The external appearance Galien Industrial Co., Ltd.'s "White Men Toothpaste" allegedly violated the provisions of Articles 22 and 24 of the Fair Trade Law. The Supreme Administrative Court subsequently reversed the original disposition and the original judgment and ordered that a new disposition be made based on a more appropriate legal basis.
Case:
The external appearance Galien Industrial Co., Ltd.'s "White Men Toothpaste" allegedly violated the provisions of Articles 22 and 24 of the Fair Trade Law. The Supreme Administrative Court subsequently reversed the original disposition and the original judgment and ordered that a new disposition be made based on a more appropriate legal basis.
Key Words:
Darlie Toothpaste, White Men Toothpaste, appearance of goods (trade dress), single color
Reference:
Fair Trade Commission Decision of March 1, 2002 (the 538th Commissioners' Meeting); Letter Kung San Tzu No. 0910001962
Industry:
Cleaning Preparations Manufacturing (2230)
Relevant Laws:
Summary:
1. In 1997, Hawley & Hazel Chemical (Taiwan) Co., Ltd. (the complainant) filed a formal complaint with the Fair Trade Commission (FTC) alleging that the "White Men Toothpaste" manufactured by Galien Industrial Co., Ltd. (the respondent) copied the name and external appearance of the "Darlie toothpaste (Chinese: Hei Ren Ya Gao = Black Man Toothpaste) manufactured by the complainant in violation of the provisions of Articles 20 and 24 of the Fair Trade Law in force at that time. Following the FTC's 8 April 1998 Decision (the 355th Commissioners' Meeting), a letter was sent to the complainant stating that the names and external appearances of the two products involved did not conform with the key condition of "Use, in the same or similar manner" as stated in the provisions of Article 20(1)(i) of the Fair Trade Law. Furthermore, it was difficult to consider that the respondent had plagiarized the external appearance of the complainant's goods and thus there no violation of the provisions of Article 24 of the same law was involved. The complainant refused to accept the decision and filed two appeals that were later rejected. The complainant subsequently filed an administrative appeal on which the Supreme Administrative Court ruled as follows: The complainant's criticism of the original decision as illegal is not without grounds. That the re-appeal failed to address the deficiencies and was rejected was also negligent and, consequently, the decision is reversed and the FTC is ordered to issue another decision with appropriate legal basis following a detailed investigation. 2. The overall external appearance of the respondent's "White Men Toothpaste" does not imitate the external appearance of the complainant's goods and thus there is no violation of the provisions of Article 20(1)(i) of the Fair Trade Law: (1) The external appearance of the complainant's "Hei Ren Ya Gao" is a trade dress that is widely recognized by consumers and relevant enterprises: (i) Although there have been minor modifications to the external appearance of the complainant's "Hei Ren Ya Gao" toothpaste through the years, the chief design elements of that overall external appearance comprise a yellow background accompanied by the hei ren design and hei ren trademark, imprinted with the word "DARLIE" and accompanied by a general textual explanation. To date, Hei Ren Ya Gao has been sold in Chinese Taipei for more than 50 years dating back to 1949. Between 1994 and 1996, more than 20 million units of Hei Ren Ya Gao were sold annually in Chinese Taipei for, accounting for about 50% of the market, and the complainant's advertising expenditures during that period exceeded NT$10 million annually; thus there is can be no doubt that the overall external appearance of the complainant's "Hei Ren Ya Gao" constitutes a trade dress that is widely recognized by consumers and relevant enterprises. (ii)The complainant argued that since it entered the market more than 50 years ago, Hei Ren Ya Gao (Darlie) has consistently used "yellow" as the color of its external packaging. When consumers see a yellow toothpaste box, they immediately associate it with Hei Ren Ya Gao (Darlie) toothpaste. Consequently, the use of yellow color in the external appearance of Hei Ren Ya Gao (Darlie) should be protected. Judgment of the trade dress of goods, however, should be examine whether or not the distinctiveness and integrity of the design form a distinctive character differentiating it from other goods. If such is the case, then the trade dress in question meets the requirements of overall external appearance. The overall packaging may not be broken down and examined in terms of individual characteristics such as color, appearance or shape or printing fonts. This is consistent with 2000 Taipei High Administrative Court decision Su-Tzu No. 1004, which states that when consumers or other trading partners identify Darlie toothpaste it is not merely the Chinese characters "Hei Ren" or the stylized graphic head shot of a man on the package but the overall external appearance, including the "Hei Ren" characters on the front and back, the stylized graphic head shot and the predominantly yellow coloring of the packaging, not individual recognition of the coloring or the "Hei Ren" characters. Furthermore, since the packaging of the complainant's goods is composed of a multi-colored design with text characters, it does not conform to the "single color" argument previously raised by the complainant. In any case, the advertising volume and other marketing materials provided by the complainant all relate to the overall external appearance of Darlie toothpaste and thus may not be considered as grounds for establishing that the yellow background color [of the Darlie toothpaste packaging] is the basis of the widespread recognition of the trade dress among consumers and relevant enterprises. As