The Supreme Administrative Court Rules The Conduct That Is Able To Influence Trading Order Is Not Preconditioned On “Substantial Loss” Caused by Imported Counterfeits.

  The Supreme Administrative Court recently rendered a judgment ruling that any business which imports a vast quantity of counterfeits of well-known brands for sale shall constitute the conduct that is able to “influence trading order” as defined in Article 24 of the Fair Trade Law, and such conduct is not preconditioned on actual or substantial loss to arise.  That is, the act of importing counterfeits shall be held in violation of the Fair Trade Law even if the counterfeits imported are not even sold.

 

  For example, company A is reported for importing counterfeit Hello Kitty products and thus is held suspected of violating Article 20 and Article 24 of the Fair Trade Law.  The Fair Trade Commission (FTC) made a decision on 2003, holding that company A’s act is unfair conduct that is able to influence trading order and thus shall be fined NT$200,000.

 

  Company A disagreed with the decision and then instituted an administrative appeal and further initiated an administrative proceeding with the Taipei High Administrative Court.  Taipei High Administrative Court ruled that “the decision of administrative appeal and the decision made by the FTC shall be vacated”, while the FTC was not satisfied and filed an appeal with the Supreme Administrative Court.

 

  Company A maintained that the Hello Kitty products were unlikely to influence trading order since they had been seized by the police after imported into Taiwan before their sale and that importation is just a preparation of “influencing trading order”. 

 

  FTC held that the conduct that is able to influence trading order as defined by Article 24 of the Fair Trade Law in Taiwan is preconditioned on the nature and outcome of the deceptive or obviously unfair conduct, instead of the adverse influence on the market.  (2006.6)

/CCS