Judgment of Subjective Criteria in Patent Infringement

patent infringementCompany A, the patentee of the patent at issue, claims that its dealer has sold two products (robot vacuum cleaner) of the patent at issue with the indication of the patent number on the online shopping center of Company B. Also, Company A has authorized the patent at issue to another company who has also indicated the patent number of the patent at issue on its website.

Company C sold products infringing the patent at issue on the online shopping center of Company B. As company C is a retailer specializing in the field of robot vacuum cleaners, Company C should be familiar with the infringing products and thus is liable for negligence resulted from its willful acts or failing to exercise due care . Also, Company B fails to request the retailers selling products on its website to submit “Freedom to Operate Search”, and while knowing that the products sold by Company A have the patent right, Company B still allowed the infringing products to be sold on its website. Thus, Company B is also liable for willful act or negligence. Company A claimed damage against Companies B and C.

IP Court’s viewpoints

The IP court judges that Company C negligently infringed the patent at issue and thus shall be responsible for the damage of Company A, while Company B is concluded not infringing Company A’s patent rights either intentionally or negligently. The IP court’s view points are as follows.

(I) Company C is liable for infringement in negligence

1. From the website of Company C and the products it displayed in the brick-and-mortar department store, it can be seen that the “robot vacuum cleaners” are one of its main sales products. Also, Company C has maintenance personnel to provide repair services for robot vacuum cleaners, which shows that Company C is more than a retailer who simply sells goods but a professional seller of robot vacuum cleaners. Thus, Company C has a competitive relationship with Company A in the same industry and should reasonably have a certain degree of understanding of the function, price and related information of the same type of products sold by its competitor in the market. 

2. The patented products of Company A are indicated with the patent number and have been sold on the online shopping center of Company B earlier than the Company C’s products. Also, the infringement of the patent at issue can be easily recognized from operation of the infringing products without using special analytical device. With due care and proper attention, Company C should have been able to avoid the infringement. As Company C failed to avoid the infringement, it should be responsible for negligence.

3. Company C is only a seller of robot vacuum cleaners instead of a manufacturer itself. Company A did not notify Company C of the infringement before the lawsuit, and there is no evidence to prove that Company C was deliberately infringing the patent at issue. Thus, Company C is only liable for negligence of the infringement.

(II) Company B did not infringe Company A’s patent rights either intentionally or negligently.

1. In the contract between Company B and its suppliers, it is clearly stated that the suppliers should not infringe the intellectual property rights of a third party. Also, after receiving the notice of the infringement, Company B soon removed the infringing products to prevent further damages. Thus, Company B has paid the due care and has no negligence.  

2. Company B does not request the suppliers selling products on its website to submit “Freedom to Operate Search” to prevent infringement. However, Company B has no access to review each product sold on its website. Also, there are a wide variety of types of products sold on the website, which makes it difficult to require the e-commerce platform operator to perform one-by-one inspection of each product to avoid patent infringement. Also, it is unreasonable to expect the platform operator to have the ability to assess the result of “Freedom to Operate Search” provided by its suppliers. Thus, even if Company B requests the suppliers to submit “Freedom to Operate Search”, it does not help to prevent the infringement but only increase the efforts and costs of online transaction.

Delivered by: Sandy WANG (Ms.) / Senior Partner
JAW-HWA INTERNATIONAL PATENT &
TRADEMARK & LAW OFFICES
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