Is a warning letter really that effective?
Warning letters have often been used in society. It can be the informing letter about the issues to a company that they may have conducted some actions that violate the rights of the sender of the letter. Or, a warning letter can be the final notification to an employee about his/her bad performance at the company in recent time. Regardless of the purpose, it can be understood that a warning letter is, in fact, a ‘warning letter’ that warns some party about the action that they might or have already committed, depending on the circumstances. However, in the IP world, a question remains, is a warning letter really that effective?
Warning letter
A warning letter can be official or non-official, depending on the circumstance. In the working environment, usually, a warning letter is an official notification sent by the employer about the performance of their employees. The warning letter, in this case, is not to threaten the employee but it is the last effort to try to make the employees realize that they need to improve.
In fact, a warning letter must not be for threatening purposes as this might be considered illegal in some circumstances.
For example, if a warning letter is sent between firms about an infringement issue, in most circumstances, it must not be interpreted as threatening because this might be considered an act of bad faith with the purpose of hindering or weakening the competitor.
Still, the margin of whether or not a warning letter can do this or can’t do that is still very vague, and in many complex cases, it needs the hand of a court to give a final decision on the matter.
The problematic issue about warning letters in an IP case can be further understood below.
The issue of warning letter in an infringement action
In 2014, a global pharmaceutical company filed a patent infringement action against a manufacturer of generic drugs or a Gx company.
The global pharmaceutical company requested that the court takes necessary actions to stop and prevent the infringement from happening, affecting their rights and interests.
However, the request was rejected as the court expert panel, after careful examination of the dossiers have concluded that the patent had not been infringed.
The problem should have come to a close but during the time of examination of the patent infringement case, the patent owner has sent a warning letter to a different company, stating that it was manufacturing potentially infringing products and informing it of the ongoing legal action.
Within the letter, the patent owner explained their current situation, how they are in the process of an ongoing patent enforcement action against the Gx company, the scope of protection of their patent, and the risk of violation of the manufacturing company against their patent, stating that the manufacturing company needs “to watch out for the patent rights”.
The warning letter is not of threatening nature, as there is no statement about there could be a court action if the patent rights were infringed and there are also no requests or demands that the manufacturing company stop their manufacturing activities.
Rather than a warning letter, it can also be called an informational letter.
However, on receipt of the warning letter, the manufacturing company subsequently suspended its manufacturing process.
After finalizing the infringement action, in 2016 the Gx company filed an unfair competition action before the Commercial Court claiming moral and material damages against the patent owner because of the said warning letter.
This leads to another entirely different courtroom battle.
In its defense, the patent owner stated that the tone of the letter was appropriate and objective. They stated that there is no threatening nature in the letter, it was only limited to informing the manufacturing company of its patent rights, the risk of patent infringement, and the ongoing action without any kind of threat.
Overall, the entire case can be put to a close with the court’s decision that the Gx company did not infringe the patent and the rights of the patent owner.
However, with a simple warning letter, the case has transformed and expanded to another entire sector – an act of unfair competition. So, in the end, the warning letter did not serve any useful purpose but rather causes more problems for the sender – the global pharmaceutical company that is filing a patent infringement case.
After the case, a question remains, is a warning letter really that effective?
AAA IPRIGHT – Global IP – Global Trademark Registration
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