent. Shang Xing Bird Shop also requested the warning letter recipients to help identify the source and supplier of the products in question and take the products off their shelves. Wang Ping Co. thought the offender had violated the Fair Trade Law by sending the warning letters without any confirmation on the said patent infringement and therefore filed the complaint with the FTC.

Findings of the FTC after investigation:

(1) Shang Xing Bird Shop applied for a patent for its "turning wheel structure for pet cages" on November 21, 2008 and was granted Invention Patent No. I347829 on September 1, 2011. The patent was valid until November 20, 2028.

(2) On August 15, 2012, Shang Xing Bird Shop sent emails to online sellers Cool Bi Pet Supplies, A Fei Pet Supplies, Home of Cats and Dogs, Le Bao Supplies, and the content were as follows:

(i) stated that Shang Xing Bird Shop was a pet supply wholesaler with a number of patents on pet cages and accessories;

(ii) pointed out that the hamster cages the email recipients were selling on online platforms, with their product numbers, were not its products but the turning wheels inside had been invented by Shang Xing Bird Shop who had the patent license on the wheel structure of the cage;

(iii) requested the email recipients to help identify the source of the said products and their supplier and to take the said products off their shelves on the very same day;

(iv) reminded the sellers in the note at the end of the email to remove the same products being sold on other online platforms because Shang Xing Bird Shop would check the following day and directly request such platforms to remove the items if there were any.

(3) Shang Xing Bird Shop sent on August 18, 2011 an email with the same content to Angel Cat Pet Shop, another online seller on August 15, 2012.

Grounds for disposition:

(1) Without providing any concrete evidence of the said patent infringement, the offender Shang Xing Bird Shop sent emails to online sellers, requesting them to identify their upstream supplier and to remove the hamster cages off their shelves. According to the concepts commonly accepted by the general public, the emails sent by Shang Xing Bird Shop could easily make the recipients, the trading counterparts of the informer, Cool Bi Pet Supplies, A Fei Pet Supplies and others; believe the informer had infringed the said patent of the offender. Therefore, the emails had to be considered warning letters.

(2) The offender admitted that its accusation of patent infringement stated in the emails had not been confirmed by any court, nor had it sent the object suspected of patent infringement to any professional institution for appraisal and acquired the appraisal report or notified in writing the manufacturer, importer or agent suspected of the said infringement to request for severance of business connection with the infringer, before or at the same time it sent the emails. Furthermore, the content of the warning letters did not comply with Point 4 of the "Fair Trade Commission Disposal Directions (Guidelines) on the Reviewing of Cases Involving Enterprises Issuing Warning Letters for Infringement on Copyright, Trademark, and Patent Rights." As there was no appraisal report attached or any statement of the concrete fact of the patent infringement for the recipients to make a reasonable assessment, the sending of the warning letters could not be considered justifiable exercise of rights according to the Patent Act.

(3) The invention patent held by the offender for the "wheel structure for pet cages" which was merely an accessory for pet cages. However, without providing any concrete evidence of patent infringement, the offender hastily claimed that the hamster cages were not its products and its quick conclusion on the infringement of its patent therefore was simply based upon the pictures posted on the Internet by online sellers. It was difficult not to consider the conduct "abuse of rights." Moreover, online sellers Cool Bi Pet Supplies, Angel Cat Pet Shop, A Fei Pet Supplies, and others did take the products in question off their shelves to avoid being involved with any right infringement disputes. These trading counterparts of the informer obviously became suspicious and frightened as a result of the warning letters sent by Shang Xing Bird Shop. Hence, the FTC concluded that the conduct of the offender was obviously unfair and able to affect trading order in violation of Article 24 of the Fair Trade Law. Acting according to the first section of Article 41(1) of the same law, the FTC ordered the offender to cease its unlawful act and also imposed on it an administrative fine of NT$50,000.

Appendix:
Shang Xing Bird Shop's Uniform Invoice Number: 97864255

Summarized by Lin, Hsiao-Hung; Supervised by Lin, Gin-Lan

! : For information of translation, click here

(1)	Without providing any concrete evidence of the said patent infringement, the offender Shang Xing Bird Shop sent emails to online sellers, requesting them to identify their upstream supplier and to remove the hamster cages off their shelves. According to the concepts commonly accepted by the general public, the emails sent by Shang Xing Bird Shop could easily make the recipients, the trading counterparts of the informer, Cool Bi Pet Supplies, A Fei Pet Supplies and others; believe the informer had infringed the said patent of the offender. Therefore, the emails had to be considered warning letters.
(2)	The offender admitted that its accusation of patent infringement stated in the emails had not been confirmed by any court, nor had it sent the object suspected of patent infringement to any professional institution for appraisal and acquired the appraisal report or notified in writing the manufacturer, importer or agent suspected of the said infringement to request for severance of business connection with the infringer, before or at the same time it sent the emails. Furthermore, the content of the warning letters did not comply with Point 4 of the "Fair Trade Commission Disposal Directions (Guidelines) on the Reviewing of Cases Involving Enterprises Issuing Warning Letters for Infringement on Copyright, Trademark, and Patent Rights." As there was no appraisal report attached or any statement of the concrete fact of the patent infringement for the recipients to make a reasonable assessment, the sending of the warning letters could not be considered justifiable exercise of rights according to the Patent Act.
(3)	The invention patent held by the offender for the "wheel structure for pet cages" which was merely an accessory for pet cages. However, without providing any concrete evidence of patent infringement, the offender hastily claimed that the hamster cages were not its products and its quick conclusion on the infringement of its patent therefore was simply based upon the pictures posted on the Internet by online sellers. It was difficult not to consider the conduct "abuse of rights." Moreover, online sellers Cool Bi Pet Supplies, Angel Cat Pet Shop, A Fei Pet Supplies, and others did take the products in question off their shelves to avoid being involved with any right infringement disputes. These trading counterparts of the informer obviously became suspicious and frightened as a result of the warning letters sent by Shang Xing Bird Shop. Hence, the FTC concluded that the conduct of the offender was obviously unfair and able to affect trading order in violation of Article 24 of the Fair Trade Law. Acting according to the first section of Article 41(1) of the same law, the FTC ordered the offender to cease its unlawful act and also imposed on it an administrative fine of NT$50,000.