Product Differentiation in Terms of Packaging Presentation, Advertising, Trade Marks, ETC.: An Assessment of the Legal Situation Regarding Pharmaceuticals and Certain Other Consumer Goods

129 Pages·1983·2.928 MB·English

by  Dr. Jules Stuyck (auth.)

PRODUCT DIFFERENTIATION IN TERMS OF
PACKAGING, PRESENTATION,
ADVERTISING, TRADEMARKS, ETC.
PRODUCT DIFFERENTIATION
IN TERMS OF PACKAGING
PRESENTATION,
ADVERTISING,
TRADEMARKS, ETC.
AN ASSESSMENT OF THE
LEGAL SITUATION
REGARDING PHARMACEUTICALS AND
CERTAIN OTHER CONSUMER GOODS
Dr. Jules Stuyck
LECTURER AT THE FACULTY OF LAW, UNIVERSITY
OF LOUVAIN AND THE SCHOOL OF ECONOMICS,
LIMBURG
Springer-Science+Business Media, B.V.
ISBN 978-90-6544-084-6 ISBN 978-94-017-4456-0 (eBook)
DOI 10.1007/978-94017-4456-0
©1983 Springer Science+Business Media Dordrecht
Originally published by Kluwer, Deventer, The Netherlands in 1983.
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system,
or transmitted in any form or by any means, electronic, mechanical, photocopying, recording
or otherwise, without prior written permission of the publisher.
Acknowledgments
I am indebted to the many people who have helped me collect information
for this survey and put it into perspective: Messrs. Duprat, Gaerner, H.
Johannes, L. Krämer and B. Schwab, offleials at the Commission; Dr. Albert
Degen and Mr. Maurice Wagner (Hoffmann-La Rache, Basle); Mr. C. A.
Knook and Mr. H. Molijn (Unilever, Rotterdam); Dr. Mak (Philips, Eind
hoven); Mr. J. Sarens (GB-INNO-BM, Brussels); Mr. A. Thrierr (Union
des Fabricants pour la protection internationale de Ia propriete industrielle,
Paris); Mr. Thaillade (Syndicat des Industries Pharmaceutiques, Paris);
Professor F.-K. Beier, Professor G. Schricker, Dr. M. Lehmann, Dr. H.
Ullrich (Max Planck Institut Patentrecht, Munich); Professor U. Bernitz
(Stockholm); Dr. Moritz and Mr. J. Hennig (Stiftung Warentest, Berlin);
Dr. Möbius (Berlin); Dr. Lesley Yeomans (Consumers' Association); Mrs.
C. Van Lierde (BEUC); Mrs. R. Loosli, Mrs. J. Jacquot and Mr. Y. Thepot
(Institut National de La Consommation, Paris); Messrs Bialonski and Dirnper
(Arbeitsgemeinschaft der Verbraucher, Bonn); Mr. de Savornin Lohmann
(Barrister, Brussels); Dr. P.B. Mertens (Dutch Health Insurance Council);
Dr. Feiden (Federal Ministry of Health); Mr. Johan Uytendaele (Belgian
pharmacist) and Prof. D. W. F. Verkade (Nijmegen). I am particularly
indebted to L. Krämer and P.B. Mertens and to Mrs. C. Van Valsem who
typed the text.
V
Foreward to the English edition
This book is the Final Report on a survey carried out on behalf of the
Commission of the European Communities, Environment and Consumers
Protection Service. The Commission, however, is in no way responsible for
the content of this report.
The report was presented to the Commission in November 1980. lt was
originally written in Dutch and the English translation has been updated,
wherever possible and necessary, to September 1981.
VII
Preface
With consumer goods, as weil as consumer durables, the market is obscured
because of product differentiation, in for example, the use, of trade marks,
and the advertising and get-up of products, and this presents arealproblern
in the protection of consumers.
After a general demarcation of the forms, techniques and functions of
product differentiation, an investigation is made into the correlation between
the law and product differentiation; first, regarding pharmaceutical products
and, then, though only by way of reconnaissance, for foodstuffs and
cosmetics. Both in the general descriptive part and in the parts dealing with
various sectors, attention is also paid to product differentiation as a source
of the geographical division of markets.
In a later chapter, certain general Observations on the law and socially
undesirable product differentiation are developed. Here special attention is
paid to trade mark law and regulations relating to misleading and dishonest
