Patent Law Office

Dr. Ernst-Peter Heilein

  • Intellectual Property
  • Gewerblicher Rechtsschutz
  • Propriété Intellectuelle

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Unfair Competition

General view

The general freedom of action” established in the Constitution includes the freedom of every individual to take part in economical competition. This freedom ends as to the violation of rights of other individuals when the constitutional order and the public policy law are offended. Therefore the unfair competition is characterized by an “offence against objective standards of conduct which protect the fair competition in the interest of the competitors, the consumers and all the other participants in the market and the public”. The free competition where the participant can distinguish himself and participate only by his performance is covered by the law against unfair competition by means of the civil law.
The law comprises some special facts (e.g. in §§ 17, 18 UGW a protection of secrets), the violation of which is related to different penalties: in case of the violation against the ban on misleading advertising and against other individual injunctions businessmen, some associations having legal capacity, the chambers of industry and commerce and the chambers of handicrafts have a right for injunction; as to certain acts the obligee can claim damages from the infringer. In some cases of violation of competition there can be a criminal prosecution.

General clause

The law against unfair competition is particularly characterized by a general clause, which is understood as competition characteristic of the general freedom of action warranted in the Constitution. It refers to acts, which in the course of business activities are made for the purpose of competition and which are contrary to public policy, the legal consequences of claims for discontinuance and damages.
The interpretation of the presupposition of facts “in the course of business activities” and “for purpose of competition” also takes influence on the interpretation of the special norms. As the main problem of the right of protection of unfair competition there is to be seen the provision of the competition standards of conduct by standards of public policy. The completion of the term of public policy by the court has lead to a rich casuistry the individual cases of which can be summarized to certain generic terms: As to the practises of competition towards the market participant (client) and towards the co-contractor the touting for customers, obstruction, exploitation, breach of law and disturbance of the market can be distinguished. Transactions contrary to public policy doesn’t suppose a fault; the infringer does only have to know the circumstances surrounding the case, which in the case of objective assessment substantiate the violation of bonos mores of his competition act. The law on competition comes also into question as additional protection for acts concerning software; the manufacture of pirate copies may represent an exploitation in form of a taking over of benefits.

Subsidiarity

Intellectual property rights – patents , utility models , designs , copyrights – are intended to protect intellectual creations. However, not all the facts of the immediate or imitative takeover of external performances, which sometimes urgently require protection, are included. This fact has prompted the case law to grant, in addition to the industrial property rights an copyright, a competitive performance protection, which it derives from § 3 UWG, which is referred to in §§ 4 et seq. UWG. The latter systematize the previous case material prior to the amendment of the law on July 8, 2004. The object of this performance protection is not, as in the case of intellectual property rights, the concrete performance result, but the way in which third-party performances are used and exploited in the course of business regardless of whether they could also be the subject of a special protection right or do not fulfill the requirements of the protection laws.
If the foreign performance is not subject to any special legal protection, its takeover is permitted in principle. If the foreign product was protected by a protective law, a renewal by contract or by competition law is usually not possible. If the protective laws have failed or if special anticompetitive behavior is added to an infringement of property rights, an (additional) UWG application is in principle open. For example, competition law may be considered as complementary protection in software related activities; the making of pirated copies may constitute exploitation in the form of immediate performance.
However, it should be noted that no further protection can be obtained via the general clause of § 3 UWG than would be possible via the protective laws. In that regard, §§ 3 and 4 et seq. UWG are not a catching event for the protection of protected, no longer protected or otherwise public domain (technical) performance from takeover or imitation.