Axistar Trading Co., Ltd. was complained for advertisement use of the "MONTBLANC" and "white star" marks throughout its commercial activities in violation of Article 24 of the Fair Trade Law
Case:
Axistar Trading Co., Ltd. was complained for advertisement use of the "MONTBLANC" and "white star" marks throughout its commercial activities in violation of Article 24 of the Fair Trade Law
Key Words:
Montblanc, Wan Pao Lung, taking advantage of another's business reputation
Reference:
Fair Trade Commission Decision of August 30, 2001 (the 512th Commissioners' Meeting); Disposition (90) Kung Ch'u Tzu No. 121
Industry:
Book and Stationery Retail (4661)
Relevant Law:
Article 24 of the Fair Trade Law
Summary:
1. The complainant, Montblanc Distributors Ltd. Taiwan Branch, is the general agent for Montblanc products in Chinese Taipei. In marketing those products in Chinese Taipei, it has invested heavily in extensive marketing and advertisement campaigns, spending NT$40 million to establish name recognition. While the parallel imports of Montblanc products by Axistar Trading Co., Ltd. (Axistar) were in fact genuine goods, it failed to indicate the source of those goods or the name and address of the importer on its packaging, containers, labels, booklets, or price lists, and in fact set up a website for the purpose of introducing those products under its own name. Axistar further displayed the "Montblanc" mark and white star device on its company doorplate, stationery, and name cards with the intent of taking advantage of the complainant's business reputation, in violation of Article 24 of the Fair Trade Law.2. Investigation by the Fair Trade Commission (FTC) found that Axistar had signed a distributor's agreement with Montblanc during the years 1996 and 1997, and in June of 1997 and March of 1988 signed separate agreements with Montblanc under the name Chung Tien Shih Chi Ltd., which were effective until the end of March 2000. During the above period of distributorship, Axistar ordered product from Montblanc Distributors Ltd. Taiwan Branch under its own Axistar name. The distributor's agreement clearly stipulated that the "Montblanc" mark and "white star" device were owned by Montblanc-Simplo GmbH, and that written consent from the complainant must be obtained prior to any use of those marks by Axistar; the agreement further stated that the complainant would provide suitable display cases for use by the distributor to appropriately display the products at its sales venue. It can be seen that Axistar either knew or had means of knowing that no use of the Montblanc marks or display cases was allowed without express authorization from Montblanc or its agent. 3. The result of the FTC's investigation showed that after the expiry of Axistar's distributorship, it either knew or had means of knowing that no use of Montblanc marks would be allowed without written authorization from Montblanc; nevertheless, at its Sunrise Department Store location, it continued to use black display cases and carrying bags identical to those of the complainant, bearing the "Montblanc" and white star marks. Axistar did not in any way indicate or explain the distinction between its own and the complainant's commercial activities, and further, in other commercial uses, such as on its doorplate, name cards, stationery, advertising and website, it used the "Montblanc" and white star marks widely in conjunction with its own name, Axistar Trading Co., Ltd. Some of the Montblanc products it sold were ordered from the complainant and some imported indirectly from a third-country trading partner, but all were products manufactured by Montblanc, and while Axistar had the right to reasonable use of the marks to indicate the brands it sold, it used the marks widely throughout all its commercial activities, and failed to actively differentiate between its own and the complainant's distribution channels, which would easily mislead others into believing it had a commercial relationship with Montblanc Simplo GmbH's agent. Axistar's intent was to take advantage of Montblanc's commercial reputation and to exploit the fruits of another's efforts. Such a conduct is ethically reprehensible in business competition, and constitutes an obviously unfair conduct sufficient to adversely affect the trading order under Article 24 of the Fair Trade Law.4. In conclusion, the facts of Axistar's violations were clear, and in consideration of its motives, the scope of its business, its degree of cooperation and demonstration of remorse over its acts, as well as the degree of injury to the trading order, the FTC imposed an administrative fine of NT$50,000 against Axistar in accordance with the fore part of Article 41 of the Fair Trade Law, and ordered it to immediately cease such a unlawful conduct.Appendix:Axistar Trading Co., Ltd.'s Uniform Invoice Number: 86029385Summarized by Tai, Mei-Chin; Supervised by Yeh, Ning