The Taoyuan District Court requested the FTC determine whether or not Apollo Story Whisky violated Fair Trade Law Article 24 by imitating Suntory Whisky

Chinese Taipei


Case:

The Taoyuan District Court requested the FTC determine whether or not Apollo Story Whisky violated Fair Trade Law Article 24 by imitating Suntory Whisky.

Key Words:

determine, common knowledge, confusion

Reference:

Fair Trade Commission Decision of November 25,1998 (the 368th Commissioner's Meeting)

Industry:

Tobacco and Wine Distribution (5133)

Relevant Laws:

Articles 20 and 24 of the Fair Trade Law

Summary:

  1. Articles 20(1) and 20(2) the Fair Trade Law ("the Law") plainly state that when an enterprise provides goods and services, it shall not use, in the same or similar manner, another person's name, company appellation or name, trademark, container, packaging, external appearance, or other symbol that represents that person's goods, business, or services so as to cause confusion with the goods of that other person; or the sale, transport, export, or import of goods using that symbol. Consequently, these provisions apply only in cases when the copied symbol meets the condition of being commonly known to the relevant public and where the use of that symbol confuses the consumer as to the product's origin or manufacturer.

  2. With regard to whether or not the plaintiff's rectangular, transparent glass container with a tortoise-shell pattern is a symbol, the Fair Trade Commission (FTC) found that spirits industry uses glassware widely as containers. The FTC also found that among the hundreds of types of whiskies, some containers resembled the plaintiff's, and some did not. Because the FTC was unable to evaluate the reliability of the market report that Suntory Whisky, the plaintiff in the case, so it was unable to determine the exterior appearance of the plaintiff's container did in fact constitute a "symbol" as referred to in the Law.

  3. With regard to whether or not the product name 'Suntory Whisky' is known to the relevant public, information appended to the case indicated that this product had been imported by Mi Le Co., Ltd. since the importation of Japanese whisky was liberalized in 1994. Moreover, the product has been promoted in advertisements appearing in more than ten print media magazines since November 1994 including Chinatimes Weekly, The Journalist, Business Weekly, Scoop Weekly, and Commonwealth. Suntory Whisky is also a leader in whisky sales at chain stores and supermarkets where its 'Suntory Cornered' and 'Suntory Half-Cornered' often rank as the leading or second leading seller. In 1997, Suntory Whisky was the leading seller in Chinese Taipei's whisky market. In March 1996, two advertisements for Suntory Whisky, "Wedding Banquet" and "Ku Ling's World of the Cornered Bottle" appeared on television. Further, a market research report entitled "Recognition of Suntory Whisky's Cornered Bottle" that Suntory commissioned from Taylor Nelson Sofres Taiwan indicated 94% of study participants recognized Suntory Whisky when they were shown the product. Consequently the FTC finds that the name "Suntory Whisky" is known to the relevant public on the basis of the length of time the "Suntory Whisky" symbol has been on the market and in consideration of factors including the product's sales volume in recent years, its sales rank at chain stores and supermarkets, its broad exposure in the media, and the reputation of the product with this symbol.

  4. With regard to whether or not the Apollo Story Whisky sold by the defendant was used in the same or a similar manner to cause confusion with Suntory Whisky, information from the case shows that Apollo Story Whisky primarily uses a gold-edged oval label with a white background and black lettering placed at the middle of the bottle as its symbol. On the label, an English text in red reads "Apollo Story Whisky," above which there a sun icon. Below, there are the English words "Blended and bottled by Sodiko N.V. …Product of Belgium." Inside the gold-edged oval, the label reads "Finest blended…Reserved product for the royal families." The label on the plaintiff's Suntory Whisky products reads, in black English lettering, "Suntory Whisky Kakubin," above which there is a fan-shaped symbol. The bottom section of the label reads "blended and bottled by Suntory Ltd….Product of Japan." Inside a gold-edged oval, the label reads "Special Quality" and "A super B of Selected Whiskies." This comparison of the two product labels shows that the product name, company name, product origin, and label design are all obviously different. Moreover, the labels on the necks of the two products and the bottle caps are also obviously different. Consumers will not confuse the two products when making purchases. What is more, whisky is not cheap. Consumers do not make the external appearance of spirits the basis of transactions. Rather, most consumers carefully examine the label for the product's place of manufacture, trademark, and manufacturer and make a critical decision before selecting. This is quite different from the purchase of ordinary beverages wherein consumers may make a purchase after a brief examination. Moreover, the normal industry practice is to place similar spirits together when retailing products. Consequently, when Apollo Story and Suntory whiskies are placed together, consumers are able to compare the two when making purchases. Hence, there is as yet no grounds for confusion of the products' place of origin. In sum, currently available information indicates that this case does not fully meets the conditions set in the Law Article 20.

  5. With respect to the issues concerning Article 24 of the Law, that article provides that in addition to what is otherwise provided for in the Law, an enterprise shall not engage in deceptive or other obviously unfair acts that are capable of affecting the trading order. Also, Point 16 of the FTC's Principles for Handling Cases Governed by Article 20 of the Fair Trade Law provides that cases which do not meet the conditions of Article 20 may be handled under Article 24 where one of the following circumstances exist: (1) an enterprise has copied a well known product or service symbol belonging to another without causing confusion but nonetheless actively seeking to latch onto the other's business reputation and (2) cases where the exterior appearance of another's product or service has been copied in an active effort to reap the rewards of another's effort, in a way that is obviously unfair and capable of disrupting the trading order.

    Consequently, if an enterprise latches itself onto another's reputation or inappropriately copies the external appearance or symbol of a product in such a way as to reap the rewards of another's efforts unethically, it is competing unfairly. Because the defendant in the case is a spirits distributor and does not manufacture Apollo Story Whisky, it is not possible to determine that the defendant actively copied and latched onto Suntory Whisky in an effort to reap the rewards of Suntory's efforts. Accordingly, the defendant's marketing practices still fall short of the conditions set forth in the above FTC case handling principles. Moreover, had it been possible to determine through the comparison of Apollo Story and Suntory that copying and latching onto reputation had occurred, such acts would be the responsibility of the manufacturer or the importer, not the defendant. In sum, Article 24 of the Law does not apply to the defendant's marketing practices.


Summarized by Pan Shih-hsi
Supervised by Wu Ting-hung


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