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【智財評析】寄發侵害智財權警告函前應注意之事項 - 臺灣公平會對於事業發侵害著作權、商標權或專利權警告函案件之處理原則 -

2019-10-04 陳彥嘉 資深顧問
寄發侵害智財權警告函前應注意之事項
- 臺灣公平會對於事業發侵害著作權、商標權或專利權警告函案件之處理原則 -

Nowadays intellectual property plays a crucial role in various fields of business because the application of intellectual property in these businesses helps to increase their business strategies and enhance their competitiveness in today’s competitive market worldwide, including Taiwan.  Under the Patent Act,[1] the Trademark Act,[2] and the Copyright Act[3] in Taiwan, a right holder of a patent, a trademark, or a copyright is entitled to exercise his rights and prevent any third party from exploiting the invention, the trademark, or the copyrighted work of the right holder without the right holder’s consent.[4]  When an enterprise doing business in Taiwan becomes aware of any alleged, suspected or actual infringement of a patent, a trademark, or a copyright held by the enterprise, the enterprise may consider taking certain actions to protect the patent, the trademark, or the copyright held by the enterprise,[5] including but not limited to, issuing a “warning letter to the trading counterparts or potential trading counterparts of the issuing enterprise or of another enterprise alleging that another enterprise infringes the issuing enterprise’s patent, trademark, or copyright” (an “IP infringement warning letter”).[6]  However, prior to issuing any IP infringement warning letter, an enterprise doing business in Taiwan should adopt the preliminary procedures set forth by the Fair Trade Commission in Taiwan (the “TFTC”) in 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” (the “Guidelines”).[7]  If an enterprise issues an IP infringement warning letter without adopting the preliminary procedures set forth in the Guidelines, and also if the act of issuing such IP infringement warning letter is obviously unfair and sufficient to affect trading order, the issuing enterprise will likely violate the Fair Trade Act (the “FTA”)[8] in Taiwan and face an administrative penalty assessed by the Fair Trade Commission in Taiwan (the “TFTC”) as well as a TFTC order demanding rectification within the period prescribed in the TFTC order.[9]  Various decisions of the TFTC show that the TFTC has not been hesitated to assess administrative penalties against an enterprise issuing an IP infringement warning letter without adopting the preliminary procedures set forth in the Guidelines when the TFTC finds that the enterprise’s act of issuing such IP infringement warning letter is obviously unfair and sufficient to affect trading order.[10]  A variety of court judgments indicate that the courts in Taiwan have upheld the aforementioned position of the TFTC.[11]
 
I.  The Guidelines
 
If the act of issuing an IP infringement warning letter by an enterprise constitutes a proper exercise of rights by a patentee, a trademark holder, or a copyright holder pursuant to the laws, such act will not be considered violating the FTA because the FTA does not apply to any proper exercise of rights pursuant to the Copyright Act, Trademark Act, Patent Act or other intellectual property laws.[12]  Nevertheless, not every act of issuing an IP infringement warning letter by an enterprise constitutes a proper exercise of rights by a patentee, a trademark holder, or a copyright holder pursuant to the laws.  In the opinion of the TFTC, an enterprise (who is also a right holder of a patent, trademark, or copyright) will likely violate the FTA if that enterprise abuses its intellectual property rights through issuing infringement warning letters, resulting in unfair competition.[13]  The courts in Taiwan also share the same view with the TFTC in this regard.[14] 
 
Given the foregoing, the TFTC has adopted the Guidelines to “ensure fair competition among enterprises,” “maintain trading order,” and “effectively handle the abusive uses of copyright, trademark, or patent rights . . . constituting [a] restraint on competition or unfair competition, through inappropriate issuance of warning letters to other persons alleging that the competitors have infringed copyright, trademark, or patent rights.”[15]  If an IP infringement warning letter issued by an enterprise involves any allegation of another enterprise’s infringement of a patent, a trademark, or a copyright of the issuing enterprise, the TFTC will follow the Guidelines and review the content of the very letter on a case-by-case basis for any violation of the FTA.[16]  Also, some courts in Taiwan will refer to the Guidelines in deciding whether the act of issuing an IP infringement warning letter by an enterprise violates the FTA.[17]
 
