Peter Luger Company of the United Sates complained that the Hung Fang Tingchi Steak Restaurant used the name Peter Lugar, which was in violation of the Fair Trade Law
Chinese Taipei
Case:
Peter Luger Company of the United Sates complained that the Hung Fang Tingchi Steak Restaurant used the name Peter Lugar, which was in violation of the Fair Trade Law
Key Words:
free-riding; deceptive or obviously unfair acts that are sufficient to affect trading order
Reference:
Fair Trade Commission Decision of October 15, 1997 (the 311th Commission Meeting); Disposition (86) Kung Chu Tzu No. 202
Industry:
Food and Beverages Industry (4050)
Relevant Laws:
Article 20 and 24 of the Fair Trade Law
Summary:
1. Investigation showed that the complainant did not have a branch office in Chinese Taipei. Neither did the complainant have sufficient advertisements, sales volume, and market share in Chinese Taipei's market, all of which were necessary to prove that the complainant was commonly known to the relevant public. Since the complainant was not commonly know to the public, Article 20(1) of the Fair Trade Law was not applicable in this case.
2. In accordance with Article 24 of this Law, in addition to what has been provided for in this Law, an enterprise shall not conduct other deceptive or obviously unfair acts that are sufficient to affect trading order. The purpose of this Article is to regulate transactions between enterprises and their trading counterparts, and to determine whether such transactions constitute deceptive or obviously unfair acts that are sufficient to affect trading order. The basis for determination is whether relevant acts have undermined efficiency from competition. Where an enterprise violates the principle of efficiency competition, such as free-riding, copying the products or features of services of other businesses, exploiting the hard-working results of others, its actions are obviously considered unfair to those who are being exploited or those who adhere to the spirit of fair competition.
3. Although the service mark of the complainant was not commonly known to the relevant public in the domestic market, the complainant had obtained exclusive use of the Peter Luger service mark in the United States, Canada, and Israel, among other countries. In addition, the said mark received extensive coverage in newspapers and magazines in the United States and U.K., as well as on the February 28, 1997 issue of the United Daily News. Since the nationals of this country frequently travel to the United States for either business or pleasure, the service mark of the complainant should be known among a large number of the domestic connoisseurs. Further, the steak being served at the complainants restaurant had been famous in the United States since 1887, and had received praise as being the best steak restaurant in the United States by steak lovers. Since the name Peter Luger was uncommon, it was easy for consumers to associate the name Peter Luger with the complainant. In Taiwan, steaks are imported delicacies.
The steak restaurant operated by the defendant used Peter Lugar as its part of the service mark, which was difficult to distinguish from the complaintant's Peter Luger service mark. Not only were the spellings similar, so were the pronunciations. The defendant also stated in its advertisements that ... originating from the 19th Century, a restaurant with a style of American gentlemen. Such statements misled the consumers into believing that the two restaurants share the same recipes and techniques, or that one was the sponsor or franchise of the other. The defendant argued that its service mark is Junior Peter Lugar Hung Fang Tingchi Steak Restaurant and that the steak restaurant was established by three Tzai Shing high school students about 20 years ago. And by coincidence, the three founders were all named David, which were unrelated to the service mark of the complainant. Although the names David and "Peter Lugar were unrelated, the word Junior (referring to being a new addition or newcomer) misled people into thinking that the two were related. Investigation also showed that on the signboard of the steak restaurant operated by the defendant, the words Peter Lugar were written conspicuously in bold red letters.
The word Junior was written disproportionately in white and small characters. The signboard misled the consumers into believing that the restaurant was Peter Lugar Hung Fang Tingchi Steak Restaurant rather than the Junior Peter Lugar Hung Fang Tingchi Steak Restaurant. In addition, even assuming that the signboard was for the Junior Peter Lugar Hung Fang Tingchi Steak Restaurant as argued by the defendant, the signboard itself misled consumers into believing that one was the sponsor or franchise of the other restaurant. Thus the argument of the defendant was unacceptable. In conclusion, it can be seen that the respective markets of the two restaurants were different due to their geographic locations, and that the service mark of the complainant was not commonly known to the general public in Taiwan, thus it is difficult to consider the actions of the defendant as exploiting the hard-working results of the complainant. However, the act of copying others service mark was obviously unfair, and contrary to business ethics.
Summarized by Lin, Chiu-miao
Supervised by Wu, Ting-hung
Appendix:
Hung Fang Tingchi Steak Restaurant's Uniform Invoice Number: 97290928
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