False representation and false advertising by Shu Er Pao Enterprise Co., Ltd. in violation of the Fair Trade Law
Chinese Taipei
Case:
False representation and false advertising by Shu Er Pao Enterprise Co., Ltd. in violation of the Fair Trade Law
Key Words:
false representations, false advertising, false and untrue, misleading
Reference:
Fair Trade Commission Decision of August 12, 1998 (the 353rd Commission Meeting); Disposition Ref. (87) Kung Ch'u Tzu No. 178
Industry:
Wholesales of other hardware and household daily goods
Relevant Laws:
Article 21(1) of the Fair Trade Law
Summary:
According to the complaint filed by Nan Cheng Enterprise Co., Ltd. (the complainant):
Both Mai Di Er Women's and Children's Company (MDE, the complainant's authorized general distributor) and Shu Er Pao Enterprise Co., Ltd. (the respondent) sold nursing bottles (the product) made by the complainant. The respondent, however, changed the packaging of the product without authorization and advertised and distributed the re-packaged product under a different trademark. Furthermore, the respondent falsely claimed to be the general distributor of the product, thereby usurping advertising rights and interests, causing confusion to the public as to the integrity of the complainant's trademark, defaming the complainant's business reputation, deceiving the consumer, and imposing additional cost on the consuming public (as the original product is sold for NT$95 per piece and the re-packaged product is sold for NT$190 per piece). Therefore, the complainant filed the complaint in accordance with Articles 21(1) and 24 of the Fair Trade Law (FTL).
The respondent, using the complainant's trademark without authorization on its re-packaging of the product which is made by the complainant and distributed by MDE, intended to deceive the consumers by misleading them into believing that the re-packaged product had come from the same source.
The Fair Trade Commission (this Commission) found that the product, i.e. "SOOTHER scientific bottomless nursing bottle," was produced by the complainant and re-sold to the respondent through MDE, i.e. the complainant's general distributor. The respondent then re-packaged the product and advertised the same for sale. The distributorship agreement between MDE and the respondent may serve as evidence to prove this point. Despite the fact that the respondent obtained the product through proper channel, it was not authorized as the "general distributor" of the product. Nonetheless, the respondent, representing itself as the general distributor on the re-packaging of the product and in advertisement for the product, has made false, untrue, and misleading representations in violation of the FTL.
The content of the re-packaged product done by the respondent, i.e. the "SOOTHER scientific bottomless nursing bottle", is genuine product made by the complainant. But the external packaging (i.e. the re-packaging) is completely different from the original packaging produced by the complainant, which is labeled "MY DEAR." The respondent did not have the intent to copy the complainant's product in violation of FTL Article 20(1)(i), as the re-packaged product done by the respondent does not have the same or similar use.
The original packaging of the product lebels "MY DEAR and design of a baby being nursed" on the lower right hand portion. However, in terms of the overall appearance, the original packaging is substantially different from the re-packaging done by the respondent in terms of the color, the product name, and the product description. Furthermore, the complainant and MDE changed the original packaging in January 1996. Thus, the consumer is unlikely to mistakenly associate the original-packaged product and the re-packaged product as coming from the same distribution source. Therefore, the Commission cannot find that the respondent engaged in deceptive or obviously unfair act in violation of FTL Article 24.
In conclusion, the respondent is found in violation of FTL Article 21 for falsely representing itself as the general distributor on the packaging of and in its advertisements for the product. Pursuant to the first clause of FTL Article 41, the respondent is ordered to cease its acts of making false, untrue and misleading representations from the next day after receiving this disposition.
Summarized by Tai, Bei-Yi
Supervised by Chu, Wei-Ching
Appendix:
Shu Er Pao Enterprise Co., Ltd.’s Uniform Invoice No.:
89737405