Acts of Unfair Competition

It is true that describing unfair competition as acts contrary to "honest trade practices," "good faith" and so on does not make for clear-cut, universally accepted standards of behavior, since the meaning of the terms used is rather

fluid. The standard of "fairness" or "honesty" in competition is no more than a reflection of the sociological, economic, moral and ethical concepts of a society, and may therefore differ from country to country (and sometimes even within a country). That standard is also liable to change with time. Furthermore, there are always new acts of unfair competition, since there is ostensibly no limit to inventiveness in the field of competition. Any attempt to encompass all existing and future acts of competition in one sweeping definition—which at the same time defines all prohibited behavior and is flexible enough to adapt to new market practices—has so far failed. This does not mean, however, that acts of unfair competition cannot be encompassed by any general definition. The most notable of these 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.

On the other hand, there is broad agreement that at least some acts and practices are always irreconcilable with the notion of fairness in competition. These are discussed in detail below.

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.

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”. The scope of this article is very broad, as it covers any act in the course of trade involving a mark, sign, label, slogan, packaging, shape or color of goods, or any other distinctive indication used by a businessman. Thus not only indications used to distinguish goods, services or businesses but also the appearance of goods and the presentation of services are considered relevant for the prohibition of confusion. However there are two main areas in which confusion frequently occurs. These are indications of commercial origin on the one hand, and the appearance of goods on the other. However, this does not preclude or limit the protection of other attributes or achievements against confusion. 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

Audio segment 2: Briefly how does industrial design protection work?

Such legislation usually prohibits the use of identical or similar product appearances for identical or similar goods. 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.

SAQ 3: Which of the following are potentially confusing practices that could lead to unfair competition?

Date: 2015-12-17; view: 757