Sin Li Din Bio-Tech Enterprise Co., Ltd. allegedly violated Article 21 of the Fair Trade Law by making false and misleading representations in its advertisements

Sin Li Din Bio-Tech Enterprise Co., Ltd. allegedly violated Article 21 of the Fair Trade Law by making false and misleading representations in its advertisements

Chinese Taipei

Case:

Sin Li Din Bio-Tech Enterprise Co., Ltd. allegedly violated Article 21 of the Fair Trade Law by making false and misleading representations in its advertisements

Key Words:

false advertising, biotechnology products, newspaper report

Reference:

Fair Trade Commission Decision on August 1, 2002 (the 560th Commissioners’ Meeting); Disposition (91) Kung Ch’u Tzu No. 119

Industry:

Other Food Manufacturing Not Elsewhere Classified (0899)

Relevant Law:

Article 21 of the Fair Trade Law

Summary:

1. This case originated with advertisements published by the respondent Sin Li Din Bio-Tech Enterprise Co., Ltd. in the Commercial Times on 2 March, 27 April, 20 June, and 18 July in 2001 containing wordings including “Sin Li Din Bio-tech Enterprise Co., Ltd. obtained an incentive subsidy of NT$157 million from the government’s ‘Medical Care Development Fund,’” “apart from its successful recruitment of 80,000 members,” “team of biotechnology experts,” “recruited by Hung Kuo-chen, chairman of Sin Li Din Bio-tech Enterprise Co., Ltd.,” “scientist Shih Chiao-sen,” and “four patented SUPER-BIO technologies developed by Sin Li Din as green biotechnologies.” The respondent also claimed in its advertisements that its SUPER-BIO manufacturing process was patented and further published advertisements under the name of Shu Bao-Ai Erh (SUPER-BIO) Co., Ltd., and Ai Erh Co., Ltd. It was thus suspected of publishing false advertisements.

2. Upon investigating, the Fair Trade Commission found that the respondent published the 27 April 2001 advertisement under the name of Shu Bao-Ai Erh Co., Ltd. and the 20 June 2001 advertisement under the name of Ai Erh Co., Ltd. No information about these two companies could be found on the website of the Commerce Department of the Ministry of Economic Affairs. The respondent itself admitted that the Shu Bao-Ai Erh Co., Ltd. it intended to incorporate to provide assistance to its distributors in business promotion was still in the preparatory stage and not yet registered as a company. Publishing the above company name in the advertisements thus constituted false and misleading representations in violation of Article 21(1) of the Fair Trade Law.

　　Secondly, the respondent claimed in its advertisements that the 6Q quality assurance SUPER-BIO manufacturing process and the SUPER-BIO technologies were four patented biotechnologies developed by the respondent. The “glutathione complex multilayer liposome” technologies were claimed to be patented “Lipsome” sublingual absorption technology that the respondent co-developed with and purchased from Panbiotic Biotechnology Co., Ltd. Yet it was found that the “glutathione complex multilayer liposome” technologies were not yet patented, and there was no evidence proving the contested technologies to be the same patented SUPER-BIO technologies claimed in the advertisements. The respondent hence made false and misleading representations in violation of Article 21(1) of the Fair Trade Law by claiming the 6Q quality assurance SUPER-BIO manufacturing process and the SUPER-BIO technologies comprised four patented biotechnologies that it had developed.

　　As for the part of the reports in the Commercial Times, the Commercial Times stated that “[The reports] were written after an exclusive interview with Mr. Chu Ming, vice president of Sin Li Din Bio-tech Enterprise Co., Ltd., and based upon the ideas contained in information he provided regarding the company’s business operations.” The reports were thus based upon information the enterprise provided to the media, constituting “any other means of communication to the public” under Article 21 of the Fair Trade Law. In the 2 March 2001 report in the Commercial Times, Shih Chiao-Sen claimed to be a scientist. Mr. Shih, however, was discovered to have work experience only in the realms of production, manufacturing, and sales, and not in scientific research. The licenses Mr. Shih holds, such as licenses for the administration of industrial security and hygiene, pressure container operation, and fire control management, are only technician licenses and are insufficient to qualify Mr. Shih as a “scientist” as that term is generally understood. Based upon Shih’s academic and work experience, it was thus concluded that the respondent made false and misleading presentations in the contested advertisements by claiming that Mr. Shih was a scientist.

