The principle of fair competition has been recognized in France since 1791 by virtue of the famous “Le Chapelier” legislation. However, this freedom of fair competition must be moderated by principles of ethics to avoid competition becoming distorted and unjust, and so that it does not prevent economic actors from being able to fully operate.
Actions which are contrary to normal commercial practices may be sanctioned on the basis of unfair competition under the principles of civil liability (Articles 1382 and 1383 of the French Civil Code). There are three prerequisites to bring an action on the grounds of civil liability: fault, a loss or harm suffered and causation between the fault and the loss or harm.
In intellectual property law, unfair competition arises when a risk of confusion is created in relation to a competitor’s product, trademark or other distinctive sign.
Free-riding is positioning oneself in the wake of a competitor. It is constituted whenever a company attempts to misappropriate the reputation, efforts and investments of its competitor for its own profit without spending anything.
In practice, such behavior may include using identical or very similar packaging to the sort used by a leading competitor on the market.
An action for unfair competition may be attached to an action for infringement however both actions must remain independent of one another. Indeed, both actions seek different outcomes. On the one hand, an infringement action is brought to protect intellectual property rights, while on the other hand, actions for unfair competition are sought to recover for the loss or harm suffered as a result of a violation of the rules on fair competition. One must therefore be able to rely on the facts of unfair competition that are distinct from the acts of infringement in order to recover damages for any alleged loss.
An action based on unfair competition and free-riding should be favored over an action based on infringement when the infringement is not clearly ascertained. In that case, a civil liability action allows greater latitude in the action but is more difficult to prove.
Cases involving unfair competition cannot be standardized, and each must be dealt with individually on its own merits.
Assistance and representation:
For both pre-litigation matters and litigation representation for actions based on unfair competition and defamation.