N.V. Nutricia (Taiwan) Ltd., Co. violated the Fair Trade Law for its misuse of the two Chinese characters (mien-min in English transliteration, literally free-allergy) as a symbol of the product

Chinese Taipei

Case:

N.V. Nutricia (Taiwan) Ltd., Co. violated the Fair Trade Law for its misuse of the two Chinese characters (mien-min in English transliteration, literally free-allergy) as a symbol of the product

Key Words:

the two subject Chinese characters, mien-min (free-allergy), symbol, secondary meaning, dilution effect

Reference:

Fair Trade Commission Decision of May 28, 1997 (the 291st Commission Meeting); Disposition of (86) Kung Chu Tze 072

Industry:

Food Manufacturer (2010)

Relevant Laws:

Article 24 of the Fair Trade Law

Summary:

1.The informer has imported a special anti-diarrhea formula -- bebelac formula -- since 1985. It selected the two subject Chinese characters (mien-min) and named the formula as Neoangelac Mien-Min formula for sales in the Chinese Taipei market. The name was given to illustrate the nature of the product and to indicate the unique market position of the product. This fact was not disputed by the informer and the respondent. The informer has used the two subject Chinese characters in a continuous manner along with its other neoangelac formula products. In addition, the informer has frequently associated “Mien-Min” with the informer's company name in promotional campaigns. This sufficiently allowed the name of the mien-min formula to be associated with neoangelac products by the general public. Accordingly, such goodwill as generated from neoangelac mien-min formula should belong exclusively to the informer.

2.The Fair Trade Commission’s investigation found that the two subject Chinese character, mien-min, have been used by the informer to identify the special formula since December 1985. For over a decade, the informer has continuously put in manpower and giveaway samples, and invested a massive amount of money in advertising to promote sales. According to the market surveys conducted by Survey Research Taiwan Ltd. (SRT) and surveys conducted by LYEMPF B.V., which was the predecessor of the respondent, the neoangelac mien-min formula occupied a market share of 54% and thus ranked as the top brand of anti-diarrhea formula in the market. Other than the informer's use of mien-min characters to identify its special anti-diarrhea baby formula, no other suppliers of baby formula had ever used the two subject Chinese characters to identify their products. Similar baby formula prescribed by doctors have other names such as "anti-diarrhea formula," "special anti-diarrhea formula," "lactose-free formula," or "low-lactose formula."

According to SRT’s conclusion of the survey on “a comparison of the informer's special formula identifying by the two subject mien-min characters with similar formula of other brand names”, the informer has continuously used the trademark-- Neoangelac for more than ten years in marketing and on widely circulated advertisement. The two subject Chinese characters, which originally carried only secondary, or even descriptive meanings, have been accepted by consumers to associate the mien-min formula with the trade name -- Neoangelac. Therefore, the two subject Chinese characters not only serve to indicate the informer as the only source of the special formula but also become a symbol well known to the relevant public for the anti-diarrhea product supplied by the informer.

3.Despite the fact that the two subject Chinese characters are well known to the relevant public as the symbol of the informer's special anti-diarrhea formula, the respondent has not used the two subject Chinese characters alone to identify its own products. The respondent highlighted its "bebelac formula - mien-min baby formula" in its advertisement and catalogs and indicated its company name in the advertisement. Therefore, it is unlikely to cause the likelihood of confusion among the consumers for the respondent's use of the name "bebelac mien-min formula" with the informer's neoangelac mien-min formula. Accordingly, Article 20, Paragraph 1, Subparagraph 1 of the Fair Trade Law does not apply, because conditions for a violation thereunder are not met.

4.The respondent repeatedly argued that the two subject Chinese characters are descriptive and therefore it had the right to use the two descriptive characters on its special anti-diarrhea formula. However, the FTC’s investigation showed that the respondent had tried to file a trademark application with the National Bureau of Standards when the LYEMPF B. V. terminated the agency relationship with the informer on November 3, 1995 and the respondent has succeeded the LYEMPF B.V.'s capacity. Apparently, the respondent has intended to use the two subject Chinese characters not in a descriptive way but with an attempt to compete in the same anti-diarrhea formula market with the informer. The respondent's conduct has misled consumers to associate its bebelac mien-min formula with the informer's neoangelac mien-min formula and has reduced the distinctiveness of the two subject Chinese characters used by the informer as a symbol for its products. The respondent's conduct has caused a dilution effect on the two Chinese characters in question, which the informer has invested for a long time to establish as a symbol. The respondent's conduct constitutes a deceptive and obviously unfair act sufficient to affect trade order, which is in violation of Article 24 of the Fair Trade Law.

　

Summarized by Wang, Rong-jing
Supervised by Pai, Yu-chuang

Appendix:
N.V. Nutricia (Taiwan) Ltd.’s Uniform Invoice No: 22001897

＃: For information of translation, click here

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