such, there is no evidence to suggest that the yellow background coloring [of the packaging] independently constitutes the trade dress characteristic that is widely recognized by consumers or relevant enterprises. (2) The external appearance of Darlie toothpaste and White Men toothpaste is neither the same nor similar: Although the two products involved in this case are booth toothpaste, the text, graphic design and external appearance of the complainant's White Men toothpaste, however, regardless of whether in terms of coloring, graphic design, text and even the name of the manufacturer, all are clearly different. The graphic design on the product packaging of White Men toothpaste comprises three background colors of yellow, green and white while that of Darlie toothpaste is simply yellow. The design of the product packaging of White Men toothpaste features alternating white and green stripes with bold white text on the front reading (Chinese text) "Bai Ren (not harsh) Toothpaste" and "easy squeeze soft tube." On the back the words "White Men" are arranged horizontally from left to right. The packaging design of Darlie toothpaste, on the other hand, features the (Chinese) text "Hei Ren Ya Gao" (Black Man toothpaste) or (English) "Darlie," an image of a man wearing a top hat (formerly a photo of a black man, now an ambiguous white-colored silhouette-type image), white (Chinese) lettering on a green background reading "healthy whitening cleansing, powerfully refreshing," occasionally bearing the red print (Chinese) characters "internationalized; new packaging" arranged in a top-to-bottom composition. On the sides of the packaging of White Men toothpaste are alternating green and white stripes and bearing the (Chinese) text "Bai Ren Ya Gao" (White Men Toothpaste) of (English) White Men. The sides of the Darlie toothpaste-packaging read "Darlie or "Hei Ren (super fluoride) toothpaste." Moreover, there are numerous places on the front, back and sides of the packaging of the two products using the text "Bai Ren" trademark, the English words "White Men," the Chinese characters "Hei Ren," the "White Men logo" trademark and the names of the two companies to serve as differentiating characteristics. Consequently, the conception and overall design of the packaging of the two products is different and does not conform to the main points of Article 20(1)(i) of the Fair Trade Law concerning "use, in the same or similar manner." (3) The overall external product appearance of Darlie toothpaste and White Men toothpaste does not cause confusion [among consumers]: (i)The overall external product appearance of Darlie toothpaste constitutes a trade dress that is widely recognized by consumers and relevant enterprises and, although both products involved in this case are toothpastes, however, the overall external product appearance of the two is neither the same nor similar, as has been established above. As regards the external product appearance of the two products in question, the two are dissimilar not only in terms of the Chinese- and English-language text but also the "black man" graphic design element on the Darlie toothpaste is sufficient to differentiate between the two products, giving people a lasting impression, while the overall external appearance, design conception and pronunciation are all clearly different so that when observed separately at different times and in different places there is no likelihood of confusion among consumers and it is difficult to believe that there is a likelihood that an ordinary purchaser of goods would draw an association with regard to the source of the goods cited by the trade dress and make a mistaken purchase. Between 1989 and 1996, the respondent made enormous outlays on television, newspapers, magazine and other media advertising for White Men toothpaste in widespread publicity campaigns. This can be verified through advertising tracking data, assessment reports and "White Men" product catalogs produced by the respondent, Ruen Lye Co., Ltd. The respondent has raised the degree of recognition of its product through repeated placement of advertisements, conducting lucky draws and other marketing activities and it can now be discerned that the two products, having co-existed in the market for a number of years, have each established their own independent reputation and it is therefore difficult to believe that there is a likelihood that ordinary consumers would confuse the external appearance of the two products. (ii) The complainant also argued that the opposing relationship between the "Hei Ren" (black man) and "Bai Ren" (white man) product names and, indeed, the strong contrast in meaning, could easily cause consumers to form a mistaken or confused association and conclude that the two products were produced by the same company or related enterprises or had a sub-brand relationship. Application for registration of the "Bai Ren" and "White Men" trademarks, however, was filed in 1987. Since the "Bai Ren" name is a legally registered trademark its display upon products is merely the legal exercise of rights in accordance with the Trademark Law. Further, its registration for [more than] 10 years is sufficient to determine that the two products have been used and co-existed in the market for many years and each has established its own independent reputation and thus it is difficult to believe that there is a likelihood of that ordinary consumers would confuse the external appearance of the two products based merely upon the opposing nature of the two names. (iii) As far as the two market research reports from Hong Kong-based companies Taylor Nelson Sofres Interactive (TNS Interactive) and the Field Force Group (Field Force) are concerned, although the two companies are international market research organizations with a certain degree of professionalism, when carrying out the actual