The Competition Council imposed a fine of HUF 1 000 000 (app. EUR 3800) on Traubi Hungária Rt. because Traubi released an advertisement in a newspaper which was suitable for misleading consumers.

The Antecedents

The proprietor of the Traubisoda trademark was the Austrian Lenz Moser company. The trademark was sold to Warimpex Aktiengesellschaft in 1979. The list of goods of the trademark contained juices, wines and the soft drink called Traubisoda.

The first producer of Traubisoda in Hungary was the Badacsonyi Állami Gazdaság (hereinafter BÁG) under the authorisation of the Lenz Moser company. In 1987 BÁG concluded a licence agreement with Warimpex AG, that was the proprietor of the know-how and the trademark. Warimpex gave utilisation right to BÁG for the shape-bottle and for the trade-name. For a specific period BÁG was obliged to buy the aroma from Warimpex, but after this period, its authorisation for the utilisation of the shape-bottle and the trade-name, was not required and BÁG was free to buy the aroma elsewhere or to produce it itself.

In 1990 the contract was prolonged.

Centrals Kft. acquired the Traubisoda plant of BÁG in 1992 and BÁG, with the contribution of Warimpex assigned its rights and obligations to the Kft. under the licence agreement. Centrals Kft. obtained the aroma from Reynold & Fils GmbH. R&F alleged that it is the only producer of the original aroma of Lenz Moser.

Centrals Kft. granted its rights including the rights deriving from the licence agreement to Traubi Hungária Rt. in 1998.

In Hungary Traubisoda is produced by Traubi Hungária Rt. and by Ráthonyi Kft. This latter company concluded a licence agreement with Warimpex in 1995 in which it got exclusive distributing rights in Hungary. It utilises the original Lenz Moser aroma for the production.

The Traubisoda trademark was registered by the National Patent Office in 1995 and it was stated that the proprietor is the Warimpex AG. The Office took note that the Warimpex gave utilisation right to Ráthonyi Kft. for the use of the visual Traubisoda trademark and trade-name as well. In 1997 the Office refused the application of Centrals Kft. to delete the right of Warimpex AG from the registration. The Supreme Court upheld the decision of the Office. The judgement stated that Warimpex had not transferred the property of the trademark to the applicant or to its legal predecessor.

The Infringement

Traubi Hungária Rt. released an advertisement in a newspaper, in 25. 000 issues in August 2000. In this advertisement the Rt. alleged that a) only its product is the original Traubisoda b) the other similar products do not meet the accustomed quality requirements of the Traubisoda and these products are usually murky. c) In the advertisement the competitor`s product was pulled through.

The Investigation

The investigator stated that as Traubi Hungária Rt. utilises the original Lenz Moser aroma, its product might be considered original. In relation with the second two questions the investigator proposed the termination of the procedure as these infringements constituted the slender of title under Article 3 of the Competition Act and the judge of these infringements is the court.

The Party

The party claimed that its product is produced by the original recipe and that it lawfully used the Traubi trade-name. It added that the World Intellectual Property Organisation had registered its trade-name as a trademark.

It upheld that the quality of the competitor`s product is not suitable for the original recipe and that the competitor does not know the know-how and therefore their product is not the same than the original Traubisoda.

The party attached the opinion of the Metropolitan Food-inspector Office in which it states that in a case the competitor`s product was murky.

The Council

The Council examined the 3 points of the questioned advertisement.

At point a) it alleged that the phrase _this is the only original Traubisoda" contains that other products do not meet the necessary quality requirements characterising the Traubisoda. That was an indirect negative allegation about the competitors` products and a positive one for its own product. At question b) the Council stated that the advertisement contains direct and negative statements about the competitor`s product. At the third part of the advertisement the advertiser company directly, through visual representation alleged that the product of Ráthonyi Kft. is not the real Traubisoda.

If the allegation in point a) is not true than it constituted a breach of Article 8 of the Competition Act, namely consumer fraud. Points b) and c) must be regarded in relation with the firs allegation as the indirect purpose of the unreasoned negative allegations about the competitor`s product is to give deceptive information about its own product.

Therefore the advertisement has to be examined in its entirety. As the party could not prove its allegations, the advertisement constituted a breach of Art. 8 of the Competition Act.

January 8, 2000. Budapest

dr. Sólyom Eszter sk. előadó
dr. Lénárd Réka sk.
Fógel Jánosné dr. sk.
Szabó Györgyi