Background
Facts
Decision


In a civil judgment rendered by the Intellectual Property and Commercial Court,(1) the Court considered that delivering a product is part of the process of selling it, and thus may constitute patent infringement.

Background

Article 58(1) of the Patent Act stipulates as follows: "Unless otherwise provided for in this Act, the patentee of an invention patent has an exclusive right to prevent others from exploiting the invention without the patentee's consent." Article 58(2) defines the term "exploiting" as "the acts of manufacturing, offering for sale, selling, using the products, or importing the products for the aforementioned purposes".

These provisions also apply to utility model patents, with certain changes.(2) Since the types of conduct involved in commercial activities may be very diverse, doubts may arise regarding how to apply the law when it comes to a specific type of conduct that is not listed.

Facts

In this case, plaintiff A, the patentee and joint owner of two utility model patents in dispute, accused defendants B and C of jointly selling or making several products that infringed the patents in dispute.

Defendant B entered into a product supply contract for the disputed product with a third party before the patent rights thereto became effective. After the patents in dispute became effective, defendant B merely "delivered" the products in dispute to the third party.

Decision

The Court held that defendant B's conduct constituted patent infringement. The Court's rationale was as follows:

  • The patent terms of the two patents in dispute were from 21 February 2018 to 30 October 2027, and from 11 May 2018 to 21 January 2028. Therefore, infringement of the patents could only be established if it had occurred within these terms.
  • Article 58(1) and (2) of the Patent Act expressly stipulate that:

Unless otherwise provided for in this Act, the patentee of an invention patent has an exclusive right to prevent others from exploiting the invention without the patentee's consent; exploiting means the acts of manufacturing, offering for sale, selling, using the products, or importing the products for the aforementioned purposes.

The act of offering for sale aims to make a third party aware that the infringing product may be manufactured or delivered, so that such party can expect to obtain de facto control over the infringing product. The aforementioned provision was established on 6 February 2003 in view of article 28(1) of the World Trade Organization's Agreement on Trade-Related Aspects of Intellectual Property Rights. The provision includes "offering for sale" in the scope of the patent right so as to expand the protection for a patentee. Since the delivery of an infringing product in fulfillment of a product supply contract not only puts the infringing product into circulation but also impedes the exercise of the patentee's exclusive right, such conduct is more serious than "offering for sale" and thus is naturally considered to be part of the process of selling the product.

  • Although defendant B had entered into a product supply contract with a third party on 26 December 2017 and had delivered the infringing product in dispute on 15 June 2018, and the two patents in dispute had not been granted patent rights at the time of concluding the contract, defendant B's conduct still had to be recognised as patent infringement since the delivery of the infringing products in dispute occurred between the patent terms of the two patents in dispute.

For further information on this topic please contact Hsiu-Ru Chien or Elina Yu at Lee and Li Attorneys at Law by telephone (+886 2 2763 8000) or email ([email protected] or [email protected]). The Lee and Li Attorneys at Law website can be accessed at www.leeandli.com.

Endnotes

(1) 2020 Min Zhuan Shang Zi No. 45, 22 August 2022.

(2) See article 120 of the Patent Act.