May a third party be warned of a utility model patent infringement without a technical report?

(1) In Taiwan, an application for a utility model patent requires only formality examination; consequently, a granted utility model patent may have an exceedingly large scope, or an application with an unpatentable subject matter may be approved. A patentee of a utility model patent, therefore, should exercise their patent right prudently, lest improper exercise of the patent right hinder the development or application of technology in the industry or compromise trading order seriously.

(2) In the judgment of this case, the Court held that the Defendant presented an infringement evaluation report while issuing a warning but did not provide a technical report; that failure to provide a technical report was not a deliberate act of the Defendant, but it was hard to say that the Defendant had no negligence; and that the Defendant caused damage to the Plaintiff due to a lack of due care and was therefore liable to make compensation for the damage.

(3) We suggest that a patentee of a utility model patent should provide a technical report for the utility model when issuing any kind of warning associated with the utility model patent. According to our current practical views, a patentee of a utility model patent is liable to make compensation for the damage caused by a warning they give if they present only an infringement evaluation report but no technical report for the utility model.

Issue: May a third party be warned of infringement of a utility model patent without being presented with a technical report for the utility model?
Judgment No.:2020 Min-Zhuan-Su Zi No. 60
Patent at issue:Utility Model Patent No. M536321
Case summary

1. The Plaintiff’s claims:

(1) The Defendant issued a warning without presenting a technical report.
In February 2018, the Defendant professed on the Internet that the Plaintiff infringed the Defendant’s patent at issue, demanding that the Plaintiff’s products be removed from online platforms. The Defendant, however, did not provide a technical report for the utility model. In March of the same year, the Defendant filed a patent infringement lawsuit with the Intellectual Property Court, but the Court rejected the patent infringement lawsuit on the grounds that the patent at issue lacked an inventive step.

(2) The Defendant’s patent at issue was invalid.
After winning the patent infringement lawsuit in November 2018, the Plaintiff filed an invalidation action with the Intellectual Property Office, but the Defendant made no response within the stipulated time period. The Intellectual Property Office considered the invalidation action well-grounded and revoked the patent at issue.

(3) In accordance with Article 117 of the Patent Act, the Defendant was liable to make compensation for the damage caused.

2. The Defendant’s claims:

(1) The condition set forth in Article 117 of the Patent Act was not satisfied.
Article 16 of the Constitution stipulates that the people shall have the right of instituting legal proceedings. The aforesaid right includes the right to file with the judiciary an application for remedy for unlawful infringement of the people’s rights. Filing a utility model patent infringement lawsuit does not require the presentation of a technical report for the utility model, is proper and lawful exercise of the right of instituting legal proceedings, and therefore does not satisfy the condition set forth in Article 117 of the Patent Act.

(2) The Defendant presented the infringement evaluation report and had no willful negligence.
When filing the infringement lawsuit, the Defendant had already commissioned a patent and trademark office to produce the evaluation report at issue, which concluded that the products at issue of the Plaintiff (CHIAN YIH OPTOTECH CO., LTD.) constituted literal infringement. The Defendant, therefore, subjectively believed that the Plaintiff’s products infringed the patent at issue. This indicates that the Defendant exercised their patent right with due care, did not exercise the patent right improperly, and had no willful negligence in exercising the patent right.

(3) The Defendant’s patent application was intended for both utility model patent and invention patent, and there was no need to maintain the utility model patent after the invention patent was granted.
The Defendant’s invention patent application was approved by the Intellectual Property Office on December 1, 2018 (Certificate No. I642568), so the Defendant did not have to maintain the patent at issue any more. This is why the Defendant made no response to the Plaintiff’s invalidation action. The patent at issue was revoked as a result of the invalidation action only because the Defendant had chosen not to respond. Now that the Defendant’s invention patent application for the same technical contents was approved, the revocation cannot be used as a proof of a lack of patentability of the contents of the patent at issue, let alone a proof of the Defendant’s willful negligence in exercising the patent at issue.

3. The Court’s judgment

(1) An infringement evaluation report cannot be used in place of a technical report for a utility model, so it was hard to say that the Defendant had no negligence.
The evidence provided by the Defendant while filing the infringement lawsuit lacked a technical report for the utility model. Although the Defendant presented the patent infringement evaluation report produced by a patent and trademark office, this only proves that the Defendant had no intention to exercise their patent right improperly when filing the infringement lawsuit. It was hard to say that the Defendant had no negligence.

(2) During the examination of the Defendant’s invention patent application, the Defendant could have anticipated the possibility that the subject matter of the invention patent application was unpatentable, so it was hard to say that the Defendant had no negligence.
During the examination, the Intellectual Property Office sent the examiner’s opinions to the Defendant on October 25, 2017 and March 30, 2018, informing the Defendant that the invention patent application lacked an inventive step and clarity. The Intellectual Property Office’s letters of notification of the examiner’s opinions were on file. It can therefore be inferred from the above that before and after filing the infringement lawsuit, the Defendant was well aware that the aforesaid invention patent application, which was directed to the same creation as that claimed in claim 1 of the patent at issue, might be unpatentable. The Defendant, however, never applied for a technical report for the utility model at issue, nor did the Defendant consult any impartial and objective external institution in order for the institution to evaluate the validity of the patent at issue. Hence, it was hard to say that the Defendant took due care and had no negligence.

(3) In accordance with Article 117 of the Patent Act, the Plaintiff filed a compensation claim of TWD 144,000 against the Defendant.

1. Article 116 of the Patent Act: When exercising a utility model patent, the patentee shall not make a warning without presenting the technical evaluation report of utility model patent.

2. Article 117 of the Patent Act: Where a utility model patent is revoked, the patentee shall be liable for the damages suffered by another person due to the patentee’s exercise of utility model patent right prior to its revocation. The above shall not apply if such exercise is based on the content of the technical evaluation report of utility model patent and carried out with due care.

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