1. The establishment of the patent right is to allow a patentee an exclusive competing position to make, offer for sale, sell, use, or import under these purposes, patented goods in the market within a specific period through a provision of an exclusive right, so as to allow the patentee to obtain a corresponding economical reward, in order to encourage continuous invention as well as innovation, and thereby to promote the development of the industries. Further, the value of a patent depends upon the extent of the patent’s contribution over the prior arts, and when there is any existing patent infringement, the patent right can be enforced through requesting damages or excluding the infringer from infringement, in order to safeguard the patentee’s economic benefit expected in the market.

2. The right to claim tortious damages is initiated to compensate the actual damage of the injured party, rather than awarding beyond the actual damage. Therefore, an actual damage is a prerequisite for establishing the tortious damages. The rights to claim damages resulted from patent infringement as stipulated by Article 108, Article 84, Paragraph 1 and Article 85, Paragraph 1 of the Patent Act are considered the rights to claim tortious damages, and therefore, the aforementioned rule of actual damage compensation is to be applied hereto. Although a patentee is allowed to calculate damages based upon the profit gained by the infringer through its infringement, a court shall still determine whether the calculated damages is comparable to the actual damage suffered by the patentee. The calculated damages shall not be allowed if it is apparently not comparable to the actual damage, in order to comply with the legislative purpose where the right to claim tortious damages is initiated to compensate the actual damage of the patentee. As a result, in order not to disturb technology competition due to over or undue compensation to the patentee, so as to prevent from effects upon market competition and consumer’s interests, pursuing consistency between an “economic value of an invention” and a “value of a patent” has become a doctrine in the patent damages institution.

3. Article 97, Sub-Paragraph 3 of the Patent Act, as amended and promulgated on June 29, 2011, stipulates that “the damages can be the amount comparable to the royalties that may be collected under a license for exploiting the patent.” This newly incorporated method of calculating the damages based upon “reasonable royalties” is to provide a legitimately reasonable way of compensating the damage suffered by the patentee, in order to appropriately relieve the patentee of the burden of proof. Nevertheless, the “Entire Market Value Rule” in the US is an auxiliary rule for calculating damages caused by loss of profit due to patent infringement by means of reasonable royalties, which is originated from the “Entire Machine Value Theory” stipulated by the US Supreme Court in Garretson v. Clark (111 U.S. 120, U.S.N.Y. 1884). Thereafter, the US courts have been continuously adjusting and defining the applicable prerequisites of the “Entire Market Value Rule” through their decisions, namely, if (1) the Defendant’s products are multi-component products comprising infringing components and non- infringing components, and the patentee can prove that the infringing components were the basis for customer demand for the products; (2) the Defendant sold products comprising the individual infringing and non-infringing components together; and (3) the individual infringing and non-infringing components are analogous to a single functioning unit, the patentee can apply the price of the entire product to be the basis for calculating the reasonable royalties. Therefore, in general, the calculation of reasonable royalties shall be based upon the “smallest salable patent practicing unit,” rather than the “entire product.” Only when the patentee can evidence the existence of the three aforesaid prerequisites (additive (not alternative) conditions), the “entire product” can be exceptionally applied as the basis to calculate the reasonable royalties, so as to avoid undue compensation to the patentee. As a result, the newly amended article of our Patent Act and the “Entire Market Value Rule” in the US are both related to the calculation of loss of profit and reasonable royalties directed to the patentee. Nevertheless, because the product at issue of the present case is sold jointly with a tire, issues including whether the patented technology contributed onto the sale of the tires, and whether the sale of the tires should be incorporated into the profit resulted from infringement by Company B, are therefore two independent issues, despite that the basic principle that only the profit attributed by the value of the patent at issue can be included into the scope of the damages claimable by Party A can be applied thereto.

4. The following issues are examined: (1) The utility model registration at issue is an improved utility model improving the prior art of a tire edge fixing plate, rather than a patent of a brand new pioneering invention, which can be evident by the paragraph “Description of the Creation” of the specification (Page 172, Volume 1 of the case file), and is further admitted by Party A (i.e. the Patentee) (Records of the Hearing, Page 78, Volume 2 of the case file); (2) The technical feature of Claim 1 of the Utility Model Registration at issue as shown by Items 1-A, 1-B of the attached Table 1 is directed to the portion of “Preamble”, which refers to the necessary technical feature commonly shared with the prior arts as admitted by Party A upon filing this Utility Model application. Although the product made according to the Utility Model Registration at issue (hereafter referred as “Product of the Utility Model Registration at Issue”) and the Product at Issue were sold jointly with the tire in order to facilitate easy delivering or stacking of the tires, such advantageous function is inherent in the known tire edge fixing plate, and has been stated into the portion of “Preamble” through the Jepson Type Claim Structure by Party A upon filing this Utility Model application, it is thus that Party A’s assertion, namely, “the tire edge fixing plate is always attached to the tire upon the sale of the tire, and therefore is an indispensable product to the tire, or otherwise, the tire will not be easy to deliver or stack, and thereby the tire edge fixing plate renders specific function” is not acceptable. Further, the improvement of the Utility Model Registration at issue over the prior arts is stated in the portion of “Features” of Claim 1 of the Utility Model Registration at issue (as shown by Items 1-C to 1-E of the attached Table 1), and such improvement can ensure a reliable engagement with the tire edge while the tire edge fixing plate being installed into the tire, and further prevent human hands from being scratched by the main plate body during delivering, so as to render significant and valuable effects. Nevertheless, it is not readily evident enough to show that the existence of the portion of “Features” of the Utility Model Registration at issue construed the major reason for consumer demand for the tire, this is because while the relevant consumers are shopping for the tires, the material characteristics, model, design, specification, size and so on, are all important features and matter to the tire consumers. It is thus that either one of these features will possibly deter the demand of the consumer, and accordingly, the portion of “Features” of Claim 1 of the Utility Model Registration at issue can be hardly suggested as the major motivation for the consumer’s demand for the tire; (3) Further, the tire edge fixing plate can be installed and detached from the tire with ease, and therefore has physical separability, the sale of the tires thus does not depend upon the tire edge fixing plate. In addition, among the market of the tire edge fixing plate, there are other alternatives in addition to the Product of the Utility Model Registration at Issue, and can be evidenced by Cheng Shin Tire with paper fixing plate and Kenda Tire without using the Product of the Utility Model Registration at Issue as produced by Company B. Furthermore, in comparison with these alternatives, the profit that is able to be increased by the Product of the Utility Model Registration at Issue (that is, the added profit by the technology associated with the Utility Model Registration at issue that is higher than the alternatives) is unclear, and therefore, said tire edge fixing plate is neither deemed as an “indispensable product during the sale of the tire,” nor “the contribution of the Product at Issue towards each tire after the cost being deducted” is to be allowed, which have both been erred in the decision by the first instance court. As a result, the scope of the damages for the present case shall be based upon the “Product at Issue” itself without even calculating the so-called “contribution towards the tire.”