An Unfair Competition Case on Account of Selling a Medicine

An Unfair Competition Case on Account of Selling a Medicine

Li Dongtao

Keywords: unfair competition, well-known product, medicine, name, solution.

The Facts

Love is the name of the game.¹    

This is a case about “NAME”.   

CHLORHEXIDINI is the name of a medicine recorded in the China Medicine Dictionary.

Both the plaintiff and the defendant are producers of a CHLORHEXIDINI solution.

In the process of distributing their products, each producer used different registered trademarks and labels as well as packing boxes with different design and colors. However, the containers held in the packing boxes were almost the same.

In March 1993, the plaintiff applied for a utility model patent for the container of the CHLORHEXIDINI solution, and in December 1993 got the patent.   

Between 1992 and 1996, the plaintiff received several awards for this product. In 1992 the Health News, a newspaper, published an article on the plaintiff’s products.

The plaintiff sued the defendant for unfair competition for using the specified name, package and decoration of its well-known product, the CHLORHEXIDINI solution.

The defendant argued that unfair competition was not established because: 

(1) the name of the medicine had been recorded in the China Medicine Dictionary, so it couldn’t be monopolized by one producer;

(2) though the containers used by the two parties were similar, each container was held in a packing box with different designs and colors, so the public couldn’t be misled about which company had produced the products.

The court ruled that the unfair competition was not established, because:

a.       The packages used by the two parties were different, so there was no likelihood of confusion;

b.       The name of a medicine recorded in the China Medicine Dictionary couldn’t be monopolized by one producer;

c.       The similar containers used by the parties may be solved by patent law, but the plaintiff didn’t say anything about this.

Analysis

The facts of the case are quite simple. However, the question lies in how to decide a concept of a well-known product.   

A well-known product is the result of the investment (including development, production and advertising fees, etc.) made by its producers and distributors.

The public has also recognized a well-known product.

In theory, when determining whether a product can be considered “well-known”, various factors, such as the investments of the parties, length of time the product has been on the market, the market shares, the distinctiveness of the name, package and decoration of the product, etc., should be given attention.

In China, a product may receive a lot of awards and certificates, but there is also no legal standard to judge the accuracy of such praise. Therefore, awards and certificates and a piece of news report cannot be used as the evidence that a product is well-known.

Another factor also warrants attention.

One party cannot monopolize the name of a medicine (including the word “solution”) that has been recorded in a medical dictionary.

In short, love is the name of the game, but CHLORHEXIDINI is not.

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