When enforcing provisions of certain laws in the execution of its duty, the competent authority may provide explanations that are necessary for the execution of duty by the said authority or public employees of its subordinate. The foregoing has been explicitly stated in this Yuan*s Interpretation No.407 and is a form of administrative procedure stated in Article 159 of the Administrative Procedure Act. The Fair Trade Act is a commercial legislation governing enterprises* competitive business practices. Due to the evolution of the society and economy, the forms of business transactions and unfair business practices have expanded, making it difficult to regulate explicitly each and every practice and conduct in detail. Therefore, legislators have adopted abstract legal concepts for the regulation of such, thus necessitating the competent authority to set explanatory administrative rules in order to guide them in the performance of their duty, clarification of facts and applicable laws.
Article 45 of the Fair Trade Act stipulates: "No provision of this Act shall apply to any proper conduct in connection with the exercise of rights pursuant to the provisions of the Copyright Act, Trademark Act, or Patent Act." Its aim is to balance the conflict between the needs to protect intellectual property right owners and to maintain fair trade orders. Accordingly, when the competent authority is determining what "proper conduct in connection with the exercise of rights" is, it must not only take into account the interests of intellectual property right owners, but also balance these interests with the need to maintain a fair and competitive environment and public interests. The Fair Trade Commission of the Executive Yuan issued the "Guidelines for the Review of Cases Involving Enterprises Issuing Warning Letters for the Infringement of Copyright, Trademark, and Patent Rights" under Article 45 of the Fair Trade Act, through Letter (86) Kung Fa Tze No.01672 of May 14, 1997, to determine whether the conduct of enterprises, in issuing warning letters to others for infringement of intellectual property, constitutes abuse of their rights, thus conducive to the conduct of unfair competition prohibited by the Fair Trade Act, Articles 19, 21, 22, and 24 and the like. Items 3 and 4 of the said Guidelines (amended by Letter (88) Kung Fa Tze No.03239 of November 9, 1999) state that the issuing of warning letters by enterprises to other people for infringement of various intellectual property rights shall be regarded, in formality, as the proper exercise of rights and does not breach the Fair Trade Act where, prior to such issue, the enterprises have obtained court judgment of the first instance, or assessment reports furnished by professional infringement assessment institutions that are fair and objective, and have notified the potentially infringing parties, such as manufacturers and others, to request cessation of infringement and removal of the infringing articles. It is also a proper exercise of rights where the warning letters, though including no court judgment or the said assessment report, state explicitly the content and scope of the intellectual property in question and the facts surrounding their infringement, and do not come within the prohibitions set by the Fair Trade Act. The above are reasonable explanations for the abstract legal concepts as provided in the execution of duty.
Although the enterprises* issue of patent infringement warning letters is a right, to request the cessation and prevention of infringement, granted by Article 88 of the Patent Act, such right must not be abused. The foregoing is a fundamental principle of law, not something introduced by the said Guidelines, and the owners of such right shall observe such obligation. If enterprises abuse the rights granted by the Patent Act for purposes of competition, and issue patent infringement warning letters to parties, or potential parties, dealing with their competitors, without cause, and without specifying the content and scope of the relevant patents and the facts surrounding the infringement, which create doubt and fear in the minds of the said parties in their attempt to avoid unnecessary lawsuits by purchasing the competitors* products or services, or which cause the said parties to refuse dealings with the competitors and lead to unfair competition, then they are not proper exercises of rights which are protected by the Patent Act; rather, they are competitive business practices to be regulated by the Fair Trade Act. The said Guidelines are exemplary explanations provided by the Fair Trade Commission of the Executive Yuan in order to facilitate assessment of whether the enterprises* conduct, in issuing warning letters to others for infringement of intellectual property, is the proper exercise of their rights under Article 45 of the Fair Trade Act. They add no restriction to the exercise of people*s rights that are new to the law, and do not conflict with the principle of legal reservation, nor do they raise the question of authority. Thus, they are not in conflict with the Constitution.*
*Translated by Wei-Feng Huang of THY Taiwan International Law Offices.