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Research & Academia
A Study on the Regulations Regarding the Protection and Scope of Company's Name Under the Fair Trade Law


The purpose of this Research Project is to conduct an extensive research regarding the protections of the company name under the present Fair Trade Law (the “FTL”) mechanism. Previously, both the Fair Trade Law and the Company Law have provisions that specifically protect the company name so as to prevent the unfair competition behavior, such as counterfeiting and passing-off that impairs the goodwill of a legitimate company. After the revision of the Company Law in Nov. 2001, however, the amended Company Law limits its protection to those names that are registered with the government agency. The function of the company name under the Company Law, therefore, is restricted to identify the corporate only. As a result, the amended Company Law will no longer play a major role in the counterfeiting or passing-off issues.


On the contrary, Articles 21 and 24 of the “FTL will be responsible in preventing the unfair competition behavior such as the passing-off of company's name. Consequently, the goal of this Project is to explore the best practice in dealing with such issue pursuant to the FTL.


As a result, this Research Project first collects and analyzes the present rules and regulations regarding the protection of company name and trade name so as to clarify the differences between various laws and regulations. Secondly, this Research Project further analyze the laws, regulations and practice with respect to the protection of the company name from various countries, such as United Kingdom, United States and Japan. The purpose for such comparative legal research approach is try to achieve the following goals: first, to clarify the relation between company name and other property rights; secondly, try to draft guidelines that differentiate the “bona fide” use and “unreasonable” use of the corporate name for the Fair Trade Commission. Furthermore, since the Trademark Law has undergone an extensive revision, this Research Project also discusses the company name protection issue pursuant to the revised provisions and its interaction with the FTL.


After further research, the research team finds out that the FTL has fundamental differences with the Company Law, especially concerning the use of company name. Such differences can be easily differentiated in many aspects, for example in scopes, purposes, subject matters, activating events and approaches adopted by these two laws. Therefore, any unauthorized use of other corporation's name and which falls into the ambit of Article 20, subsection 1 & 2, will constitute an unfair competition act, which violates the legislative purpose of the FTL. Consequently, in such situation, the offender will not be allowed to argue that, pursuant to Article 46 of the FTL, the Company Law shall have priority over the FTL, nor it is an act of legitimate exercising its rights.


Moreover, comparing with other symbols as illustrated in Article 20 of the FTL, since company name requires higher standards, therefore, the research team believes that the FTL shall treat the unfair use of other company name's action with care. For example, corporate name must satisfy the registration requirements to be registered with the authority, but other symbols, except trademark, does not have such requirements; company name must be presented in Chinese so as to fulfill the requirements of the “company name” as illustrated in the Company Law, therefore only English name will not constitute an legitimated company name pursuant to the Company Law.


Furthermore, previous court decisions use “appearance, pronunciation and concept” in determining whether two corporate names are similar. On the contrary, the rules promulgated by the Fair Trade Commission, i.e., the “Principles that handle Article 20 cases of the Fair Trade Law” provide a different approach. For example, on Section 14, subsection 1 expressly states that should two company's names marked by different business, even though the company names are similar, they will not be deemed as violating Article 20 of the FTL. Such rule cause tremendous trouble when applying Article 20 in the determination of the similarity of the company name. As a result, in the wake of Company Law's revision and to prevent any unfair competition, the research team believes that such rule shall be revised.


In conclusion, this research team argues that the use of other company's name in an anticompetitive manner, if find to satisfy Article 20's requirements, then Article 20 shall be applied first. Only when no Article 20 violation is found, then we shall use Articles 21 and 24 of the FTL in finding violation of the FTL.



Updated at:2008-12-19 06:31:30