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TRADEMARK OWNER IS LIABLE FOR ACTS OF FRANCHISE STORES
The law is silent as to whether a trademark owner should be jointly liable with a licensed user of the trademark when the goods manufactured or the services provided by the licensed user cause damage to consumers. In its judgment in 2009 on a dispute between a franchise real estate agent and a consumer, the Taiwan High Court upheld the Taoyuan District Court's opinion in respect of the acts by a franchise store that the trademark owner shall be jointly liable with the licensed user as an employer as stipulated in Article 188-1 of the Civil Code. This case was appealed to the Supreme Court but the Supreme Court dismissed the appeal in 2009.
The Taiwan High Court found that the trademark owner in that case had licensed its trademarks to the franchisee to provide real estate agency services and the contracts used by the franchisee were provided by the trademark owner and the licensed trademark were displayed thereon. Therefore, the Court held that the franchisee provided services under the instructions and supervision of the trademark owner and thus, was deemed an employee of the trademark owner under Article 188-1 of the Civil Code. In consequence, the trademark owner, as an employer, should be jointly liable for damage arising from the services provided by the franchisee pursuant to Article 188-1 of the Civil Code.