萬國法律事務所

Four international companies including LG, Pioneer, Philips and Sony, have applied to form a DVD product patent alliance, which would be named One-Red, LLC. Taiwan’s Fair Trade Commission (FTC) approved the formation of the alliance on January 24, 2013, but with certain conditions. In the future, the producers of DVD reading devices can simply apply to the Alliance to obtain licenses for most of the patents rather than negotiating with each and every patent holder for such authorization.

After comprehensive consideration, the FTC determined that this merger will be helpful in reducing transaction costs for obtaining licenses. Also, the overall economic benefit of the merger will outweigh the disadvantages resultant from the restraint of competition. However, in order to prevent the applicant enterprises from using the patent alliance to restrain competition, the FTC attached conditions to ensure the overall economic benefit in accordance with Article 12, Section 2 of Taiwan’s Fair Trade Act as follows:

1. No filing enterprise shall engage in any concerted action with respect to DVD products, such as any agreement on price or yield and or the exchange of important trading information.

2. Neither the Filing enterprises nor One-Red, LLC. shall restrain any authorized enterprise with respect to its scope of techniques used, the object of a transaction, or product prices.

3. Neither the Filing enterprises nor One-Red, LLC. shall restrain any authorized enterprise from arguing the necessity and effectiveness of a licensed patent.

4. Neither the Filing enterprises nor One-Red, LLC. shall restrain any authorized enterprise from developing, manufacturing, using, or selling competing goods or from adopting competing techniques during or after the term of license.

5. Neither the Filing enterprises nor One-Red, LLC. shall refuse to provide for the authorized enterprise the content, scope or patent validity date of the licensed patent.