Unfair Competition

Everyone is aware of the practice of competition - “Follow-the-Leader Strategy” that leads to imitation of leading competitor’s products.

In this case, competitors try to prey on human perception of visual images, when people don’t remember the label in detail. When people remember only major colored elements, so-called color patches (for example, something white and blue, or having striped sides or something yellow in the middle). Consumers make an informed choice to a particular product based on the visual image that is sticked in our memory - color patches.

Often, disputes over an unfair competition arise out of comparison of visual images, which distinguishes them from disputes that arise out of establishing identical or confusingly similar to existing trademarks, where all elements should be compared in detail.

The definition of unfair competition is given in Article 1 of the Legislation of the Republic of Belarus “On Counteracting Monopolistic Activities and the Development of Competition” (as amended by the Legislation of the Republic of Belarus dated 08.01.2018 No. 98).

Unfair competition – is a number of actions that one or more business entities aim at acquiring advantages (benefits) in entrepreneurial activity that are illegal and may cause or have already caused losses to other competitors or may discredit their business reputation.

There are 4 signs of unfair competition:

·        competitive relations between the parties;

·        business entity focuses on the acquisition of benefits in entrepreneurial activity;

·        actions of an economic entity contradict the Legislation of the Republic of Belarus “On Counteracting Monopolistic Activities and the Development of Competition”;

·        the ability of a business entity to inflict losses on a competitor by its actions or discredit its business reputation.

Only if there are all four signs, the actions of a competitor will be recognized as unfair competition.

Disputes related to unfair competition are dealt with by:

·        Ministry of Antimonopoly Regulation and Trade (MART);

·        Judicial Division for Intellectual Property of the Supreme Court of the Republic of Belarus (if there is an item of intellectual property).

Countering Unfair Competition

What are the methods of countering unfair competition? These methods can be divided into several groups.

The first group of countering includes granting exclusive rights to intellectual properties (i.e., registration of trademarks, industrial designs, utility models, inventions, etc.).

The second group includes active promotion of products and trademarks in the market (advertising, participation in contests, exhibitions, etc.). In this case, one should not forget to keep documentary evidence of such participation: contracts, diplomas, awards, promotional products, etc.

The third group includes documenting the results of their activities to create new types of goods, packaging design, trademarks, etc. (execution of contracts, job assignments, etc.). In this case, you should pay attention to purchasing of containers and packages from third-party organizations and request documents confirming that the rights to created containers and packages belong to these organizations.

The above actions allow either to avoid a dispute or to prove their rights and establish a violation. The availability of registered intellectual property should be taken into consideration. Registered intellectual property significantly complicates imitation for competitors, since significant changes have to be made to escape liability.