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Categories of Acts of Unfair Competition

The need for protection

Unfair competition law is therefore necessary either to supplement the laws on industrial property or to grant a type of protection that no such law can provide.

How do the laws of unfair competition relate to those designed to combat the abuse of a dominant market position?

The rules on the prevention of unfair competition and those on the prevention of restrictive business practices (anti-trust law) are interrelated: both aim at ensuring the efficient operation of a market economy. They do so, however, in different ways. Anti-trust law is concerned with the preservation of the freedom of competition by combating restraints on trade and abuses of economic power. Unfair competition law, on the other hand, is concerned with ensuring fairness in competition by forcing all participants to play according to the same rules. Yet both laws are equally important, although in different respects, and supplement each other.

valid reasons for the need for laws concerning unfair competition:

1. To provide a “level playing field” for all existing and potential competitors.To get the best and the honest result in a sporting and economic competition requires that all the competitors play to the same rules.

To help to ensure a working free market

 

Acts of Unfair Competition

The most notable of acts are the causing of confusion, discrediting and the use of misleading indications. The common aspect of these most important, but by no means exhaustive, examples of unfair market behavior is the attempt (by an entrepreneur) to succeed in competition without relying on his own achievements in terms of quality and price of his products and services, but rather by taking undue advantage of the work of another or by influencing consumer demand with false or misleading statements. Practices that involve such methods are therefore doubtful at the outset as to their fairness in competition.

The most important factor for determining "unfairness" in the marketplace, however, is derived from the purpose of unfair competition law. In this respect, unfair competition law was initially designed to protect the honest businessman. In the meantime, consumer protection has been recognized as equally important. Moreover, some countries put special emphasis on the protection of the public at large, and especially its interest in the freedom of competition. Modern unfair competition law therefore serves a threefold purpose, namely: the protection of competitors, the protection of consumers and the safeguarding of competition in the interest of the public at large.

Categories of Acts of Unfair Competition

The following are amongst the most common generally recognized acts of unfair competition:

• Causing confusion

• Misleading

• Discrediting Competitors

• Disclosure of secret information

• Taking advantage of another’s achievements (free riding)

• Comparative advertising



Let’s look at each of these in turn.

Ex:

1. An advertisement that a competitor’s dairy Yogurt was not made with cows milk

2. An untrue statement that a competitor was about to become bankrupt

3. Choosing a logo that was just marginally different from that of a competitor

4. Stealing the secret design of a competitor’s product

Causing confusion

The Paris Convention (Art. 10bis (3)) obliges member States to prohibit all acts that are “of such a nature as to create confusion by any means whatever with the establishment, the goods or the industrial or commercial activities of a competitor”.. An example of the first type of confusion could be a situation in which an organization which is completely separate from the large American toy store known under the trademark " Toys 'R' Us” would begin to sell games in a storecalled Games 'R' Us

Briefly how does industrial design protection work?

However, as with trademark legislation, protection under special laws on industrial designs is also limited in several ways, which vary significantly from country to country. In a manner similar to the specific protection under trademark laws, such limitations may concern the general applicability of the designs law to certain product appearances and also the exact scope of the protection granted by the specific legislation. For example, if the design protection of a surface decoration is limited to the use of the decoration on products for which the design is registered, protection against copying of the design for the decoration of other products may be obtained under unfair competition law, if the copied design is misleading or causes confusion as to the commercial source.

Misleading

Misleading can roughly be defined as creating a false impression of a competitor's own products or services. It may well be the single most prevalent form of unfair competition, and it is by no means harmless. On the contrary, misleading can have quite serious consequences: the consumer, relying on incorrect information, may suffer financial (or more harmful) prejudice. The honest competitor loses clients. The transparency of the market diminishes, with adverse consequences for the economy as a whole and economic welfare. There is a consensus according to which the concept of misleading is restricted neither to inherently false statements nor to statements that have actually led to a false impression on the part of the consumer. Instead it is considered sufficient that the indications in question are likely to have a misleading effect. Even statements that are literally correct can be deceptive. If, for example, chemical ingredients are generally forbidden in bread, the courts of most countries would consider an advertising claim that a certain bread "was without chemical ingredients" to be deceptive, because, though literally true, it gives the misleading impression that the advertised fact is something out of the ordinary. It is likewise not necessary for the product in question to be inferior, in an objective sense, so long as the indication or allegation has some enticing effect on the consumer. For example, if the public prefers domestic goods to foreign goods, a false declaration to the effect that imported goods are domestic is misleading even if the imported goods are of superior quality.

Would you consider the following to be misleading? An ad claims that a slice of bread from one type of loaf has fewer calories than a slice from a different type of loaf, while this is solely due to the fact that it is thinner.Yes. The omission of the information that the slice was thinner can createas strong an incorrect impression, as an express statement stating thatthe bread as a whole had fewer calories than other breads.Could a company that produced a new beer called Bavaria be guilty of misleading the customers?If the beer was not made in the German region of Bavaria it could be misleading in that its’ origin might be assumed to be Bavaria. Also it mightbe assumed to be a German style beer made to German quality

standards. In certain countries, this might be regarded as an infringement of a Geographical Indication.

Does the concept of misleading vary from country to country?

Generally the concept of misleading does vary from country to country and this can best be seen in the various national treatments of exaggerations. Although in all countries obvious exaggerations (even if literally inaccurate) are not considered deceptive because they can easily be recognized as "sales talk," the question of what is mere "hot air" or "puffing" and what is to be taken seriously is answered differently in different countries.


Date: 2015-12-17; view: 1063


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