INTERNATIONAL REPORT ON QUESTION A:
CAN THE LAW ON UNFAIR COMPETITION COMPLETE OR REPLACE THE SPECIFIC
PROTECTION CONFERRED ON INTELLECTUAL PROPERTY AND, IF SO, TO WHAT
EXTENT?
By
Andrée PUTTEMANS
INTRODUCTION
1.
The purpose of this question is to determine to what extent, in the countries
represented in the League, the law governing unfair competition affords protection in
accumulation with the protection afforded by intellectual property law (patents, trade marks,
designs and models, copyright,…), and/or completes and/or substitutes this, and to advocate
potential improvements to the current systems.
Three separate sections have thus been examined in the relationship between intellectual
property law and the law of unfair competition, and these are set out as the same sections in
this report: 1) accumulation of protection, 2) supplementary protection through unfair
competition law and 3) protection of substitution by unfair competition law.
2.
This international report was drawn up on the basis of national reports in
response to the questionnaire which the report uses for its structure. My warmest thanks to
the national groups and rapporteurs who made possible this synthesis1:

Helmut KÖHLER (Germany)

Vincent WELLENS (Belgium)

Carlos MORAN (Spain)

Erwann MINGAM, Christine VILMART and Joffrey SIGRIST (France)

Iain CONNOR (United Kingdom)

Gustàv BACHER (Hungary)

Paola FRASSI (Italy)

Kazuko MATSUO (Japan)
1
Unfortunately I cannot cite here all those who took an active part in drawing up the various reports; their names
appear in the national reports.
1

Nicolas DECKER (Luxembourg)

Samuel HÄGG (Sweden)

David ASCHMANN (Switzerland)

Petr HAJN (Czech Republic)
1. Action against unfair competition as accumulative protection in relation to the
rules ensuring protection for intellectual property (in a broad sense)
3.
This hypothesis assumes the existence, simultaneously: 1) of perfectly valid
intellectual property rights in force and 2) of a violation of such rights sanctioned by the
special law establishing same.
Each rapporteur was asked to ascertain whether the laws in his or her country allow the
victim of a violation of intellectual property rights in such cases to present an action for
counterfeiting or another violation of intellectual property rights as well as an action for unfair
competition. In other words, can the same fact in law (violation of intellectual property rights
prohibited by the special law governing intellectual property rights) simultaneously present
two kinds of action in the justice system (action against counterfeiting and action for unfair
competition) in the charges brought by a sole plaintiff? Moreover, is action against unfair
competition open to those prejudiced by violation of the intellectual property rights of others,
such as the distributor of a product protected by intellectual property rights?
Where accumulation is permitted, what is the resultant added value of the accumulative
exercise of the two types of actions or, in a general sense, the advantages and
disadvantages of proceeding in this manner?
***
4.
Accumulation of actions is forbidden by legal stipulations in only one of the
countries examined: Belgium. Belgian law in relation to unfair competition2 contains an
express stipulation which excludes the possibility of acting after a « cessation action » based
on this law for an act of counterfeiting sanctioned by the laws governing patents, trade
marks, designs or models, copyright and neighbouring rights (LPCC, art. 96). This exclusion
is enhanced and reinforced by the exclusive authority of civil courts in all such matters, with
2
Law of 14 July 1991 governing commercial practices and information and protection for consumers (abbreviated
to: « LPCC »).
2
the exception of trade marks, whereas the judges presiding over commercial tribunals have
the authority to try cessation actions concerning unfair competition.
However, Belgian jurisprudence has placed considerable restrictions, and even circumvented
this exclusion. Thus, in cases of copyright (but also in the case of trade marks),
jurisprudence has established a theory known as the « water mark theory », whereby a
cessation action based on the LPCC may be brought before the judge of the commercial
tribunal if the basic facts of the case simultaneously constitute an act of unfair competition
and an act of counterfeiting3. This water mark theory does not require that facts argued as
unfair competition differ materially from counterfeiting; it is sufficient for them to be qualified
in the legal sense, in a different fashion, as simultaneous acts of unfair competition and acts
of counterfeiting.
With respect to trade marks, the Court of Arbitration, a constitutional court, has even stated
that exclusion of accumulation of actions is unconstitutional. It has not yet been consulted in
relation to other areas of intellectual property, but a preliminary bill envisages complete
abrogation of the current article 96, and comprehensive modification of the rules of
competition, with the aim, among others, of allowing accumulation of actions4. Since this
ruling, jurisprudence allows cessation action with regard to unfair competition for violation of
registered trade mark rights, in the Benelux or the EU.
In the field of designs and models, the Benelux lawmakers recently removed the rule
prohibiting accumulation of protection5.
It should be emphasised that, under Belgian law, doctrine and jurisprudence consider that
any violation of any legal regulation or rule constitutes an act of unfair competition if it is
liable to damage the interests of another business6 or of a consumer or consumers. Insofar
as the legislative ban on accumulation is lifted, since counterfeiting of valid intellectual
property rights is a violation of the law, it is automatically classified as an act contrary to
honest usage, often called « illicit competition », and it is not necessary to demonstrate any
additional circumstances other than the risk of damage to the protected interests.
3
Cass., 19 March 1998, A & M, 1998, p. 229, note B. Dauwe.
See the preliminary bill of 28 March 2003 in relation to the civil aspects of protection of certain patent rights,
http://mineco.fgov.be/intellectual_property/patents/news/law_counterfeiting_002.pdf.
5 Former article 14.8 of the uniform Benelux law in relation to designs and models, abrogated by the Protocol of
20 June 2002 modifying the uniform Benelux law in relation to designs and models, in effect since 1 December
2003.
