Unfair Competition

Unfair Competition

Unfair competition is a business practice which is inconsistent with the good morals of competition and is likely to cause harm to other competitors, consumers, or other clients. Unfair competition is forbidden. 

The law distinguishes between the following specific merits of unfair competition:

(a) misleading advertising;

(b) misleading labeling of goods and services;

(c) creating a likelihood of confusion;

(d) sponging off the reputation of an enterprise, products, or services of another competitor;

(e) bribery;

(f) downplaying;

(g) comparative advertising;

(h) violation of trade secrets;

(i) endangering consumers’ health and the environment.

A more detailed description of the individual merits of unfair competition is given in Sections 2977 et seq. of Czech Act No. 89/2012 Coll. of the Civil Code. Section 2976 also defines the general merits of unfair competition. Persons whose rights have been infringed or threatened by unfair competition may require the infringer to abstain from doing so and to remove the defective condition. They may also require reasonable compensation, which may also be provided in money, compensation for damages and unjust enrichment.

Industrial and copyright collisions are very often linked to unfair competition. The infringer of intellectual property rights, for example, when using an interchangeable sign of his enterprise, copying another’s products, etc., is committing the offence of unfair competition at the same time. On the basis of Czech Act No. 221/2006 Coll., on the Enforcement of Industrial Property Rights, a court of the first instance with specialized senates – the Municipal Court in Prague – was appointed for disputes over industrial rights violations. It is also authorized to assess potential actions related to unfair competition if indissociably linked to the violation of industrial rights. If there is a parallel infringement of copyright and unfair competition, the Regional Court is always the competent court of first instance.

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