Trustwin Tech Co., Ltd.

Case:

Trustwin Tech was complained for violating the Fair Trade Law by unjustifiably sending warning letters

Key Word(s):

Warning letter, patent right

Reference:

Fair Trade Commission Decision of July 16, 2014 (the 1184th Commissioners' Meeting)

Industry:

Manufacture of Other Communications Equipment (2729)

Relevant Law(s):

Article 24 of the Fair Trade Law

Summary:

1. The FTC received a complaint from InVue Security Products Taiwan (hereinafter referred to as the informer) stating that on Oct. 25, 2013 Trustwin Tech Co., Ltd. (hereinafter referred to as the Trustwin Tech) sent to Far Eastone Telecommunications Co., Ltd. (hereinafter referred to as Far Eastone), a vendor to which the informer supplied, an email claiming it had discovered at Far Eastone's retail outlets products manufactured and sold without the offender's authorization. The offender not only made the accusation of right infringement to a trading counterpart of the informer without notifying the informer at the same time and obtaining confirmation of the alleged infringement by an objective and impartial appraising agency, but also urged the said trading counterpart of the informer to remove the products from its shelf with the purpose of obstructing the informer from competing in the market without any justification. Subsequently, Kuan Yu International Patent and Trademark Office sent a patent infringement warning letter (hereinafter referred to as the warning letter) to Far Eastone on Dec. 5 of the same year at the request of the offender. The warning letter made Far Eastone begin to doubt whether the informer's products had really infringed the patent right of the offender. Therefore, the offender's conduct was in violation of Article 24 of the Fair Trade Law.
2. Findings of the FTC after investigation:
   

   The FTC's investigation revealed that the offender was indeed the assignee of the M427637 utility patent. At the same time, the offender did send an email and a warning letter to Far Eastone, a trading counterpart of the informer, respectively on Oct. 25, 2013 and Dec. 5, 2013. However, according to the email and the warning letter, the accused infringer was Far Eastone. In other words, the email and the warning letter were not sent to accuse "another" enterprise of infringing the company's copyright, trademark right or patent right. Therefore, the email and the warning letter could not be considered warning letters as defined in Point 2 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". Meanwhile, the email pointed out that Trustwin Tech was the assignee of the M427637 utility patent and the company had found out that InVue Security Products Taiwan had manufactured and marketed certain products without its authorization. Therefore, the company requested Far Eastone to stop selling the products in question and negotiate with it to for proper solutions. Such content was an assertion of a patent assignee's rights. The email had clearly stated the content and coverage of the patent right, and the facts of right infringement involved in this case. As for the warning letter sent to Far Eastone on Dec. 5, 2013, in addition to the provision of the patent name and number, it included attachments in relation to the content and coverage of the patent and the corresponding right infringement appraisal report. In other words, the content and coverage of the patent and the facts of infringement were all specified in the letter. Another finding of the investigation showed that both parties had engaged in a patent dispute over some products sold to Far Eastone in 2012. Because of that right infringement dispute, the offender expected the informer to take defensive measures. Therefore, what the offender did on Oct. 25, 2013 and Dec. 5, 2013 were conducted after it had gone through the preliminary procedures necessary for confirmation of right infringement. Moreover, in addition to Far Eastone, the informer's trading counterparts also included other telecommunications businesses and cell phone producers, but the offender only sent the email and warning letter to Far Eastone while Far Eastone, after receiving the email and the warning letter, never removed the products in question from its shelf or stop selling them. Instead, it sought clarification from the informer and continued to do business with the informer.

3. Concluding that the existing evidences were inadequate to decide what the offender had done constitutes obviously unfair conduct that was likely to affect trading order, the FTC therefore found it difficult to consider that the offender had violated Article 24 of the Fair Trade Law.

Summarized by Lin, Hui-Mei; Supervised by Wu, Lieh-Ling