MasterLink Investment Consulting Co., Ltd. allegedly made public use of names including “MasterLink Group” and “MasterLink Financial Investment Consulting” in violation of the Fair Trade Law

Chinese Taipei



Case:

MasterLink Investment Consulting Co., Ltd. allegedly made public use of names including “MasterLink Group” and “MasterLink Financial Investment Consulting” in violation of the Fair Trade Law

Key Words:

MasterLink Securities, MasterLink Group, MasterLink Financial Investment Consulting

Reference:

Fair Trade Commission Decision of March 27, 2003 (the 594th Commissioners’ Meeting); Disposition Kung Ch'u Tzu No. 092043

Industry:

Investment Consultation Services (7401)

Relevant Law:

Article 20 of the Fair Trade Law

Summary:

1. MasterLink Securities Corporation (now Prudential Financial) filed a complaint alleging as follows:
“MasterLink Securities” [“Yuan Fu Zheng Chuan” in Chinese] and “MasterLink and Device” are, respectively, a specific portion of the company name and a service mark of MasterLink Securities Corporation, have been continuously used by it for a long period of time, are indicative of its business and the source of its services, and are symbols commonly known to relevant enterprises or consumers. MasterLink Securities is moreover an integrated securities firm licensed to operate securities underwriting, dealership, and brokerage business. Operation of any business related to assets management, finance, or investment evaluation, analysis, or consulting under the name of MasterLink by any enterprise other than MasterLink Securities or an enterprise in its group would cause confusion by the public or cause the public to mistakenly believe that such business was in fact operated by one of the many enterprises within the MasterLink Securities group, or that some relationship existed with that group. This likelihood of confusion or mistaken belief is evident from the many related telephone calls and complaints received from members of the investor public. The respondent MasterLink Investment Consulting Co., Ltd., by using names such as “MasterLink Group,” “MasterLink Investment Consulting,” and “MasterLink Financial Investment Consulting” in connection with its business of underwriting unlisted stocks and personnel recruitment, and as a specific portion of its name, is likely to cause confusion with facilities, services, and business actually operated by MasterLink Securities, in violation of Article 20 of the Fair Trade Law.

2. The complainant, MasterLink Securities, was listed on the over-the-counter securities market in 1995, and was named as the top-performing securities firm in 1999 by the ROC Over-the-Counter Securities Exchange (now the GreTai Securities Market). It has continually built up awareness of its brand name through advertising and promotional activities, with advertising expenditures of NT$7.5 million in 1999 and NT$8.30 in 2000. According to the rating report on MasterLink Securities issued by the Taiwan Ratings Corporation in November 1999, it commanded a 3.24% share of the stock brokerage market in that year, and was the fifth-largest brokerage firm in Taiwan. Clearly, the “MasterLink Securities” and the “MasterLink and Device” service mark are symbols commonly known to relevant enterprises or consumers. This is supported by the following evidence and materials, photocopies of which were submitted by the complainant and are included in the case file: its company license, rating report, news clippings, branch office photographs, Intellectual Property Office (IPO) opposition decision canceling the registration of the “MasterLink Financial Group” associated service mark and the IPO invalidation decision voiding the registration of the “Chunghsing MasterLink” service mark.

3. There is nothing inappropriate in the respondent MasterLink Investment Consulting Co., Ltd. using its company name or an abbreviation thereof in an ordinary manner. However, from April through August of 2002, the respondent, in addition to using its registered company name, also made widespread public use of names such as “MasterLink Group” and “MasterLink Financial Investment Consulting” as its service marks in personnel recruitment advertisements and on business cards and envelopes. But during that period, the respondent MasterLink Investment Consulting was a single company with no affiliated enterprises, and thus did not constitute a business “group” as the term is commonly understood. Also, “MasterLink Financial Investment Consulting Co., Ltd.” is not a legally registered company name. Furthermore, the respondent MasterLink Investment Consulting Co., Ltd. is engaged in stock analysis and consulting business, which is closely related to the securities and futures business operated by the complainant MasterLink Securities, and identical to that operated by the complainant's subsidiary Masterlink Securities Investment Advisory Corp. The respondent also acknowledged that to stem the high turnover rate of its associated persons, it condoned the improper public use by its associated persons of the terms “MasterLink Securities” and “MasterLink Affiliate.”
The above-stated conduct of MasterLink Investment Consulting Co., Ltd. would naturally cause people to associate the source of the business indicated thereby with the business or service activities of MasterLink Securities, creating confusion and misidentification. The respondent's claimed that it intended to establish affiliated enterprises in the future, hence it used the name “MasterLink Group.” However, given that the respondent had established only one company at the time, and had not received permission to establish a “MasterLink financial Investment Consulting Co., Ltd.,” so its public use of “MasterLink Group” and “MasterLink Financial Investment Consulting” caused people to mistakenly identify it as a member of the same large “business group” as MasterLink Securities. Its intention to create confusion between its business activities and those of MasterLink Securities for purposes of recruiting personnel and expanding its scale of business was obvious.

4. In summary, the facts of the violation by the respondent MasterLink Investment Consulting Co., Ltd. were clear. After weighing such factors as the respondent's motives, degree of cooperation in the investigation, evidence of repentance, and the degree of impairment to trading order caused by the conduct, the Fair Trade Commission ordered the respondent to immediately cease the violations and imposed an administrative fine of NT$100,000 under the forepart of Article 41 of the Fair Trade Law.

Appendix:
MasterLink Investment Consulting Co., Ltd.’s Uniform Invoice Number: 13115700

Summarized by Tai, Mei-Chin; Supervised by Yeh, Ning