6 Businesses subject to unfair competition law are known as « sellers » in the LPCC.
4
3
In Switzerland, most jurisprudence allows accumulative action, since counterfeiting is
considered to create a risk of confusion or, at the very least, to constitute a violation of the
general clause of observance of honest usage. However, with respect to designs and
models, it is more common to find that the two actions are independent.
In Spain, majority jurisprudence established by the Supreme Court, also allows accumulative
action, and this is criticised by doctrine and certain jurisdictions. With regard to trade marks,
accumulation is only permitted in relation to well-known brand names.
Italian law has just made comprehensive changes with regard to intellectual property, since
the new « Codice della proprietà industriale » became law on 19 March 2005. Its provisions
with regard to unfair competition are still part of the Civil Code (sec. 2598). We can
understand that the authorities have as yet been unable to delve deeper into the relationship
between these two sets of rules, but most jurisprudence and doctrine permits accumulation
in relation to trade marks.
Czech law allows victims of a violation of intellectual property rights to accumulate a
counterfeiting action and an action for unfair competition. The conditions demanded for the
action for unfair competition and the counterfeiting action must be met (this means, for
example, the obligation to prove a competitive relationship between the parties, an inherent
condition to unfair competition action in the Czech Republic).
In Hungary, accumulation of actions is permitted for trade marks and patents; this solution
would appear to be less certain in relation to other intellectual property rights, but the national
rapporteur states that the parasitism grievance could be used as a remedy on this point.
The situation is rather special in the United Kingdom, where strictly speaking there are no
actions for unfair competition. The Common Law action of passing-off is close to action
against unfair competition in that it protects the goodwill owned by a business, but requires a
claimant to satisfy a number of conditions, known as the classical trinity: the existence of
goodwill, misrepresentation, and damages. UK Common Law has shown its flexibility to
adapt passing off (and to a lesser extent some other causes of action) to new situations to
protect against acts of unfair competition and, in this regard, the national rapporteur suggests
that jurisprudence may develop in accordance with article 10bis of the Paris Union
4
Convention7, and thus to gradually establish a real unfair competition action in the known
sense, applied in other European countries. Accumulation of an action for passing-off and a
counterfeiting action is accepted, and intellectual property rights do not in any way exclude
the possibility of protection under common law.
The situation is unclear in France. Although those who drew up the national report cite the
violation of a law or regulation as possibly constituting an act of unfair competition, it does
not appear that counterfeiting is seen from this angle in French law, unlike Belgian law.
Moreover, doctrine and jurisprudence are divided as to whether unfair competition may be
admitted on the basis of facts which are materially identical but legally different from those
which could provide grounds for an action against counterfeiting of intellectual property
rights. It is clear that an affirmative response to this question corresponds to admission of the
water mark theory in Belgium. A negative response to the same question, on the other hand,
means the exclusion of any real accumulation of actions brought by the owner of intellectual
property rights.
In Japan and Sweden, accumulation is permitted in the abovementioned sense of the water
mark theory: acts of unfair competition and counterfeiting must be accumulated in relation to
the same facts, as far as the facts may be legally qualified in a different manner.
In Luxembourg, most jurisprudence gave a negative response to the question of
accumulation until a ruling was issued by the Luxembourg appeal court in 19828, which
accepted actions against unfair competition when they are formulated as such, and not as
counterfeiting, even if the reproachable facts are really counterfeiting of trade marks. Here,
too, as a result, it is sufficient for the facts to be legally different.
In Germany, jurisprudence refused accumulation under the old unfair competition law (UWG
1909); according to the national rapporteur, legislators did not wish to introduce any
innovations on this point with the new UWG in 2004, feeling that additional protection of
intellectual property rights by protection against unfair competition was unnecessary.
***
7
8
1883 Paris Convention for the Protection of Industrial Property
12 February 1982, Mathes vs. Vinsmoselle, unpublished.
5
5.
Action against unfair competition for violation of the intellectual property rights
of others would seem to be accepted in all the countries examined. This therefore permits,
for example, distributors who observe the intellectual property rights of others to take action
in order to put an end to counterfeiting of the rights by competitors. The French rapporteurs
have nevertheless observed a recent modification to jurisprudence: the licensees of a holder
of patent rights are allowed to take action for unfair competition against the counterfeiters9
but, since a recent ruling by the Court of Cassation10, in order to win the case, the licensees
must demonstrate the existence of a risk of confusion. This solution is also used in Sweden,
where it is applied to all third parties acting on such a basis.
***
6.
With regard to the advantages and disadvantages of accumulation of actions,
the latter depend on preponderant evidence of the respective effectiveness of counterfeiting
and unfair competition in the various countries examined. In Belgium, where cessation action
for unfair competition has proved its effectiveness for 70 years, the advantages of this action,
and therefore of accumulation, are emphasised: the action is introduced and develops « as in
summary proceedings », thus swiftly obtaining cessation of the reproachable acts, most
frequently punishable by penalties, following a judgment in which the magistrate rules on the
content of the case. The urgent nature of the cessation order need not be proven, judgment
is executory, and the cessation order may be accompanied by advertising measures. Failure
to observe the cessation order carries a penal sanction. However, action for cessation
excludes any demands for damages and interest or other compensation (these must be
requested of the court subsequently, and the court will be bound by the cessation judgment),
but according to the Court of Cassation, it allows those involved to obtain a certain amount of
recall of goods.
In Italy, the possibility of bringing an action for unfair competition allows all appropriate
measures to be ordered to bring about the cessation of the effects of the prohibited act,
which does not permit actions for counterfeiting.
