Complaint filed by Chin Yuan Food Co., Ltd. against Cheng Tzung T'ang Chin Yuan Enterprise Co., Ltd. for violation of the Fair Trade Law by copying its service mark of "Chin Yuan Pork Chop" and making untrue representations in its advertisements for "Cheng Tzung T'ang Chin Yuan Pork Chop"
Chinese Taipei
Case:
Complaint filed by Chin Yuan Food Co., Ltd. against Cheng Tzung T'ang Chin Yuan Enterprise Co., Ltd. for violation of the Fair Trade Law by copying its service mark of "Chin Yuan Pork Chop" and making untrue representations in its advertisements for "Cheng Tzung T'ang Chin Yuan Pork Chop"
Key words:
service mark, counterfeiting, untrue advertisement
Reference:
Fair Trade Commission Decision of 29 July 1998 (350th Commission Meeting); Disposition (87) Kung Ch'u Tzu No. 8700166
Industry:
Fast Food Restaurant Industry (1195)
Relevant Laws:
Summary:
"Chin Yuan Pork Chop" was established by Chin Yuan Food Co., Ltd. (complainant) forty years ago and properly registered with the Taipei City Government to operate dining services with the name of "Chin Yuan." Around early September 1997, Cheng Tzung T'ang Chin Yuan Enterprise Co., Ltd. respondent opened for business on Section 1 of Keelung Road in Taipei, posting a signboard of "Cheng Tzung T'ang Chin Yuan Pork Chop" and depicting itself as the "headquarters." Presenting the registration license, the complainant requested the respondent to remove its signboard, but to no avail. The respondent also placed advertisements in the Liberty Times and other newspapers that alleged it had "over forty years of experience in operating successful diner services and franchises," and was acclaimed with the "First Medium and Small Enterprise Manager's Elite Award in Chinese Taipei" for the purpose of attracting potential franchisees. A complaint was filed with the Fair Trade Commission (this Commission) against the respondent for making untrue statements in the newspaper ads in violation of Articles 21 and 24 of the Fair Trade Law (FTL).
This Commission found that although the complainant's service mark has its historical origin, the ordinary public does not necessarily associate "Chin Yuan" with pork chops (as associating "McDonald's" with hamburgers). Additionally, the complainant was unable to present sufficient evidence that "Chin Yuan" constituted a symbol "commonly known to the relevant public." Accordingly, this Commission could not hold the respondent in violation of Article 20(1) of the FTL. However, the respondent prominently featured "Chin Yuan Pork Chop" in the newspaper ads, with "Cheng Tzung T'ang" depicted above "Chin Yuan Pork Chop" in a comparatively smaller font. Such representation would lead the ordinary public, who does not pay special attention, to confuse the respondent with the complainant. In addition, literally "Cheng Tzung" of "Cheng Tzung T'ang" means genuine, real and so on. Therefore, semantically speaking, the representation of "Cheng Tzung T'ang" is obviously different from the ordinary use as a supplementary description (e.g., "Sun Moon T'ang" or "East T'ang"). Moreover, because both the complainant and respondent operate their businesses through franchises islandwide, based on the above conclusions, the respondent's trade name will easily cause the ordinary public to form a mistaken belief, as they would be led to mistake it for the "genuine Chin Yuan Pork Chop." If a portion of a properly registered company name is used as a "service mark," the lettering of such mark cannot be randomly arranged, free from regulation. If the respondent had used its complete company name in the newspaper ad, there could have been a distinction by which the general public could tell from the earlier established "Chin Yuan Pork Chop." The respondent's representation of its trade name (in the newspaper ad) in lettering that semantically leads to confusion on the part of the ordinary public constitutes a misleading representation.
Regarding its statement in the newspaper ad about having "over forty years of experience in operating successful diner services and franchises," the respondent argued that it had added up the experience of its employees. Nevertheless, according to the advertisement, such phrasing should refer to the respondent's overall experience in the franchise business rather than the accumulation of its employees' experience. Although its employees' experiences added up to more than forty years, the respondent cannot claim to have forty years of experience in operating "Cheng Tzung T'ang Chin Yuan." Therefore, the respondent's representation was false. Regarding the representation in the newspaper ads about winning the award of the First Medium and Small Enterprise Manager's Elite Award in Chinese Taipei, which the respondent had alleged for the purpose of attracting potential franchisees, this Commission found that, although the award exists, it had been awarded to the respondent's general manager rather than to the respondent. Therefore, the respondent's representation of being "the only franchiser and the only diner service that has ever won the Elite Award" was false and misleading, and caused confusion as to who had won the award.
In conclusion, the respondent's ads, including the depiction of its trade name, the representation as having forty years of successful experience and of being "the only franchiser and the only diner service that has ever won the Elite Award," were found to have been false and untrue in violation of Article 21(3) of the FTL, in which Article 21(1) applies mutatis mutandis. This Commission disposed of the matter in accordance with Article 41 of the FTL by ordering the respondent to stop making the false, untrue and misleading representations from the day following its receipt of this Commission's disposition.
Summarized by Kung Ch'in-lung
Supervised by Chu Wei-ching
Appendix:
Cheng Tzung T'ang Chin Yuan Enterprise Co., Ltd. ’s Uniform
Invoice No.: 16168623