Unfair competition

Areas of expertise > Unfair Competition

In intellectual property matters, unfair competition consists mainly in creating a risk of confusion with a product, a trademark or any other distinctive sign of a competitor. The principle of free competition has been recognized in France since 1791 and the famous Le Chapelier law. However, this freedom must necessarily be tempered by ethical principles so that free competition is not distorted.

See the following area of expertise

What is free riding?

Parasitic competition consists of following in the footsteps of a competitor. It is constituted when a company tries to divert to its profit the notoriety or the efforts and investments of its competitor, without untying its purse. Such behavior may be reflected in practice, for example, by the use of packaging that is identical or very similar to the packaging used by a leading competitor.

What is free riding?

Parasitic competition consists of following in the footsteps of a competitor. It is constituted when a company tries to divert to its profit the notoriety or the efforts and investments of its competitor, without untying its purse. Such behavior may be reflected in practice, for example, by the use of packaging that is identical or very similar to the packaging used by a leading competitor.

Qualification requirements

Acts contrary to normal commercial practice may be punished as unfair competition on the basis of civil liability (Articles 1382 and 1383 of the Civil Code). This action is therefore conditioned by the existence of the 3 elements necessary for the implementation of civil liability:

A fault

Misconduct is often an intentional act intended to harm a competing business. Intentionality is not a requirement. An unintentional act may constitute an act of unfair competition.

A prejudice

A fault that does not cause harm cannot be considered as unfair competition. The damage caused to the competitor must be certain (not just presumed or alleged) and only the company targeted by the unfair competition can claim this damage.

A causal link

There must be a causal link between the fault committed and the harm suffered. The fault must be at the origin of the damage suffered: if no causal link can be established, unfair competition will not be characterized.

Unfair competition action

An action for unfair and parasitic competition can be joined to an action for infringement, but these two actions must remain independent.

The two actions have different objectives. The purpose of an infringement action is to defend intellectual property rights, whereas the purpose of an unfair competition action is to repair the damage caused by infringements of commercial loyalty. It is therefore necessary to be able to invoke facts of unfair competition distinct from acts of infringement in order to obtain compensation for the alleged damage.

An action for unfair competition and parasite abuse may be preferred to an action for infringement when the infringement is not certain. In this case, the civil liability action allows greater latitude in the action but poses more difficulties in proving it.

It is important not to standardize situations but to consider each case as a whole.

Unfair competition action

An action for unfair competition and parasitic competition can be joined to an action for infringement, but these two actions must remain independent.

The two actions have different objectives. The purpose of an infringement action is to defend intellectual property rights, whereas the purpose of an unfair competition action is to repair the damage caused by infringements of commercial loyalty. It is therefore necessary to be able to invoke facts of unfair competition distinct from acts of infringement in order to obtain compensation for the alleged prejudice.

The action for unfair competition and parasite may be preferred to the action for infringement when the infringement is not certain. In this case, a civil liability action allows greater latitude in the action but poses greater difficulty in proving it.

It is important not to standardize situations but to consider each case in its entirety.