In Japan, accumulative counterfeiting action and unfair competition action is advantageous in
relation to compensation for the holders of well-known trade marks.
9
Provided, with regard to the trade mark licensees, they have had their contract listed in the trade mark register.
Cass Com 31 March 2004, Industrial property, September 2004, n° 75 p. 29.
10
6
In France, admission of accumulation is an advantage when plaintiffs are uncertain as to the
validity or the scope of their rights (for example, with regard to the distinctive power of their
brand names), but this can create a dilemma of authority between district courts and
commercial tribunals.
In Switzerland, the possibility of taking action against unfair competition as counterfeiting
holds, among others, the advantages of simultaneous absence of a limitation on protection
time and of a restrictive enumeration of the forbidden acts, and the open possibility of action
which may be taken by any person whose economic interests are damaged or threatened, or
professional groups and consumer organisations, and even the Helvetic Confederation,
under certain conditions. The disadvantages of unfair competition action with respect to
counterfeiting action stem from the more targeted and more precise nature of the special
laws, from the geographical extent of the protection afforded, from measures which may be
obtained, and procedural difficulties.
The national rapporteur in Spain, who observes that accumulation does not pose any
particular problem, considers that the simultaneous introduction of an action for unfair
competition does not offer any advantage since the procedure and sanctions are identical,
except in relation to the period for action to be taken, which is more favourable with respect
to counterfeiting actions (five years) than actions for unfair competition (three years).
In the United Kingdom, the conditions to be met with regard to counterfeiting are easier to
satisfy than those required for a passing-off action.
In Sweden, the plaintiff is obliged to instigate two separate actions since the counterfeiting
action is a matter for civil jurisdictions, whilst actions for unfair competition are subject to
specific rules of authority (jurisdiction of the « Market Court » for appeals).
***
7.
In a general fashion, civil sanctions for counterfeiting and unfair competition
(corrective measures and indemnities) are extremely similar, as are the difficulties
encountered in relation to damage assessment. Damages cannot be accumulated to cover
the same damages if the plaintiff has won the case simultaneously on the grounds of
counterfeiting and unfair competition.
7
Certain rapporteurs emphasise that corrective measures do not necessarily focus on the
same object. In Sweden, depending on the cases, cessation of an unfair commercial practice
is more restricted or, on the contrary, more extensive than the cessation of the counterfeiting
of which it forms part.
2. Unfair competition law as a supplement to the rules for protection of
intellectual property
8.
This hypothesis assumes the following: 1) the existence of perfectly valid
intellectual property rights in force but, 2), contrary to the above hypothesis, the absence of
any violation of the rights sanctioned by the special law which establishes them.
Here we must ascertain whether a violation of intellectual property rights other than those
forbidden by the special law establishing those rights may be forbidden by application of
unfair competition law - are the rules of the special intellectual property rights exhaustive and
restrictive, or do they afford supplementary protection through unfair competition law in order
to enforce the prohibition of acts circumstantial to counterfeiting, which differ from
counterfeiting in the legal sense?
***
9.
Generally
speaking,
the
laws
of
the
countries
examined
provide
supplementary protection of intellectual property rights when additional circumstances to the
act of counterfeiting have been established. Two categories of circumstantial unfair acts are
cited in this regard in a number of national reports: the creation of a risk of confusion, and
parasitism (Germany, Belgium, Spain, France, Italy, Czech Republic). There are a number of
nuances, however, in relation to specific application of the rules, and these could be
important.
In Belgium, with regard to trade marks, the possibility of supplementary protection through
common law is expressly recognised by the Benelux uniform law11. In relation to designs and
models, all legal obstacles in this sense were lifted on 1 December 200312. In other areas of
11
LBM, article 13.A.1.
Former article 14.8 of the Benelux uniform law in relation to designs and models was abrogated by the Protocol
of 20 June 2002 modifying Benelux uniform law in relation to designs and models, in effect since 1 December
2003.
12
8
intellectual property, the creation of a risk of confusion is not a constituent element of the act
of counterfeiting. However, doctrine and jurisprudence would appear to require, in a general
sense, that the act of unfair competition be detachable from the act of counterfeiting to allow
it to be an act which differs from the latter.
Belgian doctrine and jurisprudence treat the notion of parasitic competition with
circumspection. A copy – even a slavish copy – is not sufficient in itself – there must be
« systematic and characterised plagiarism » of the item copied, making it possible to prevent,
on a permanent basis, all creative effort, research effort or investment. Acknowledging that a
mere slavish copy would constitute an act of unfair competition would revert to granting
protection similar to the protection afforded by intellectual property rights, and this is to be
avoided, as has been emphasised in jurisprudence on several occasions13.
In French law, if the notion of « faute distincte » (distinct offence) does not pose a problem
when unfair competition grievances relate to acts totally intrinsic to the sphere of
counterfeiting (denigration, for example), it is a different matter for acts which normally fall
within the scope of this sphere.
Qualification of an act of unfair competition due to the creation of a risk of confusion is
particularly delicate when this grievance appears together with a counterfeiting grievance in
areas where the risk of confusion is inherent to any counterfeiting, such as in patent rights. In
the other areas, too, there is uncertainty as to whether we can acknowledge the existence of
a risk of confusion arising from a slavish copy, when the elements protected by intellectual
property rights have only been used again (this fact is already opening the case up on these
grounds to a counterfeiting action). The question is asked in particular with regard to
overcopying practices, which have produced some extremely divided jurisprudence.
With regard to parasitism (defined as the desire to follow in the wake of an economic agent in
order to profit, at no expense (or little expense), from the agent’s efforts, investment,
reputation or know-how, in particular), this is very often accepted as grounds for a
supplementary unfair competition action, in addition to a counterfeiting action across the
entire scope of intellectual property (for example, the commercial use of fictional characters).
