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Judgment of Subjective Criteria in Patent Infringement

[ June 2019 ] >Back

Patent

I.	Judgment of Subjective Criteria in Patent Infringement

	Fact
	Company A, the patentee of the patent at issue, claims that its dealer has sold two products (robot vacuum cleaner) of the patent at issue with the indication of the patent number on the online shopping center of Company B. Also, Company A has authorized the patent at issue to another company who has also indicated the patent number of the patent at issue on its website. Company C sold products infringing the patent at issue on the online shopping center of Company B. As company C is a retailer specializing in the field of robot vacuum cleaners, Company C should be familiar with the infringing products and thus is liable for negligence resulted from its willful acts or failing to exercise due care . Also, Company B fails to request the retailers selling products on its website to submit “Freedom to Operate Search”, and while knowing that the products sold by Company A have the patent right, Company B still allowed the infringing products to be sold on its website. Thus, Company B is also liable for willful act or negligence. Company A claimed damage against Companies B and C.

	IP Court’s viewpoints
	The IP court judges that Company C negligently infringed the patent at issue and thus shall be responsible for the damage of Company A, while Company B is concluded not infringing Company A’s patent rights either intentionally or negligently. The IP court’s view points are as follows.

	(I) Company C is liable for infringement in negligence
	1.	From the website of Company C and the products it displayed in the brick-and-mortar department store, it can be seen that the “robot vacuum cleaners” are one of its main sales products. Also, Company C has maintenance personnel to provide repair services for robot vacuum cleaners, which shows that Company C is more than a retailer who simply sells goods but a professional seller of robot vacuum cleaners. Thus, Company C has a competitive relationship with Company A in the same industry and should reasonably have a certain degree of understanding of the function, price and related information of the same type of products sold by its competitor in the market.

	2.	The patented products of Company A are indicated with the patent number and have been sold on the online shopping center of Company B earlier than the Company C’s products. Also, the infringement of the patent at issue can be easily recognized from operation of the infringing products without using special analytical device. With due care and proper attention, Company C should have been able to avoid the infringement. As Company C failed to avoid the infringement, it should be responsible for negligence.

	3.	Company C is only a seller of robot vacuum cleaners instead of a manufacturer itself. Company A did not notify Company C of the infringement before the lawsuit, and there is no evidence to prove that Company C was deliberately infringing the patent at issue. Thus, Company C is only liable for negligence of the infringement.

	(II) Company B did not infringe Company A’s patent rights either intentionally or negligently.
	1.	In the contract between Company B and its suppliers, it is clearly stated that the suppliers should not infringe the intellectual property rights of a third party. Also, after receiving the notice of the infringement, Company B soon removed the infringing products to prevent further damages. Thus, Company B has paid the due care and has no negligence.

	2.	Company B does not request the suppliers selling products on its website to submit “Freedom to Operate Search” to prevent infringement. However, Company B has no access to review each product sold on its website. Also, there are a wide variety of types of products sold on the website, which makes it difficult to require the e-commerce platform operator to perform one-by-one inspection of each product to avoid patent infringement. Also, it is unreasonable to expect the platform operator to have the ability to assess the result of “Freedom to Operate Search” provided by its suppliers. Thus, even if Company B requests the suppliers to submit “Freedom to Operate Search”, it does not help to prevent the infringement but only increase the efforts and costs of online transaction.

	Source: https://www.tipo.gov.tw/public/epaper/113/ePaper113_ep13750.htm

Copyright Act

Legislative Yuan passed amendments to Articles 87 and 93 of the Copyright Act which have entered into force on May 03, 2019

Legislative Yuan passed amendments to Articles 87 and 93 of the Copyright Act on April 16. The providers who use set-top boxes or applications that allow customers to link to infringing websites will be punished for 2 years in prison, or a fine up to NT$500,000 in the future. The new regulations can effectively curb malicious online infringement derived from the new technologies

In recent years, some set-top boxes and APPs in the market have provided access to infringing websites for people to watch illegal audiovisual contents. By charging users monthly rental fees or selling set-top boxes, the providers gain exorbitant profits. It further affects the development of Taiwan’s audio-visual industries.

In order to put a strong emphasis on protecting the intellectual property rights in Taiwan, legislators proposed the draft amendments. Apart from the payment for civil damages, the providers will face a sentence of up to two years or a fine up to NT$500,000. The following three kinds of behavior will constitute copyright infringement:

Launching apps that compile links to websites containing illegal audiovisual contents on Google Play, Apple Store, or other platforms that allow people to download such applications;

Without directly providing the computer programs, providing a way to download and use computer programs that contain illegal audiovisual contents. For example, a provider sells a set-top box that does not contain the above-mentioned applications, but provides guidance on how to install them. Or, a link is provided in the set-top boxes for people to install and use.

Manufacturing, importing or selling equipment that contains the above-mentioned programs, such as manufacturing, importing or selling set-top boxes of said applications in the market. Selling set-top boxes for public to access to infringing contents will also break the law in the future.

