Approved by the 143rd Commissioners' Meeting of July 6, 1994
Amended by the 348th Commissioners' Meeting of July 8, 1998, revising Point 10
Amended by the 384th Commissioners' Meeting of March 17, 1999, revising Points 2, 3, 4, 5, 7, 10(1)(2)(3)(4)(5), 11(1), 12(1), 13, 14, 15, 17, 19
Circulated by Letter (88) Kung San Tzu No. 00782

1. [Purpose]

These Principles are adopted by the Fair Trade Commission (hereinafter the "Commission") for the purposes of maintaining fair competition among enterprises, protecting consumers' rights and interests, and effectively handling counterfeit cases in violation of Article 20 of the Fair Trade Act (hereinafter the "Law").

2. [Definition 1]

The term "relevant enterprises or consumers" as used in Article 20 of the Law refers to enterprises or consumers that may have involvement with the goods or services at issue through transactions such as sales or purchases.

3. [Definition 2]

The term "commonly known to relevant enterprises or consumers" as used in Article 20 of the Law refers to being considerably well known and being known by a majority of relevant enterprises or consumers.

4. [Definition 3]

The term "symbol" as used in Article 20 of the Law refers to a feature that is distinctive, or that carries secondary meaning for purposes of identifying the source of goods or services, so that relevant enterprises or consumers can distinguish such goods or services from goods or services originating from another source.

The term "distinctive" referred to in the preceding paragraph means a symbol that is sufficiently prominent so that when seen by members of relevant enterprises or consumers, those persons are able to identify the goods or services at issue as being produced or supplied by a particular enterprise.

The term "secondary meaning" referred to in the first paragraph of this article means a symbol that is not intrinsically distinctive, but that, through long and continuous use, has become known to relevant enterprises or consumers who associate the source of goods or services with such symbol such that the symbol takes on another meaning that can distinguish goods or services.

5. [Definition 4]

Regarding the term "identical or similar use" as used in Article 20 of the Law, "identical use" means that the words, device, logo, container, packaging and shape of the goods are completely the same, or where the combined appearance, arrangement, and color scheme are completely the same, whereas "similar use" means where, due to imitation of the primary part, there is likelihood of causing confusion to relevant enterprises or consumers who pay an ordinary degree of attention at the time of purchase.

6. [Definition 5]

The term "confusion" as used in Article 20 of the Law means a misidentification or erroneous belief regarding the source of the goods or services.

7. [Factors for consideration when judging a symbol]

The term "symbol" used in Article 20 of the Law means one of the following:

(1) Where the word(s), graphics, marks, container, packaging or shape of the goods, or the combination of these, is particularly distinctive to the extent that relevant consumers or enterprises identify it as representing the source of the goods or services, thereby distinguishing the goods or services from those provided by others.

(2) Where the word(s), graphics, marks, container, packaging or shape of the goods, or the combination of these, is not particularly distinctive but due to its longtime use relevant enterprises or consumers easily associate it with the source of the goods or services.

8. [Listing of symbols]

Each of the following is a "symbol" for purposes of Article 20 of the Law:

(1) Personal name.

(2) Trade name or company name.

(3) Trademark.

(4) Mark.

(5) Specially designed container, packaging, or appearance of goods that is distinctive.

(6) Container, packaging, or appearance of goods that is not inherently distinctive, but that has acquired secondary meaning through long and continuous use.

9. [Listing of symbols]

The following are not "symbols" for the purposes of Article 20 of the Law, as they do not possess the attribute of identifying the source of goods or services:

(1) Commonly-used shape, container, or packaging for goods.

(2) Common informational literature, content, or color of goods.

(3) Shapes that are practical or technically functional.

(4) Internal structures of goods.

(5) Commonly used name of operations or services.

10. [Factors for consideration when determining whether something is commonly known to relevant enterprises or consumers]

The following factors should be taken into account when determining whether a symbol is commonly known to relevant enterprises or consumers:

(1) Whether the volume of advertisements of the symbol has been sufficient to cause the relevant public to form an impression of the symbol;

(2) Whether the sales period of the goods or services marketed under the symbol has been sufficient to cause relevant enterprises or consumers to form an impression of the symbol;

(3) Whether the sales volume of the goods or services marketed under the symbol has been sufficient to cause relevant enterprises or consumers to form an impression of the symbol;

(4) Whether the market share of the goods or services marketed under the symbol has been sufficient to cause relevant enterprises or consumers to form an impression of the symbol.

(5) Whether the reporting in the media about the goods or services marketed under the symbol has been extensive enough to cause relevant enterprises or consumers to form an impression of the symbol.

(6) The quality and reputation of the goods or services bearing the symbol.

(7) Scientific, fair, and objective market surveys submitted by the party concerned regarding the goods and services marketed under the symbol.

(8) The opinion of the relevant competent authority.

When reviewing the market surveys mentioned in item 10.(7) above, the Important Points for Evaluation of the Market Survey Report Submitted by the Concerned Parties, approved in the 322nd Commissioners' Meeting and amended in the 347th Commissioners' Meeting, shall apply.

The various factors cited in the first paragraph of this article shall be considered in conjunction with other related elements.

