Taiwan Tina Enterprise Co., Ltd. violated
Article 20(1)(i) of the Fair Trade Law by using the Hey-Song Sarsaparilla product's
container, appearance, pattern and color, commonly known to the relevant public,
on the Mr. Zebra Salty Sarsaparilla product, causing confusion
Chinese Taipei
Case:
Taiwan Tina Enterprise Co., Ltd. violated Article 20(1)(i) of the Fair Trade
Law by using the Hey-Song Sarsaparilla product's container, appearance, pattern
and color, commonly known to the relevant public, on the Mr. Zebra Salty Sarsaparilla
product, causing confusion
Key Words:
product container appearance, commonly known to the relevant public, misappropriation,
confusion
Reference:
Fair Trade Commission Decision of January 19, 2000 (the 428th Commissioners'
Meeting); Disposition (89) Kung Ch'u Tzu No. 019
Industry:
Non-alcoholic Beverage Industry (1183)
Relevant Laws:
Articles 20(1)(i)
and 24
of the Fair Trade Law
Summary:
- Kuo Lian Kuo Chi Patent and Trademark Offices filed a complaint on behalf
of Hey-Song Corporation ("Hey-Song"). That complaint is summarized
as follows:
On 1 March 1993, the "HEY-SONG & Design" trademark (approval
No. 588242) was registered for use on sarsaparilla products in Class 19 of
the Classification of Goods and Services. The registration was valid for the
period from 1 March 1993 to 15 July 2001. The Hey-Song Sarsaparilla product
("the Hey-Song product") was the company's leading product with
a market share of 100% between 1994 and 1997. However, the Mr. Zebra Salty
Sarsaparilla product ("the Mr. Zebra Salty product'") was produced
and sold by Taiwan Tina Enterprise Co., Ltd. ("Taiwan Tina"), used
a coffee-colored background and gold and white stripes similar to the Hey-Song
product. This was very likely to cause consumers to confuse and misidentify
the brands when making a purchase in a hurry. Therefore, this act violated
Article 20 of the Fair Trade Law.
On 10 September 1997, in the 307th Commissioner's Meeting, the Fair Trade
Commission (the "Commission") deemed in a decision that Taiwan Tina
violated Article 24 of the Fair Trade Law in force when the act occurred.
On 23 October 1997, in the disposition (ref.: (86) Kung Chu Tzu No. 183, the
Commission ordered Taiwan Tina to immediately cease the unlawful act as of
the day after service of the disposition, and, within two months, to pull
all offending product out of the market. Taiwan Tina disagreed with the disposition
(received on 27 October 1997) and filed an appeal according to the appellate
procedure. That appeal was dismissed, so Taiwan Tina filed another further
appeal. On 4 September 1998, in the decision (ref.: T'ai (87) Su Tzu No. 43605),
the Cabinet annulled the original decision and the original disposition, and
it ordered that the original disposing agency shall render another disposition
in accordance with the law.
- In the further appellate decision, the Cabinet deemed that the question
of whether Taiwan Tina's act violated Article 20(1)(i) or Article 24 of the
Fair Trade Law merited further exploration. Its reasons were as follows: Hey-Song
repeatedly stressed that its design was expressed in its coffee-colored background,
white lettering, and gold and white stripes. But, a coffee-colored background
failed to constitute a symbol that can distinguish one sarsaparilla beverage
from another. So, it was deemed that Article 20 of the Fair Trade Law was
not violated. But, how can a product's container, appearance, and packaging
not constitute the symbols of the product? The original disposition deemed
that it was customary for the color and packaging used on the Mr. Zebra Salty
product to be used on sarsaparilla beverages, and that this would not cause
Mr. Zebra Salty Sarsaparilla to be confused with the Hey-Song product. However,
the original disposition also deemed that the former was not significantly
distinguishable from the latter, and that this constituted a misappropriation
of the latter's container, appearance, color, and pattern. The question of
whether Taiwan Tina's act violated Article 20(1)(i) or Article 24 of the Fair
Trade Law regarding anticompetitive acts merited further analysis. Consequently,
the Cabinet annulled the original disposition and the appellate decision,
and it ordered the Commission to render another disposition in accordance
with the law.
- Hey Song obtained a right of exclusive use of a trademark for the Hey-Song
product's design from the National Bureau of Standards under the Ministry
of Economic Affairs (MOEA) on 16 January 1987 and on 1 March 1993 respectively.
