A complaint is filed against China Development Business Inc., for copying the business symbol of another party and for false advertisement, acts which violated the Article 20 and Article 21 of the Fair Trade Law.

Chinese Taipei

Case:

A complaint is filed against China Development Business Inc., for copying the business symbol of another party and for false advertisement, acts which violated the Article 20 and Article 21 of the Fair Trade Law.

Key Words:

counterfeit and plagiarize, confusion and misidentification, advertisement

Reference:

Fair Trade Commission Decision of March 31, 2005 (the 699th Commissioners' Meeting); Disposition (94) Kung Ch’u Tzu No. 094039

Industry:

Other Financing and Auxiliary Financing Not Elsewhere Classified (6299)

Relevant Laws:

Article 20 and Article 21 of the Fair Trade Law

Summary:

1. China Development Industrial Bank (hereinafter referred to as “the complainant”) has filed a complaint against China Development Business Inc., (hereinafter referred to as “the respondent”) that is briefly stated: The complainant’s company name, “China Development” and the company’s trademarks, “China Development (hereinafter referred to as “China Development’s trademark”, “China Development Bank” and ancient coin “ ” are symbols that commonly known to relevant enterprises or consumers. The respondent operates external loan business and has used the company name of “China Development” and the trademark of “China Development” of the complainant as a special part of its own company name. Also, the respondent has called itself “China Development Group” in external publications and company website; used representations that are similar to the trademarks of the complainant, “China Development”, “CHINA DEVELOPMENT BANK” and drawing of ancient coin. The words “China Development Business Bank Loan Hotline” appears in advertisement of the respondent that has misled consumers into thinking that the respondent is a unit that handles external loan business for the complainant or both companies are affiliated companies. The acts of the respondent are under suspicion of violating Article 20 of the Fair Trade Law. In addition to this, the respondent has published in its company web page “the oldest friend, the best choice”, “http://www.bestbank.com.tw”, “China Development Business Group (Development Group in brief) is a business partner of large-scale banks………. We have specially expanded the market to cover all top-ranking companies, the nation’s excellent small and medium enterprises are our service targets in the near future”, “3% preferred deposit” such representations were suspected to be false. Therefore, the Fair Trade Commission (FTC) initiated an investigation to find out if the respondent has also involved in false advertisement.
   
2. With regard to the violation of Article 20 of the Fair Trade Law: Upon deliberately considering the duration that the complainant has established and provided financial services, as the results of using the symbols by the complainant in the financial market, such symbols therefore are substantiate to cause the relevant enterprises or consumers to have impressions about it and its service quality and public comments, the company name of the complainant together with the symbols of “China Development”, “ ”, “ ”, “ ” and “CHINA DEVELOPMENT” in effect are commonly known to relevant enterprises or consumers, whereas the manners of combined representation, regardless of trademark diagram, wordings or business entity, used by the respondent are the same as or similar to the symbols of the complainant that are commonly known to relevant enterprises or consumers. It is apparent that the conducts of the respondent has confused and mislead the relevant enterprises or consumers into thinking that the facilities or activities of its business or service are related to the complainant, an affiliated company or reinvestment business of the complainant. The investigation concludes that the acts of the respondent have violated the provision of Article 20 (1) (ii) of the Fair Trade Law.
   
3. With regard to the violation of Article 21 of the Fair Trade Law: It is found in the advertisement of “Preferred Savings Plan”, the respondent has stated “How can you live the rest of your life with an annual interest of NT$20,000 on your NT$10 million bank savings? “Quick! Transfer to one with 3% interest on savings.” The advertisement likewise included a comparison of interest on savings from deposits with “China Development”, “Post Office” and “Other Banks”. The representation of the whole advertisement will cause trading counterparts to have impressions that they can enjoy 3% preferred interest rate on deposits if they participate in the “Preferred Savings Plan” of the respondent, the returns on deposits are higher then those offered by post office and other banks. Even though the respondent argued that the investment and financial management product referred to in the advertisement of “Preferred Savings Plan” was “Type B Cash Value Life Insurance Plan” (a type of life savings insurance) offered by Aegon Life Insurance Inc; the “3% preferred deposit” stated in the advertisement referred to the 3-percent premium discount when 10 or more policyholders pay their premium as a group in a “Type B Cash Value Life Insurance Plan”. Although life savings insurance products have savings feature, but its nature is different from regular savings deposit in some aspects. The aforementioned advertisement has given its trading counterparts an impression that was different from what was actually offered. Furthermore, Aegon Life Insurance Inc. also denied the agreement with the respondent that allows the respondent to tout personal insurance on behalf of Aegon Life Insurance Inc. The written reply of Aegon Life Insurance Inc. is enclosed for examination. It is questionable about the claim of the respondent that the product referred to in the aforementioned advertisement is actually “Type B Cash Value Life Insurance Plan” of Aegon Life Insurance Inc. In conclusion, the representation of the aforementioned advertisement is different from the actual service provided and sufficient to mislead the trading counterparts into making erroneous decision. The investigation concludes that the aforementioned advertisement has false and misleading representations.
   
4. With regard to the words “business partner of large-scale banks………. We have specially expanded the market to cover all top-ranking companies, the nation’s excellent small and medium enterprises are our service targets in the near future” published on the web page, these are statements related to the content of loan agency business provided by the respondent, no specific financial institution was mentioned as the cooperative partner. As the respondent is a loan agency, there is no clear stipulation indicates that the respondent cannot make loan application with large-scale bank on behalf of the loan applicant. Therefore, with the available evidences, it is not substantiate to conclude the advertisement for this part is false. In addition to this, the advertised statement “the oldest friend, the best choice” concerns with an individual’ s subjective feeling, there is no objectively recognized standard; “http://www.bestbank.com.tw” is simply a representation of website for the respondent, not related to the statement on service quality of the respondent. Therefore, with the available evidences, it is not substantiate to conclude that the advertisements of the aforementioned last two statements are false.

Summarized by Lee, Wan-Chun;
Supervised by Wu, Lieh-Ling

Appendix:

China Development Commercial Co., Ltd.’s Uniform Invoice Number: 80202112