Criminal judgment regarding the alleged damage to business reputation caused by Bo Ma Technology Co., Ltd. in violation of the Fair Trade Law

Taiwan

Case:

Criminal judgment regarding the alleged damage to business reputation caused by Bo Ma Technology Co., Ltd. in violation of the Fair Trade Law

Key Words:

CD-ROM labels, damage to business reputation, the Internet

Reference:

Pan Chiao District Court Criminal Judgment (89) Yi Tzu No. 501

Industry:

Other Non-Classified Wholesale Industries (5299)

Relevant Laws:

Articles 37 and 38 of the Fair Trade Law

Summary:

1. The defendant, Li Chao-chang, is the responsible person of the defendant, Bo Ma Technology Co., Ltd. ("Bo Ma"), which is a competitor of Inter-Mass Corporation ("Inter-Mass"). Beginning from July 1999, Bo Ma began posting advertising on the Internet about the tool-free CD-ROM labels produced by Inter-Mass. The advertising text read, "Don't get fooled-this is no better than a condom for CD-ROMs." Such derisive and untrue statements were sufficient to damage the credibility and business reputation of Inter-Mass. The defendant Li Chao-chang had thereby violated Article 310(2) of the Criminal Code and Article 37(1) of the Fair Trade Law. He should be fined pursuant to Article 38 of the Fair Trade Law and in accordance with Article 37 of the same law.

2. Under questioning, the defendant Li Chao-chang did not deny posting the disputed advertisement, but he steadfastly denied any criminal activity based on the following reasons: The advertisement in question was produced by an employee of Bo Ma, Li Shun-yi, and Li Chao-chang himself was unaware of its content prior to its publication. There are countless paper products on the market for CD-ROM labeling that don't require tools, so that the Inter-Mass product was not unique, and Bo Ma was simply providing useful information to consumers under the spirit of free and fair competition. There are in fact 10 or 20 such products, so that the advertising was not directed specifically at the complainant's product, and there was no subjective intent to infringe the rights of the complainant. Consumers could not infer from the comparison table published on the Internet by Bo Ma that Bo Ma was referring to any specific product. The defendant further stated that suspicion of his guilt by the prosecutor was based on nothing more than the accusation of the complainant, who assumed that the prices and specifications listed in the said comparison table were indeed a reference to those of his product.

3.

The Original judgment of the Pan Chiao district Court as follows:

A reading of the comparison table posted on the Internet by Bo Ma shows that it does not in fact list the names of the manufacturer, agent, or distributor of the competing products that were being compared with Bo Ma's.

The complainant, Inter-Mass, felt that from the specifications listed, it could be seen that the product referred to in the comparison table was its own. Those specifications were for tool-free CD-ROM labeling paper, with a suggested retail price of NT$99 for every 20 sheets in the pack; dimensions of 12.5 by 12.5 centimeters; center-hole diameter, 15 or 35 millimeters. However, similar products on the market include the following: Giant Earth Co.'s "self-sticking labels" at a suggested retail price of NT$99 per 20 sheets; Custom CD Labels' labeling paper, 12.5 by 12.5 centimeters and center-hole diameter 15 millimeters; "Wei Hung ink-jet stickers"; "Ai Wei Shih Image Factory DIY-Master CD-ROM stickers" and "Computer Paper." There was also the "Do-it-yourself round label" made by Polyact Information Co., Ltd. with a 35-millimeter diameter. The information included with these products, as well as the information collected by the defendant on 12 different products, shows that they are all meant for use with home computers and printers for designing CD labels that can be peeled off the printing sheet and stuck on the CD by hand. All are basically similar to the complainant's "tool-free CD-ROM labels" in form, applications, and methods of use. It would be extremely difficult to make a decisive determination or inference that any specific product was being pointed out in the comparison table posted by Bo Ma.

The statement made by Bo Ma, "Don't get fooled-this is no better than a condom for CD-ROMs," was printed in the column listing prices and made no concrete reference to the features or the quality of products made by any other firm; it was simply hyperbole indicating the general superiority of Bo Ma products over those of other firms. While this type of promotional behavior is less than praiseworthy and should not be encouraged, the average person should still be able to recognize the statement as typical advertising language, and if not, it still falls short of a statement or information sufficient to damage the reputation of another or to damage the business reputation of a firm. Therefore, given the lack of specific reference to any particular company, the statement had not been disseminated with the intent to damage the business reputation of another.

Proving the crime of defamation under Article 310 of the Criminal Code requires several elements. There must be criticism or statements made; there must be the intent to disseminate such; and they must be sufficient to damage the reputation of another. Proof of crime under Article 37(1) of the Fair Trade Law requires, pursuant to Article 22 of the same law, that the conduct in question is undertaken for the purpose of competition, and that untrue statements are made or disseminated which are sufficient to damage the business reputation of another. In determining what is sufficient to cause damage to the reputation of a person or a business, there must in each case be a specific subject of defamation, and each of the constituent elements must be judged separately based on prevalent and objective societal norms, rather than depending on the subjective perceptions of the accuser. Based on the evidence put forward by the prosecutor, reasonable doubt remains. There is insufficient proof that the comparison table posted on the Bo Ma website was making specific reference to the complainant's company or that there were untrue statements sufficient to damage the business reputation of the complainant. Therefore, based on the aforementioned laws and their provisions, the testimony of the defendant is credible and no crime is proven against the defendant.

Summarized by Jen Han Ying;

Supervised by Hsu Jao In