Protection against unfair competition

According to the general clause on unfair competition (Section 2976(1) of the Civil Code): “If, in business relations, a person gets into conflict with good morals of competition as a result of his conduct capable of causing harm to other competitors or customers, such a person has competed unfairly. Unfair competition is prohibited.”.

Section 2976(2) of the Civil Code provides an exemplary (demonstrative) list of facts that lead to unfair competition, specifically:

• false advertising
• false designation of goods and services
• inducing confusion
• free-riding on the reputation of an enterprise, product or services of another competitor
• bribery
• disparagement of a competitor 
• comparative advertising unless allowed as admissible (it is admissible if it is objective)
• infringement of trade secrets
• unsolicited advertising
• threat to health and the environment

In addition to the aforementioned facts, we also distinguish unnamed facts established by case-law. In any case, in order to qualify as unfair competition, it is both necessary and sufficient that the general clause is fulfilled.

Legal protection

A person whose rights have been endangered or violated by unfair competition may require the infringer to refrain from unfair competition or to remedy the defective condition. He may also request adequate satisfaction, compensation for damage and restitution of unjust enrichment (Section 2988 of the Civil Code).

A preliminary injunction as an institute ensuring an immediate, albeit temporary, solution to certain conditions provides temporary protection of rights by imposing a certain obligation on the violator, either to do something, refrain from doing something or tolerate something. Even a mere threat to a right by unfair competition is sufficient to order a preliminary injunction, but its imposition must be required on the basis of an exigent interest (Section 2988 of the Civil Code).

A prohibitory injunction is a form of legal action requiring a party to refrain from unfair competition. The aim of the action is to prevent the violator from continuing to act or to prevent the impending act from taking place. However, the threat must be real and imminent, not merely speculated by the plaintiff. It is thus a precaution claim directed towards the future. In order for the action to be successful, the defective condition must continue at the time of the judgement. The only exception to this is a situation where there is a risk of the violator repeating the misconduct.

A removal action (seeking the removal of consequences) is applied where a prohibitory injunction cannot be successfully used. The aim of this action is to remedy the defective state of the past.

The purpose of the protection against unfair competition is to provide the affected person with certainty that his rights will not be further jeopardised or infringed and that the defective state will be removed, i.e. the status quo ante will be restored.

What issues do we typically handle for clients in relation to the protection against unfair competition?

• What is unfair competition?
• What conduct falls under unfair competition?
• I suspect unfair competition, what should I do?
• How to file a prohibitory injunction?
• How to file a removal action?
• Representation of consumers affected by unfair commercial practices
• Assessment of advertising in terms of unfair competition
• Advice on the protection of a business name, trade secrets or know-how
• Representation in proceedings before the Office for the Protection of Competition