polling portion of their survey, Field Force however displayed White Men toothpaste and Darlie toothpaste together and directly asked those polled whether or not the two products were produced by the same company. This is not in line with the principle of observing separately at different times and in different places when examining trade dress and raises the likelihood that pollsters could lead respondents in their answers. Furthermore, the polling sample used was limited to street corner polls of about 100 people at three locations around Taipei city. This polling sample is, therefore, insufficiently representative in its composition and questionable in its results. The TNS Interactive survey, in conducting the actual polling portion of the survey, arranged the White Men and Hei Ren toothpastes side-by-side, also not in accordance with the principle of separate observation at different times and in different places when examining trade dress, and directly asked respondents whether or not the two products were produced by the same company, also creating a likelihood that respondents' answers could be led. Furthermore, TNS Interactive's polling sample was culled from villages, townships and secondary cities island-wide, randomly drawing 1,000 respondents chosen as a proportion to the general population. Although the polling sample was broadly diverse, the company failed to make available their files regarding respondents' answers to the poll questions, statistics of the replies so it is impossible to determine whether the final results are truthful or not. Due to the deficiencies of the two above-mentioned market research reports, it is difficult to use the reports to determine whether they can serve as the basis for a decision on whether the external appearance of the two toothpastes is likely to cause confusion. (4)In summary, although the trade dress of Darlie toothpaste is one that is widely recognized by ordinary consumers and relevant enterprises, however, the overall external product appearance of White Men toothpaste and Darlie toothpaste cannot be considered the same or a similar usage and it is difficult to believe that the external appearance of the two products would cause a likelihood of confusion; thus there is no violation of the provisions of Article 20(1)(i) of the Fair Trade Law. 3. The external appearance of White Men toothpaste does not plagiarize the trade dress of Darlie toothpaste; thus there is no violation of the provisions of Article 24 of the Fair Trade Law. (1) Although the two products involved in this case are both toothpastes and both use yellow as the background of the package design, however, the text and graphic design on the packaging of the respondent's White Men toothpaste when compared with the overall external product appearance of the complainant's Darlie toothpaste is clearly different, whether ion terms of color, graphic design, text and even the name of the manufacturer. Furthermore, the text, graphic design, background color of stripes and other characteristics of the packaging of both product have all been modified over the years and, consequently, the conception and overall design of the packaging of the two products in not the same; thus it is difficult to consider this a case of one plagiarizing the external appearance of another to benefit from the fruits of another's labor. (2) The complainant also argued that the respondent selected the name "White Men" toothpaste and, with no overriding necessity for the use of the color yellow on a toothpaste, meticulously choose yellow as the color of its packaging, which is bound to create an association with Darlie toothpaste, further using a different font in mimicking the complainant's package design in a reproachable act of commercial free-riding. However, an examination on the complainant's Darlie toothpaste reveals that the packaging design is not composed of a single color as it also includes major characteristics of the Chinese characters "Hei Ren" on the front and back, the "Hei Ren" graphic design. The complainant may not claim that because of this use of the color yellow, all others are precluded from the right to use the color yellow on their product packaging. Further, the packaging of the respondent's White Men toothpaste utilizes a light shade of yellow while the Darlie packaging utilizes a darker shade of yellow. Whether viewed in terms of color tint or visual effect, there is a difference in both. The graphic design on the packaging of the two products at issue in this case is different in terms of conception and overall design and thus there is no instance, as claimed by the complainant, of reproachable commercial practices. In any case, the White Men mark has been registered and in use for more than 10 years and White Men toothpaste has been sold on the local market for more than 10 years. Based on this fact, it is evident that the external packaging designs of the two products have co-existed in the market for many years, with each establishing its own commercial reputation and it is difficult to believe that the external appearance of the two products could cause a likelihood of confusion or misidentification among ordinary consumers. And the use as trade dress of similar opposite names on goods in same class of goods and services must be judged based upon the actual usage circumstances without making inferences regarding how easily the text may cause someone to draw an association and prevent a competitor from using opposite-meaning text as the product name. 4. In summary, based upon the available evidence, it is difficult to believe that the respondent's manufacture and sale of White Men toothpaste violates the provisions of Articles 20 and 24 of the Fair Trade Law.Appendix: Galien Industrial Co., Ltd.'s Uniform Invoice Number: 22567325 Summarized by Tai, Mei-Chin; Supervised by Yeh, Ning