13
See Liège, for example, 18 March 2003, R.D.C., 2003, 991.
9
Simultaneous counterfeiting and unfair competition action poses a particular problem in
relation to trade marks since the summary proceedings envisaged here14 do not relate to the
same jurisdiction as the proceedings in common law, applicable in cases of unfair
competition. Since this is a matter of making good the damage, the damages put forward in
unfair competition must differ from the damages made good by an action for counterfeiting.
Other examples of supplementary protection by unfair competition actions concern the
protection of well-known trade marks: the Spanish rapporteur points out here that protection
of these trade marks beyond the speciality principle was accepted in unfair competition law 15
well before the trade mark law was modified in this sense in 2001. In Japan, this solution
continues to prevail concerning the protection of well-known trade marks beyond the
speciality principle.
In Switzerland, in accordance with the theory known as "Umwegthese" (detour thesis), it is
not possible to grant, by a detour of the law in relation to unfair competition, protection which
special intellectual property legislation expressly refused to the holder of the rights. This
theory was misunderstood by jurisprudence, which wrongly deduced that any supplementary
application of unfair competition rights should be rejected. This errance was criticised in
doctrine
and
substantially
corrected
in
jurisprudence,
which
now
accepts
such
supplementary protection.
In the United Kingdom, a passing-off action may be taken to complete the protection afforded
against counterfeiting. Passing off can offer protection beyond the scope of the intellectual
property regime. Common Law jurisprudence has shown a willingness to develop the law
beyond the strict criteria of passing-off and may develop further to broaden such passing off
actions towards a genuine action against unfair competition, as per article 10bis of the Paris
Union Convention.
***
3. Unfair competition action as a substitute for the rules to ensure protection of
intellectual property
3.1. Substitute in the absence of any protection
14
15
Article L. 716-6 of the Intellectual Property Code.
Law of 10 January 1991 governing unfair competition, articles 6 and 12.
10
10.
This hypothesis assumes the absence of valid intellectual property rights in
force on behalf of the plaintiff.
When a « creation » or a « sign » is not eligible for protection as per the rules of intellectual
property, for reasons of form (failure to respect the formalities of depositing or registering) or
of content (because the basic conditions of protection by intellectual property rights have not
been met), is it nonetheless possible for a holder or author to bring an action for unfair
competition in the event of reproduction, usage or copying by a third party, particularly by
application of a parasitic competition theory?
***
11.
Most of the national reports point out that any reasoning to solve this matter
must commence with the principles of free trade and competition, from which the freedom to
copy arises, and for which intellectual property law makes an exception, at the wish of
legislators, following an appraisal of the interests of the community and of the holder of the
rights . A copy or an imitation, even a slavish imitation, cannot therefore be prohibited as
such, as acts of unfair competition, without shattering the principles of intellectual property.
Here additional circumstances are again required to permit the application of unfair
competition law, and in particular the general rule of conformity to honest usage, in the form
of the creation of a risk of confusion or a situation of parasitism.
Civil sanctions ruled against unfair competition are similar to those applied for counterfeiting.
Prohibition of an act of counterfeiting, however, based on an intellectual property law, will
generally be formulated in a broader fashion than an order to cease unfair competition – the
order will be drawn up solely concerning the specific case of the infringement detected.
12.
The peculiarity of Spanish law is that it makes explicit provision for the
boundaries within which unfair competition law can offer protection with regard to distinctive
signs and creations to persons who do not hold intellectual property rights. Such protection
does not confer absolute rights, and is limited by the definition of acts of unfair competition as
laid down in articles 6 - 17 of the law of 10 January 1991 governing unfair competition. With
regard to technical or aesthetic creations, the limitations are described in article 11 of the
law16; the conditions of protection of trade secrets or business are described in article 1317,
16
“Article 11 – Acts of imitation” :
11
and protection under unfair competition law of items which could identify a product or a
service is described in articles 6 and 1218.
Thus, in the case known as DECATHLON vs. PENTATHLON, only the verbal trade mark
DECATHLON had been registered, but not its graphics or the colour in which the mark had
been created. The competing entity used the sign PENTATHLON for its sporting equipment
outlet with the same graphics and the same colouring as DECATHLON. Counterfeiting of the
verbal trade mark DECATHLON was not accepted by the Barcelona appeal court19, which
ruled that the risk of confusion between the two verbal marks had not been established. In
the same ruling, however, the court considered that specific usage of the PENTATHLON
sign (graphics, colouring) constituted an act of unfair competition by the creation of a risk of
confusion with the DECATHLON sign in the specific use of the sign, which is well known in
Spain.
The sanctions for unfair competition and counterfeiting are similar, but the evidence required
of the plaintiff for unfair competition is more difficult to establish, since the plaintiff cannot
simply assert intellectual property rights. In the same way, with regard to compensation, the
situation of a holder of intellectual property rights is more comfortable than that of the unfair
competition plaintiff, since Spanish trade mark law (2001) and the law governing designs and
models (2003) make provision for an objective compensation system which must
automatically be granted by the judge when counterfeiting of a trade mark or a design or a
“1. Imitation of third parties' business renderings and initiatives shall be free, unless they are protected by an
exclusive right recognised by Law.
2. Nevertheless, imitation of a third party's services shall be considered unfair when it is apt to give rise to
association by consumers in relation to the renderings or entails misappropriation of another party's reputation or
efforts.
When the risk of such association or appropriation of another's reputation is unavoidable, the practice shall not be
considered unfair.
