What Duty of Care Must Be Exercised When Sending a Warning Letter? – Analysis of Taiwan Supreme Court Judgment No. 664, 2025
[ August 1, 2025 ] >BackA warning letter with an infringement analysis report is one of the most ordinary legitimate tools available to a patent holder, often serving as a preliminary step before initiating litigation. However, the Taiwan Supreme Court's Judgment No. 664, 2025 has rendered this first step fraught with risk, posing a serious concern for Taiwan’s intellectual property practice.
The facts underlying this case are straightforward and typical of everyday practice for any patent firm: a patent holder engaged a patent firm to send a warning letter (enclosing an infringement analysis report) to the alleged infringer and its manufacturers, notifying them of a potential patent infringement. The alleged infringer countersued the patent holder for sending abusive warning letters, seeking damages under Article 30 of the Taiwan Fair Trade Act. The appellate court held that the patent holder had first submitted the potentially infringing product to a patent firm to obtain an infringement analysis report, and attached the patent gazette, infringement report, and notarized materials to the warning letter, specifying in detail the scope and content of the patent and the facts of infringement. The appellate court therefore concluded that the patent holder had complied with the Taiwan Fair Trade Commission’s (TFTC) “Guidelines for Handling Warning Letters,” and that the conduct was lawful. The Supreme Court, however, vacated the decision.
In its judgment, the Supreme Court reasoned:
“Where an intellectual property rights holder intentionally or negligently ignored the fact that another enterprise has NOT infringed its intellectual property rights, but nonetheless sending warning letters not for the purpose of protecting those rights legitimately, but instead as a means of intimidating competitors or their business partners…cannot be deemed a legitimate exercise of rights… Compliance with the pre-amendment procedural requirements in Items 3 and 4 of the relevant TFTC guidelines does not, by itself, render the issuance of such warning letters a proper exercise of rights…”
The Supreme Court noted that the defendant had, upon receiving the patent holder’s warning letter, responded by certified mail with specific reasons why its product did not fall within the asserted patent claims, including detailed mechanical distinctions. The Supreme Court found that the appellate court’s conclusion—that the patent holder had no intent or negligence—was premature.
Under Article 4 of the TFTC’s Guidelines for Handling Cases Involving Warning Letters Alleging Copyright, Trademark, or Patent Infringement, a business must complete all of the following steps before issuing a warning letter in order for the action to constitute a legitimate exercise of rights:
1. Prior to or contemporaneously with issuing the warning letter, the business must notify the manufacturer, importer, or agent of the potentially infringing product and request that the infringement be cured;
2. The warning letter must clearly set forth the specific content and scope of the copyright, trademark, or patent rights and the concrete facts of infringement (e.g., when, where, and how the infringing activity allegedly occurred) such that the recipient can understand the nature of the alleged infringement;
3. In the case of a utility model patent, the warning letter or prior notice must be accompanied by the utility model technical evaluation report.
The Supreme Court has now added a fourth, subjective requirement:
4. The IP rights holder must not know, nor be negligent in not knowing, that the other party’s product does not infringe its IP rights.
This decision fundamentally alters longstanding practice in the IP community. Previously, adherence to the TFTC’s guidelines was sufficient to ensure that a patent holder’s warning letter would be deemed lawful. Following this judgment, however, the legal landscape is uncertain. The Supreme Court did not explain why reliance on a patent firm’s expert analysis report is insufficient to establish an absence of negligence. As a result, lower courts, patent holders, and lawyers are left without guidance. Patent holders are not themselves patent law experts, and if they have already sought expert opinions before sending the warning letter, it seems unreasonable to deem them negligent merely because the parties’ infringement analyses differ—it was the key reason by the appellate court in finding no wrongdoing.
While the Supreme Court’s decision appears to aim at curbing abuses of rights, its actual impact may be the opposite: by overly subjectivizing the assessment of a patent holder’s intent, the ruling risks chilling the legitimate exercise of IP rights and weakening Taiwan’s environment for protecting innovation. We anticipate that the lower court will not rule the patent holder violating TFTA unless direct and strong evidence of the holder’s bad faith is shown, and divergent interpretations regarding the existence of infringement, from various perspectives, could not, and should not, be construed as evidence of bad faith.
