Complaint alleging Chin Chih Spirits, Ltd.'s advertisement of “Chin Chih Kan Chun Rice Wine” contained false representations in violation of Article 21 of the Fair Trade Law

Complaint alleging Chin Chih Spirits, Ltd.'s advertisement of “Chin Chih Kan Chun Rice Wine” contained false representations in violation of Article 21 of the Fair Trade Law

Chinese Taipei

Case:

Complaint alleging Chin Chih Spirits, Ltd.'s advertisement of “Chin Chih Kan Chun Rice Wine” contained false representations in violation of Article 21 of the Fair Trade Law

Key Words:

Chin Chih Kan Chun Rice Wine, patent number

Reference:

Fair Trade Commission Decision of September 5, 2002 (the 565th Commissioners' Meeting); Disposition (91) Kung Ch’u Tzu No. 91141

Industry:

Wholesale of Tobacco Products and Alcoholic Beverages (4423)

Relevant Law:

Article 21 of the Fair Trade Law

Summary:

1. A complainant filed a complaint alleging, in summary, as follows:
　　Chin Chih Spirits, Ltd. (the respondent) falsely advertised its Chin Chih Kan Chun Rice Wine on page 17 of the 26 March 2002 issue of the Liberty Times by giving untruthful information as to the cost of the rice wine in relation to its alcoholic strength. Item number 4 of the “special features” listed in the advertisement claimed that the cost of materials for a bottle of 600cc rice wine with an alcoholic strength of 20% was NT$11.7, when in fact it was NT$16.7; item number 5 claimed that the “materials cost” of a bottle of 600cc rice wine with an alcoholic strength of 50% was NT$35, when in fact it was NT$46; and item number 6 claimed that the “materials cost” of a bottle of 600cc [Ahydi Sake (a Japanese rice wine)] was NT$8.8, when in fact it was NT$12.5. The respondent also falsely claimed in the advertisement that the distiller had been granted patent number 90204254, whereas in fact the patent application for the distiller was still pending in the examination phase.

2. The phrase “Patent number: 90204254, counterfeiters will be prosecuted” found on the respondent’s advertisement for its Chin Chih Kan Chun Rice Wine in the Liberty Times violated Article 21(1) of the Fair Trade Law, which provides that “an enterprise shall not, on goods, in the advertising of goods, or by any other means of communication to the public, make or use any false or misleading presentation or symbol as to price, quantity, quality, content, production process, production date, validity period, method of use, uses, place of origin, manufacturer, place of manufacture, processor, place of processing, and so forth.” The term “false” means any representation or symbol that is inconsistent with facts, and where the deviation would be unacceptable to a significant number of the general or relevant public, and would lead to misunderstanding or incorrect decisions. The term “misleading” means any representation or symbol that would cause a significant number of the general or relevant public to misunderstand or make incorrect decisions, regardless of whether such representation or symbol is consistent with facts.

3. Article 83(2) of the Patent Law as amended on 24 October 2001 provides, “Articles other than those protected by a patent or manufactured by use of a patented process shall not have affixed to any advertising, publications, articles, or packaging thereof any wording indicating such article is patented or any marking likely to mislead others to consider it as patented.” The Intellectual Property Bureau of the Ministry of Economic Affairs was still examining the respondent’s patent application for its Sung Rung Brand Multifunctional Distiller when the company printed the wording “Patent No. 90204254, counterfeiters will be prosecuted” in its newspaper advertisement. This wording would obviously mislead the public to believe that the distiller had been granted a patent. The Fair Trade Commission (FTC) thus concluded that the phrase was both false and misleading.

The respondent argued that it stated clearly in the distiller’s catalogue that the distiller’s Patent Application Number was 90204254, indicating the patent was still pending in the examination phase. It maintained that the omission of the word “application” was due to careless proofreading, and was unintentional and not meant to deceive consumers. However, the FTC found that even if this were so, the wording would still constitute a false and misleading representation likely to cause a significant number of the general or relevant public to misunderstand or make incorrect decisions, in violation of Article 21(1) of the Fair Trade Law.

Appendix:

Chin Chih Spirits, Ltd.’s Uniform Invoice Number: 13031104

Summarized by Chiang, Kuo-Lun;
Supervised by Wu, Ting-Hung

＊＊: For information of translation, click here

1.	A complainant filed a complaint alleging, in summary, as follows: 　　Chin Chih Spirits, Ltd. (the respondent) falsely advertised its Chin Chih Kan Chun Rice Wine on page 17 of the 26 March 2002 issue of the Liberty Times by giving untruthful information as to the cost of the rice wine in relation to its alcoholic strength. Item number 4 of the “special features” listed in the advertisement claimed that the cost of materials for a bottle of 600cc rice wine with an alcoholic strength of 20% was NT$11.7, when in fact it was NT$16.7; item number 5 claimed that the “materials cost” of a bottle of 600cc rice wine with an alcoholic strength of 50% was NT$35, when in fact it was NT$46; and item number 6 claimed that the “materials cost” of a bottle of 600cc [Ahydi Sake (a Japanese rice wine)] was NT$8.8, when in fact it was NT$12.5. The respondent also falsely claimed in the advertisement that the distiller had been granted patent number 90204254, whereas in fact the patent application for the distiller was still pending in the examination phase.
2.	The phrase “Patent number: 90204254, counterfeiters will be prosecuted” found on the respondent’s advertisement for its Chin Chih Kan Chun Rice Wine in the Liberty Times violated Article 21(1) of the Fair Trade Law, which provides that “an enterprise shall not, on goods, in the advertising of goods, or by any other means of communication to the public, make or use any false or misleading presentation or symbol as to price, quantity, quality, content, production process, production date, validity period, method of use, uses, place of origin, manufacturer, place of manufacture, processor, place of processing, and so forth.” The term “false” means any representation or symbol that is inconsistent with facts, and where the deviation would be unacceptable to a significant number of the general or relevant public, and would lead to misunderstanding or incorrect decisions. The term “misleading” means any representation or symbol that would cause a significant number of the general or relevant public to misunderstand or make incorrect decisions, regardless of whether such representation or symbol is consistent with facts.
3.	Article 83(2) of the Patent Law as amended on 24 October 2001 provides, “Articles other than those protected by a patent or manufactured by use of a patented process shall not have affixed to any advertising, publications, articles, or packaging thereof any wording indicating such article is patented or any marking likely to mislead others to consider it as patented.” The Intellectual Property Bureau of the Ministry of Economic Affairs was still examining the respondent’s patent application for its Sung Rung Brand Multifunctional Distiller when the company printed the wording “Patent No. 90204254, counterfeiters will be prosecuted” in its newspaper advertisement. This wording would obviously mislead the public to believe that the distiller had been granted a patent. The Fair Trade Commission (FTC) thus concluded that the phrase was both false and misleading.
3.	The respondent argued that it stated clearly in the distiller’s catalogue that the distiller’s Patent Application Number was 90204254, indicating the patent was still pending in the examination phase. It maintained that the omission of the word “application” was due to careless proofreading, and was unintentional and not meant to deceive consumers. However, the FTC found that even if this were so, the wording would still constitute a false and misleading representation likely to cause a significant number of the general or relevant public to misunderstand or make incorrect decisions, in violation of Article 21(1) of the Fair Trade Law.