The amendments focus only on ceasing such malicious set-top boxes or applications because the providers promote a monthly fee or a lifetime free of charge of cable TV which incites consumers to buy set-top boxes that incorporate many infringing content links. However, based on the principle of technology neutrality, devices such as mobile phones, tablets or legal OTT set-top boxes that generally do not have internal infringing content apps will not be affected. In addition, even if people who have purchased set-top boxes or apps that link to infringing contents are not considered to have broken the law, since the contents of set-top boxes and applications are illegal, the consumers could end up with their services being disconnected. The TIPO also reminds people not to buy a set-top box from unknown sources.

After the amendments of this law, it will help to curb infringement and promote the development of the creative industries in Taiwan. The TIPO will furthermore be actively involved in publicizing and education to let the public understand the contents of the amendments.

Source: https://www.tipo.gov.tw/ct.asp?xItem=702365&ctNode=7123&mp=1

Amendments

Article 87

Any of the following circumstances, except as otherwise provided under this Act, shall be deemed an infringement of copyright or plate rights:

To exploit a work by means of infringing on the reputation of the author.

Distribution of articles that are known to infringe on plate rights, or public display or possession of such articles with the intent to distribute.

Import of any copies reproduced without the authorization of the economic rights holder or the plate rights holder.

Import of the original or any copies of a work legally reproduced abroad without the authorization of the economic rights holder.

Exploitation for business purposes of a copy of a computer program that infringes on economic rights in such computer program.

Distribution, by any means other than transfer of ownership or rental, articles that are known to infringe on economic rights; or public display or possession, with the intent to distribute, of articles that are known to infringe on economic rights.

To provide to the public computer programs or other technology that can be used to publicly transmit or reproduce works, with the intent to allow the public to infringe economic rights by means of public transmission or reproduction by means of the Internet of the works of another, without the consent of or a license from the economic rights holder, and to receive benefit therefrom.

To provide the public with access to contents publicly broadcasted or transmitted that are known to infringe on copyrights, and to receive benefit from the following:

(i)	offering the public a computer program that collects IP addresses of the said infringing contents.
(ii)	instructing or assisting or presetting a path for the public to use the computer program as stated in the preceding item.
(iii)	manufacturing, importing, or selling an equipment or device containing computer program as stated in item (i).

A person who undertakes the actions set out in subparagraphs 7 and 8 above shall be deemed to have "intent" pursuant to that subparagraph when the advertising or other active measures employed by the person instigates, solicits, incites, or persuades the public to use the computer program or other technology provided by that person for the purpose of infringing upon the economic rights of others.

Article 93

In any of the following circumstances, a sentence of up to two years imprisonment or detention shall be imposed, or in lieu thereof or in addition thereto, a fine of not more than five hundred thousand New Taiwan Dollars:

1.	Infringement of the author's moral rights as set forth in the provisions of articles 15 through 17.
2.	Violations of the provisions of Article 70.
3.	Infringement of another person's copyright by any of the means specified in paragraph 1, subparagraphs 1, 3, 5, or 6 of Article 87, provided this shall not apply to offenses as referred to in paragraph 2 or paragraph 3 of Article 91bis.
4.	Violations of subparagraphs 7 and 8 of paragraph 1 of Article 87.

Trademarks

Notices for Trademark Cases related to Article 30.1 (8) of Trademark Act

TIPO (Taiwan Intellectual Property Office) held propaganda in 2017 to specifically explain the key points of Article 30.1 (8) of Trademark Act and the relevant regulations issued by Ministry of Health and Welfare. Recently, we noticed that the TIPO issues Office Actions or Formal Rejections based on the Article 30.1 (8) of Trademark Act more frequently. It seems that the examiners tend to follow the guidelines more strictly. We herewith name some examples for your reference.

Trademark Act Article 30.1 (8): A trademark shall not be registered if the mark is likely to mislead the public as to the nature, quality, or place of origin of the goods or services.

In other words, false association between the trademark and the goods/services as well as misleading indications on the trademarks are forbidden. Moreover, the issue of misleading cannot be overcome by disclaiming the exclusive right of the trademark.

Based on the notice of the TIPO, the judgments made based on Trademark Act, Health and Welfare Act, Fair Trade Act and Consumer Protection Act are different. Especially, the Health and Welfare Act applies a stricter standard. Although a trademark is allowed to be registered, when it comes to its actual use, the registrant may still be punished when the trademark violates other laws.

In this article, we would like to present some examples which are deemed to violate part of the Article 30.1 (8), Trademark Act, “A trademark shall not be registered if the mark is likely to mislead the public as to the nature and quality” in the table below.