Under the Guidelines, a “warning letter” issued by an enterprise refers to any “written materials sufficient to inform [the issuing enterprise’s] or another enterprise’s trading counterpart or potential trading counterpart” which alleges that “another enterprise infringes [the issuing enterprise’s] copyrights, trademarks, or patent rights.”[18]  The act of issuing an IP infringement warning letter by an enterprise meeting the aforesaid definition is subject to the Guidelines, regardless of whether such IP infringement warning letter is named as a “warning letter,” a “notification letter,” an “attorney letter,” an “open letter,” or an “advertisement or public notice.”[19]  The form of a “written” warning letter is not limited to any written materials in the form of a hard copy, and may include any content or information contained in an email or published on any website, any webpage, or any social media platform.[20] 
 
The Guidelines only apply to the act of issuing an IP infringement warning letter by an “enterprise.”[21]  According to the FTA, an “enterprise” refers to a “company,” a “sole proprietorship or partnership,” “any other person or organization engaging in transactions through the provision of goods or services,”[22] or a “trade association organized by businesses, or any other organization lawfully established to promote the interests of its members.”[23]  Thus, the act of issuing an IP infringement warning letter by a natural person is not subject to the Guidelines.[24]
 
The Guidelines apply to the act of issuing an IP infringement warning letter by an enterprise to the issuing enterprise’s or another competing enterprise’s trading counterparts or potential trading counterparts alleging that “another enterprise” infringes the copyright, trademark, or patent held by the issuing enterprise.[25]  The aforementioned “another enterprise” includes not only a competing enterprise to the issuing enterprise, but also a “non-competing enterprise” to the issuing enterprise (i.e., an enterprise that is “not at the same stage of production/sale as the issuing enterprise”).[26]
 
II.  Preliminary Procedures
 
Article 3 and Article 4 of the Guidelines set forth the preliminary procedures which should be adopted by an enterprise before issuing an IP infringement warning letter.[27]  The Guidelines do not require an enterprise to adopt all preliminary procedures set forth in both Article 3 and Article 4 of the Guidelines before issuing an IP warning letter.[28]  The act of issuing an IP warning letter by an enterprise will likely be considered a proper exercise of rights pursuant to the Copyright Act, the Trademark Act, or the Patent Act if the issuing enterprise has adopted the preliminary procedures set forth in either Article 3 or Article 4 of the Guidelines.[29]  On the other hand, the act of issuing an IP infringement warning letter by an enterprise without adopting the preliminary procedures set forth in either Article 3 or Article 4 of the Guidelines would less likely be taken as a proper exercise of rights pursuant to the Copyright Act, the Trademark Act, or the Patent Act.[30]
 
1.  Article 3 of the Guidelines
Under Article 3 of the Guidelines, the act of issuing an IP infringement warning letter by an enterprise will likely be considered a proper exercise of rights pursuant to the Copyright Act, the Trademark Act, or the Patent Act if the issuing enterprise, through any of the following procedures, has confirmed the infringement of its rights before issuing an IP infringement warning letter: (1) a court of first instance rendered a judgment finding the infringement of copyright, trademark, or patent; (2) through a conciliation, the Copyright Review and Mediation Committees found the infringement of copyright; or (3) the issuing enterprise obtained an assessment report issued by a professional infringement assessment institution after submitting the allegedly infringing article to the professional infringement assessment institution for assessment, and also give notification beforehand or simultaneously to the potentially infringing manufacturer, importer, or agent requesting the cessation of such infringement.[31]  According to the TFTC, the preliminary procedures set forth in Article 3 of the Guidelines does not require an issuing enterprise to include a full copy of an assessment report in an IP infringement warning letter.[32]  Nevertheless, the IP infringement warning letter should contain facts allowing the letter recipient to reasonably tell that the assessment result indicates that there is an infringement.[33]
 