3. Systematic imitation of a competitor's business renderings and initiatives shall likewise be considered unfair
when such strategy is directly intended to prevent or hinder the other party's consolidation in the marketplace and
goes beyond what, depending upon the circumstances, may be regarded as a natural response of the
marketplace.
17Divulgement or exploitation of these secrets, without the consent of their owner, constitutes an act of unfair
competition when it is carried out by a person with a duty of confidentiality, or who acquired the secrets through
industrial espionage or incitation to break a contract.
18 “Article 6 – Acts of confusion”: “Any conduct which is capable of creating confusion with the business, services
or establishment of another is considered unfair. The risk of association by consumers in relation to the origin of
the service is sufficient to establish the unfair nature of a practice”; “Article 12 – Exploitation of another’s
reputation” : “It shall be considered unfair to misappropriate, for the benefit of oneself or a third party, the
advantages attaching to the industrial, commercial, or professional reputation acquired by another party in the
marketplace. In particular, it shall be considered unfair to use other parties' distinctive signs or false appellations
of origin accompanied by an indication of the true origin of the product or expressions such as "model", "system",
"type", "kind", and the like.”
19 7 June 2002.
12
model has been detected (the equivalent of 1% of turnover achieved through sales of the
counterfeit goods or services). This system is not envisaged in the case of unfair competition.
In Belgium, doctrine and jurisprudence do not accept that a distinctive sign or creation can
benefit from protection which is equivalent or comparable to the protection afforded by
specific legislation in connection with intellectual property, solely by application of the rules of
unfair competition, regardless of the conditions of application of such specific legislation: the
principles of « no protection without registration » and, more generally, the principle of « no
protection without a special law » form the reflex effect of intellectual property rights vis-à-vis
unfair competition rights, which do not allow the rules of unfair competition to play a
substitute role in relation to intellectual property law20.
Benelux uniform law in relation to trade marks expressly states that, with the exception of the
owner of a well-known trade mark, nobody, regardless of the nature of the action brought,
may make a claim in the justice system on a sign considered to be a trade mark. No express
provision for such a rule is made in other intellectual property laws, but doctrine and
jurisprudence establish the reflex effect in a general fashion.
However, protection against acts creating confusion and parasitic acts is accepted on the
basis of unfair competition law, which may, in certain cases, present a substitution effect. On
most occasions it is the general rule of conformity to honest usage which serves as grounds
for the action taken (article 93 of the LPCC), in such a way that the mere emergence of one
of these circumstances is not sufficient, and the plaintiff must also furnish proof that his or
her professional interests may be damaged21.
Protection against acts which create confusion would appear to contradict the reflex effect of
intellectual property rights, where confusion is a concept which constitutes counterfeiting, like
trade marks and designs and models.
The theory of parasitic competition targets circumstantial acts of copying, and this lies
outside the sphere of protection of intellectual property rights, not merely the fact that a copy
has been made. In view of the prevalence of the principle of freedom to copy, there may only
be exceptional circumstances, rendering abusive the use which is made of the right to copy.
20
See A. PUTTEMANS, Droits intellectuels et concurrence déloyale (Intellectual property rights and unfair
competition), Brussels, Bruylant, 2000, p. 13.
13
It must be established that the copier behaves as a genuine economic leech who carries out
« systematic and characterised plagiarism ». Jurisprudence is at pains to point out that these
grounds cannot permit the installation of a new kind of monopoly together with intellectual
property rights, or offer to a person who has not gone through the formalities for protection of
intellectual property rights – often complex and costly – the possibility of obtaining protection
similar to the protection granted to the person who made the effort to observe such
formalities.
In the same spirit, in Italy, with regard to designs and models, doctrine and jurisprudence
refuse unfair competition actions when the infringement concerns a registered design or
model which could have been registered.
In France, not more than a copy, even a slavish copy, is not in itself an act of unfair
competition, an attempt at compatibility between products, simple reselection of items arising
from technical standards, or advertising units, or colour coding, or everyday items, cannot
qualify as such.
French jurisprudence, however, considers that the objective of unfair competition action is to
ensure protection for those who cannot take advantage of a privative law, particularly when
the act judged transforms unfair behaviour, causing damages to the person targeted by the
act. In this regard, a distinction is made as to whether or not there is a relationship of
competition between the parties.
In the context of a competitive relationship, taking up a creation or a sign which is not
protected by intellectual property rights only constitutes an act of unfair competition if this
creates a risk of confusion in the mind of the general public, or entails the wish to follow in
the wake of a competitor.
Demonstrating the existence of a risk of confusion assumes the establishment of reselection
of characteristic features with a strong charge of evocation, not necessarily of the original
sign or creation. Thus, jurisprudence rules the existence of a risk of confusion in cases
similar to the Spanish case of DECATHLON vs. PENTATHLON cited above.
21
In the case of advertising, a creation of confusion may also be attacked as per article 23-8 of the LPCC. In this
case, plaintiffs are not obliged to show a risk of damages in their claim (even if they must obviously have sufficient
interest to take action, in the sense of the judicial code).
14
Proof of parasitism is not itself subordinate to the existence of a risk of confusion or the
existence of a competitive relationship; it covers « all manner of behaviour whereby an
economic agent interferes with the wake of another person in order to profit without spending
from the person’s efforts and know-how ».
The Czech rapporteur cites an example of a party condemned for parasitic acts, contrary to
the general norm in relation to unfair competition: a certain product was protected by a patent
(design or model), although
the machine to produce it was not, and a former employee of
the patent-holder had copied this quite special machine and had manufactured products
which were different to those of his former employer; the Prague appeal court placed a ban
on copies of the machine as a parasitic act, contrary to the accepted standards of
competition.