The design (consisting of a flat pattern containing the words "Hey-Song"
and gold and white stripes encircling the container) was listed for use with
sarsaparilla, soda, and juice products, and was still in force. This can be
confirmed from the Shiling District Court criminal decision (ref.: (87) Zi
Keng Tzu No. 6). Given that the current Trademark Law in Chinese Taipei extends
recognition to two dimensional trademarks, but not to three dimensional trademarks,
the "words, symbols, combination of colors, or a combination thereof"
pertaining to the definition of a trademark under Article 5 of the Trademark
Law extends only to two dimensional word patterns, but not to three dimensional
containers or packaging shapes. The Hey-Song product's container had a coffee-colored
background, but that color was the same as the color of sarsaparilla beverages
in general. But, according to Article 5 of the Trademark Law, a registered
trademark "shall enable an ordinary products purchaser to identify the
trademark as representing the products, and the trademark shall enable the
products to be distinguished from those of another person." [Designs
that do not comply with the provisions of the preceding paragraph shall be
deemed to comply where,] "the trademark has become distinctive because
of the trademark's use in connection with its products in commerce by the
applicant"(i.e., a registered trademark must possess either distinctiveness
or secondary distinctiveness in order to be a trademark). Since Hey-Song obtained
a right of exclusive use of a trademark for the words and pattern printed
on the Hey-Song product's container, the design itself must possess distinctiveness
or secondary distinctiveness pursuant to Article 5 of the Trademark Law. The
Hey-Song product's pull-tab, and the words "Hey-Song" and the gold
and white stripes encircling the beverage can, are its main attributes. Since
this design possesses distinctiveness or secondary distinctiveness, the Hey-Song
product's container appearance thus constitutes a "symbol" under
Article 20(1)(i) of the Fair Trade Law when viewed in terms of overall appearance.
- The Commission found that large quantities of the Hey-Song product were
sold in Chinese Taipei in 1977. In 1996, more than 14,000,000 dozen cans of
the Hey-Song product were sold. From 1994 to between March and April of 1997,
the Hey-Song product's market share averaged over 90% and that of other sarsaparilla
brands was about 10%. The company also ran a large number of advertisements
in television, newspaper, and magazine media. Between 1992 and 1997, annual
ad expenditures for the Hey-Song product were between NT$23,570,000 and NT$81,480,000.
Between 1992 and May of 1997, the Hey-Song product's total ad expenditures
were NT$259,000,000. The Hey-Song product's appearance has been commonly known
to the relevant public in Chinese Taipei for a long time because it has been
sold for a long time, it has a large market share, and it has been intensively
advertised and promoted. This appearance consisting of the coffee-colored
background, the words "the Hey-Song product" in white lettering.
In addition, the gold and white curved stripes of its outer packaging has
also been commonly known to the relevant public because it has been marketed
for a long time.
- The Commission found that the pull tab, coffee-colored background, and
gold and white curved stripes oriented from upper right to lower left on the
Mr. Zebra Salty product were the same as those on the Hey-Song product. Furthermore,
the Mr. Zebra Salty product used the words "Salty Sarsaparilla"
in white lettering too. The Mr. Zebra Salty product differed from the Hey-Song
product only in that its curved stripes were twisted and that there were intersections
in different places. There were no other clear differences between the two
designs that would be noticeable to the relevant public when observing on
average attention levels. When viewed at different times and at different
places, a consumer would be likely to have the same impression of them regardless
of whether they were viewed in terms of their overall appearance or their
main parts.
In summary, the Commission deemed that Taiwan Tina used Hey-Song's symbol
in the same or similar manner. It deemed that the words "Salty Sarsaparilla"
clearly labeled on the front of the Mr. Zebra Salty product were only descriptive
and only able to describe the product's flavor. Since the words were unable
to distinguish the product's origin, it would be difficult for them to serve
as a basis for differentiating different products. This is especially so as
the general public customarily added salt to sarsaparilla beverages for a
long time. The word "salty" not only was unable to differentiate
the product's origin, it was also likely to cause consumers to misidentify
the Mr. Zebra Salty product as a new product flavor or product line of Hey-Song.
The Mr. Zebra Salty product was labeled with the words "Mr. Zebra"
and design under the words "Salty Sarsaparilla," but the former
were smaller than the latter, and they were in gold and white lettering. The
main words and patterns on the Mr. Zebra Salty product design were similar
to those of the Hey-Song product. When viewed in terms of overall appearance,
the Mr. Zebra Salty product's design possesses no clear distinguishing effect.
It was difficult to determine whether the words "Mr. Zebra" and
its appearance design represented a product not from Hey-Song, or not a new
product from Hey-Song. Sarsaparilla is a low-price product (about NT$15 per
can). A purchaser is likely to pay less attention when purchasing a lower-priced
product than when purchasing a higher priced product. As a result, when a
purchaser is making a purchase in a hurry, he could very easily make a mistaken
purchase based on a momentary misidentification. The Mr. Zebra Salty product
used the Hey-Song product's symbol in the same or similar manner. The differences
between the two designs' appearances are insufficient to distinguish them
in terms of their origins. When viewed at different times and at different
places, the word "Salty" would be very likely to cause the relevant
public to misidentify the Mr. Zebra Salty product as that belongs to Hey-Song's
sarsaparilla product line and as being produced by Hey-Song. Consequently,
it is determined that the Mr. Zebra Salty product's appearance was likely
to cause consumers to confuse it with the Hey-Song product.
Appendix:
Taiwan Tina Enterprise Co., Ltd.'s Uniform Invoice Number: 96870666
Summarized by Lin Ch'iu-miao
Supervised by Wu Ting-hung
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