An issuing enterprise failing to give notification requesting the cessation of the infringement as mentioned above may nonetheless be considered as having carried out the procedure of giving notification requesting the cessation of the infringement if any of the following circumstances takes place: (1) the issuing enterprise has followed the procedures to pursue legal remedies beforehand; (2) the issuing enterprise has exercised all reasonably possible due diligence; (3) such notification is objectively impossible; or (4) there are solid evidences indicating that the party who should be notified of the infringement controversy already knew the infringement controversy.[34]
 
2.  Article 4 of the Guidelines 
In addition to Article 3 of the Guidelines, Article 4 of the Guidelines sets forth alternative preliminary procedures for an issuing enterprise to carry out before issuing an IP infringement warning letter.  Under Article 4 of the Guidelines, the act of issuing an IP infringement warning letter by an enterprise will likely be considered a proper exercise of rights pursuant to the Copyright Act, the Trademark Act, or the Patent Act if the issuing enterprise carries out the following procedures before issuing an IP infringement warning letter: (1) giving notification to the allegedly infringing manufacturer, importer, or agent requesting the cessation of infringement prior to or simultaneously with the issuance of an IP infringement warning letter; and also (2) clearly stating the content and scope of copyright, trademark or patent rights in the IP infringement warning letter (for instance, when, where, and how the right at issue was produced, used, sold or imported), which sufficiently informs the letter recipient of the fact that the right at issue is likely infringed.[35]
 
An issuing enterprise failing to give notification requesting the cessation of the infringement as mentioned above may nevertheless be deemed having proceeded the procedure of giving notification requesting the cessation of the infringement if any of the following circumstances takes place: (1) the issuing enterprise has followed the procedures to pursue legal remedies beforehand; (2) the issuing enterprise has exercised all reasonably possible due diligence; (3) such notification is objectively impossible; or (4) there are solid evidences indicating that the party who should be notified of the infringement controversy already knew the infringement controversy.[36]
 
III.  Obviously Unfair and Sufficient to Affect Trading Order
 
Under the Guidelines, the act of issuing an IP infringement warning letter by an enterprise meeting the two following conditions constitutes a violation of Article 25 of the FTA: (1) the issuing enterprise fails to carry out the preliminary procedures set forth in either Article 3 or Article 4 of the Guidelines; and (2) the act of issuing the very IP infringement warning letter is obviously unfair and sufficient to affect trading order.[37]  Article 25 of the FTA prohibits an enterprise from carrying out any deceptive or obviously unfair act sufficient to affect trading order.[38]  In order to provide detailed guidance on the application of Article 25 of the FTA, the TFTC has adopted the “Fair Trade Commission Disposal Directions (Guidelines) on the Application of Article 25 of the Fair Trade Act”[39] (the “Guidelines for Article 25 of the FTA”).[40] 
 
According to the Guidelines for Article 25 of the FTA, the term “trading order” as used in Article 25 of the FTA means “the economic order of the marketplace for all goods or service transactions.”[41]  Trading order “may involve all the stages regarding research and development, production, sales, and consumption,” and “includes horizontal competition order, market order of vertical trading relationship, and trading order that comports with the spirit of free and fair competition.”[42] 
 
Under the Guidelines for Article 25 of the FTA, an “obviously unfair” act refers to an act “engaging in market competition or commercial transactions by obviously unfair means.”[43]  Particularly, the Guidelines for Article 25 of the FTA has identified that the “inappropriate issuance of warning letters alleging intellectual property rights infringement” is a type of obviously unfair act “[i]mpeding market competition for the purpose of injuring a particular enterprise.”[44]    
 
