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Keeping competition clean
Written by: Halka Jaklová
Photo by: René Jakl

Do you know when it's possible to sue for court protection when you feel that someone has injured your firm's reputation?

The Commercial Code covers such cases in §50, which governs unfair competition. It defines such actions as derogation and stipulates that it constitutes the statement or dissemination of untrue information on the situation of a competitor, his products, or his performance. This information must be capable of causing harm, and could involve either the state of affairs within the company or the private life of the affected party. In the latter case, it could happen that false information about the affected party could cause harm by effecting the loss of customers or clients. Harm need not necessarily occur; it's enough for there to be an objective possibility of a harmful outcome.
Protection under §50 requires participation in competition by both the plaintiff and the accused. In this it differs from defamation, which is covered by §206 of the Criminal Code, and from breach of protection of the personality of an individual or legal entity as per §11 or §19b, respectively, of the Civil Code. There is also recourse for derogation in the case of private communications if the preceding conditions are met (i.e., falsehood and the potential for causing harm). Additionally, disseminating truthful information, if capable of causing harm to a competitor, can be considered derogation. Associated problems in practice are so-called comparative product tests that evaluate certain products from different manufacturers. To avoid derogation, the comparison must not be made by a party in competition with the maker of the compared products. With published tests, the stated information must be factual, and verifiable, and must not be deceitful.
The law does not prohibit the use of such individual evaluations by a competitor in advertising, provided the following conditions are met. The way the advertising is published must not be at variance with good competition ethics, must be truthful and objective, and must not be deceitful nor lead to the derogation of or damage to other competitors' reputations. The party ordering the advertising, the advertising agency, and the media that published the advertising can be held responsible for derogation. If your rights are violated or threatened, you can ask the court to order the defendant to restrain his behavior and rectify the wrongful condition, and you can demand appropriate satisfaction, including in monetary terms, compensation for damages, and surrender of unjust enrichment.

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