The facts underlying this case are straightforward and typical of everyday practice for any patent firm: a patent holder engaged a patent firm to send a warning letter (enclosing an infringement analysis report) to the alleged infringer and its manufacturers, notifying them of a potential patent infringement. The alleged infringer countersued the patent holder for sending abusive warning letters, seeking damages under Article 30 of the Taiwan Fair Trade Act. The appellate court held that the patent holder had first submitted the potentially infringing product to a patent firm to obtain an infringement analysis report, and attached the patent gazette, infringement report, and notarized materials to the warning letter, specifying in detail the scope and content of the patent and the facts of infringement. The appellate court therefore concluded that the patent holder had complied with the Taiwan Fair Trade Commission’s (TFTC) “Guidelines for Handling Warning Letters,” and that the conduct was lawful. The Supreme Court, however, vacated the decision.
In its judgment, the Supreme Court reasoned:
“Where an intellectual property rights holder intentionally or negligently ignored the fact that another enterprise has NOT infringed its intellectual property rights, but nonetheless sending warning letters not for the purpose of protecting those rights legitimately, but instead as a means of intimidating competitors or their business partners…cannot be deemed a legitimate exercise of rights… Compliance with the pre-amendment procedural requirements in Items 3 and 4 of the relevant TFTC guidelines does not, by itself, render the issuance of such warning letters a proper exercise of rights…”
The Supreme Court noted that the defendant had, upon receiving the patent holder’s warning letter, responded by certified mail with specific reasons why its product did not fall within the asserted patent claims, including detailed mechanical distinctions. The Supreme Court found that the appellate court’s conclusion—that the patent holder had no intent or negligence—was premature.
Under Article 4 of the TFTC’s Guidelines for Handling Cases Involving Warning Letters Alleging Copyright, Trademark, or Patent Infringement, a business must complete all of the following steps before issuing a warning letter in order for the action to constitute a legitimate exercise of rights:
1. Prior to or contemporaneously with issuing the warning letter, the business must notify the manufacturer, importer, or agent of the potentially infringing product and request that the infringement be cured;
2. The warning letter must clearly set forth the specific content and scope of the copyright, trademark, or patent rights and the concrete facts of infringement (e.g., when, where, and how the infringing activity allegedly occurred) such that the recipient can understand the nature of the alleged infringement;
3. In the case of a utility model patent, the warning letter or prior notice must be accompanied by the utility model technical evaluation report.
The Supreme Court has now added a fourth, subjective requirement:
4. The IP rights holder must not know, nor be negligent in not knowing, that the other party’s product does not infringe its IP rights.
This decision fundamentally alters longstanding practice in the IP community. Previously, adherence to the TFTC’s guidelines was sufficient to ensure that a patent holder’s warning letter would be deemed lawful. Following this judgment, however, the legal landscape is uncertain. The Supreme Court did not explain why reliance on a patent firm’s expert analysis report is insufficient to establish an absence of negligence. As a result, lower courts, patent holders, and lawyers are left without guidance. Patent holders are not themselves patent law experts, and if they have already sought expert opinions before sending the warning letter, it seems unreasonable to deem them negligent merely because the parties’ infringement analyses differ—it was the key reason by the appellate court in finding no wrongdoing.
While the Supreme Court’s decision appears to aim at curbing abuses of rights, its actual impact may be the opposite: by overly subjectivizing the assessment of a patent holder’s intent, the ruling risks chilling the legitimate exercise of IP rights and weakening Taiwan’s environment for protecting innovation. We anticipate that the lower court will not rule the patent holder violating TFTA unless direct and strong evidence of the holder’s bad faith is shown, and divergent interpretations regarding the existence of infringement, from various perspectives, could not, and should not, be construed as evidence of bad faith.