In determining whether an act of an enterprise is “sufficient to affect trading order,” the TFTC generally will consider factors such as “the number of victims,” “the quantity and degree of harm caused,” “the deterrent effect on other enterprises,” “whether specific organizations or groups have been targeted by the alleged acts,” “whether the case would affect a majority of future potential victims,” “the method or the means of the act,” “the frequency and size of the alleged acts,” “the reciprocity of the information with respect to the actor and its trading counterpart,” “the amount of dispute resolution resources,” “the size of the market power,” “the presence of the dependency,” and “the trade habit and industry characteristics.”[45]  The TFTC has long held the view that the “sufficient to affect trading order” element under Article 25 of the FTA does not require that trading order is indeed affected as a consequence of the act at issue.[46]  The “sufficient to affect trading order” element under Article 25 of the FTA is met as long as there is a possibility that the act at issue will affect trading order.[47]  The courts in Taiwan also upheld this view for a long time.[48]
 
IV.  Consequences
 
An enterprise will be in violation of Article 25 of the FTA if (1) that enterprise issues an IP infringement warning letter without adopting the preliminary procedures set forth in either Article 3 or Article 4 of the Guidelines; and (2) the act of issuing such IP infringement warning letter constitutes an obviously unfair act sufficient to affect trading order.[49]  Under the FTA, the TFTC may assess upon an enterprise violating Article 25 of the FTA an administrative penalty of not less than fifty thousand nor more than twenty-five million New Taiwan Dollars.[50]  Moreover, the TFTC may order that enterprise to “cease therefrom, rectify its conduct or take necessary corrective action within the time prescribed in the order” of the TFTC.[51]  If such enterprise fails to comply with the TFTC’s order, the TFTC may (1) “continue to order such enterprise to cease therefrom, rectify the conduct or take any necessary corrective action within the time prescribed in the order;” and (2) “each time may successively assess thereupon an administrative penalty of not less than one hundred thousand nor more than fifty million New Taiwan Dollars” until such enterprise ceases therefrom, rectifies its conduct or takes the necessary corrective action.[52]
 
It is worth noting that, even if an issuing enterprise has adopted the preliminary procedures set forth in Article 4 of the Guidelines before issuing an IP infringement warning letter, the act of issuing such IP infringement warning letter by the issuing enterprise will nonetheless be subject to the review of the TFTC on a case-by-case basis for any violation of the FTA, as long as the content of the very IP infringement warning letter involves restraint of competition or unfair competition.[53]
 
V.  Conclusion
 
An enterprise doing business in Taiwan should be aware of and comply with the FTA and other FTA related regulations in Taiwan.  The FTA and the Guidelines do not apply to a proper exercise of rights pursuant to the Copyright Act, Trademark Act, or Patent Act.[54]  The act of issuing an IP infringement warning letter by an enterprise is one of the options available to the issuing enterprise (who is also a right holder of a patent, a trademark, or a copyright) to exercise its rights and prevent any third party from exploiting the invention, the trademark, or the copyrighted work of the issuing enterprise without the consent of the issuing enterprise.[55]  However, not all acts of issuing an IP infringement warning letter by an enterprise are unquestionably taken as a proper exercise of rights pursuant to the Copyright Act, Trademark Act, or Patent Act.  If (1) an enterprise issues an IP infringement warning letter without carrying out the preliminary procedures set forth in either Article 3 or Article 4 of the Guidelines, and (2) the act of issuing such IP infringement warning letter constitutes an obviously unfair act sufficient to affect trading order, the issuing enterprise would likely violate the FTA,[56] and face administrative penalties assessed by the TFTC as well as a TFTC order demanding rectification within the period prescribed in the TFTC order.[57]  This is not saying that an enterprise doing business in Taiwan is prohibited from issuing any IP infringement warning letter or otherwise properly exercising its rights pursuant to the laws to protect the patent, trademark, or copyright held by the enterprise in Taiwan.[58]  Nonetheless, an enterprise doing business in Taiwan should adopt the preliminary procedures set forth in the Guidelines before issuing any IP infringement warning letter.
 
