The bottles of the “Weilih Pure Water” sold by Weilih Corp. were copied from the bottles of “Taisun Pure Water” produced by Taisun Enterprise Corp. in violation of Article 24 of the Fair Trade Law
Chinese Taipei
Case:
The bottles of the “Weilih Pure Water” sold by Weilih Corp. were copied from the bottles of “Taisun Pure Water” produced by Taisun Enterprise Corp. in violation of Article 24 of the Fair Trade Law
Key Words:
to ride on the success of others; to exploit the successful efforts of others
Reference:
Fair Trade Commission Decision of June 2, 1999 (the 395th Commission Meeting); Disposition (88) Kung Chu Tzu No. 064
Industry:
Food and Beverage Manufacturing Industry (1183)
Relevant Law:
Article 24 of the Fair Trade Law
Summary:
1. A complaint was filed by Taisun Enterprise Corp. In the complaint, the company claimed that since July 1995, the company had sold bottled pure water using the brand name “Taisun Pure Water.” The bottles of these products featured two small Chinese characters “tai sun” in red and two large Chinese characters “ch'un shui” (pure water) in blue, and had the GMP mark at the upper right hand corner and the English words “Pure Water.” The product was the first of its kind in the domestic market. In addition, the company acquired a specific market share after investing over NT$100 million to advertise the product. Due to the popularity of the “Taisun Pure Water” advertisement, consumers were all aware of the bottles of the “Taisun Pure Water.”
The complainant further alleged that in order to sell its own “Weilih Pure Water,” the disposed party copied the bottles of “Taisun Pure Water.” The act, which was obviously riding on the success of the “Taisun Pure Water,” violated Article 24 of the Fair Trade Law.
2. Currently there are dozens of kinds of bottled water in the market, including mineral water, pure water, oxygenated water, and fruit-flavored water, among others. Among the different brand names, Taisun, in July 1995, was the first to use the name “ch'un shui” (pure water) on the bottles. At the center of the transparent bottle were two big Chinese characters “ch'un shui” (pure water) written in blue from left to right. Together with the English words “Pure Water” and the GMP mark at the upper right hand corner, this labeling was about two-thirds the height of the bottle and constituted the physical appearance of the product packaging.
To further promote the product and the physical appearance of the product packaging, Taisun made huge investments in television, newspaper, and magazine advertisements. According to statistics compiled by AC Nielsen, the company's annual advertising expenses from 1995 to 1997 ranked number 1, 2, and 5 respectively among bottled water products; the company's advertising expenses also ranked number 4 during the first half of 1998. Cumulative advertising expenditures for “Taisun Pure Water” reached more than NT$100 million. According to AC Nielsen statistics, the company's market share was between 5.4% and 6.7% during the period between April 1997 and May 1998.
3. Investigation showed that the “Weilih Pure Water” manufactured and sold by the disposed party used the same transparent bottles as “Taisun Pure Water” with the same big Chinese characters “ch'un shui” (pure water) written in blue from left to right, together with the English words “Pure Water” and the GMP mark at the upper right hand corner. Looking at the physical appearance, the bottling of “Weilih Pure Water” was a careful copy of “Taisun Pure Water”.
The different bottled water products available in the market have diversified packaging; there are many possibilities in the design of the physical appearances, colors, Chinese and English labels, character fonts, and arrangement of texts and graphics. The disposed party failed to use its own innovation and marketing efforts to design its own bottle. It did not develop its own market using proper methods, and instead chose to copy the bottle of others and ride on the success of others. This exploitation of the successful efforts of others was obviously unfair.
4. Since the “Taisun Pure Water” was introduced into the market, Taisun had invested huge amounts in advertising and marketing to attain a certain market share, as the disposed party was aware. The disposed party furthermore did not publicly advertise “Weilih Pure Water.” Not only did the disposed party fail to use its own marketing efforts to develop its own market, it further took advantage of the business reputation and advertisements of others, an act contrary to business ethics. In addition, its act of copying would have the effect of diluting the advertising efforts and achievement of Taisun and damage Taisun's interests. This improper act against the competitor was obviously an unfair act that would affect the trading order.
Appendix:
Weilih Corp.'s Uniform Invoice Number: 89977657
Summarized by Lin, Ch'iu-miao
Supervised by Wu, Ting-hung