Criminal judgment regarding violation of the Trademark Law and Fair Trade Law by Ch'en Mao-lung
Chinese Taipei
Case:
Criminal judgment regarding violation of the Trademark Law and Fair Trade Law by Ch'en Mao-lung
Key Words:
right of exclusive use of trademark, counterfeit
Reference:
Shilin District Court Judgment (86) Yi Tzu No. 3395
Industry:
Information Software Services (7501)
Relevant Laws:
Summary:
Ch'en Mao-lung, proprietor of the Mei Chi Hang video game
store in the Shilin District of Taipei City, clearly knew that SEGA of Japan
had applied for registration of the trademarks SEGA, SONIC2, SEGA Cartoon
Figures, and SONIC & TAILS Cartoon Figures with the National Bureau of
Standards (NBS, currently the Intellectual Property Office) of the Ministry
of Economic Affairs, and that SONY of Japan had likewise applied for
registration of the trademarks PLAYSTATION and PS Graphic Design with the
same agency. He was also aware that the aforementioned firms had obtained
permission to use the said trademarks on goods such as computers, video game
cartridges, magnetic tape, magnetic cartridges, floppy disks, hard disks,
computer memory, compact disks, compact disk players, diskettes, magnetic
drums, printers, keyboards, and data processing machines. Furthermore, all
of these trademarks are commonly known to the relevant public.
Beginning in February of 1997, however, Ch'en Mao-lung, without obtaining
the consent or authorization of SONY or SEGA, and out of general criminal
intent and intent to commit fraud, displayed in his store counterfeit game
CD's that he had purchased for approximately NT$50 per disk from a male
surnamed Li (age unknown), and repeatedly sold them for profits to
unspecified persons at the price of NT$70 per disk or NT$100 per three
disks. He did so despite knowing that consumers would confuse the CD's with
the genuine articles produced and sold by SEGA and SONY. Thus, he was
unfairly competing with the SEGA and SONY brands commonly known to the
relevant public. All of the sold disks have also infringed upon the rights
of exclusive use of trademarks enjoyed by the companies SEGA and SONY.
Articles 62 and 63 of the Trademark Law differ from
Articles 20 and 35 of the Fair Trade Law (FTL) in constitutive requisites
and regulatory scope. The former provides the right of exclusive use and
protection for only the registered trademarks. The latter, however, extends
its protection to trademark, product's container, packaging, and external
appearance, while requiring that the trademark in question be "commonly
known to the relevant public”; its scope is thus rather broad, and may
sometimes cover trademark counterfeiting. Therefore, it is sufficient to
punish the sale of merchandise bearing counterfeit registered trademarks
under Article 63 of the Trademark Law. Only when that the trademark
counterfeit is also a trademark “commonly known to the relevant
public" and its use could "cause confusion with the other
products" are proved will the provisions of the latter part of Article
20(1)(i) of the FTL apply and an offense under Article 35 of the same law
established.
In case that a defendant sold the counterfeit goods bearing well-known
registered trademarks such as Rolex watches, or Chanel handbags, luggage,
and wallets, it has by one act violated simultaneously Articles 20(1)(i) and
35 of the FTL as well as Article 63 of the Trademark Law. According to
Article 55 of the Criminal Code, it constitutes a constructive joinder of
offenses and only the most severe penalty of these three violations, Article
35 of the FTL in this case, should be imposed on the defendant.
The compact disks manufactured by the complainants SONY and SEGA that bear
the trademarks (illustrated in Attachment 1 of the judgement) have been sold
in the international and local markets for many years. Their reputation for
outstanding product quality has been widely circulated within the industry
as well as among the consumers. Their trademarks are also commonly known to
the general public. The defendant was a dealer of the products, and clearly
knew that the CD's he had purchased counterfeit the aforesaid well-known
trademarks. Still, he went ahead and sold for profits the counterfeit CD's
at a significantly lower price than the genuine goods. Objectively, his
actions were sufficient to create confusion between the genuine and
counterfeit goods. Also, the availability of counterfeit goods at lower
prices would adversely affect consumers' desire to purchase genuine goods,
and thereby engender unfair competition and disrupt the market trading
order. The defendant's actions thus constitute the offense of selling goods
with counterfeit trademarks under Article 63 of the Trademark Law, as well
as the offense of selling goods that use another person's trademark commonly
known to the relevant public under Article 20(1)(i) of the FTL as is
provided by Article 35 of the FTL. The defendant committed offenses under
both the Trademark Law and the FTL by one act, constituting a constructive
joinder of offenses. Pursuant to Article 55 of the Criminal Code, only the
more severe of the two penalties, i.e., Article 35 of the FTL, would be
imposed on the defendant. Moreover, the defendant has repeated the same
violations within a consecutive period of time; it is obvious that he has
committed the offenses based on a general criminal intent. In accordance
with Article 56 of the Criminal Code, the penalty should thus be increased.
Summarized by Ch'iu, Shu-fen
Supervised by Hsu, Chao-ying