Application number	Trademark	Goods/Services	TIPO’s opinion	Current status
107033455	OMNIPORK	Artificial meat; tofu; dried tofu; vegetarian meat; vegetarian fish; soya patties; tofu patties	The examiner deems that the part “PORK” of the trademark designating the goods in class 29 has the issue of misleading because consumers will deem that the products designated in class 29 are made of pork or contain ingredients of pork.	Response, arguing that consumers have well recognized the trademark at issue and its goods after the applicant’s extensive use of the trademark so no misleading will incurred, to the Office Action is rejected because the examiner deems the evidence of use is not sufficient. TIPO issued the Formal Rejection. The client filed the petition of Appeal and is waiting for the result.
107014853	SUPER TRUFFE	Lipstick; cleansing milk; Cosmetic preparations for baths; Nail polish; Beauty masks; Cosmetic preparations for skin care; Herbal extracts for cosmetic purposes; Cleansers for intimate personal hygiene purposes, non medicated etc.	The examiner deems that “Truffe” is the French of “Truffle”, which is a precious ingredient not only in the food industry but also in the cosmetic industry. Consumers will deem that the products designated in class 3 contain such ingredient. If yes, the trademark is merely a description to the ingredients of the products so lacks distinctiveness to be a trademark. If not, it will cause the issue of misleading.	Formal Rejection is issued because the applicant failed to file a response.
107056014	The League of Green Food	Tea leaf; Tea bag; coffee; confectionery; cereal-based snack food; Brown rice powder; almond powder; nut flours; congee; noodles etc.	The examiner deems that “Green Food” indicates food made by special way and recognized by the government so that it can use the Green Food symbol to prove that the food is pollution-free. However, the applicant of the application is an individual which is in conflict to the trademark which contains a term “league”. It will cause the issue of misleading of the nature and quality of the provider.	Formal Rejection is issued because the applicant failed to file a response.

Other examples to the terms of the nature and quality contained in a trademark are as follows:

(1)

Misleading of the nature: A trademark contains the term “abalone” but the designated goods are “dried vegetables”.

(2)

Misleading of the quality: A trademark contains the term “Golden Prize” and designates the goods of food such as “dried vegetables”.

Conclusion: Based on our experience and the current practice of the TIPO, if the trademark contains any wording which might mislead consumers to the nature or quality of the products, we suggest collecting as much evidence as possible before filing to have a better chance to overcome the Office Action when receiving the same, if any. Under some circumstances, there would be a chance to overcome the issue of misleading by submitting sufficient evidence of use to prove that consumers have well recognized the trademark at issue so that no misleading will incur.

In our next issue, we will continuously introduce further examples to the terms of the origin contained in a mark which also violates the Article 30.1 (8), Trademark Act, “A trademark shall not be registered if the mark is likely to mislead the public as to the origin”.

IP FAQs

※ The difference between “NICE classification” and “the practice of TIPO”

Though the TIPO generally follows the classification of NICE, some of the designated goods and services in NICE classification are not acceptable since some of them are not definite enough under the practice in Taiwan. We will actively check the client’s specification and provide our suggestions before filing within our services.

Kindly refer to the examples below for your information (Class 03, Class 05 & Class 06).

Nice (Indication of Goods)	Our suggestions
Class03
abrasives	Please be informed this item is too broad to be accepted under the practice in Taiwan. It should be specified into concrete ones, such as “Grinding preparations”, “Abrasive paper”, “Grinding preparations”, “Abrasive cloth”, “Smoothing stones”, etc.
Class05
Biocides	Please be informed this item is too broad to be accepted under the practice in Taiwan. It should be specified into concrete ones, such as “biocides for medical purposes”, “Biocides for agricultural use”, “Biocides for environmental sanitary use”, “Biocides for veterinary purposes”, etc.
dietary supplements with a cosmetic effect	It is not acceptable to add the term “with a cosmetic effect” to “dietary supplements” as it will violate relevant regulations under the practice in Taiwan.
vermifuges / anthelmintics	Please be informed this kind of description is too broad to be accepted under the practice in Taiwan. It should be specified into concrete ones, such as “vermifuges / anthelmintics for medical purposes”, “vermifuges / anthelmintics for agricultural use”, “vermifuges / anthelmintics for veterinary purposes”, etc.
Class 06
anchors	Please be informed this item is too broad to be accepted under the practice in Taiwan. It should be specified into concrete ones, such as “Ground anchors”, “End anchor for building”, “Pre-stressed end anchor”, “Anchor plates”, “Ship anchor (class 12)”etc.
bells	Please be informed this item is too broad to be accepted under the practice in Taiwan. It should be specified into concrete ones, such as “Door bells of metal, non-electric”, “Hanging bell on animal”, “Bells for animals”, “Signal bells (class 9)”, “Bells for bicycles (class 12)”, etc.
ironmongery / hardware of metal, small	Please be informed this kind of description is too broad to be accepted under the practice in Taiwan. It should be specified into concrete ones, such as “Metal hardware, not in another class”, “Hooks [metal hardware]”, “Pins [hardware]”, “Iron nail”, etc.
trays of metal	Please be informed this item is too broad to be accepted under the practice in Taiwan. It should be specified into concrete ones, such as “Tool trays of metal”, “Dental impression trays (class 10)”, “Trays for domestic purposes (class 21)”etc.

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