4 June, 2019
Semiconductor Components Industries, LLC (“SCI”) filed a lawsuit with the Intellectual Property Court (“IP Court”) alleging that the “InnoSwitch Series,” “InnoSwitch3 Series” and “SC Series” chip products (“the Products”) sold by Power Integrations, Inc. (“PI U.S.”) and its affiliate Power Integrations Netherlands B.V.’s Taiwan Branch (“PI Taiwan”) infringed SCI’s Taiwan Patent Nos. I323551, I389435 and I493847 (collectively “the Patents”).
The IP Court rendered the first-instance judgment (Year 2018 Min-Zhuan-Su-Zi No. 22) on April 8, 2019 to dismiss SCI’s suit and deny the motion for provisional enforcement, holding that the Products did not infringe on any of the Patents.
In addition to denying the infringement of the Products and the validity of the Patents, the Defendants also raised the issue of the IP Court’s jurisdiction over this case. Plaintiff alleged that PI U.S. provided information such as datasheets and distributors on the official website of PI group, and that such action was an “invitation to make an offer” and should constitut an “offer for sell” under the Patent Act. In addition, Plaintiff alleged that the sale of the Products by PI U.S. through the aforesaid website should constitut the “act of sale” under the Patent Act.
Therefore, Plaintiff provided prima facie evidence for supporting its allegation of Defendant’s infringement. Defendant contended that PI U.S. did not sell the Products directly or indirectly via any distributors in Taiwan; that the group website only indicated that PI group had distributors in Taiwan; that these distributors were not PI U.S.’s distributors; and that there is no transaction or any legal relationship between the distributors and Defendant.
Defendant pointed out that the information on said websit could only enable persons who intend to purchase the Products to purchase from the Taiwanese distributors listed on the website, that these purchasers did not purchase from PI U.S., and that the final sales agreement thereof would not be made with PI U.S.
According to the Defendant, the court should not conclud that PI U.S. either sold or offered for sale in Taiwan solely because of the existence of such a website. As for Plaintiff’s contention that customers could purchase the Products via the website, the Defendant argue that the webpage referred to by Plaintiff was just a “request for sample” webpage.
Since the website did not charge any fees for the sample and only required the buyer to pay the shipping and handling cost, the provision of samples should not be an act of selling the Products.
If the court exercises international jurisdiction, it is unfair to Defendant and violates the principle of good faith in litigation, and violates the legal principle that judgments should be justified and prompt. Thus, Defendant contended that Plaintiff did not provide prima facie evidence for Defendant’s infringement in Taiwan, and the court should have no international jurisdiction over this case.
The IP Court held that it did have international jurisdiction over this case. The Court stated in the judgment that given the lack of overall provisions of international jurisdiction currently, the jurisdictional provisions of the ROC Code of Civil Procedure or international norms could be used as the “legal principle” of international jurisdiction.
In this case, Defendant provided datasheets of the Products in the language of traditional Chinese on Defendant’s official website for Taiwanese customers. Plaintiff also purchased the Products from the distributors listed on the website, and the Products were shipped to Taiwan. According to the objective facts presented by Plaintiff, the alleged infringement took place in Taiwan terretory. Although Defendant argued that PI U.S. did not sell the Products, the website did describe the product specifications and provided information for pruchase.
Based on the objective evidence and facts submitted by Plaintiff, Defendant and its global distributors of direct shipments acted jointly in infringement. Thus, the trial of this case by Taiwan courts does not violate the special circumstances of expecting fairness between the parties and the proper and prompt judgment. According to Paragraph 1, Article 15 of Taiwan Code of Civil Procedure, the Taiwan courts should have jurisdiction.
In this case, although the Court held that it has international jurisdiction, the only basis of jurisdiction is that “Plaintiff has provided prima facie evidence for Defendant’s infringement.” The Court should have adjudicated whether the facts provided by Plaintiff are with merits. The court should further examine whether Defendant PI U.S. should be considered committing an infringement by selling or offering for sale by virtue of the group website’s design.
However, since the court held that the Products did not infringe on the Patents, the judgment did not further discuss whether the facts of this case could demonstrate that there existed any sale or offer for sale for purpose of the Patent Act or that the Defendant should be deemed to have committed joint infringement.
Recently, the IP Court has apparently become more willing to exercise international jurisdiction. For example, in the IP Court’s judgment 2018-Min-Zhu-Kang-Zi No. 1, where the defendant contended that it did not sell the products infringing on the plaintiff’s copyright, the alleged infringing product was purchased by customers from the website called Buyee, which was irrelevant to the defendant. Although the defendant’s subsidiary operated a website, said website did not deliver goods to Taiwan.
However, the IP Court held in that case that the defendant sold relevant products on the Internet and sold to Taiwan via the Buyee website since the website of said subsidiary showed the defendant’s English name. The Court further held in that case that even if the defendant’s arguments were valid, the defendant and its subsidiary should be deemed to conduct joint infringement because the subsidiary operating the website was the defendant’s wholly-owned subsidiary, and thus that Taiwanese courts should have international jurisdiction.
If the IP Court continues to follow the direction in the above-mentioned Buyee website case and actively exercises international jurisdiction, foreign companies should seriously be aware of the risk of infringement lawsuits in Taiwan since the Internet has no boundaries.
For further information, please contact:
Genson Hung, Tsar & Tsai Law Firm
GHung@TsarTsai.com.tw
