August 2017
Although an enterprise does not use the symbol of another entity for purposes of competition, still if any obviously unfair act sufficient to undermine trading order such as false association with the goodwill of such other entity is engaged, such practice shall be sanctioned in accordance with Article 24 of the Fair Trade Law(Taiwan)
Sean Liu
The Supreme Court rendered the 105-Tai-Shang-81 Civil Decision of January 14, 2016 (hereinafter, the "Decision"), holding that although an enterprise does not use the symbol of another entity for purposes of competition, still if any obviously unfair act sufficient to undermine trading order such as false association with the goodwill of such other entity is engaged, such practice shall be sanctioned in accordance with Article 24 of the Fair Trade Law.
According to the facts underlying this Decision, the Appellee in this matter asserted as follows. The Appellee is the owner of the registered "Happy Space" trademark (hereinafter, the "Trademark at Issue"). The Appellant sold the Trademark at Issue as a keyword advertisement to Yaputa Co., which is not a party to this lawsuit and which subsequently sold such keyword advertisement to another interior designer, to generate advertising fees (hereinafter collectively, the "Advertisement at Issue"). As a result, after general consumers entered the Trademark at Issue as a search term on an Internet search engine, an interior designer, which was a competitor to the Appellee, appeared. This constituted false association with the goodwill the Appellee had developed with long-term efforts and thus was an obviously unfair profit-seeking act sufficient to undermine trading order in violation of Article 24 of the Fair Trade Law before amendment (Article 25 of the current law). Since unfair competition was constituted, a complaint was filed to compel the Appellant not to use the registered "Happy Space" trademark as a keyword advertisement and to pay damages.
According to the Decision, although both the Fair Trade Law and the Trademark Law contain protective provisions, still the Trademark law focuses on the protection of the private law rights of a trademark holder and infringement upon a registered trademark is dealt with in accordance with the Trademark Law. In comparison, the Fair Trade Law contains separate provisions because using a symbol of another party, causing confusions and misidentification, making false association with the goodwill of others, or defrauding others of their fruit of labor violates the nature of efficiency competition, is imputable in business ethics and undermines fair competition. Therefore, it is necessary for the government to intervene to maintain fair competition with an emphasis on the maintenance of fair competitive order. Although an enterprise does not use the symbol of another entity for purposes of competition, still if any obviously unfair act sufficient to undermine trading order such as false association with the goodwill of such other entity is engaged, becomes imputable in business ethics and should be prohibited, such practice shall still be sanctioned in accordance with Article 24 of the Fair Trade Law.
According to the Decision, the Appellant and another interior design operator made false association with the Appellee's famous mark through keyword advertising as advertisers, making it likely for the Appellee to lose transactions opportunities with potential customers. Since this was sufficient to harm the Appellee and constituted an act of unfair competition under Article 24 of the Fair Trade Law, the original decision which appropriately ordered the Appellant to assume the liability for damages was upheld, and the Appellant's appeal was rejected.
The Supreme Court rendered the 105-Tai-Shang-81 Civil Decision of January 14, 2016 (hereinafter, the "Decision"), holding that although an enterprise does not use the symbol of another entity for purposes of competition, still if any obviously unfair act sufficient to undermine trading order such as false association with the goodwill of such other entity is engaged, such practice shall be sanctioned in accordance with Article 24 of the Fair Trade Law.
According to the facts underlying this Decision, the Appellee in this matter asserted as follows. The Appellee is the owner of the registered "Happy Space" trademark (hereinafter, the "Trademark at Issue"). The Appellant sold the Trademark at Issue as a keyword advertisement to Yaputa Co., which is not a party to this lawsuit and which subsequently sold such keyword advertisement to another interior designer, to generate advertising fees (hereinafter collectively, the "Advertisement at Issue"). As a result, after general consumers entered the Trademark at Issue as a search term on an Internet search engine, an interior designer, which was a competitor to the Appellee, appeared. This constituted false association with the goodwill the Appellee had developed with long-term efforts and thus was an obviously unfair profit-seeking act sufficient to undermine trading order in violation of Article 24 of the Fair Trade Law before amendment (Article 25 of the current law). Since unfair competition was constituted, a complaint was filed to compel the Appellant not to use the registered "Happy Space" trademark as a keyword advertisement and to pay damages.
According to the Decision, although both the Fair Trade Law and the Trademark Law contain protective provisions, still the Trademark law focuses on the protection of the private law rights of a trademark holder and infringement upon a registered trademark is dealt with in accordance with the Trademark Law. In comparison, the Fair Trade Law contains separate provisions because using a symbol of another party, causing confusions and misidentification, making false association with the goodwill of others, or defrauding others of their fruit of labor violates the nature of efficiency competition, is imputable in business ethics and undermines fair competition. Therefore, it is necessary for the government to intervene to maintain fair competition with an emphasis on the maintenance of fair competitive order. Although an enterprise does not use the symbol of another entity for purposes of competition, still if any obviously unfair act sufficient to undermine trading order such as false association with the goodwill of such other entity is engaged, becomes imputable in business ethics and should be prohibited, such practice shall still be sanctioned in accordance with Article 24 of the Fair Trade Law.
According to the Decision, the Appellant and another interior design operator made false association with the Appellee's famous mark through keyword advertising as advertisers, making it likely for the Appellee to lose transactions opportunities with potential customers. Since this was sufficient to harm the Appellee and constituted an act of unfair competition under Article 24 of the Fair Trade Law, the original decision which appropriately ordered the Appellant to assume the liability for damages was upheld, and the Appellant's appeal was rejected.
