Taiwan’s Teco Co. may file claim for damages against Philips, agency


TAIPEI, Taiwan — Taiwan’s Teco Electronic and Machinery Co. said yesterday it was considering seeking damages from Royal Philips Electronics Inc. in Germany for the harm Philips and its patent agency had caused to Teco’s products and reputation at a Berlin trade fair last week.

Teco and two other Taiwanese companies in the Taiwan Image Hall — Proview Electronics Co. and NU Inc. — were among the exhibitors at the 2008 Internationale Funkausstellung (IFA) raided Aug. 29 by German customs officials at the request of the Italian “patent troll” Sisvel, which administers patents for Philips and other companies.

Some 220 armed German Customs agents raided 69 booths belonging to Taiwan, Hong Kong, China and South Korea after Sisvel complained that the exhibitors may have infringed the patents of its clients.

The products seized by the agents included 170 flatscreen TVs, 140 MP3 players, 57 DVD recorders, and 22 notebook computers.

Teco said in a statement that the 13 LCD TVs the German customs agents seized from its booth had nothing to do with Philips’ patents for its DVD player, and that all patents on Teco’s products were obtained lawfully with authorization by their owners.

Teco said that the seizure not only damaged its reputation but also squandered its business opportunities at the trade fair, making its participation in the international exhibition “completely meaningless.”

As a result, Teco was consulting German lawyers with a view to instituting legal action against Philips in order to seek damages for the harm sustained by Teco.

According to Amy Chen, public relations manager for Teco, the German customs agents ignored the explanation by Teco’s lawyers at the exhibition that Teco’s LCD TVs are not equipped with DVD functions before forcibly removing the products from its booth.

“It is simply unbelievable that they seized our products in such a savage manner — without any proof of patent violations on our part,” she said.

Proview Electronics Co. and NU Inc. also explained that there are no patent infringement problems as far as their products are concerned.

They called for a technical examination as soon as possible to sort out the dispute so that they can have their “innocent products” back.

Meanwhile,Taiwan’s representative office in Germany also expressed “serious concern” over the controversy in letters to German parliamentarians, the public prosecutors office in Berlin and German customs authorities.

Sisvel has gained notoriety by repeatedly using the same strategy during international trade fairs to seize products from companies it suspects has infringed patents.

Similar German raids were carried out in March at the 2008 CeBIT in Hannover — also at the request of Sisvel — to shut down the booths of several companies and to seize products over claimed MPEG patent infringements.

In 2006, Sisvel did the same thing by obtaining an order from the German Public Prosecutor’s Office to conduct raids at the IFA exhibition and seized SanDisk’s newest MP3 products from its booth, claiming that the products infringed patents owned by Philips and other companies.

But a Berlin Court later found that Sisvel’s use of the criminal seizure proceedings were “illegal” and ordered Sisvel to immediately stop the seizures.