PAT NBK Co., Ltd. violated the Fair Trade Law for its obviously unfair act regarding the appearance of its products

Chinese Taipei

Case:

PAT NBK Co., Ltd. violated the Fair Trade Law for its obviously unfair act regarding the appearance of its products

Key Words:

symbol, copying appearance of products manufactured by others, exploit the effort-making results of others

Reference:

Fair Trade Commission Decision of September 24, 1997 ( the 308th Commission Meeting), Disposition (86) Kung Ch'u Tzu No. 172

Industry:

International Trade (4040)

Relevant Laws:

Article 24 of the Fair Trade Law.

Summary:

1. The HLC series of horizontal lifting clamps produced by the Japanese complainant Super Tool Co., Ltd. were introduced in the Japanese market in 1974 (the 49th year of the Showa Period). These products have been imported to Chinese Taipei since 1983, and up to 1995 there have been over 6,000 units of the products sold, with a cumulative trading volume of over 50 million Yen. The products feature a silver U-shaped device. On one end of the device is a red clamp that revolves around the end section. At the end of the clamp is a hollow red ring, and the front end of the clamp features serrated edges. The inner side of the other end of the U-shaped device has connecting teeth to match the above serrated edges. In addition, the connecting teeth were protected by a green soft pad. The complainant etched "HLC" on the products to mean "Horizontal Lifting Clamp." PAT NBK Co., Ltd. (hereinafter, "PAT") was established in 1987. Except for the trademark "HARU" used on its products, PAT's products resemble those of the complainant in structures and colors.

2. Regarding application of Article 20 of the Fair Trade Law:

(1) The HLC series of clamps produced by the complainant are tools used as clamps for horizontal lifting. Although this category of product in the market has the same structure and is designed on the basis of the same theory, the color combination and shape created by the components of the complainant's product -the red clamp (including the hallow ring), silver U-shaped body, and green soft pad for the connection part - are with substantial difference and can serve as symbols of the product that enable the general consumer to distinguish the source of the product. As for the "HLC" model specification on the product, the complainant expressed that it means "Horizontal Lifting Clamp," while PAT alleged that it indicates the product's application to H, L, C models of steel. According to the statement of the complainant, "HLC" merely indicates the method of use for the clamp and is therefore a description of the product. Thus, it is inappropriate to allow one single enterprise to monopolize the use of such description. Therefore, "HLC" can not be considered as a symbol under Article 20 of the Fair Trade Law.

(2) The products of the complainant and PAT are very similar in appearance, color combination of red and green and model number (HLC-1). In addition to the above features, the products of both the complainant and PAT clearly bear their trademarks: "SUPER" and "HARU." In addition, buyers of the products are professional users who can be expected to examine the products and to take into consideration factors such as the lifting capacity, brand reliability, price, convenience of maintenance, price of components, insurance, and materials. Therefore, the consumer is unlikely to be confused about these two products. Since the consumer is not likely to be confused about these two products, PAT has not violated Article 20 of the Fair Trade Law. Therefore, whether the symbol of PAT's products is commonly "known to the relevant public" is irreverent.

3. Regarding Article 24 of the Fair Trade Law: The complainant introduced the HLC series of lifting clamps in the Japanese market over 20 years ago in 1974 (the 49th year of the Showa period). Although the details of the products have changed, the appearance remains the same. This fact is supported by the design drawings completed in 1974, 1976 and 1982 as supplied by the complainant. Thus, the complainant is indeed the original designer of the product at issue. The products have been imported into Taiwan since 1983. PAT was established on October 1, 1987. Chiu Shuei-chih, owner of the company, had distributed the HLC products in the name of Yung Mu Machinery Co. [transliteration] as early as 1983. The products of both the complainant and PAT appeared in Taiwan in 1983. However, the complainant developed the product in 1974, earlier than PAT's development of the product. In addition, the complainant's products look different from other products in the same category as produced by other companies. PAT copied the complainant's products after the complainant committed a large amount of capital and effort in putting its products on the market. As a result, PAT could compete with the complainant without assuming the cost and risk for product development, thus causing unfair competition. Therefore, PAT has obviously exploited the effort-making results of another party by copying the appearance of another party's product. Such act is unfair to PAT's competitors and has violated Article 24 of the Fair Trade Law. However, since the Fair Trade Law was promulgated on February 4, 1992, the Fair Trade Law does not apply to PAT's act committed prior to February 4, 1992 pursuant to the principle of non-retroactive application. Nevertheless, PAT has continued to copy the product appearance of the complainant after February 4, 1992, such act remains subject to the provisions of the Fair Trade Law.

　

Summarized by Chang, Hung-tse
Supervised by Pai, Yu-chuang

Appendix:
PAT NBK Co., Ltd.'s Business Administration Number: 226055020

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