In the United Kingdom, following examination of the intellectual property laws, it would
appear that there are coherent reasons to justify the exclusion of certain signs or creations
within the field of protection provided by these laws. Pondering the domains in which the
absence of specific protection poses a problem which could find a solution in unfair
competition law (a solution has not yet been found), the national rapporteur sets out in turn
the « formats » of televised programmes, broadcasting rights at sporting events and the
presentation of products for consumers. Focusing slightly more on the lastmentioned, the
national rapporteur observes – regretfully – that in the United Kingdom, there have been
many cases where “look-a-like” products (or “smell-a-like” products) escape both the
protection afforded by trade mark rights and an action for passing-off, whereas these
products would not be permitted on the grounds of unfair competition in other European
countries.
Precisely on this subject, the Hungarian rapporteur states that the general clause of
conformity to honest usage can offer protection in certain cases where no protection is
afforded by intellectual property law, and that this is the case concerning programme
formats, and also well-known and characteristic product presentations. Likewise, in Italy,
grievances of creation of a risk of confusion or parasitism allow protection of product
packaging against “look-a-likes”. In Japan, presentation of products against imitation is
protected with no formalities, by a specific stipulation, over three years from commencement
of sales. In Sweden, entrepreneurs cannot use for their products the well-known sign or
creation of a competitor if this practice risks inducing consumers to an error as to the origin of
15
the products, or allows the person carrying out this practice to profit unduly from the
reputation of the competitor22. The same reasoning is applied to product packagings.
In Switzerland, it is only if characteristics of unfair competition have been established which
do not relate to the categories of intellectual property, particularly false advertising for the
products sold, that substitution protection may be found in unfair competition law. In the
Rubik's Cube affair23, for example, a copy of the famous game – which was not protected by
any intellectual property rights – was banned following application of unfair competition law
because it reproduced exactly the six faces of the cube and evoked the same overall
impression, and this led consumers into an error as to the origin of the product.
***
3.2. On expiry of protection
13.
Here the hypothesis is the protection of intellectual property rights through the
rules of unfair competition following expiry of the legal period of protection afforded by the
law.
Following along the lines of the Hungarian rapporteur, a number of the other rapporteurs
pointed out that it would be contrary to the essence of intellectual property rights legally
restricted in time to allow the former holder of these rights, following expiry of the protection
period, to place a ban, on the grounds of unfair competition, without any additional
circumstances, on the usage of these exclusive rights. The rapporteurs in Switzerland and
the United Kingdom also insist on the fact that the protection period for intellectual property
rights was set by legislators following an appraisal of the interests involved, and that there
are solid reasons in relation to general interests, which justify the limitation of the protection
period. If action for unfair competition following expiry of this period is not totally excluded,
this can only be based on grievances which are external to those within the sphere of
protection afforded by special intellectual property laws.
22
23
Hästen-case , MD 2000:25.
BGE 108 II 75 E. c Rubik's Cube.
16
The Supreme Court in Hungary also upheld a ban on the marketing of a generic medication
in a presentation which led to confusion with a medication whose patent protection had
expired.
Hungarian copyright law also contains a rule close to unfair competition law: copyrights on
names have no limit in time, and so collective management companies may, following
ordinary expiry of copyright, act to stop abusive use of the name.
The rapporteur in the United Kingdom states that it is only in cases where the holder of
intellectual property rights has created goodwill over the legal period of protection that
passing-off action may be taken after this period. The pharmaceutical industry attempts to
refute these arguments, asserting that the effective duration of the exploitation of patented
medicines is much shorter than the 20-year protection period, bearing in mind the periods
required to develop a marketable molecule and obtain authorisation for marketing (in this
regard, the national rapporteur states that European legislators have already specifically
intervened on this point, creating supplementary protection certificates which allow the patent
protection period to be extended for medicines, for up to five years24).
In Germany, it is possible to take action against unfair competition in relation to additional
circumstances which are not covered by intellectual property laws, but are prohibited by Sec.
4 n° 9 UWG. The sanctions ruled on the grounds of unfair competition are similar to those
which could have been ruled following a counterfeit action during the period of protection.
The ban ruled in connection with unfair competition is limited in time, and the judge sets this
period in accordance with the circumstances of the case and the balance of interests.
With regard to copyright, supplementary protection in time may be granted to the holder of
the rights by application of unfair competition law if, for particular reasons, the holder has not
had time to recoup his or her investments or extract reasonable earnings from the product.
Jurisprudence is severe in its appreciation of these conditions.
Imitation of a design or model can be banned after expiry of the protection period where
there is a risk of confusion with the original.
24
EEC Council Directive n° 1768/92, 18 June 1992, concerning the creation of a supplementary protection
certificate for medical products (JOCE n° L 182/1, 2 July 1992).
17
On the other hand, German jurisprudence does not accept any prolongation of patent
protection periods in unfair competition law.
In Belgium, items which can no longer be protected by the rules of intellectual property rights
fall into the public domain. Here copying is a free regime, although subject to the risk of
confusion and parasitic acts. The same is true of Luxembourg, where jurisprudence has not
established the theory of parasitic competition, but it is accepted in doctrine. In Japan,
protection by substitution by unfair competition law following expiry of the period of protection
by an intellectual property law is possible, but seems rather difficult to obtain; only in cases
where a basic regulation of trading fairness has been flouted could protection be obtained.
Likewise, in Spain, this protection after expiry of the period envisaged by special intellectual
property laws is theoretically possible, by application of and under the conditions laid down in
articles 6, 11 and 12 of the unfair competition law (act of confusion, imitation or abusive
appropriation of the reputation of others), but cases are rarely practical.
