Yue Shih Tsong Heng Enterprise Corp. violated the Fair Trade Law for publishing false and untrue advertisements and for counterfeiting the symbol of others
Chinese Taipei
Case:
Yue Shih Tsong Heng Enterprise Corp. violated the Fair Trade Law for publishing false and untrue advertisements and for counterfeiting the symbol of others
Key Words:
commonly known to the relevant public, to use in a similar manner, confusion
Reference:
The Fair Trade Commission Decision of December 24, 1997 (the 321st Commission Meeting); Disposition (86) Kung Chu Tzu No. 230
Industry:
Retail Industry (4020)
Relevant Laws:
Summary:
The respondent, Yue Shih Enterprise knew that the Blue Sky and Green Mountain trademark and symbol owned by YES Co. were known to the relevant public and were used to represent products of YES Co.
Despite such knowledge, Yue Shih Enterprise used the name Yue Shih Health Group of Enterprise to publish a full-page advertisement in page 8 of the United Daily News on December 24, 1996. Yue Shih Enterprise used wordings exactly the same as the Yue Shih trademark in the advertisement, reversed the colors of the trademark drawing owned by the complainant, and placed the trademark in the most conspicuous location of the advertisements as well as affixed the trademarks on the advertised products. In addition, the symbol was used, indicating that the trademark had been registered, while the company name Yue Shih Tsong Heng Enterprise Corp. was placed inconspicuously at the lower left-hand corner of the advertisement.
The deliberate design of the advertisement made it impossible for consumers to determine whether the products being offered were products of the complainant, YES Co. The consumers were mislead into believing both YES Co. and Yue Shih belonged to the same group of enterprises, resulting in confusion regarding the source of the products and services, thus adversely affecting trading order and competition ethics.
(1) Since its incorporation in 1989, YES Co. has spent in excess of NT$10 million annually on advertising campaigns. With distributors located throughout the island, the companys revenue in 1995 and 1996 amounted to more than NT$600 million and NT$800 million respectively. The company was also featured in several media reports. In an article entitled Survey of Ideal Brandnames in 1997 published in the January 1997 issue of the Breakthrough Magazine (volume 138), the companys YES Mineral Water was rated as the number one ideal brand for mineral water products, accounting for 30.7% of the market share. The Commission verified the above facts after investigation, and it was evident that the companys Yue Shih trademark and symbol were commonly known to the relevant public.
(2) In addition, investigation showed that in its published advertisement, the sanctioned party placed a trademark drawing similar to that of the complainant, but with the colors reversed, conspicuously at the upper left-hand corner of the advertisement. An English word YES!, which was similar to the abbreviation of the complainants company name (Y.E.S.), was placed beneath the trademark drawing. Further, the ad was published using the name Yue Shih Health Group of Enterprise.
The deliberate design of the advertisement constituted use in a similar manner as referred to by Article 20 of the Law. The advertisement made it impossible for consumers to determine whether the products being offered were from the complainant, YES Co. The consumers were mislead into believing that both YES Co. and Yue Shih belonged to the same group of enterprises, and the advertisement had obviously led to confusion as to the origin of the product.
(3) Investigation showed that the sanctioned party, Yue Shih Tsong Heng Enterprise Corp., was established in 1996. The companys major shareholder and chairman of the board, Yang Kuo-pen, was originally the distributor of YES Co. in central Chinese Taipei, a fact which was proven by the contracts from 1992 to 1995 provided by the complainant. Investigation showed that the respondent, despite prior knowledge, registered its company name using Yue Shih and registered the dark colored linear curve drawing and the Yue Shih trademark with the National Bureau of Standards, Ministry of Economic Affairs. The registered drawing and trademark were used on the following products: drinking fountains, water purifiers, mineral water dispensers for family use, water softeners, and other products. The respondent further used the name Yue Shih Health Group of Enterprise to publish an advertisement, and changed the black and white drawing to the colored Blue Sky and Green Mountain drawing, which was similar to the drawing of the complainant except that the colors were reversed. The Yue Shih trademark was on the products, intending to confuse the consumers as to the origin of the products.
(4) The sanctioned party claimed that it had several business operations, thus the name a Group of Enterprises was used in the advertisement. It was, however, unable to prove such claim. In general practice, a group of enterprises or group of companies refers to an organization formed by the association of several companies. It includes a parent company or holding company plus one or more subsidiaries or affiliate companies; the organization is managed and controlled by the parent company who owns more than 50% of the shares (Dictionary of International Trade and Finance, edited by Lin Po-sheng, Chang Ching-yuan. the Chung Hwa Information Services Corp., p. 492).
(5) For the case in question, despite being a single company, the respondent used the name Yue Shih Health Group of Enterprises in its advertisement, together with a Yue Shihs drawing that was similar to the symbol of the complainant. The public were misled into believing that the respondent and the complainant were a group of enterprises formed by several companies. It was thus obvious that the respondent intended to create confusion of its business operations with that of the complainant.
(6) From the above discussions, the respondent was deemed to have violated Article 20(1)(i) of the Fair Trade Law.
(1) Investigation showed that the respondent had applied for the following trademarks registrations at the National Bureau of Standards, Ministry of Economic Affairs:
(i) Black and White linear curve (Registration number 00734157). This trademark was designated for use on the following products: Article 49, class 011 of the Implementation Procedures of the Trademark Law for products including drinking fountains, hot water dispensing machines, and water purifiers among others.
(ii) Yue Shih trademark (Registration number 00717986). This trademark was designated for use on the following products: Article 49, class 011 of the Implementation Procedures of the Trademark Law for products including calcium ion water dispensers, drinking fountains, and hot water dispensing machines among others. The trademark, however, was determined to be invalid by the National Bureau of Standards on August 15, 1997.
(iii) Yue Shih trademark (Registration number 00729386). This trademark was designated for use on the following products: Article 49, class 3 of the Implementation Procedures of the Trademark Law for products including facial creams, moisturizing oil, and moisturizing cream among others. The trademark, however, was determined to be invalid by the National Bureau of Standards on August 15, 1997.
(iv) Yue Shih trademark (Registration number 00735360). This trademark was designated for use on the following products: Article 49, class 5 of the Implementation Procedures of the Trademark Law for products including protein and minerals among others.
(2) Investigation also showed that the respondent used the unregistered product name Te Yih Chu in its advertisements and affixed a mark to the product name, misleading the public into believing that the trademark and name was already registered. In addition, the respondent also affixed the Yue Shih trademark on its product Yellow Emperor Equipment, misleading the public into believing that the trademark was approved for use on Yellow Emperor Equipment.
It was obvious that regarding trademark acquisition, the acts of the respondent were false, untrue, and misleading, thus constituting a violation of Article 21(1) of the Fair Trade Law.
Summarized by Tu, Hsing-feng
Supervised by Pai, Yu-chuang
Appendix:
Young Energy Source Co., Ltd. Uniform Invoice Number: 23159760