Enforcing competitive ethics
Written by: Halka Jaklová
Photo by: René Jakl
Is someone threatening or damaging your rights with respect to economic competition, but you don’t know how to protect your interests? It might involve legally prohibited behavior called “unfair competition”, which can take many forms.
The right to protection against unfair competition is based on an international treaty on the protection of intangible industrial rights – the so-called 1883 Paris Union Treaty, mentioned in the Czech Law No. 64/1975 Coll. In the Czech Republic, unfair competition is governed by the Commercial Code, as legally prohibited behavior in economic competition that is at variance with good competitive ethics and is capable of causing damage. A competitor is a legal entity or an individual that takes part in economic competition but need not be an entrepreneur. Behavior that is at variance with good ethics is understood as a violation of the principles of fair economic engagement that is capable of distorting or eliminating the functioning of economic competition.
Besides the aforementioned general clause, the Commercial Code breaks down and specifies behaviors that are not in harmony with good competitive ethics. These involve misleading advertising, mislabelling goods or misrepresenting services, drawing on the reputation of the company, products, or services of another competitor, bribery, disparagement, comparative advertising, breach of trade secrecy, and threatening the health of consumers and the environment.
Entities whose rights have been violated or threatened through unfair competition can take the offending party to court to restrain such behavior and rectify the violation. They can also demand reasonable compensation for damages (monetary or otherwise), and surrender of unjustified enrichment. These means can also be used by an entity that is entitled to defend the interests of competitors or consumers. The court can also recognize the right of the winner of the dispute to publish the verdict at the expense of the opposing party. A special feature of unfair competition is the acceptability of excluding the public from oral proceedings before the court in cases where trade secrecy or some other public interest is threatened. In the interest of completeness, it is necessary to mention in closing the possibility of criminal protection against unfair competition, which is governed by 149-152 of the Criminal Code.
This article was prepared in cooperation with attorney-at-law Mgr. Tomáš Krejčí.