3. The respondent, in newspaper advertisements that it published about its biotechnology products and company information that it provided to the media, made false and misleading representations as to the manufacture and source of its products, the acquisition of patents, and the work experience and qualifications of its R&D and production personnel, in violation of Article 21(1) of the Fair Trade Law. Weighing the respondent’s motive for the violation, business volume, cooperativeness during the investigation, and the degree to which the violation damaged the trading order, the Fair Trade Commission imposed an administrative fine of N$100,000 and ordered the respondent to cease the violation immediately.

Appendix:

Sin Li Din Bio-Tech Enterprise Co., Ltd.’s Uniform Invoice Number: 84715374

Summarized by Chen, Jen-Ying;
Supervised by Yeh, Ning

＊＊: For information of translation, click here

1.	This case originated with advertisements published by the respondent Sin Li Din Bio-Tech Enterprise Co., Ltd. in the Commercial Times on 2 March, 27 April, 20 June, and 18 July in 2001 containing wordings including “Sin Li Din Bio-tech Enterprise Co., Ltd. obtained an incentive subsidy of NT$157 million from the government’s ‘Medical Care Development Fund,’” “apart from its successful recruitment of 80,000 members,” “team of biotechnology experts,” “recruited by Hung Kuo-chen, chairman of Sin Li Din Bio-tech Enterprise Co., Ltd.,” “scientist Shih Chiao-sen,” and “four patented SUPER-BIO technologies developed by Sin Li Din as green biotechnologies.” The respondent also claimed in its advertisements that its SUPER-BIO manufacturing process was patented and further published advertisements under the name of Shu Bao-Ai Erh (SUPER-BIO) Co., Ltd., and Ai Erh Co., Ltd. It was thus suspected of publishing false advertisements.
2.	Upon investigating, the Fair Trade Commission found that the respondent published the 27 April 2001 advertisement under the name of Shu Bao-Ai Erh Co., Ltd. and the 20 June 2001 advertisement under the name of Ai Erh Co., Ltd. No information about these two companies could be found on the website of the Commerce Department of the Ministry of Economic Affairs. The respondent itself admitted that the Shu Bao-Ai Erh Co., Ltd. it intended to incorporate to provide assistance to its distributors in business promotion was still in the preparatory stage and not yet registered as a company. Publishing the above company name in the advertisements thus constituted false and misleading representations in violation of Article 21(1) of the Fair Trade Law.
	Secondly, the respondent claimed in its advertisements that the 6Q quality assurance SUPER-BIO manufacturing process and the SUPER-BIO technologies were four patented biotechnologies developed by the respondent. The “glutathione complex multilayer liposome” technologies were claimed to be patented “Lipsome” sublingual absorption technology that the respondent co-developed with and purchased from Panbiotic Biotechnology Co., Ltd. Yet it was found that the “glutathione complex multilayer liposome” technologies were not yet patented, and there was no evidence proving the contested technologies to be the same patented SUPER-BIO technologies claimed in the advertisements. The respondent hence made false and misleading representations in violation of Article 21(1) of the Fair Trade Law by claiming the 6Q quality assurance SUPER-BIO manufacturing process and the SUPER-BIO technologies comprised four patented biotechnologies that it had developed.
	As for the part of the reports in the Commercial Times, the Commercial Times stated that “[The reports] were written after an exclusive interview with Mr. Chu Ming, vice president of Sin Li Din Bio-tech Enterprise Co., Ltd., and based upon the ideas contained in information he provided regarding the company’s business operations.” The reports were thus based upon information the enterprise provided to the media, constituting “any other means of communication to the public” under Article 21 of the Fair Trade Law. In the 2 March 2001 report in the Commercial Times, Shih Chiao-Sen claimed to be a scientist. Mr. Shih, however, was discovered to have work experience only in the realms of production, manufacturing, and sales, and not in scientific research. The licenses Mr. Shih holds, such as licenses for the administration of industrial security and hygiene, pressure container operation, and fire control management, are only technician licenses and are insufficient to qualify Mr. Shih as a “scientist” as that term is generally understood. Based upon Shih’s academic and work experience, it was thus concluded that the respondent made false and misleading presentations in the contested advertisements by claiming that Mr. Shih was a scientist.
3.	The respondent, in newspaper advertisements that it published about its biotechnology products and company information that it provided to the media, made false and misleading representations as to the manufacture and source of its products, the acquisition of patents, and the work experience and qualifications of its R&D and production personnel, in violation of Article 21(1) of the Fair Trade Law. Weighing the respondent’s motive for the violation, business volume, cooperativeness during the investigation, and the degree to which the violation damaged the trading order, the Fair Trade Commission imposed an administrative fine of N$100,000 and ordered the respondent to cease the violation immediately.