In France, jurisprudence is based on the theory of parasitism to give extended protection to
creations which were no longer protected by an intellectual property law, under conditions
which seem less strict than those observed in the other countries examined. This, for
example, was the case of a slavish copy of a model of a prestigious watch which fell into the
public domain: the Court of Cassation25 considered that the slavish reproduction of the
model, even if not covered by a privative law, manifestly damaged the image of the brand
name of the watch, which it vulgarised and belittled, bringing it down to the level of a simple
advertising gadget; « a usage which affects the image, considered prestigious, of a wellknown brand name, is an incorrect breach ».
In Italy, it would seem that jurisprudence now accepts more readily than before the possibility
of obtaining a ban on a copy of a model whose protection period has expired, when the
external features reproduced are not essential, such as a certain colour or an external detail,
regardless of the specific function of the product.
4. Suggestions to improve the system applicable to your country.
25
Cass. com 22 October 2002 JPC 2003 p. 793
18
a)
General suggestions
14.
The Spanish rapporteur feels that the complex and detailed system envisaged
by the law of 1991 governing unfair competition is satisfactory. If a problem exists in this
area, this stems in particular from a lack of specialisation in Spanish civil courts. Since
September 2004, however, the cases envisaged in this report come under new trading
jurisdictions, and the rapporteur trusts these will apply the provisions in a more precise
fashion.
The Czech rapporteur would like the relationships between the various sources of law
covered by this report to be expressed explicitly, where possible.
The United Kingdom rapporteur insists that the UK Common Law has in the past shown it is
flexible and capable of adapting to new situations without any need for legislation. However,
he calls for more attention to be paid by the UK courts to article 10bis of the Paris Union
Convention to ensure that there is a remedy against acts of unfair competition.
According to the Hungarian rapporteur, it would be desirable for a system of sanctions and
similar actions in justice to be laid down to combat acts of counterfeiting and acts of unfair
competition. In this sense, the adaptation of European directive 2004/48 concerning respect
for intellectual property rights could offer national legislators the chance to harmonise the
systems of sanctions and, in particular, to establish the right to information for the two
domains considered, as imposed by article 8 of the directive, and also corrective measures,
in the sense of article 10 of the directive (recall of goods). Hungarian law obliges judges, in
relation to intellectual property, to order provisional measures in a short, fixed period of time;
it would be appropriate to establish the same rule for cases of unfair competition.
The Italian rapporteur states that global harmonisation would appear to be rather difficult to
envisage, in view of the heterogenic nature of the various national systems with regard to
unfair competition. In Italy, the new trend, ushered in by the recent intellectual property code,
is to include a larger number of items in intellectual property law (such as geographic
indications and protection of secrets), in such a way that the system of protection by
intellectual property rights appears as the dominant force, and the role of unfair competition
law is seen as subsidiary. The procedures envisaged by the new code are applied by twelve
jurisdictions specialising in intellectual property; they are faster and more efficient than the
rules for civil procedure in common law.
19
The Japanese rapporteur suggests clarification of the conditions, allowing for a declaration
that an act is contrary to honest usage. He also proposes a register of recent examples of
acts of unfair competition linked to a question of intellectual property, worldwide, to obtain an
overall viewpoint of the matter, which seems essential at this time of commercial
globalisation.
The rapporteur from Luxembourg feels care must be taken to ensure that unfair competition
law does not become an all-in concept allowing the holders of precarious rights to obtain
protection which they do not merit. In the same spirit, a number of rapporteurs, of which the
Swedish rapporteur, insist that it must be ensured that new intellectual property rights are not
created by an ill-considered application of the law on fair competition, permitting a ban on
unfair practices when there has been creation of a risk of confusion or usage of the
reputation of a competitor to market one’s own products.
The Swiss rapporteur calls for centralisation of actions for unfair competition: a single canton
jurisdiction should have authority for cases of unfair competition nationwide, with no
restrictions as to the value of the issue.
b)
With more particular reference to question 1.
15.
The Swiss rapporteur feels that care should be taken to ensure that the
conditions of each domain (unfair competition and counterfeiting) are respected, and are not
amputated or simplified when applied to the other sector.
The Belgian rapporteur approves the option taken in the preliminary bill to permit and
organise accumulation of actions in all domains of intellectual property, and to broaden the
authority of the chief magistrate on the commercial tribunal as the judge of cessations with
regard to unfair competition. In addition to the advantages already cited, he is at pains to
point out that accumulation allows a single effective action to be brought before the same
judge, in order to put an end simultaneously to acts of counterfeiting and acts of unfair
competition circumstantial to counterfeiting.
The United Kingdom rapporteur claims that UK Common Law is sufficient to solve this
matter, and so no legislative intervention is desirable.
20
The French rapporteurs feel that, in the case of an action for counterfeiting, it should be
ensured that the same behaviour is sanctioned twice under the cover of two distinct
qualifications.
c)
With more particular reference to question 2.
16.
The French rapporteurs propose demanding characterisation of specific
incorrect behaviour, materially different from the items constituting counterfeiting (whether
such behaviour concerns the conditions of exploitation for the counterfeit product, a risk of
confusion arising from the copying of other aspects of the original product not included in the
field of intellectual property law, or a parasitic attempt to follow in the wake of the holder of
the rights to the product).
The Spanish rapporteur considers that the law of 1991 governing unfair competition has
shown its effectiveness in providing supplementary protection for the holders of intellectual
property rights.
The Swiss rapporteur feels it is logical to permit supplementary application of unfair
competition law insofar as this is properly applied. He feels that the detour theory should not
be applied when aspects of unfair competition have been established which are external to
the acts of counterfeiting prohibited by a special intellectual property law.
