Tso Tan Nu Glasses Co. Ltd. was complained for violating the Fair Trade Act through the use of another’s well-known trademark as the special portion of its corporate name when applying for establishment and registration

Chinese Taipei

Case:

Tso Tan Nu Glasses Co. Ltd. was complained for violating the Fair Trade Act through the use of another’s well-known trademark as the special portion of its corporate name when applying for establishment and registration

Key Words:

Tso Tan Nu [Giordano], eyewear, Wan Kuo Optical

Reference:

Fair Trade Commission Decision of December 19, 2002 (the 580th Commissioners' Meeting); Disposition (91) Kung Ch’u Tzu No. 91208

Industry:

Wholesaling of Watches, Clocks and Spectacles (4470)

Relevant Law:

Article 24 of the Fair Trade Act

Summary:

1. The case was originated from a complaint filed by Wei Teng International Limited, a company registered in the British Cayman Islands. The respondent in this case was approved for registration of establishment on 14 September 1994 for business in sales and processing of lenses and other products. Earlier, on 11 June 1994, the complainant had designated the "Tso Tan Nu" mark for use in import and export trade and agency for watches and other products manufactured locally and overseas under the approved Service Mark Registration No. 66179. The complainant was a global company well known for its wide range of products, particularly for its clothes, clocks and watches. The trademark "Tso Tan Nu," or "Giordano," became famous as it represented the reputation of the complainant's products. Knowing full well that "Tso Tan Nu" was the well-known mark of the complainant, the respondent nevertheless used the complainant's Chinese-language trademark as the special portion of its corporate name without the permission of the complainant when applying for establishment registration under the corporate name Tso Tan Nu Glasses Co., Ltd. The respondent's conduct would be likely to cause confusion and misidentification on the market, resulting in the perception that the company's eyewear or maintenance services came from the complainant or that there was an agency or licensing relationship between the company and the complainant, and the resulting misidentification would lead consumers to conduct transactions with the respondent, damaging the interests of the complainant and ordinary consumers.

2. Article 24 of the Fair Trade Act provides that "Except as otherwise provided for in this Law, no enterprise shall engage in other deceptive or obviously unfair acts that are capable of affecting the trading order." The term "obviously unfair" in that law means engaging in competition or business activities by obviously unfair methods such as exploitation of other persons' good will. The most common type of "obviously unfair act" is trading upon another person's business reputation or substantial copying that run counter to ethical competition in business. An enterprise's copying of another person's well-known trade dress in goods or services, even if insufficient to cause confusion, will be deemed as aggressively trading upon such person's business reputation in violation of Article 24 of the Fair Trade Act. Upon investigation, the respondent was found to have been in the businesses of sales and maintenance of eyeglasses and dealing in relevant parts and accessories for more than 20 years. It first used "Wan Kuo Optical" as its shop name. Later, in 1993, it used its "Wan Kuo" design to file applications for registration of its trademark and service mark in the area of eyewear, and in September 1994 it used "Tso Tan Nu" as a corporate name to apply for establishment and operation of its company. The respondent argued that it was a company approved for establishment in September 1994 under the name of "Tso Tan Nu Glasses Co., Ltd." and that its use of "Tso Tan Nu" as its corporate name was an exercise of its rights under the Corporation Law. The Corporation Law and the Fair Trade Act, however, had different regulatory purposes. If a corporate name was used with the intent to aggressively trade upon another person's distinctive business reputation and to exploit such person's good will, such act should be subject to the regulation of the Fair Trade Act. Therefore, the respondent could not claim to be exempt from liability because its corporate name had been reviewed and approved by the competent authority pursuant to the Corporation Law.

3. The respondent was incorporated under the name of "Tso Tan Nu" in September 1994 for sales of glasses. At that point in time, "Tso Tan Nu" and "Giordano" were trademarks of the Hong Kong-based Giordano Limited and the complainant, and were generally recognized by the relevant enterprises and consumers for their use on various items of clothing and personal accessories, footwear, hats, and handbags. In addition, the complainant's continuous use of the disputed trademarks was not affected by its failure to register the trademarks. Therefore, even though the respondent's right of exclusive use of the trademarks registered in 1982 for use on clothing and personal accessories was extinguished in 1992 due to its failure to apply for renewal, and even though the complainant did not file for registration of its "Tso Tan Nu" service mark until 1995 for use in agency services in import and export trade and distribution of watches and other products manufactured locally or overseas, the respondent could not claim its use of "Tso Tan Nu" to be a bone-fide prior use. In addition, the respondent applied for registration of the "Tso Tan Nu-GODANO" service mark for use in optometry and eyeglasses prescription services, and in response, the complainant filed an opposition in 1995. Because the respondent used the Chinese-language "Tso Tan Nu," identical to that of the complainant, as a principal part of its service mark design and the English-language "GODANO," similar in appearance and arrangement to the complainant's and designated for use on optometry and eyeglasses prescription services, the Intellectual Property Office under the Ministry of Economic Affairs invalidated that service mark for the reason that the respondent's use of the Chinese-language "Tso Tan Nu," would create the likelihood of confusion and misidentification by ordinary consumers as to the provider or source of the services indicated by the service mark. The respondent took advantage of the good will and huge sums invested continually over 20 years by the complainant and the Hong Kong-based Giordano International Limited in advertising and marketing, and used "Tso Tan Nu" as the special portion of its corporate name to promote its sales of eyeglasses and relevant products. It was obvious that the respondent's exploitation of the complainant's good will were deserving of condemnation under the ethical competition of business, in violation of Article 24 of the Fair Trade Act.

Appendix:
Tso Tan Nu Glasses Co., Ltd’s Uniform Invoice Number: 89849817

Summarized by Chiang, Kuo-Lun; Supervised by Wu, Ting-Hung