Counterfeiting of others' symbols (trade dress) by Ta Chia Dairy Co., Ltd. in violation of Article 24 of the Fair Trade Law
Case:
Counterfeiting of others' symbols (trade dress) by Ta Chia Dairy Co., Ltd. in violation of Article 24 of the Fair Trade Law
Key Words:
counterfeiting, passing-off, exploiting the fruits of another's efforts, symbol
Reference:
Fair Trade Commission Decision of August 30, 2001 (the 512th Commissioners' Meeting); Disposition (90) Kung Ch'u Tzu No. 125
Industry:
Dairy Products Manufacturing (0820)
Relevant Laws:
Summary:
1. Since its founding in 1948, the Japanese firm Calpis Co., Ltd. has been engaged in manufacturing and marketing Calpis lactobacillus drinks, and in 1966 invested in Chinese Taipei to establish the Taiwan Calpis Co., Ltd. for marketing of the same products here. For 50 years, the Calpis lactobacillus drink has been marketed in a tall bottle with a narrow neck. The bottle's design style, which has never been changed, features a white background with a decorative blue circle, with trademark and text items in white characters on a blue background, or the reverse. The design has been popular with consumers, and undoubtedly constitutes what Article 20 of the Fair Trade Law refers to as a "symbol . . . commonly known to consumers." The Ta Chia Dairy Co., Ltd. (the respondent) produced its Ru Mei Su drink for the Chinese Taipei market in a container whose external appearance and packaging design are extremely similar to the aforesaid product, with the layout of text items, fonts, and the ingredients list being virtually identical. The respondent's counterfeiting of the Calpis product's external appearance and packaging constituted a possible violation of the provisions of Article 20(1)(i) of the Fair Trade Law, also constituted a possible violation of Article 24 of the same law by exploiting the fruits of others' efforts.2. The Fair Trade Commission's investigation showed that, in addition to the outer packaging of the bottles of Calpis' and the respondent's products, which both used a white background with a blue circle, the front sides of both indicated the product name and trademark, and included relevant product information such as the product name, main ingredients, manufacturing date, expiration date, freshness period, storage method, volume of contents, and manufacturer. In addition to the aforementioned essential product information, the backside also included the method of preparation. Specification of these items is required under Article 8 of the Product Labeling Law, and may not be taken as a symbol indicating the product's source. Addition of the phrases "healthy new formula with added oligosaccharides" and "quality lactobacillus drink" should also be considered typical representations on product labels that are explanatory of the main ingredients; thus they also are not indication on the product's source. With respect to the content of the product's back label, the only indications have to do with the method of preparation and the aforementioned items common to all product labeling. Further examination showed that the center of the label on the respondent's bottle showed an oval shape smaller than the Calpis circle, with an internal "Ta Chia Dairy" label in white letters on a blue background, along with "Ru Mei Su," "Newpis," and "quality lactobacillus drink" advertising texts. The sides of the bottle also had "Newpis" and "Yogurt Milk" in smaller letters that were white on a blue background. The "Ru Mei Su and NEWPIS device" had formerly been registered as a trademark by an associated enterprise of the respondent, Ai Kuo Le Shih Co., Ltd., though the period of exclusive use of the trademark had lapsed (16 June 1987 to 15 September 1997). The text portions of the respondent's product label stood out relative to the overall packaging itself, and were part of a unified label printed on plastic film over the entire bottle, including the blue circle on white background. The explanatory text on the Calpis product, however, used a long rectangular paper label adhering to the white paper with blue circle wrapped around the bottle, so the two could be distinguished in terms of materials and the printing of the product information. An average consumer paying an ordinary amount of attention could easily see the differences between the two. The respondent's product indicated "Ta Chia Dairy," "Ru Mei Su," and "Newpis," as well as the label for "manufacturer" that indicated "Ta Chia Dairy Co., Ltd.," different from the indication of "Kuo Chi Trading Co., Ltd." as importer, with labeling above primarily in Japanese, on the Calpis product. The respondent's product also differed from the packaging of the Calpis products that are imported and packaged in Chinese Taipei. Confusion would not be caused among consumers with regard to either the product itself or the source of the product; therefore, on the basis of existing evidence, it is difficult to maintain the respondent's conduct violates Article 20 of the Fair Trade Law.3. The Fair Trade Commission's investigation showed that the respondent's Ru Mei Su product originally used packaging different from Calpis', but did not continue using the original packaging, and failed to design a new external appearance for the bottle, or created a new product packaging that was distinct from products already on the market. Further, it took its already registered trademark, altered the layout of the Chinese characters and enlarged the font size of the English lettering for the product name, resulting in packaging that was similar to Calpis' in terms of the arrangement and style of the lettering and the background color. The respondent did indeed engage in passing off by imitating another's external product appearance and actively exploited the fruits of another's efforts, taking advantage of another's reputation for the purpose of obtaining trading opportunities for itself. Such conduct runs counter to business ethics and infringes upon the rights of competitors affect the trading order, in violation of Article 24. The Fair Trade Commission considered factors such as the motives for the respondent's conduct, the respondent's anticipated improper gains, the degree and duration of injury to the trading order, the benefits actually obtained, the scope of the respondent's business, its economic condition and market position, its attitude after committing the unlawful act and whether it had any previous record of unlawful conduct. The Fair Trade Commission decided to order the respondent to immediately cease its unlawful conduct, and imposed an administrative fine of NT$200,000 against the respondent, pursuant to the fore part of Article 41 of the Fair Trade Law.Appendix:Ta Chia Dairy Co., Ltd.'s Uniform Invoice Number: 84699016Summarized by Wu, Lieh-Ling; Supervised by Yeh, Tien-Fu