[…] the differences in national legal systems. Whilst those continental European countries that possessed a written civil law when instances of unfair competition emerged, more or less successfully attempted to incorporate them in the existing tort law system, protection in the common law countries was restricted to some narrowly defined torts, in particular “passing off”. At this stage one of the few shared convictions was, that the protection of “honest entrepreneurs” was at issue; on this basis, in 1900, the only regulation at the international level until now was enacted, Art. 10bis of the Paris Convention.
Yet even this foundation is increasingly fragile. The crucial factor is namely the controversial role of consumer protection in unfair competition law. Although the interest of consumers in the fairness of commercial practices was generally regarded as legitimate, the reaction to recognise this interest was quite different. Whilst some countries integrated this protection in their existing legal regulations against unfair competition – which thereby became a sort of “market law” – other countries continued to provide protection for competitors under tort law, and supplemented this by provisions on specific business practices, serving mainly consumers’ interests.
Against this background it is not surprising that a comprehensive, coherent harmonisation at the level of the European Community has still not been successful. In 1984, a Directive on misleading advertising was accomplished, which was supplemented by comparative advertising in 1997; and there continues to be selective harmonisation by specific product and media regulations and a partial alignment of rights for the protection of Intellectual Property. Only in 2005 did an overarching regulation again succeed in the form of Directive 2005/29/EC, which concerns unfair commercial practices in general.
[…]
[…] At the 1925 revision conference of The Hague, the general clause of Para. 1 was given closer definition by means of examples; firstly through the addition of the likelihood of confusion and disparagement, and finally – but only at the 1958 revision conference – the prohibition on misleading indications. […]
[…]
[…] Thus according to Art. 22 Para. 2 of the TRIPS Agreement, the Member States are required to protect geographical indications of origin against misleading designations or generally anything that “constitutes an act of unfair competition within the meaning of Art. 10bis of the PC.” The same applies to the protection of undisclosed information.
# The Contents of the Model Provisions
The 1996 WIPO Model Provisions (WMP) seek to implement Art. 10bis of the Paris Convention. On the one hand, they define the principal acts or practices against which protection is to be granted, namely the causing of confusion with respect to another’s enterprise or its activities (Art. 2), the damaging of another’s goodwill or reputation (Art. 3), the misleading of the public (Art. 4), the discrediting of another’s enterprise or its activities (Art. 5) and, finally, unfair competition in respect of secret information (Art. 6). On the other hand, they provide for a general clause (Art. 1 Para.1) which is intended to serve as a basis for protection against any other acts of unfair competition. The system of the Model Provisions thus follows Art. 10bis. A general provision (Art. 10bis Para. 2 PC and Art. 1 Para. 1 WMP) is supplemented by the identification of certain acts which, in particular, must be prohibited (Art. 10bis Para. 3 and Arts. 2 to 6 WMP). The higher number of expressly listed acts of unfair competition in the Model Provisions can be seen as an indication of the objective to further concretise individual instances in which to provide protection. Before revisiting the catalogue of forbidden acts, however, some horizontal conceptual considerations are addressed.
[…]
[…] As described above, the aspect of consumer protection initially entered the picture when a third example dealing with the misleading of the public was incorporated into Art. 10bis Para. 3 at the 1958 Lisbon Conference. The additional example suggests taking into account the interests of both competitors and consumers (see subsection 2.2.). In this vein, the 1994 WIPO study identifies as a common aspect of the examples in Art. 10bis Para. 3 “the attempt (by an entrepreneur) to succeed in competition without relying on his own achievements in terms of quality and price of his products and services, but rather by taking undue advantage of the work of another or by influencing consumer demand with false or misleading statements”. As to the purpose of protection, it states that “unfair competition law was initially designed to protect the honest businessman”, and clarifies that, in the meantime, “consumer protection has been recognised as equally important”.
[…]
[…] The issue of misleading the public, constituting the third example of Art. 10bis Para. 3, is addressed in Art. 4 WMP. Again, a broad approach is taken. The notes on the provision clarify that, besides inherently false indications, literally correct statements as well as the omission of information are to be prohibited if they give a misleading impression. Obvious exaggerations in the course of “sales talk”, by contrast, need not necessarily be qualified as misleading. Like in Art. 5 WMP, the examples of the second paragraph refer to advertising and promotion activities. The list of characteristics of products or services contains additionally a reference to the geographical origin. Art. 4 WMP, however, is silent on how to determine the impression on the addressee of a misleading statement. In this respect, the 1994 WIPO study points out that the Paris Convention left this question to Member States, and provides an overview of different approaches, such as a distinction between average and gullible consumers, and the determination of a misleading effect on the basis of empirical data or through an overall estimation by the judge.
[…]
In sum, the Model Provisions suggest implementing the standard for protection against unfair competition on the basis of a liberal approach to Art. 10bis PC. Considering the questions left open in the Paris Convention, as identified in subsection 2.2., it can be concluded that they demonstrate the adaptability of international unfair competition law to actual problems and needs. The inclusion of consumer protection, the departure from the requirement of a competitive relationship, the broad approach to confusing, discrediting and misleading acts and, finally, express mention of further cases of unfair competition, concerning dilution and trade secrets, testify to the aim of updating the traditional unfair competition principle of honest practices.
