The well-known e-commerce platform PChome24h Shopping and its supplier, Timas Titan Co., Ltd. (hereafter, Timas Titan), have both been penalized for false advertising. The Fair Trade Commission (FTC) recently issued a disposition (Disposition Gong Chu Zi No. 114110) against PChome and Timas Titan for claiming an expired patent on their website. The FTC determined that such a claim violated Article 21, Paragraph 1 of the Fair Trade Act regarding “false or misleading representations,” and imposed a fine of NT$50,000 on each party.

Case Background: Continuous Promotion Despite Patent Lapse

The case originated from the sale of the “TiANN Antibacterial Patented Multi-Purpose Titanium Cutting Board” set on PChome24h, where the advertisement emphasized “Holding Design Patent No. D192948.” However, an investigation revealed that the design patent had already lapsed on September 21, 2023, due to failure to pay patent annuity fees. The advertisement remained published from October 13, 2024, to July 8, 2025 for over half a year, leading consumers to mistakenly believe the product was still protected under patent law and possessed a higher degree of creativity and novelty.

During the investigation, the supplier, Timas Titan, argued that the product had obtained a “utility model patent” and a “U.S. utility patent,” which allegedly provided stronger protection. That is why they chose not to continue paying the annuities for the original design patent. However, the FTC and the Intellectual Property Office provided the following legal clarifications:

  • Patent Types Cannot Be Confused: A “design patent” protects the shape and patterns (visual effects) of an object, while a “utility model patent” protects technical structure. Since the scopes of rights differ, the existence of Patent A does not justify claiming ownership of the lapsed Patent B.
  • Principle of Territoriality: Patent rights are effective only within the country in which they are granted. Holding a U.S. patent does not allow a party to claim its rights within Taiwan on that basis.
  • Determination of Advertiser’s Liability: The FTC explicitly stated that PChome, as the platform operator, provided payment and invoicing services and profited from the price margin, thereby assuming the status of a “seller.” Timas Titan, which was responsible for producing the advertising copy, was likewise identified as an “advertiser” in this case and must jointly bear the obligation to verify the truthfulness of advertisements.

Wisdom Analysis and Suggested Strategies

The core of this case lies in the gap of understanding regarding “the legal effect of patent rights” and “advertising compliance.” The following three points summarize the implications from a practical legal perspective:

1. Expansion of Advertiser’s Verification Obligations

The FTC clearly defined the joint responsibility of the “platform operator” and the “supplier.” Although PChome did not produce the advertising copy, it was deemed to assume the status of an “advertiser” because it participated in the transaction process, issued invoices, and profited from sales. This serves as a reminder for e-commerce platform operators that they bear a substantive duty to verify information claimed by the suppliers that significantly influences transaction decisions—such as patents, certifications, or awards. Public law liabilities cannot be contractually disclaimed merely through exemption clauses between private parties.

2. Misinterpretation of Territoriality and Independence of Patent Subject Matter

The supplier’s attempt to resort to a “U.S. utility patent” or a “Taiwan utility model patent” to offset the lapse of the “design patent” is legally invalid.

  • Validity Status: If an advertisement explicitly labels a specific patent number, the legal status of that number must be ”in force.” Otherwise, it constitutes a false representation under Article 21 of the Fair Trade Act.
  • Territoriality: Foreign patents do not confer exclusive rights within Taiwan unless granted by the competent domestic authority. Confusing foreign and domestic patents in advertisements easily misleads consumers.

3. Integrated Mechanism for IP Management and Legal Compliance

This case arose because the internal patent list was not updated in a timely manner. In practice, enterprises should establish an automated verification mechanism linking intellectual property status tracking with marketing materials. Once a patent lapses due to non-payment of annuities, expiration of term, or revocation, the marketing department should be notified immediately to remove relevant labels.