INTELLECTUAL PROPERTY

LAW
UNIVERSITY OF HERTFORDSHIRE
SDL PROGRAMME

Prepared By:
V. Puvaneswary
 What is meant by Protection Against Unfair
Competition?
https://www.youtube.com/watch?v=rPzlfgDAI5w
The Protection Against Unfair Competition
• What is “Protection Against Unfair Competition”?
• A market economy allows and encourages competition between industrial and commercial organizations. As
competitors are out to win, they may sometimes be tempted to use malicious means to gain an unfair advantage
such as making a direct attack against a competitor or misleading the public to the detriment of a competitor.
• Self-regulation, via associations of organizations, can play an important role by setting up a code of conduct or
controlling practices, however, it often fails to be respected by participants or followed by judicial authorities.
• As a general rule, any act or practice carried out in the course of industrial or commercial activities contrary to
honest practices constitutes an act of unfair competition; the decisive criterion being “contrary to honest
practices”. In Belgium and Luxembourg honest practices are sometimes referred to as “honest trade practices”,
in Switzerland and Spain as “the principle of good faith” and in Italy as “professional correctness”.
• It is not easy to find a clear-cut and worldwide definition of what constitutes an act contrary to honest practices.
Standards of ‘honesty’ and ‘fairness’ may differ from country to country to reflect the economic, sociological
and moral concepts of a given society. Therefore, the notion of ‘honesty’ has to be interpreted by the judicial
bodies of the country concerned. Conceptions of honest practices established by international trade should also
be taken into consideration, especially in cases of competition between organizations in different countries.
 Protection Against Unfair Competition
• Protection against unfair competition is an ever-evolving notion that has to adapt to
the evolution of trade, and the development of new principles and obligations for
participants in the business market.
• Originally designed to protect the ‘honest businessman’, the scope of protection
against unfair competition has now been enlarged to include protection of the
customer.
• Nowadays laws against unfair competition aim to ensure fair competition in the
interests of all concerned.
• It may be conveniently, if emotively, described as ‘free riding’ or ‘reaping without
sowing’.
 Behaviour Classified as Unfair Competition
• In 1900, at the Brussels Diplomatic Conference for the Revision of the Paris Convention,
Article 10 bis was added to the Convention to try and prevent unfair competition.

• To prevent unfair practice certain actions are limited by law.

• Article 10 bis of the Paris Convention classifies unfair business practices into three broad
categories:
I. Acts causing Confusion
II. Acts that are Misleading
III. Acts damaging Goodwill or reputation

• Each category will be considered.

 Acts causing Confusion

• An act or practice, in the course of industrial or commercial activities, that

causes, or is likely to cause, confusion with respect to another’s enterprise or its
activities, in particular, the products or services offered by such an enterprise
constitutes an act of unfair competition.

• Even the likelihood of confusion having a detrimental effect comparable to actual

confusion constitutes an act of unfair competition and this widely enlarges the
scope of protection. For instance, a trademark, whether registered or not, or a
product’s appearance may lead to confusion. Appearance of a product includes
packaging, shape or other non-functional characteristic features of the product.
 Acts that are Misleading

• A misleading act can create a false impression of a competitor’s

product or services leading to the consumer, acting on false
information, suffering financial damage. Misleading acts can take
the form of a statement giving incorrect indications or allegations
about an enterprise or its products or services. For example,
misleading statements concerning the manufacturing process of a
product may relate to a product’s safety and create a false
impression.
 Acts damaging goodwill or reputation
• Reducing the distinctive character, appearance, value or the reputation attached
to a product could damage another’s goodwill or reputation. For instance, any act
that dilutes the effect of a trademark is considered unfair as it could destroy the
originality and distinctive character of a trademark.
• Other acts that could be classified as causing unfair competition include
discrediting another’s enterprise or its activities, industrial or commercial
espionage, and acting unfairly with respect to confidential information such as
breach of contract or breach of confidence.
• Under the Paris Convention, Member States are obliged to provide protection
against unfair competition. This obligation is reinforced by Article 2 of the Trade-
Related Aspects of Intellectual Property Rights (TRIPS) that obliges members of
the WTO to comply with the Paris Convention.
 What is UK’s Stand?
• UK courts have traditionally adopted a robust view of competition, such that any
form of business conduct is regarded as fair provided that it does not amount to
criminal conduct (Crofter Hand Woven Harris Tweed v Veitch [1942] AC 435).
• Consequently, UK law (and indeed the law of several other common law
jurisdictions) has no general concept of unfair competition.
• Instead, intellectual property is divided into the discrete rights listed above. Where a
claimant seeks protection for something falling outside such categories, the action is
likely to fail unless an existing right can be ‘stretched’ to fit.
• The judiciary is reluctant to expand the boundaries of the existing rights.