Jin Jin Accessories violates the Fair Trade Law by producing and selling jewelry products similar to Wang Pei-Hao products

Case:

Jin Jin Accessories violates the Fair Trade Law by producing and selling jewelry products similar to Wang Pei-Hao products

Key Words:

jewelry, exploiting the fruits of others' labor [free-rider], concrete evidence of damaging to others' business reputation

Reference:

Fair Trade Commission Decision of January 2, 2004 (the 634th Commissioners' Meeting)

Industry:

Wholesale of Apparel Accessories (4435)

Relevant Laws:

Article 20, 22 and 24 of the Fair Trade Law

1. The Wang Pei-Hao Collection Co., Ltd. (hereinafter called "Wang Pei-Hao") is a company established by jewelry designer Wang Pei-Hao, which also uses "Wang Pei-Hao" as its jewelry product trademark. Following is a summary of the allegations made by Hua Mei Yi Shu Chuang Zao Co., Ltd., the complainant in this case: Jin Jin Accessories (the respondent) is an enterprise established by Wang Jin Ling which produces jewelry products extremely similar to the Wang Pei-Hao line. When making sales to consumers, it claims its jewelry to be identical in design and quality to that of Wang Pei-Hao, and further claims that it can provide any jewelry products designed by Wang Pei-Hao for the current season or for any past season. The respondent's plagiarism and production of jewelry products similar to the Wang Pei-Hao products are obviously attempts to exploit the fruits of others' labor, and its statements made during the sale or display of the jewelry products are damaging to Wang Pei-Hao's business reputation, and are obviously unfair practices sufficient to adversely affect the trading order. The respondent thus was alleged to have violated Articles 20, 22, and 24 of the Fair Trade Law (FTL).
2. Findings of the Fair Trade Commission (FTC) after investigation:
   1. It was found that registration for the "Wang Pei-Hao" trademark was not obtained until March 16, 1992, and while the complainant, Wang Pei-Hao, claimed that he had been marketing jewelry of his own design since 1988, Wang was able to provide data on business volume for only the 2001 and 2002 years, along with various media reporting and a documentary film of his 2002 product launch. The complainant admitted to advertising in the media only infrequently, and had no other marketing materials which would be sufficient grounds for a conclusion that the "Wang Pei-Hao" brand was one generally known to the relevant enterprises or consumers. Based on the period during which the complainant marketed the products, the volume of advertising, market share, and media coverage, it was difficult to conclude that "Wang Pei-Hao" was a symbol well known among the relevant enterprises and consumers. The shapes of the various jewelry and accessories were either round, rectangular, flower-shaped, or of various irregular shapes, all common shapes for pendants and jewelry, and hence not easily considered as the "symbols" referred to in Article 20 of the Fair Trade Law. So the elements of Article 20 of the Fair Trade Law were not fully satisfied, making Article 20 of the FTL inapplicable.
   2. With regard to the complainant's report of infringement of its trademark and damage to its business reputation by the respondent, a review of the audio tape provided by the complainant showed that the respondent, in the process of marketing its jewelry to customers, did in fact mention the prices, design, and quality of the Wang Pei-Hao designs as it introduced various items, but it did not engage in "making or disseminating any false statement" with regard to the complainant. The complainant also failed to provide any concrete evidence of damage to its business reputation, and so failed to fully satisfy the elements of Article 22 of the FTL, making Article 22 of the FTL inapplicable.
   3. With regard to brooches, earrings, or rings, as they primarily serve to highlight the overall looks of the wearer and their appearance changes with the fashion of the time, they are subject to rapid changes in style. Given that their appearance changes along with other fashions, it is difficult to invoke the protection of competition law based only on vague similarities in appearance. And, as the related party in this case indicated, it had been a contract manufacturer for the complainant, and while it had begun to make brooches, earrings, and rings for the complainant at an early date, the molds, patterns, and materials used in their manufacture had not been bought out by Wang Pei-Hao and so were not the property of the complainant, and there was therefore nothing to prevent a third party from selling jewelry made in these popular styles. Since the complainant also failed to specifically point out which designs had been the result of its own efforts, it could not be concluded that the respondent's acts involved exploiting the fruits of others' labors or that they were capable of adversely affecting the trading order. Therefore, it was not found to be any violation of Article 24 of the FTL.

Appendix:
Wang Pei-Hao Collection Co., Ltd.'s Uniform Invoice Number: 12870050

Summarized by Lee, Bi-Lin; Supervised by Wu, Ting-Hung