Taiwan Tagta Enterprise Corp. was complained in violation of Article 20(1)(i) and Article 24 of the Fair Trade Law
Case:
Taiwan Tagta Enterprise Corp. was complained in violation of Article 20(1)(i) and Article 24 of the Fair Trade Law
Key Word:
confusion
Reference:
Fair Trade Commission Decision on March 14, 2002 (the 540th Commissioners' Meeting); Disposition (88) Kung Ch'u Tzu No. 091052
Industry:
Telecommunications (6000)
Relevant Law:
Article 20 of the Fair Trade Law
Summary:
1. A complaint was filed by Taiwan Cellular Corp. (hereinafter "TCC"; "the complainant") alleging that Taiwan Tagta Enterprise Corp. (hereinafter "Taiwan Tagta"; "the respondent") violated Article 20 of the Fair Trade Law. TCC accused Taiwan Tagta of maliciously using the wording "T'ai Wan Ta Ke Ta," which is a part of TCC's registered Chinese-language company name and service mark, as a specific portion of Taiwan Tagta's (Chinese-language) company name, and, after successfully registering such company name with the Ministry of Economic Affairs (MOEA), actively engaging in activities that would confuse and mislead relevant enterprises or consumers to associate Taiwan Tagta's operations or services with those of the complainant. 2. After investigation, it is the finding of the Fair Trade Commission (FTC) that: The complainant TCC started its promotion activities in June 1996, and subsequently acquired a Type I telecommunications license to operate cellular phone business in January 1997. The company was incorporated on 25 February 1997 under the name Tai Ping Yang Tung Yung Tien Hsun (literally, "Pacific General Telecommunications," which was later changed to Tai Ping Yang Tien Hsin or literally "Pacific Telecommunications" in September 1997). However, Tai Ping Yang Tien Hua Tung Hsin (a non-party of the dispute which later changed its name to "Tai Ping Yang Tien Hsin" in February 1999) filed an opposition with the MOEA demanding that the complainant's company registration be revoked on the grounds that a specific portion of the (then) name of TCC was identical with its company name and operated the same lines of business as it. The MOEA then issued a letter to the complainant requesting that it change its name. The complainant did so, changing its company name to Tai Ping Yang Tien Hsin Shih Yeh (or literally "Pacific Telecommunications Enterprises," and deleted "radio receivers" and "general export and import trade" from its registered business items. The company subsequently changed its name again to "Taiwan Cellular Corp" on 18 June 1998, and continues to use that name today. The respondent Taiwan Tagta, however, was incorporated on 6 March 1995 as Tai Yang Telecommunications Corp., Ltd. It filed an application to the MOEA to rename itself to "Taiwan Tagta Enterprise Corp" (or literally, based on its Chinese name, "Taiwan Cellular Enterprise Corp.") in 1999, and obtain its approval in August of the same year. On 29 October 1999, using its original name "Tai Yang Telecommunications Corp., Ltd.," the respondent applied to the Directorate General of Telecommunications (the "DGT") of the Ministry of Transportation and Communications for a Type II telecommunications operations permit. The awarded permit, however, was voided by the DGT due to Taiwan Tagta's failure to apply for an inspection within the stipulated time period. Knowing that the complainant and its affiliate Taiwan Fixed Network (TFN) both engaged in cellular phone and fixed network operations under a Type I telecommunications business license, Taiwan Tagta deliberately advertised itself as "Affiliated with T'ai Wan Ta Ke Ta Shih Yeh (or literally "Taiwan Cellular Enterprise")" on its own advertisements and its franchises' shop signs, and claimed that it had "acquired approval from the MOEA to operate Type II telecommunications business in 1995" and had "passed review of the DGT in November 1999 and been awarded a permit to operate Type II telecommunications concession businesses." It further claimed that its operations included, at the current stage, "point-to-point hotline telephone services, international long distance least cost services, mobile phone least cost services, ADSL services, web movie theater, ..." and, in the future, would include "wideband telecommunications (image telephones) services, wideband wireless telecommunications (GPRS) services, provision of wideband to businesses, electronic commerce services" identical or similar to the Type I and Type II telecommunications businesses registered by the complainant and its affiliates. Furthermore, Taiwan Tagta used in its advertising a design showing a consumer using a cellular phone, and used the phrase "Tai Wan Ta Ke Ta" (or "Taiwan Cellular") on the installation application form it processed on behalf of an unspecified telecommunications company. Its actions were capable of misleading relevant businesses and consumers to think that the respondent was the complainant or an affiliate thereof. Although the respondent had decided to cease operations, from 1 January 2002 onward, of telecommunications businesses that were identical or similar to the complainant's services such "sales of cellular phone numbers" and "agent of products of licensees of Type II telecommunications businesses," its actions nonetheless had violated Article 20(1)(ii) of the Fair Trade Law. 3. The FTC held as follows: The respondent argued that its company name was approved by the MOEA Commerce Department and that its operations and its operating method were different from those of the complainant, so there should be no grounds for confusion by relevant enterprises or consumers. However, the Commerce Department approved the registration of "Tai Wan Ta Ke Ta Shih Yeh [Co., Ltd.]" pursuant to Article 18 of the pre-amendment Company Law, basing the decision on its findings that the two companies operated different categories of business and that Taiwan Tagta had added words to distinguish the two companies and that therefore their corporate names should not be deemed identical or similar. In addition, the Commerce Department ordered that the respondent's operations registered under Type II telecommunications business "shall be conducted in accordance with relevant laws and regulations." Since Taiwan Tagta's Type II telecommunications business permit was voided in 2000, it had no right to claim that it was operating in that category. Moreover, the respondent claimed that it had "acquired approval from the MOEA to operate Type II telecommunications businesses in 1995" and "passed review of the DGT in November 1999 and been awarded a permit to operate Type II telecommunications concession businesses," and indeed the respondent did operate Type II telecommunications businesses identical with those of the complainant. The respondent also claimed in its advertisements that it was "an affiliate of Tai Ping Yang Tien Hsin (or literally "Pacific Telecommunications Corporation, Ltd." and "Tai Wan Ta Ke Ta (or literally "Taiwan Cellular"). Since the complainant also acquired a Type II operation permit after the respondent withdrew Type II operations from its registration, the respondent clearly was aiming to mislead relevant enterprises and consumers to associate its operations and services with those of the complainant through the above-mentioned claims. Its actions thus violated Article 20(1)(ii) of the Fair Trade Law, and the case was disposed pursuant to Article 41 of the same Law.Appendix:
Taiwan Tagta Enterprise Corp.'s Uniform Invoice Number: 89975715 Summarized by Tu, Hsing-Feng; Supervised by Yeh, Tien-Fu