Taipei High Administrative Court finds Tso Tan Nu Glasses Co., Ltd. employed other’s well-known trademark and attempted to free ride on its business reputation to exploit the fruits of others' labor in violation of the Fair Trade Law

Taiwan

Case:

Taipei High Administrative Court finds Tso Tan Nu Glasses Co., Ltd. employed other’s well-known trademark and attempted to free ride on its business reputation to exploit the fruits of others' labor in violation of the Fair Trade Law

KeyWords:

free riding on other’s business reputation, specific portion

Reference:

Taipei High Administrative Court Judgment (92) Su Tzu No. 4077

Industry:

Watches, Clocks and Spectacles Wholesaling (4470)

Relevant Law:

Articles 24 of the Fair Trade Law

Summary:

1. The plaintiff of this case, Tso Tan Nu Optical Company was accused of using without owner’s consent the trademark of Giordano [Tso Tan Nu is a Chinese transliteration of “Giordano”] as the specific portion of its company name, to apply for establishment and registration, and use it accordingly, in violation of the Fair Trade Law. Upon the investigation of the Fair Trade Commission (FTC), it was the findings of the FTC that the plaintiff used other’s trademark which was commonly known to relevant enterprises or consumer as the specific portion of its company name to apply for establishment and registration, and used it accordingly. Such conduct was an attempt to free ride on other’s business reputation and an obviously unfair conduct to affect the trading order, in violation of Article 24 of the Fair Trade Law and was disposed of according to the forepart of Article 41 of the Fair Trade Law. The plaintiff did not accept the disposition and instituted this administrative litigation after an appeal was also denied by the Cabinet.

2. According to Article 24 of the Fair Trade Law, “In addition to what is provided for in this Law, no enterprise shall otherwise have any deceptive or obviously unfair conduct that is capable of affecting trading order.” If an enterprise uses the trademark commonly known to the relevant enterprises or consumers as the specific portion of its company name, even when no confusions regarding the source of other’s merchandises or the business or service facilities or activities are caused, it is still a means exploiting the fruits of other’s labor and free riding on other’s famous reputation. It is an unfair competing conduct impeding the fair competition between the said enterprise and its competitors, making the trading counterparts fail to make correct trading decisions, and against the ethics of commercial competition and would constitute pressure or obstruction on the efficacy of market competition. It is not required for the substantive damages sustained by others to be shown to establish the violation. Hong Kong Giordano has been actively developing the Taiwan market since 1981. Besides setting stands at each main department store and market, Giordano has opened many directly operated stores and franchises/chain stores. It has become a large-scale chain business in clothing in Taiwan and is commonly known by relevant enterprises or consumers. The plaintiff employed “Tso Tan Nu” [as the Chinese transliteration of “Giordano”] to use the complainant’s well-known trademark, free ride on its business reputation, and exploit the fruits of other’s labor. Based on the aforementioned descriptions, such conduct is sufficient to affect the trading order of fair competition, and had constituted an obviously unfair conduct prescribed in Article 24 of the Fair Trade Law. The original disposition pursuant to the forepart of Article 41 of the Fair Trade Law ordering the plaintiff to rectify the aforesaid obviously unfair conduct is correct both on facts and law. The disposition was also appropriately upheld in the administrative appeal. The plaintiff's administrative lawsuit requesting to reverse the administrative appeal decision and the original disposition is legally baseless and should be dismissed.

Summarized by Lai, Chia-Ching;
Supervised by Wang, Rong-Ging

Appendix:
Tso Tan Nu Glasses Co., Ltd.’s Uniform Invoice Number: 89849817