# Purposes of Protection Under Unfair Competition Law
The same discussion arose again within Unfair Competition law: According to the general view in Germany, Austria and Switzerland, and not least also due to the Directive on Misleading and Comparative Advertising in the version in force up to June 11, 2005, Unfair Competition law protects competitors, purchasers, in particular consumers, and the general public against impairments of competition (the triple purpose of protection).
[…]
Although the ECJ primarily applied the Misleading Advertising Directive to the designation “Clinique”, it interpreted the concept of misleading advertising in the Directive in the light of the provisions of the EC Treaty concerning the free movement of goods. There was therefore a need for a balancing of interests. The ECJ held that it was itself able to determine whether the German prohibition of this designation for the marketing of cosmetics could be justified by the objective of consumer protection or of human health. Because the company range of cosmetic products was marketed in Germany exclusively by perfume shops and the cosmetics departments of department stores, hence none of the products being available in pharmacies, and because the products were presented as cosmetics and not as pharmaceuticals, and finally because the products were lawfully sold in other Member States under the name “Clinique”, apparently without consumers being mislead by the use of this name, the ECJ did not regard a prohibition of the use of the name “Clinique as necessary in order to achieve the objective of consumer protection or consumer health. The clinical or medical connotation of the term was not sufficient to ascribe a misleading effect to the name that might justify its prohibition for the products sold under the said conditions.
[…]
The solution of the ECJ decision in the Darbo case lies between the Clinique and 6-Korn decisions. This case concerned the use of the adjective “naturrein” (naturally pure) for jam that was to a significant extent contaminated with the usual pollutants. The ECJ, in formal terms, maintained the position it had adopted in the 6-Korn case. It was a matter for the national courts to determine whether a designation, a trademark or advertising could be misleading. However, in contrast to the 6-Korn decision, the ECJ believed that it had sufficient indications to be able to make findings about the pollutants contained in the jam.
[…]
In the light of these difficulties, it is hardly surprising that the subsequent work led to an increasing reduction of the harmonisation plans as originally conceived.4 What began as a comprehensive project to harmonise the entire field of unfair competition law was cut back to what was just about capable of achieving a consensus. This consensus was possible in particular with respect to advertising, and yet a draft Directive on misleading and unfair advertising published in 1979 failed because the British considered the concept of unfairness to be too vague. Directive 84/450/EEC adopted in 1984 was thus limited to misleading advertising, with unfair advertising left for “later” regulation. However, this never happened, and instead the Directive was extended in 1997 through the inclusion of comparative advertising while a number of media and product-specific Directives were adopted that also applied to advertising. Only in 2005, a Directive on Unfair Commercial Practices with a broader approach was adopted; it is, however, restricted to “B2C”-relationships as Prof. Schuhmacher will later explain in detail.
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HILTY, Reto M. and HENNING-BODEWIG, Frauke, 2007. Law against Unfair Competition: Towards a New Paradigm in Europe?. Guildford Boulder: Springer London NetLibrary, Inc. [distributor]. MPI studies on intellectual property, competition and tax law, v. 1. ISBN 978-3-540-71882-6.
See Directive 84/450/EEC of September 10, 1984 on misleading and comparative advertising, as amended by Directive 97/55/EC of October 6, 1997, and the decision of the European Court of Justice, April 8, 2003, Case No. C-44/01, 34 IIC 808-814 (2003) – Pippig v. Harlauer.
Cf. Recital 2 of the Misleading Advertising Directive: “misleading advertising can lead to distortion of competition within the common market”, Council Directive 84/450/EEC of September 10, 1984 relating to the Approximation of the Laws, Regulations and Administrative Provisions of the Member States concerning Misleading Advertising, OJ L 250/17, September 9, 1984.
Cf. Recital 2 of the Council Directive 84/450/EEC of September 10, 1984 relating to the Approximation of the Laws, Regulations and Administrative Provisions of the Member States concerning Misleading Advertising, OJ L 250/17, September 9, 1984 with the amendments that result from Art. 1 of Directive 97/55/EC of the European Parliament and Council of October 6, 1997 to Amend Directive 84/450 EEC concerning Misleading Advertising for the Purpose of Including Comparative Advertising OJ L 290/18, October 23, 1997; ZULEEG, supra note 6, Art. 3 EC, note 7.
Cf. as example Recital 2 of the Council Directive 84/450/EEC of September 10, 1984 relating to the Approximation of the Laws, Regulations and Administrative Provisions of the Member States concerning Misleading Advertising, OJ 1984 No. L 250/17, with the amendments that result from Art. 1 of Directive 97/55/EC of the European Parliament and Council of October 6, 1997 to Amend Directive 84/450/EEC concerning Misleading Advertising for the Purpose of Including Comparative Advertising OJ L 290/18, October 23, 1997; ZULEEG, supra note 6, Art. 3 EC, note 7.
Recital 2 of the Council Directive 84/450/EEC of September 10, 1984 relating to the Approximation of the Laws, Regulations and Administrative Provisions of the Member States concerning Misleading Advertising, OJ L 250/17, September 19, 1984, with the amendments that result from Art. 1 of Directive 97/55/EC of the European Parliament and Council of October 6, 1997 to Amend Directive 84/450/EEC concerning Misleading Advertising for the Purpose of Including Comparative Advertising OJ L 290/18, October 23, 1997.