This Article, including the information contained herein, has been prepared only for educational and general information purposes to contribute to the understanding 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 in Taiwan.  This Article does not and is not intended to constitute, offer, or convey individual legal advice, legal opinion, or any other professional advice on any subject matters covered herein.  Please obtain specific legal advice before acting on any matters discussed herein.  While the author makes every attempt to ensure that the information covered herein is accurate, the author disclaims any liability for any omissions or errors that may be contained in this Article.
 
 
[1] Zhuanli Fa [The Patent Act] (promulgated on May 29, 1944; last amended on May 1, 2019).
[2] Shangbiao Fa [The Trademark Act] (promulgated on May 6, 1930; last amended on Nov. 30, 2016).
[3] Zhuzuoquan Fa [The Copyright Act] (promulgated on May 14, 1928; last amended on May 1, 2019).
[4] E.g., Patent Act art. 58, ¶1; Trademark Act art. 35, ¶2; Copyright Act art. 22, ¶1.
[5] Intellectual Property Court Civil Judgment 104-Min-Gon-Su-5 (Feb. 2, 2016) (智慧財產法院104年度民公訴字第5號民事判決) [hereinafter “104 Min Gon Su 5”]; Supreme Administrative Court Judgment 89-Pan-914 (Mar. 30, 2000) (最高行政法院89年度判字第914號判決) [hereinafter “89 Pan 914”].
[6] Supreme Administrative Court Judgment 96-Pan-1397 (Aug. 9, 2007) (最高行政法院96年度判字第1397號判決) [hereinafter “96 Pan 1397”].
[7] Gongping Jiaoyi Weiyuanhui Duiyu Shiye Fa Qinhai Zhuzuoquan Shangbiaoquan Huo Zhuanliquan Jinggaohan Anjian Zhi Chuli Yuanze [Fair Trade Commission Disposal Directions (Guidelines) on the Reviewing of Cases Involving Enterprises Issuing Warning Letters for Infringement on Copyright, Trademark, and Patent Rights] (initially passed by the 288th Commissioners’ Meeting on May 7, 1997; last amended and promulgated by Order Kung Fa Tzu No. 1041561063 on December 24, 2015) [hereinafter the “Guidelines”].
[8] Gongping Jiaoyi Fa [The Fair Trade Act] (promulgated on February 4, 1991; last amended on June 14, 2017) [hereinafter the “FTA”].
[9] FTA art. 42.
[10] E.g., Gong-Cu-Zi No. 102107 (F.T.C.) (July 18, 2013) [hereinafter “Gong-Cu-Zi No. 102107”]; Gong-Cu-Zi No. 102051 (F.T.C.) (Apr. 25, 2013) [hereinafter “Gong-Cu-Zi No. 102051”]; Gong-Cu-Zi No. 101030 (F.T.C.) (Mar. 29, 2012) [hereinafter “Gong-Cu-Zi No. 101030”]; Gong-Cu-Zi No. 101004 (F.T.C.) (Jan. 12, 2012) [hereinafter “Gong-Cu-Zi No. 101004”]; Gong-Cu-Zi No. 100170 (F.T.C.) (Sept. 16, 2011) [hereinafter “Gong-Cu-Zi No. 100170”]; Gong-Cu-Zi No. 100049 (F.T.C.) (Apr. 13, 2011) [hereinafter “Gong-Cu-Zi No. 100049”]; Gong-Cu-Zi No. 097156 (F.T.C.) (Nov. 27, 2008) [hereinafter “Gong-Cu-Zi No. 097156”]; Gong-Cu-Zi No. 097096 (F.T.C.) (July 17, 2008) [hereinafter “Gong-Cu-Zi No. 097096”].