The Belgian rapporteur feels it would be desirable for the courts to dismiss the reflex or
restrictive effect of intellectual rights only in the event of a case of creation of a risk of
confusion or parasitic competition, in clear reference to the respective judicial grounds,
particularly article 10bis, 3) of the Paris Union Convention (or the rules governing deceptive
or comparative advertising arising from a higher regulation) and abuse of the law.
d)
With more particular reference to question 3.
17.
The French rapporteurs consider that sanctions should only be applied for
unfair competition in the case of acts constituting facts in a material sense (and not only in a
judicial sense), as distinct from those which constitute a breach of intellectual property rights.
21
According to the Belgian rapporteur, the circumspection of jurisprudence in its application of
the theory of parasitic competition is fully justified: parasitic acts must only be banned in the
case of abuse of the law, in cases where they cannot « in any way serve the public interest,
or when the interest to be protected clearly exceeds the value of the interest of the person
responsible for the wrongful practice »26. On the other hand, action for unfair competition
should be opened up more against acts which create a risk of confusion (banned worldwide
by article 10bis of the Paris Union Convention in relation to protection of intellectual property,
which is directly applicable under Belgian law and, in relation to advertising, in the European
Union by virtue of directive 84/450 concerning deceptive advertising and comparative
advertising).
According to the Spanish rapporteur, his national system is complex, but justifiably so in view
of the need to prevent any creation or sign from automatically securing protection through
unfair competition law, which would remove all the sense of intellectual property laws.
The Swiss rapporteur states that unfair competition law, and the general clause in particular,
should develop its own categories of protection (innovation, investment, renown etc.), which
should be distinct from the categories contemplated by special laws.
26
I . VEROUGSTRAETE, « La loi sur les pratiques du commerce : loi pour une société en mutation? » (The law in
relation to commercial practices; laws for a society in mutation?), in: A. DE CALUWÉ e.a., Liber amicorum Aimé De
Caluwé, Brussels, Bruylant, p. 379.
22
Resolution proposal
1. Considering that the response to the question of accumulation between action for unfair
competition and action for counterfeiting (which assumes the simultaneous existence of
perfectly valid intellectual property rights in force and a breach of these rights sanctioned by
the special law establishing the rights) depends on the national conception of action for unfair
competition. In certain countries, such as Belgium, any violation of any legal regulation
constitutes an act of unfair competition if it damages the interests of another company or of a
consumer or consumers. Since counterfeiting is a violation of the law, it enters this category,
and under these conditions it enters the category of acts contrary to honest usage in
commercial matters. Other countries do not contemplate this conception of « illicit »
competition.
2. Considering that the relationship between intellectual property law and unfair competition
law poses a number of questions which, to be linked, are not any less distinct and which
should not be confused: 1) the accumulation of protection, 2) supplementary protection by
unfair competition law and 3) protection of substitution by unfair competition law.
That thus the possibility, permitted in certain countries, of placing a ban on an act of
counterfeiting following an action for unfair competition, or the possibility, accepted in all the
countries examined, of placing a ban by action for unfair competition on acts circumstantial to
the counterfeiting or to a copy (licit in itself), do not imply that action for unfair competition
can be used as a spare wheel for someone who has refrained from fulfilling the conditions for
protection in both form and content, as imposed by special intellectual property laws, nor
may this, in fact, lead to the creation of exclusive rights outside the cases established by
legislators.
3. Considering that it would appear desirable for unfair competition law to play a role as
supplementary protection of intellectual property, within the boundaries set out above,
4. Considering that it would appear desirable to encourage the possibility of acting both
swiftly and effectively, before the same judge, for counterfeiting and unfair competition in
relation to the same facts in connection with the same harmful practice for the holder of the
intellectual property rights breached; that better coherence of procedures, authority and
sanctions in these two legal domains would make the question of supplementary protection
for intellectual property by action taken against unfair competition less problematic, where it
23
is understood that the damages obtained from one or the other cannot at any rate be
accumulated on the basis of the same damages sustained.
THE LEAGUE HEREBY ADOPTS THE FOLLOWING RESOLUTION:
I. When national unfair competition law accepts accumulation of action for unfair competition
and counterfeiting, in the hypothesis of the existence of perfectly valid intellectual property
rights in force and a breach of these rights sanctioned by the special law which establishes
the rights, it is not desirable that legal provisions prevent such accumulation.
II. The LIDC recognises the importance of unfair competition law as supplementary
protection for intellectual property, whilst stating that, in a general fashion, the former cannot
offer substitution protection to the person who has failed to carry out the formalities imposed
to produce an intellectual property right in which the creation or the sign do not meet the
conditions of content allowing such a right to be produced: application of the law of unfair
competition cannot then confer in similar cases protection similar to that arranged by the
laws governing intellectual property.
III. Action taken against unfair competition may offer supplementary protection outside the
sphere of protection from special intellectual property laws, and allow rulings against unfair
acts by accompaniment of an act of counterfeiting or licit copies.
Variant : add in fine « and materially distinct from these ».
IV. The LIDC recommends action be taken towards genuine specialisation of the courts in
the fields of intellectual property and unfair competition, regrouping within a single jurisdiction
of authorities in all these fields, and harmonisation of procedures and sanctions. It should
also be possible to submit a single effective action to the same judge to put an end
simultaneously to acts of counterfeiting and acts of unfair competition circumstantial to
counterfeiting. The damages obtained from both charges, however, based on the same
damages sustained, cannot be accumulated.
V. Every three years, the LIDC intends to take stock of the progress in the various national
legal systems of the matter of the relationship between unfair competition law and intellectual
property law.
24
25