SATV Enterprise Co., Ltd. was alleged to have engaged in false advertising in violation of the Fair Trade Law

Chinese Taipei

Case:

SATV Enterprise Co., Ltd. was alleged to have engaged in false advertising in violation of the Fair Trade Law

Key Words:

world's first, ISO international quality assurance certification

Reference:

Fair Trade Commission Decision of December 22, 1999 (the 424th Commissioners' Meeting); Disposition (88) Kung Ch'u Tzu No. 169

Industry:

Other Household Appliances Production Industry (3129)

Relevant Laws:

Article 21 of the Fair Trade Law and Article 41 of the pre-amendment Fair Trade Law

Summary:

1. An enterprise made the following allegations regarding SATV Enterprise Co., Ltd. ("SATV") that SATV falsely presented in a catalog it printed that the "moistureproofer" electronic moistureproof box product it made and sold was made by the world's first manufacturer of professional moistureproof cabinet products to receive the ISO international quality assurance certification; that the physical condensation dehumidifier product in its catalog, indicated by Chinese Taipei patent no. 053137, was only a new design patent; that these representations would be likely to cause a general consumer to be unable to ascertain whether an invention patent, new utility model patent, or new design patent had been obtained for these products; and thereby that SATV clearly engaged in false advertising.
2. With respect to the part stating that "the world's first maker of professional moistureproof cabinet products to receive the ISO international quality assurance certification," it is important to note that the enterprise using specific numerals in a representation or symbol for its product or service must prove the truth of its statement. The Fair Trade Commission (the "Commission") found as follows that the ISO 9002 certification for which SATV had applied covered the company's operating systems, not its products; that SATV received the certification on 27 July 1999; that the enterprise referred to in the first paragraph received the certification on 15 July 1999; and thereby that SATV was not the world's first manufacturer of professional moistureproof cabinet products to receive the ISO 9002 international quality assurance certification.
3. With respect to the part stating that "physical condensation dehumidifier, aerospace technology semiconductor chip, Chinese Taipei patent no. 053137," it is also significant note that the patent certificate No. 053137 provided by SATV indicated "dehumidifier" as the patent name, and "new design patent for an exterior design innovation" as the patent type. The Commission compared the wording of "dehumidifier," in SATV's patent certificate, with "physical condensation dehumidifier" and "aerospace technology semiconductor, Chinese Taipei patent No. 053137," in SATV's catalog, and found that they were different in terms of function, design, and name. As a result, when viewed in terms of its overall appearance, the advertisement would still be likely to cause a person to misidentify the patent as being related to "aerospace technology semiconductors," or being related to the function of a "physical condensation dehumidifier," but not as an innovation related to the shape of a "dehumidifier." Therefore, the aforesaid wording used by SATV was likely to cause consumers to make misidentifications. This determination was reached with a high degree of certainty.
4. In summary, SATV made false and misleading representations in its catalog with respect to the aforesaid parts of the advertisements in violation of Article 21(1) of the Fair Trade Law. SATV printed and distributed its catalog in August 1999. The Commission issued a letter and conducted an investigation. Subsequently, on its own accord, SATV modified the offending advertisement in its catalog. In consideration of its motive and objective, the effect on market competition, and any unlawful act committed previously, the Commission ordered SATV to immediately stop the offending representations, and to pay a fine of NT$200,000 pursuant to the fore part of Article 41 of the Fair Trade Law.

Summarized by Wu Hung-kuan
Supervised by Chu Wei-ch'ing

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