Unfair competition

Unfair competition is an illegal practice in the field of the intellectual property code (IPC) and other competition law.

Concept of de unfair competition

Unfair competition is an illegal practice in the field of the Intellectual Property Code (IPC) and another competition law.

The unfair competition assumptions

The assumptions of the concept of unfair competition are contained in the introductory wording of Article 317 of the Intellectual Property Code and are as follows:
– the practice of an act of competition;
– that this act is contrary to honest norms and practices;
– from any branch of economic activity.

The article 317.º of the current Intellectual Property Code has deleted from its introductory wording the reference to the alternative specific purpose, which appeared in the introductory wording of Article 260 of the previous Intellectual Property Code of 1995: «the act of unfair competition should be practiced with the intention of causing injury to another person or of obtaining, for himself or for third parties, an illegitimate benefit.»

Competition

Competition is not susceptible of being defined in the abstract and can only be appreciated in concrete, for what is important to know is whether the activity of one economic agent reaches the activity of another, through the competition of the same clientele. It is therefore possible for two companies to compete on certain acts and not for other acts, such as when an oil or cement company competes with financial institutions by making a subscription public, the increase of its capital stock or the issuance of bonds.

Likewise, two companies with equal activities may not be in competition if, acting only locally or regionally, their geographical distance prevents them from disputing the same clientele. In addition, it is important to take into account electronic commerce and the globalization of markets resulting from it, which eliminate or subvert the traditional concept of physical space of competition.

The concept of competition is therefore a relative concept, which can not be aprioristically defined but only on a case-by-case basis, taking into account the actual action of the various economic agents and the reality of today’s economic life.

The competition may seek not the direct conquest of the clientele, but its primary objective is the dispute between suppliers, distributors, vendors, or the workers themselves. These acts continue to be acts of competition, because through them what is sought is the best equipping of the company to gain advantageous positions in the market.

There are cases in which competitive advantages are obtained through the practice of acts which are not in themselves acts of competition and which, when illicit, are punishable by specific legal rules, such as non-payment of taxes or of social security contributions.

In the very concept of a competition act, its susceptibility to cause harm to third parties, even if such damages do not actually occur, are included.

In fact, the achievement of advantageous positions in the market is done to the detriment of other economic agents that operate in it and whose clientele, current or potential, is disputed.

In this way, the act of competition, to truly be, has as its co-natural element, implicit in the notion itself, the danger of harm, that is, its suitability or ability to cause harm to third parties.

Types of unfair competition actions

In a classification that attends to the content of the act of unfair competition practiced, the acts of unfair competition are grouped in the following main types:
– acts of exploitation;
– acts of aggression; and
– acts of inducement of the public in false self-presentation.

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