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LEADING LED COMPANY WINS PATENT INFRINGEMENT SUIT
In 2006 Nichia Corporation of Japan, a leading player in the worldwide light-emitting diode (LED) industry, brought an action against the major Taiwanese LED module manufacturer Everlight Electronics Co., Ltd., for infringement of Nichia's design patent. The Panchiao District Court recently delivered a judgment in Nichia's favor, and ordered Everlight and its legal representative to pay damages of NT$80 million to Nichia. The court also dismissed the countersuit filed against Nichia by Everlight.
In its judgment, the court stated that when assessing whether an item falls within the scope of a design patent, an infringement assessor should simulate the mode of consumption in the marketplace, stand on the position of consumers having ordinary knowledge and capability of perception regarding the field to which the subject of the patented design belong, and make a judgment on whether the items under assessment are identical or similar to the patented design, on the basis of such consumers' viewpoint in the selection and purchase of goods.
With regard to the LED products concerned in the case, "ordinary consumers" should be taken to mean the purchasing personnel of mobile phone manufacturers, not the general consumers. Everlight's three allegedly infringing LED products, insofar as they were distinguishable to the naked eye and had visual appeal, were substantially identical to the novel characteristics of Nichia's patented design. The small differences that existed between them were indistinguishable to the naked eye, or were of prior-art design, or embodied simple and obvious modifications to prior-art designs. Thus they did not affect the fact of similarity between the products and the subject matter of Nichia's design patent. Accordingly, the court held that the products did fall within the scope protected by Nichia's patent.
This judgment provides important guidance for litigation over infringement of design patents, which has been rare in Taiwan. By imposing a high level of damages on a local company, the judgment would also alert Taiwanese high-tech companies to be more careful when developing products, and thus encourage enterprises to devote more resources to R&D and product strategies.