advertising.
The survey shows that, in the light of the existing economic model,
improved consumer protection against the representation of product differ
ences which hardly exist, can best be effected by means of regulations and
other initiatives concerned with the supply of information, such as labelling
requirements.
September 1981 Dr. Jules Stuyck
IX
Table of Contents
The first figure indicates the subsection number and the second figure the
page number.
Acknowledgments V
Foreward to the English edition VII
Preface IX
Abbreviations XV
subs. page
CHAPTER I. DEFINITION OF THE SUBJECT
MATTER
Starting point 1 1
CHAPTER II. FORMS, TECHNIQUES AND FUNC
TIONS OF PRODUCT DIFFERENTIATION 12 9
I. Forms 13 9
II. Techniques 17 12
1. Differentiation by product name 18 12
2. Differentiation in product properties 21 15
3. Differentiation by means of packaging 23 16
4. Differentiation by advertising 24 17
5. Differentiation by price 25 18
III. Functions 26 18
1. The creation of a product image 27 18
2. Price discrimination 28 19
3. Evasion or avoidance of price regulations 29 19
4. Geographie division of markets 29a 20
5. 'Barriers to entry' 29b 21
6. Limiting the effect of advertising to own products 29c 23
XI
TABLE OF CONTENTS
7. Maintaining historically different market shares 30 24
8. Increasing a stagnating market share 31 24
9. Maintaining a distribution network 32 25
10. Interna! competition 33 26
11. 'Bait and switch' 34 27
12. Limitation of liability and insurance against loss of
reputation 35 27
13. Limitation of the effect of competition to part of the
turnover of a given product 35a 28
14. Market entry 35b 28
CHAPTER 111. PRODUCT DIFFERENTIATION IN
CERTAIN SECTORS: PHARMACEUTICALS, FOOD
STUFFS, COSMETICS AND MAINTENANCE PRO
DUCTS 36 29
I. Introduction: differentiation in relation to the nature of
the product 36 29
II. Pharmaceuticals 37 31
1. Types of product 38 32
2. The therapeutic groups 43 36
3. The special differentiability of pharmaceuticals 44 37
4. The importance of patents and patent licences 45 38
5. The importance of brands and advertising 49 43
6. The importance of 'get-up', particularly colours 55 46
7. Brand differentiation 56 47
8. Geographical differentiation 58 48
a. General 58 48
b. Differentiation by the use of a single brand 59 50
c. Geographical differentiation by means of packaging,
colours, etc. 63 55
d. Geographical differentiation by using more than one
trade mark 64 56
e. Geographical differentiation as a result of health
policy 65 59
9. The product-differentiating effect of advertising and
the regulation of advertising and information for phar
maceutical products 68 62
10. Measures which may contribute to greater transpar-
ency of the market 72 65
a. General 72 65
b. Neutral information 73 67
c. Pharmacist's right of substitution 76 69
XII
TABLE OF CONTENTS
III. Foodstuffs 77 70
1. Product differentiation in foodstuffs 78 70
a. Coffee 81 73
b. Margarine 81 74
c. Beer 81 74
2. Product differentiation and food law 82 75
3. Product differentiation in foodstuffs, the law of com
petition and protection relating to industrial property
rights 90 79
4. Maintenance products and the like 92 81
IV. Cosmetics 95 82
CHAPTER IV. GENERAL OBSERVATIONS ON THE
LAW AND SOCIALLY UNDESIRABLE PRODUCT
DIFFERENTIATION 99 85
I. Introduction 99 85
II. Iudustrial property law 100 85
1. Patents 100 86
2. Trademarks 101 86
3. Designsandmodels 106 92
111. Regulation of advertising and trade practices 108 93
1. Current law on advertising 109 94
2. Swedish information liability in advertising 110 96
3. The proposed EEC Directive 111 97
4. Current law on trade practices 112 98
5. The Baudenbacherthesis 113 98
6. Other proposals 118 102
IV. The law of competition 121 105
CHAPTER V. CONCLUSIONS AND RECOMMEN-
DATIONS 122 107
1. Basis 122 107
2. Pharmaceuticals 124 107
3. Foodstuffs 126 108
4. Cosmetics 127 109
5. General 128 109
6. Principal recommendations 129 110
Bibliography 111
XIII