Under the doctrine of repair/reproduction dichotomy developed and established in the case law of the United States (and possibly in some other countries), if the claim of the patent at issue comprises multiple main members, a supplier will be free from the liability of direct infringement by simply making and selling one of the multiple members to a third party consumer. The remaining question is whether that supplier will be held liable for so-called “contributory infringement” if it makes and sells that member to a third party who uses it in turn to replace the worn-out part of the patented apparatus purchased from the patentee or, in a worse situation, the supplier sells to a third party who reproduces the combination form of the patented apparatus by use of the structure supplied by the supplier. To answer the inquiry, it is necessary to have a review of the law and practice regarding the issue of contributory infringement of patent and the issue of patent exhaustion doctrine.

Question One:

Will the supplier be held liable for “contributory infringement” in supplying one of the multiple main members to an end-user?

Similar provisions of inducement of infringement and contributory infringement as regulated in §271(b) and §271(c) of 35 U.S.C (Patent Act) do not exist under Taiwan Patent Law. There seems not to be a unanimous opinion today in the courts and among the practitioners as to whether the act of inducement or contribution is culpable under the law. Some practitioners hold a conservative view that, since the acts of inducement and contribution are not regulated in the Patent Act at all, neither is subject to a claim of patent infringement. However, the majority opinion holds a contrary position to the effect that if there are multiple wrongdoers involved in a patent infringement, the articles of the Civil Code and Criminal Code related to joint- participants, instigators and accomplices in general will apply. If there is not any act of final infringement, multiple defendants will not be held as joint tortfeasors.

Article 185 of the Taiwan Civil Code regulates that ” if several persons have caused an injury to the right of another person by a wrongful act committed jointly, they are jointly and severally liable for the damage. The same rule applies if it cannot be ascertained which of several participants has caused the damage. Instigators and accomplices are deemed to be joint tortfeasors.”

According to the cited article of law, a person whose act is held as constituting inducement of infringement or contributory infringement under the U.S. Patent Act may be likely held responsible for patent infringement under the Taiwan Patent Law by the concept of joint tortfeasors. As a willful intent or a negligence on the part of the wrongdoer is a critical element in establishing a tortious act under the Taiwan law, in determining if a person by the act of instigation or participation has jointly committed a patent infringement with other persons, the court will look into the mental state (intention or negligence) of the parties concerned as well as the acts respectively performed by those multiple wrongdoers. The practice in Taiwan thus differs from the typical contributory infringement doctrine in certain constituent elements.

Question Two:

Will the end-user be held liable, and thus the supplier held liable too, if it uses one of the multiple members delivered by the supplier to replace the worn-out part of the patented apparatus purchased from the patentee?

Although the competent authorities and practitioners of patents in Taiwan observe closely the current developments of patent practice in the U.S.A., the Taiwan Patent Act, or the patent infringement analysis guidelines published by the Intellectual Property Office, does not have such distinction between reproduction and repair. Instead, the provisions of Article 57 of the Patent Act regarding exhaustion of patent right are generally relied upon to determine if the act of the user in replacing a worn-out member is a fair use of the product purchased from the patentee and is therefore exempted from the patent right by the first-sale doctrine.

The judgment of the Taichung District Court, 2008 Feng Zhi Jien No. 1, issued on November 4, 2008, is one of the few cases where the court considered the rights of the parties in light of the repair/reproduction dichotomy. Plaintiff’s invention claims “ a sand washing device for a spray washing machine”, which comprises a sand hopper, a rotating disc, two side plates, and a top plate. Defendant had been an employee of the patentee for years before he left the plaintiff company to set up his own business. Defendant sold sand hoppers and top plates to those users of sand washing devices purchased from Plaintiff and provided replacement service therefore. Plaintiff brought a lawsuit for patent infringement.

In the trial of the case, the court considered and recognized the “repair/reconstruction” doctrine and rendered a non-infringement judgment in favor of the supplier. The judge stressed that a purchaser of the patented product has the right of fair use of the product, and the patentee’s claim of patent is exhausted upon the sale of the patented product to the user/consumer. Repair and maintenance of a patented product is usually deemed within the field of fair use and non-infringing, while reproduction of a patented item after its normal span of life has ended constitutes an infringement of patent. The court further concluded that the distinction of repair and reconstruction does not exist in the percentage or significance of the replaced member as compared to the whole patented apparatus, or in its value of being the characteristic element of the combination form in total, but exists in the life span of the whole elements in combination as well as the intent of the patentee in creation of the replaced member. This judgment represents an influential thinking of the majority opinion of the courts today. 

A Summary:

From the above analysis, the readers may understand that it is difficult to give solid answers to the inquiries of contributory infringement and repair/reproduction doctrine under the current law and practice in Taiwan, and the decision will be subject to the discretion of the court based on a case-to-case analysis of the relevant factors involved. Some governing inquiries may be whether the member of the patented product provided is deemed consumable or replaceable in the normal courses of trades, and the intention of the parties in the sales of the patented apparatus in combination.

Remark:

1.Article 57, Taiwan Patent Act:
“The effect of an invention patent right shall not extend to any of the following matters:
……
(6).Where the patented articles manufactured by the patentee or under the consent of the patentee are put to use or resold after the sale thereof. The aforesaid manufacture and sale are not limited to those committed in this country.
……”.

2.Tai E International Patent & Law Office represented the defendant in the civil case of Taichung District Court, Feng Zhi Jien No. 1 (2008).

(Author: Perkin LIAW has an LL.B. degree and an LL.M. degree in IP Law. He acted as the Chief of the Trademark Group at Tai E for a number of years before taking his current role as Manager of International Services. He specializes in trademark law, international IP litigation, technology licensing, corporate and commercial law, as well as other international agreements.)