11. [Factors for consideration when determining whether there is confusion]

The following factors should be taken into account when determining whether there is confusion for purposes of Article 20 of the Law:

(1) The level of attention paid by relevant enterprises or consumers of average knowledge and experience.

(2) The effect of the characteristics, differentiation, and price of the goods or services on the attention paid by relevant enterprises or consumers.

(3) The fame of the symbol and the scale and image of the enterprise.

(4) Whether the symbol is uniquely creative.

12. [Principles of determination]

A determination as to whether there is identical or similar use of the symbol should be based on objective facts and in accordance with the following principles:

(1) Using the standard of relevant enterprises or consumers, with average knowledge and experience, and paying an ordinary amount of attention.

(2) The symbols shall be viewed in their entirety and through comparison of their main parts.

(3) The symbols shall be viewed separately at different places and at different points of time.

13. [Confirmation procedures]

Confirmation that a symbol is "commonly known to relevant enterprises or consumers," used in an identical or similar manner, or that it leads to confusion, shall be done in accordance with the following procedure:

(1) Confirmed by a decision of a Commissioners Meeting.

(2) Where it is difficult to decide the case due to controversy, a public hearing or seminar may be held to obtain opinions from the academic sector, industry, consumers, relevant trade associations and agencies, and such opinions may be presented to the Commission for reference.

(3) Where the case has a wide impact and there is significant controversy, the Commission may retain an impartial and objective organization or academic institution to conduct a survey of the opinion of the general public or relevant trading counterparts.

14. [Company name]

Where two company names specify different types of businesses, it shall not be considered "identical or similar use" as that term is used in Article 20 of the Law.

Where a respondent uses its company name in an ordinary manner, the company name is duly registered in accordance with the Company Law, and the respondent has not actively engaged in acts to confuse its business with that of another person commonly known to relevant enterprises or consumers, such use shall not be a violation of Article 20 of the Law.

15. [Trade name]

Where a respondent uses its trade name in an ordinary manner, the trade name is duly registered in accordance with the Commercial Registration Law, and the respondent has not actively engaged in acts to confuse its business with that of another person commonly known to relevant enterprises or consumers, such use shall not be a violation of Article 20 of the Law.

16. [Principle governing the application of Articles 20 and 24 of the Law]

Where the following situations do not meet the elements of Article 20 of the Law, the situation may be found as a violation of Article 24 of the Law:

(1) Where the respondent has misappropriated another person's well known symbol, and while not sufficient to cause confusion, the respondent has actively taken a free ride on another person's business reputation;

(2) Where the respondent has imitated the appearance of another person's goods or services, and actively exploited another person's efforts, and such act is obviously unfair and sufficient to adversely affect trading order.

The principles in the preceding paragraph shall not apply where the appearance of the goods is a technique readily accessible to the public.

17. [Principle of non-retroactive application]

Where the container, packaging, appearance, or any other symbol of the goods was so commonly used by a majority of the relevant businesses prior to the implementation of the Law, such that relevant enterprises or consumers are unable to identify the source based on the appearance of the container or presentation, no enterprise may claim to be the first user so as to exclude others from using the same.

18. [Complaint process]

Where a complaint is filed against an enterprise for violating the provisions of Article 20 of the Law, the complainant shall be requested to submit the complaint in writing, and include the content of the alleged violation and the complainant's true name and address. If the information is provided orally, the Commission shall document the information, which shall then be signed by, or sealed with the chop of, the complainant.

It is not mandatory to dispose of a complaint that does not state the complainant's true name and address, that does not bear a signature (chop), or that is not specific as to the content of the alleged violation; provided, where there is an obvious likelihood of violation of the public interest, and for purposes of maintaining fair competition and protecting consumer rights and interests, an ex officio investigation may be made.

19. [Facts and evidence provided by the complainant]

Persons who file complaints against other enterprises for violations of Article 20 of the Law shall be asked to present evidence to prove the symbol of the goods or services at issue is commonly known to relevant enterprises or consumers and evidence to prove the respondent's alleged violation of the Law.

If the complaint fails to provide relevant data in accordance with the preceding paragraph, a written notice to provide the same within a specified time limit shall be sent to the complainant. If the complainant fails to supplement the data with the specified period, the complaint shall be deemed to be not specific with regards to the allegations.

20. [Dispositions for the non-acceptance of a complaint]

In any of the following circumstances, the unit responsible for the complaint shall, attaching its opinion, forward the case to the Commissioner in charge. With the Chairperson's approval, the case shall either be filed for reference, or closed by written notice. The matter shall be presented at a regular Commissioners Meeting:

(1) Where it is not mandatory for the complaint to be accepted in accordance with these Principles.

(2) Where the complaint is not specific with regards to the allegations;

(3) Where the subject matter of the complaint involves only a dispute between the complainant and respondent and where such parties have settled their dispute, or where the complainant has withdrawn its complaint.

21. [Opportunities for the respondent to state its case]

Before making a disposition as to an enterprise, such enterprise shall be given an opportunity to state its case; provided, this shall not apply where after the enterprise has been notified by the Commission to appear to state its case before the Commission or supplement its explanation in writing within a specified time limit, the enterprise has failed to make such appearance or file such written explanation.