Speed United Corporation and Jun Long Industrial Co. Ltd. allegedly violated Article 21 of the Fair Trade Law by making false and misleading representations of place of manufacture on product packaging
Case:
Speed United Corporation and Jun Long Industrial Co. Ltd. allegedly violated Article 21 of the Fair Trade Law by making false and misleading representations of place of manufacture on product packaging
Key Words:
false, misleading, import in original packaging
Reference:
Industry:Fair Trade Commission decision on March 28, 2002 (the 542nd Commissioners' Meeting); Disposition Kung Ch'u Tzu No. 091056 and 091057
Other Chemical Products Manufacturing (1890)
Relevant Law:
Article 21 of the Fair Trade Law
Summary:
1. German-affiliated Hilti Taiwan Co. filed a complaint with the Fair Trade Commission (FTC) alleging that Speed United Corporation sold a product called "SPEED High Performance Chemical Anchor" that was imitative of Hilti's product and that was advertised as being "imported from Germany in the original packaging," although the product was suspected not to come from Germany. Hilti Taiwan Co. also complained that Jun Long Industrial Co. Ltd. labeled "Germany" on its chemical anchor product "CONSET", although that product also was suspected not to come from Germany. Hilti Taiwan alleged that the two companies had violated Article 21 of the Fair Trade Law by these actions. 2. After investigation, it is the finding of the FTC that Speed United Corporation labeled "Germany" on the outer package of its "SPEED SK-2." The representations on the outer package are primarily in foreign languages, mainly German. The word "Germany" is also labeled on the lower part of the outer package. The content of the product includes the material in a plastic can and an applicator attached to the can. The overall labeling on the outer package gives the impression of a complete-set product imported from Germany. However, the application form for import provided by Speed United Corporation shows materials measured in kilograms rather than pieces of finished products. Speed United Corporation admitted to the FTC that it had hired another company to manufacture the product. The materials used were imported from Bayer AG in Germany and assembled in Taiwan. Speed United Corporation then printed outer package labels and hired another company to attach labels to the finished products. Although the raw materials of the product may have been imported from Germany, the formula composition ratios of the product as well as the manufacturing and inner materials of the external pipe flow ratio controller are determinants of the quality of chemical anchors. It has been found that similar chemical anchor products available on the market are mostly assembled into finished products before import. It was also found that apart from the complainant, FISHER and UPTA are the other two major manufacturers of such products in Germany. The three manufacturers are major suppliers of chemical anchor products worldwide; therefore, merely labeling such products "Made in Germany" or "Germany" can attract relevant businesses or consumers enter into transactions based on their trust that the chemical anchors are manufactured in Germany. The word "Germany" on the outer package creates the impression that Speed United's product is formulated and assembled in Germany before import into Taiwan, which conflicts with the fact that while the raw materials are imported, the product is actually formulated and assembled in Taiwan. Accordingly, the outer package is deemed to constitute false and misleading representations by the respondent. In addition, the FTC found that Jun Long Hardware Co. Ltd. was the trademark proprietor of the wording "CONSET," which appears on the label of the disputed outer package. Jun Long Hardware Co. Ltd. had subsequently changed its name to Jun Long Industrial Co. Ltd. Jun Long Industrial Co. Ltd. admitted that it printed the disputed outer package and marketed the product, and was still marketing it after the complaint was filed. Accordingly, Jun Long Industrial Co. Ltd. bore responsibility for the truthfulness of the representations of the place of manufacture on the outer package. The representations on the outer package of the "CONSET" chemical anchor are primarily in foreign languages, mainly German. The word "Germany" is also labeled on the lower part of the outer package. The content of the product includes the material in a plastic can and an applicator attached to the can. The overall labeling on the outer package gives the impression of a complete-set product imported from Germany. Jun Long Industrial Co. Ltd. admitted that it aimed at emphasizing on the disputed outer package the fact that certain key ingredients are imported from Germany, and that the disputed product is formulated and packaged in Taiwan using materials imported by another company. Although the raw materials of the product may have been imported from Germany, the formula composition ratios of the product as well as the manufacturing and inner materials of the external pipe flow ratio controller are determinants of the quality of chemical anchors. It has been found that similar chemical anchor products available on the market are mostly assembled into finished products before import. It was also found that apart from the complainant, FISHER and UPTA are the other two major manufacturers of such products in Germany. The three manufacturers are major suppliers of chemical anchor products worldwide; therefore, merely labeling such products "Germany" can attract relevant businesses or consumers enter into transactions based on their trust that the chemical anchors are manufactured in Germany. Accordingly, although the raw materials of the disputed product may have been imported from Germany, the labeling of the outer package will mislead trading counterparts into believing that the disputed product is also formulated and assembled in Germany before its import. Jun Long Industrial Co. Ltd.'s actions therefore obviously violated Article 21 of the Fair Trade Law. 3. The FTC found Speed United Corporation and Jun Long Industrial Co. Ltd. in violation of Article 21(1) of the Fair Trade Law. In accordance with the fore part of Article 41 of the same law, it therefore ordered the two companies to cease such false and misleading representations and after weighing their motives for the violations, the degree of damage done, the circumstances of the violations, their business scales, and their attitudes after the violations, imposed administrative fines of NT$50,000 each on the two companies. Appendix: Speed United Corporation's Uniform Invoice Number: 16732451 Jun Long Industrial Co. Ltd.'s Uniform Invoice Number: 84820426 Summarized by Wu, Lieh-Ling ; Supervised by Yeh, Tien-Fu