How to Issue a Legitimate Cease and Desist Letter for Your IP Rights in Taiwan?
On June 25 of 2025, Taiwan's Fair Trade Commission ("FTC") rendered a decision imposing an administrative fine of NTD 2 million (approximately USD 660,000) on Everlight Electronics., Ltd. ("Everlight") for issuing patent infringement warning letters to lighting distributors. It was a decision which has drawn considerable media attention and discussion. When a business discovers that its rights have been infringed, issuing a cease and desist letter for demanding the infringement be stopped is a common and proactive means of asserting its rights. Why, then, can such a letter be deemed unlawful in Taiwan? Some critics have pointed out that intellectual property laws expressly provide that, under certain conditions, the exercise of IP rights is exempt from applying Taiwan Fair Trade Act. Why, then, can issuing a cease and desist letter still lead to penalties imposed by Taiwan FTC? This article analyzes Taiwan FTC's principles for handling cases involving cease and desist letters concerning alleged copyright, trademark, or patent infringement, so as to help foreign businesses avoid unexpected legal risks in this IP fields.
Only "Proper" Cease and Desist Letters May Be Exempt from Taiwan Fair Trade Act
To begin with, Article 45 of Taiwan Fair Trade Act indeed provides that: "[a]cts of exercising rights in accordance with the Copyright Act, Trademark Act, Patent Act, or other intellectual property laws shall not be subject to [the Fair Trade] Act.” However, it does not mean that "as long as one claims rights under IP laws, the Fair Trade Act does not apply." In short, only proper IP cease and desist letters can fall into the Taiwan Fair Trade Act's exemption.
To address this common misconception, the courts have pointed out that: "[t]he requirements for invoking the exemption from the Fair Trade Act are twofold. First, the act must constitute an 'exercise of rights' under the Copyright Act, Trademark Act, or Patent Act; secondly, such exercise must be 'proper'. In other words, not every act that purports to assert rights under these IP statutes is automatically exempt from violation. If an IP right holder abuses its rights or violates the principle of good faith in a way that harms competitive order, and if such conduct is improper, the exemption does not apply."
The strong emphasis on whether a cease and desist letter is "proper" arises because distributors and retailers who receive such a letter often lack sufficient information about the underlying allegations, and therefore cannot independently determine whether the products they sell or purchase actually infringe the asserted IP rights. As a result, it is common in practice for distributors, upon receiving a cease and desist letter, to remove the products from shelves as requested, switch suppliers, or demand that upstream manufacturers provide guarantees or declarations of non-infringement. These reactions can significantly hinder the ability of the accused manufacturers or suppliers to sell their products and may obstruct distribution channels, thereby creating unfair competition.
Therefore, if a cease and desist letter is deemed NOT "proper", the issuer cannot rely on the exemption under the Taiwan Fair Trade Act and may end up with being penalized for violating Article 22 or Article 25 of the Taiwan Fair Trade Act.
Why Everligh Failed to Issue a Legitimate Cease and Desist Letter
For example, Everligh asserted that its three patents — related to LED chip components used in LED lighting products — were infringed. The FTC noted that starting from October 2022, Everlight repeatedly sent cease and desist letters alleging patent infringement to downstream distributors of several competing brands, including major retailers such as RT-Mart, Carrefour, B&Q, PX Mart, and PChome. Before issuing these letters, Everlight had not obtained a court judgment confirming infringement, nor did it provide independent third-party patent infringement reports. Instead, it relied solely on internal analysis reports and lists of allegedly infringing products and nonetheless demanded that distributors remove the products within extremely short periods — three days or one week. Everlight also sent more than 100 cease and desist letters to over 80 small and medium-sized electrical shops. These actions caused widespread products removal and deterred distributors from selling competing LED lighting products. Taiwan FTC therefore determined that Everlight's conduct constituted "obviously unfair conduct sufficient to affect trading order" under Article 25 of the Taiwan Fair Trade Act.
Preliminary Procedures Must Be Completed
What, then, must a business do for its IP cease and desist letter to constitute a "proper" exercise of rights? According to Paragraphs 3 and 4 of the "Principles of the Fair Trade Commission in Handling Cases of Warning Letters Issued by Enterprise for Violation of Copyrights, Trademarks or Patents", certain preliminary procedures must be completed before issuing a warning letter.
Confirming that the Right Has Been Infringed
If a business completes any one of the following procedures before sending a cease and desist letter, it will be deemed a proper exercise of rights under IP laws:
A first-instance court judgment has found that the copyright, trademark, or patent right has been infringed.
A mediation by the Copyright Review and Mediation Committee has been successfully concluded and confirmed by a court to establish infringement.
The business has submitted the potentially infringing product to a professional institution for analysis and obtained an infringement assessment report. For utility model patents, a technical evaluation report must also be provided. Moreover, the business must notify the potentially infringing manufacturer, importer, or agent prior to or concurrently with sending the warning letter, requesting that the infringement be remedied.
OR, Detailed Notification
If a business opts to rely on Paragraph 4, it must complete all of the following steps for its cease and desist letter to be considered proper:
Prior to or concurrently with issuing the cease and desist letter, the business has notified the potentially infringing manufacturer, importer, or agent and requested that they cease the infringement;
The cease and desist letter clearly identifies the scope and specific content of the copyright, trademark, or patent at issue, and sets out the concrete facts of the alleged infringement (such as when, where, and how the infringing product was manufactured, used, sold, or imported), thereby enabling the respondent to understand the basis of the infringement claim; AND
If issued for utility model patents, the technical evaluation report must be provided at the time of notification or when issuing the warning letter.
Tips for Issuing a Legitimate Cease and Desist Letter
Notably, if a business chooses to rely on Paragraph 3 (confirming infringement), it need satisfy only one of the listed items. By contrast, Paragraph 4 requires all procedures to be completed. With respect to Paragraph 4(1) — the requirement to notify the potentially infringing manufacturer, importer, or agent — if the business has already initiated legal remedies, exercised reasonable due diligence, or if such notification is objectively impossible, or if there is concrete evidence showing that the party to be notified already knows about the infringement dispute, then the notification requirement is considered fulfilled. However, all other procedural requirements must still be completed; otherwise, the act will not meet the standard.
Given the procedural intricacies, foreign enterprises are strongly advised to seek professional legal advice to evaluate their specific circumstances. Otherwise, issuing cease and desist letters without proper preparation may inadvertently violate Taiwanese laws.
