Companies must be careful when labelling products with patent numbers following FTC fine

On 3 May 2023 the Fair Trade Commission (FTC) – Taiwan’s antitrust law regulator – imposed an NT $200,000 fine on a company that posted its Taiwanese patent certificate number on its products and advertisements. It found that the patent office had invalidated the patent in question after a third party filed an invalidation action.

The FTC held that posting the certificate number of an invalidated patent on products or advertisements would mislead customers, who might falsely assume that the products come from particular patented inventions that may have better quality or function.

The Fair Trade Act on false or misleading representations

Articles 21(1) and 21(4) of the Fair Trade Act stipulate that no company can make or use false or misleading elements in their products or services, advertisements or any other occasions where the public may see them if these elements are likely to affect a customer’s decision on whether to purchase the product or service.

According to the FTC, if an ad displays any patent-related wording, this implies that the advertised products or services have come from an invention that is more original, novel and progressive than other unpatented products, which may affect a consumer’s decision.

In this case, the FTC decided that while the product in question involved a Taiwanese patent that had been granted but was later invalidated by the patent office, the company’s continual posting of the certificate number on its products breached Article 21.

The Patent Act on labelling products

Per Article 98 of Taiwan’s Patent Act, a patentee can mark a certificate of its patent on its patented products. In fact, if a patentee fails to do this, it will be burdened with producing evidence of infringement that shows actual or presumed knowledge that this product was patented in cases where it claims damages for infringement.

Citing this article, the IP Office stated that certificate numbers must be marked on patented products. However, if a patent has been invalidated and is no longer enforceable, then the patentee cannot mark that number on its products unless they were produced and placed on the market before the patent was invalidated. In other words, patentees can no longer mark their products with patent certificate numbers once they are invalidated.

Based on the information above, if an ad claims that its products or services come from a patented invention, the company must ensure that the relevant information is accurate and consistent with the patent’s status to avoid any possibility of the information being false or misleading.