False advertising on signboard by Lien Fa Bicycle Shop
Chinese Taipei
Case:
False advertising on signboard by Lien Fa Bicycle Shop
Key Words:
false advertising, operated directly by the manufacturer, distribution, signboard
Reference:
Fair Trade Commission Decision of October 15, 1998 (the 362nd Commission Meeting); Disposition Ref. (87) Kung Ch'u Tzu No. 227
Industry:
Motorcycle and bicycle repair (8923)
Relevant Laws:
Article 21 of the Fair Trade Law
Summary:
Lien Fa Bicycle Shop (the respondent) distributes "GIANT" bicycles made by Giant Manufacturing Co., Ltd. (GMC) and other bicycles under the "YAMAHA," and "Han Shih" (portable bicycle) trademarks. However, although it is an authorized wholesaler for the "Han Shih" portable bicycle, the respondent has labeled "operated directly by the manufacturer" in a smaller font after the "GIANT" and the "YAMAHA" trademarks on the signboard. This has caused the likelihood that the consumer may be misled into believing the respondent as a company store for "GIANT" and "YAMAHA" bicycles as well.
The respondent argued it is an authorized wholesaler that obtains source of bicycle directly from the manufacturer so it has labeled "portable bicycle" and "operated directly by the manufacturer" side by side and in a smaller font on the signboard so as to represent itself as a direct agent for the "Han Shih" portable bicycles. However, according to common conception, the so-called "operated directly by the manufacturer" refers to the direct distribution from the manufacturer to the consumer, i.e. absent any intermediate agent. Although the respondent is an authorized wholesaler for the "Han Shih" bicycles, the wholesaler belongs to a type of distributorship. We cannot say it is equivalent to direct distribution as aforesaid. Furthermore, absent due authorization by GMC, in addition to the "GIANT" and the "YAMAHA" trademarks featured prominently on the signboard, the respondent has represented itself as operated directly by the manufacturer in a smaller font in such a way that the consumer may mistake the store to be operated directly by the manufacturers of the "GIANT" and the "YAMAHA" bicycles in addition to being an exclusive distributor of the "Han Shih" portable bicycles.
In conclusion, the respondent is found to have engaged in an act of false representations regarding the source of the said product in violation of Article 21(1) of the Fair Trade Law.
Summarized by Chen, Wan-Chen
Supervised by Wu, Ting-Hong
Appendix:
Lien Fa Bicycle Shop’s Uniform Invoice No.: 78338628