Ch'ang Lin Enterprise Co., Ltd.'s use of packaging similar to that of the K'o Ch'au Ling drying agent constituted unfair competition
Chinese Taipei
Case:
Ch'ang Lin Enterprise Co., Ltd.'s use of packaging similar to that of the K'o Ch'au Ling drying agent constituted unfair competition
Key Words:
drying agent, packaging logo, counterfeiting
Reference:
Fair Trade Commission Decision of January 13, 1999 (375th Commissioner Meeting); Disposition (88) Kung Ch'u Tzu No. 209
Industry:
Other Chemicals Manufacturing (2290)
Relevant Laws:
Summary:
The Hua Hsien Tzu Enterprises Co., Ltd. (the complainant) filed a complaint to the Fair Trade Commission (this Commission) alleging that the Ch’ang Lin Enterprise Co., Ltd. (the respondent) violated Article 20 of the Fair Trade Law (FTL). According to the complainant:
The "Ko Ch'au ling Drying Agent Logo" used in conjunction with their "K'o Ch'au Ling" drying agents, was registered as a trademark in 1994. The complainant spent large amounts of money in advertising and marketing. The "K'o Ch'au Ling" products have become "well known to the relevant public."
The respondent began manufacturing a product "Ch'u Shih Ling" in 1996. The packaging of the respondent's product copied the complainant's registered logo and the packaging of the two products was so similar that third persons were unable to distinguish between the two products.
The complainant notified the respondent about the respondent's infringing activity, however, the respondent has continued to sell the products. Clearly the respondent intends to deceive the public and to take advantage of the fame and reputation achieved by the complainant's product. This is in violation of Article 20 of the FTL.
Article 20(1)(i) of the FTL provides:
Enterprises shall not engage in any of the following acts with respect to its goods or services:
1. use, in the same or similar manner, of another person's name, trade or company appellation, trademark, product container, packaging, external appearance, or other symbol that represents such person's products, where such symbol is commonly known to relevant enterprises or consumers, so as to cause confusion with the goods of the other person; or the sale, transport, export, or import of goods using such symbol;
This Commission finds that the respondent has violated Article 24 but not Article 20(1)(i) of the FTL. The reasons are as follows:
3.1 Although the "Ko Ch'au ling Packaging Logo" trademark of the complaint is a mark that meets the standard under Article 20 of the FTL as being well known to the public, as between this packaging and the packaging of the respondent's product there are a number of differences in the designs and the positioning of words. The two product's packagings are not completely the same. Also, the important part of the packaging, the three-character names of the products, are obviously different, and the general consumer need only to apply the ordinary standard of observation to avoid any likelihood of confusion between the two products.
3.2 The two products in question, the complainant's "K'o Ch'au Ling" and the respondent's "Ch'u Shih Ling" came on to the market in 1991 and 1993 respectively. From the time the complainant's product was first sold, its packaging has not been changed at all. The packaging of the respondent's product went through major changes from the first design, and the new design adopted in June/July 1996. Whereas the old design of the respondent's product and the complainant's product were quite different, the concepts of the respondent's new product packaging is quite similar to that of the complainant's product.
3.3 Mr. Kuo T'ien-te was the designer of the complainant's packaging. After Mr. Kuo left the respondent's company in June 1996, he was retained by the respondent, the respondent fully aware that Mr. Kuo previously worked for the complainant. The respondent admitted that of the fifty to sixty designs of Mr. Kuo, the forty which were presented to this Commission were quite different from the packaging design of the complainant's product. The respondent, however, selected the designs that are closest to those of the complainant's packaging indicating an obvious intent to masquerade its products.
3.4 Examination of the packaging of similar products in the market indicates major and obvious differences among brands; only the packaging of the respondent's product is similar to that of the complainant's product.
In summary, since bringing its product to market in 1991 the complainant has spent considerable sums in advertising and marketing in order to establish the brand and reputation of the product. The respondent intentionally altered the packaging of its product in 1996 to imitate the packaging of the complainant's product, an obvious and actively deceptive act by which the respondent intended to obtain an advantage from the efforts of the complainant. This violates business ethics, and has the potential to adversely affect trading order. It is obviously unfair and is in violation of Article 24 of the FTL.
Summarized by Ch'en P'in-ch'iu
Supervised by Pai Yu-chuang
Appendix:
Ch'ang Lin Enterprises Co., Ltd.’s Uniform Invoice No.: 23101590