Mighty Ambition Co., Ltd., despite knowing that the "Pikachu" series of designer figurines were commonly known to consumers, unauthorizedly manufactured and imported counterfeit products in violation of Article 24 of the Fair Trade Law
Case:
Mighty Ambition Co., Ltd., despite knowing that the "Pikachu" series of designer figurines were commonly known to consumers, unauthorizedly manufactured and imported counterfeit products in violation of Article 24 of the Fair Trade Law
Key Words:
Pikachu, designer figurines
Reference:
Fair Trade Commission Decision of November 8, 2001 (the 522nd Commissioners' Meeting); Disposition (90) Kung Ch'u Tzu No. 180
Industry:
Wholesale of Toys and Recreational Articles (4463)
Relevant Law:
Article 24 of the Fair Trade Law
Summary:
1. In a complaint, Top-Insight International Co., Ltd. (the complainant) stated that it has been developing a variety of products associated with the "Pokemon" series of electronic games developed by the Nintendo Corp., among which the "Pikachu" series of toys has been popular throughout the world. Mighty Ambition Co., Ltd. (the respondent), however, offered for sale in its "Popular Lane, Toy City" shop Pikachu figurines and backpacks that were not authorized by the complainant. In a 26 January 2000 police raid, 703 of the unauthorized items were seized and the respondent was prosecuted for violating Chinese Taipei's Trademark Law. Although the court subsequently handed down a judgment of "not guilty" in the trademark case, the respondent's unauthorized manufacture or unauthorized import for sale of the toys constituted unfair competition in violation of the provisions of Articles 20 and 24 of the Fair Trade Law. 2. Observing photographs of the seized products provided to the Fair Trade Commission (FTC) by the complainant and photographs of the genuine articles also provided by the complainant as well as three samples of the unauthorized products supplied by the respondent, it is apparent that the expressions, movements, and posture of the respondent's unauthorized Pocket Monster and Pokemon toys are substantially similar to those of the complainant's Pikachu toys and they share an identical yellow coloring. The composition of major elements of the unauthorized products such as the two eyes, red cheeks, black ears, size of the hands and feet, brown stripes along the back and the tail are also completely identical with those of the complainant's Pikachu toys. Thus, in addition to unauthorized manufacture and sale, the respondent also engaged in methodical replication of the major features of the Pikachu figures. Thus, Mighty Ambition Co., Ltd. was clearly culpable of improperly imitating the external appearances and shapes of Top-Insight International Co., Ltd.'s Pikachu toys to exploit the fruits of Top-Insight International Co., Ltd.'s labor. 3. In its defense, the respondent argued that following the complainant's February 1998 charge that the respondent had violated Article 63 of the Trademark Law by repeatedly selling counterfeit goods such as plush toys, backpacks and fleece Pikachu figurines bearing the Pikachu trademark, the Panchiao District Prosecutor's Office filed an indictment against the respondent. After hearing the case, the Panchiao District Court ruled that there was no factual evidence that the two defendants had committed a trademark infringement and returned a judgment of not guilty, which has become final. In its reasoning, the court ruled: "the Trademark Law's protection of exclusive rights to the use of a trademark is limited to two-dimensional designs and does not extend to product shapes (three-dimensional products) similar to a given trademark." Although the respondent was adjudged innocent of criminal conduct, this judgment does not exempt the respondent from administrative law or application of Article 24 of the Fair Trade Law - which would require consideration of whether the disputed products being sold were parallel imports of legally authorized products or were unauthorized counterfeit products. With regard to this matter, the respondent claimed that the products in question had been legally purchased through the San Tong Toy Company of Guangzhou, China; an authorized distributor of Guangdong Auldey Toy Industry Co. (Auldey) of Guangzhou, possessing a certificate of authorization. The respondent continued that Nintendo Corp. of Japan had authorized Auldey Toy to manufacture products using the trademark in question and had a product catalog. Examination of the date inscribed on Auldey's authorization certificate indicated that the authorization period began 20 March 1999. The complainant claimed that Nintendo Corp.had authorized Auldey's Hong Kong headquarters for the period of 11 January 1999 through 10 January 2001. That authorization period is clearly in conflict with the February 1998 period during which, according to the respondent's statement, the products in question had been legally imported through San Tong, Auldey's legally authorized distributor. The respondent was unable to show evidence of the existence of a proper authorization certificate from Nintendo Corp. authorizing manufacturing and sale of the disputed products during the period from February 1998 through January 1999. A copy of Auldey's product catalog bearing Nintendo Corp.'s corporate authorization mark was found insufficient to prove authorization to import the disputed products for sale in Chinese Taipei during that period and so it was difficult to believe the respondent's claim that the disputed products had been legally authorized and imported through normal channels. Consequently, the actions of the respondent were deemed to constitute improper imitation of the external appearance and shape of the complainant's "Pikachu" products that adversely affected the complainant's established business reputation, ran counter to accepted business and competitive ethics, and constituted an unfair competitive practice. The obviously unfair practices were deemed sufficient to affect the trading order, in violation of the provisions of Article 24 of the Fair Trade Law. Appendix:Mighty Ambition Co., Ltd.'s Uniform Invoice Number: 16502562Summarized by Chiang, Kuo-Lun; Supervised by Wu, Ting-Hung