[11] E.g., J.Y. Interpretation No. 548 (July 12, 2002); 104 Min Gon Su 5; Taiwan Taipei District Court Civil Judgment 97-Su-5187 (May 27, 2009) (臺灣臺北地方法院97年度訴字第5187號民事判決) [hereinafter “97 Su 5187”]; Supreme Administrative Court Judgment 97-Pan-437 (May 9, 2008) (最高行政法院97年度判字第437號判決) [hereinafter “97 Pan 437”]; 96 Pan 1397; Taiwan High Court Civil Judgment 92-Tai-Shang-559 (Mar. 21, 2003) (最高法院92年度台上字第559號民事判決) [hereinafter “92 Tai Shang 559”]; 89 Pan 914.
[12] FTA art. 45.
[13] Gong-Cu-Zi No. 102107; Gong-Cu-Zi No. 102051; Gong-Cu-Zi No. 101030; Gong-Cu-Zi No. 101004; Gong-Cu-Zi No. 100170; Gong-Cu-Zi No. 100049; Gong-Cu-Zi No. 097156; Gong-Cu-Zi No. 097096.
[14] 104 Min Gon Su 5; Supreme Administrative Court Judgment 98-Pan-1479 (Dec. 10, 2009) (最高行政法院98年判字第1479號行政判決) [hereinafter “98 Pan 1479”]; 96 Pan 1397; 89 Pan 914.
[15] Guidelines art. 1.
[16] Gong-Cu-Zi No. 102107; Gong-Cu-Zi No. 102051; Gong-Cu-Zi No. 101030; Gong-Cu-Zi No. 101004; Gong-Cu-Zi No. 100049.
[17] E.g., 104 Min Gon Su 5; Intellectual Property Court Civil Judgment 97-Min-Zhuan-Su-32 (Apr. 6, 2009) (智慧財產法院97年度民專訴字第32號民事判決) [hereinafter “97 Min Zhuan Su 32”]; Intellectual Property Court Civil Judgment 97-Min-Zhuan-Su-32 (Apr. 6, 2009) (智慧財產法院97年度民專訴字第32號民事判決) [hereinafter “97 Min Zhuan Su 32”]; 97 Su 5187; 97 Pan 437; 96 Pan 1397.
[19] Id.
[20] Does the term “written materials” in Article 2, Paragraph 6, 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” include webpages or emails?, Fair Trade Commission, https://www.ftc.gov.tw/internet/main/doc/docDetail.aspx?uid=1214&docid=15456 (last updated May 4, 2018).  See also Gong-Cu-Zi No. 101004.
[21] Guidelines art. 2.  See also 89 Pan 914.
[22] FTA art. 2, ¶1.
[23] Id. ¶2.
[24] 97 Min Zhuan Su 32; 89 Pan 914.
[25] Guidelines art. 2.
[26] Id. art. 6.
[27] Id. arts. 3 & 4.
[28] 97 Min Zhuan Su 32.
[29] Id.
[30] 97 Su 5187; 96 Pan 1397.
[32] Fair Trade Commission, Whether an Issuing Enterprise is Required to Include a Full Copy of an Assessment Report in a Warning Letter, (89) Gongfazi No. 00146 (Jan. 13, 2000), available at: https://www.ftc.gov.tw/internet/main/doc/docDetail.aspx?uid=225&docid=432.
[33] Id.
[34] Guidelines art. 3, ¶2.
[35] Id. art. 4, ¶1.
[36] Id. ¶2.
[37] Id. art. 5, ¶1.
[38] FTA art. 25.
[39] Gongping Jiaoyi Weiyuanhui Duiyu Gongping Jiaoyi Fa Di Ershiwu Tiao Anjian Zhi Chuli Yuanze [Fair Trade Commission Disposal Directions (Guidelines) on the Application of Article 25 of the Fair Trade Act] (initially passed by the 117th Commissioners’ Meeting on December 29, 1993; last amended and promulgated by Order Kung Fa Tzu No.10615600201 on January 13, 2017) [hereinafter the “Guidelines for Article 25 of the FTA”].