Ti Yi Company filed a complaint against Chih Ch'un Plastic Co., Ltd. for violation of the Fair Trade Law
Chinese Taipei
Case:
Ti Yi Company filed a complaint against Chih Ch'un Plastic Co., Ltd. for violation of the Fair Trade Law
Key words:
counterfeiting
Reference:
Fair Trade Commission Decision of 6 November 1996 (the 262nd Commission Meeting)
Industry:
Timepiece Manufacture Industry (3320)
Relevant Laws:
Article 24 of the Fair Trade Law
Summary:
The complait filed by Ti Yi alleges the following:
Ti Yi Company (Ti Yi) is a company specializing in the design, research and development, and manufacture of specialty alarm clocks. Ti Yi developed dozens of designs for specialty alarm clocks including Harley-Davidson motorcycle, Harley-Davidson police motorcycle, American-style semi-truck, retro-style train engine. Instead of doing its own research and development for new products, Chih Ch'un Plastic Co., Ltd. (Chih Ch’un) had these specialty alarm clocks dismantled so as to make molds for making copies. Without any research and development or design costs, Chih Ch'un had a competitive advantage. Chih Ch'un's acts of copying another products which designed and marketed with considerable efforts and investment and competing in the market with low-cost imitations were alleged to be in violation of Article 24 of the Fair Trade Law.
According to the Fair Trade Commission's investigation, the Commission reached a decision in its Commission Meeting that no substantial evidence to prove that Chih Ch'un had violated Article 24 of the Fair Trade Law. The reasons are as follows:
The designs of the subject specialty alarm clocks were modeled after well-known objects [Harley-Davidson motorcycles, et al.]. Although there were differences between the clocks and the actual objects, the main selling point was the recognition of the object's appearance. Ti Yi claimed that the average molding cost for each model was NT$1.5 million or more; however, this amount can hardly compare with the value of the worldwide recognition [of the well-known material objects]. The legal interest that Ti Yi claimed for protection lacks justification. Chih Ch'un's products may have been similar to Ti Yi's products in some appearance or structure of no significance to its trading counterparts; Chih Ch'un's products also may have been complete imitations of Ti Yi's products without any changes. For its acts of making copies of the products in question, Chih Ch'un can be condemned for lack of business ethics. However, what Article 24 of the Fair Trade Law prohibits is deceptive or obviously unfair acts engaged in for unfair competition purposes. The specialty alarm clocks in question were modeled after famous goods. Therefore, Chih Ch'un is not considered to have committed any deception. As to whether these acts constitute obviously unfair acts intended for unfair competition purposes, the investigation found that the main reason why this kind of product [specialty alarm clock] is attractive to consumers is the recognition of its appearance [modeled after material objects]. Ti Yi's costs in designing its products do not compare with the [benefit received from the] value of the famous objects' worldwide recognition. Therefore, although Chih Ch'un's acts could incur criticism, there exists substantial difference between Ti Yi's cost and the value of the rights in respect of which it claims protection. The requirements for disposition have not been fulfilled.
Summarized by Kung, Ch'in-lung
Supervised by Wu, Ts'ui-feng