Unfair Competition Action: An Additional Tool To Defend Trademarks

By: Rosa Margarita Santacruz & Germán Marín, Marin Santacruz & Asociados

In Colombia the right to exclusive use of the marks is obtained only by registration.  Once registered, if this right is infringed, the law provides mechanisms for the defense of the protected rights of the owner, who may bring action for infringement before civilian judges.

However, it is important to note that there is another mechanism to defend the trademark protected right, which is the unfair competition action.

Free enterprise and free competition are behaviors not only lawful but necessary for the proper functioning of the market, encouraging and promoting it, so that consumers may have various different offers and decided by that which, lawfully competing in the market, will report the best conditions.

Colombian law establishes a general competition clause, which requires that market participants competing in all their actions comply with the principles of commercial good faith, righteous mercantile customs, and honest practices in the commercial and industrial areas.

But in addition to the general competition clause, the law regulates other behaviors that shape  acts of unfair competition.

On the one hand the law states as unfair  the behavior of acts of exploitation of the reputation of others, which is set when there is an abusive use,  in own benefit or in benefit of others,  of the advantages  of the reputation acquired by another competitor in the market. In close connection with this, the law expressly provides as unfair the unauthorized use of distinctive signs of thirds (including trademarks) even if accompanied by an indication about the true origin of the product, or expressions that refer to the owner as  "type", "class", "imitation", among others.  The behavior of acts of exploitation has the ability to take advantage of the reputation of others,  this is to use the fame, credit, and the efforts of the original owner, with a profit-making by the imitator.

Another behavior that the law provides as unfair is constituted by acts of confusion which have as their object or effect creating confusion, among others, with the commercial services of other competitors, so that behavior can be predicated of acts of confusion in relation to trademarks of other owners.

The law likewise establishes as unfair behavior the one constituted  by acts of imitation.   Firstly the law is clear in stating that "the imitation of commercial services and business initiatives of others is free, unless they are protected by law".   In our trademarks topic, this refers to those protected by registration, in which case, being registered the mark, its imitation is forbidden, since registration grants the right to exclusive use of the same.

Additionally the law provides for other circumstances in which the imitation is not valid and it is considered unfair: i) when the imitation by the imitator is "accurate and thorough" of a commercial service (trademark in our case) even if it is not protected by registration,  provided that such imitation leads to confusion about the business origin of the trademark or that it  involves, again,  an abuse of the reputation of others, and  ii) when the imitation made  by the imitator is a systematic imitation of the commercial service of a competitor,  provided that this behavior intends to prevent or hinder the consolidation in the market of the owner.

It is pertinent to note here that while the law refers to "accurate and thorough imitation" of the commercial service  (of the trademark in our case) of a third, however  jurisprudence and doctrine have determined that it  is obviously not required that the mark is imitated exactly the same,  but  just that the imitation has the capacity to cause confusion and thus likelihood of association within the average consumer.  Thus, it is not required an identical imitation of the mark,  but that  the overall similarity between the marks as a whole  creates in the consumer's mind the idea that it is the same product or service, as to take one for the other (direct confusion) or that similarity as a whole makes consumer believe that the goods or services have the same commercial origin (indirect confusion).

It is important to state that imitation can be considered then a form of confusion and in that regard it must be highlighted the fact that  since acts of confusion are  behaviors of danger,  it is not necessary that the behavior actually caused confusion or error to constitute  the act of confusion, but these behaviors are punishable if they are susceptible  to produce such an error or confusion among consumers.

The action of unfair competition punishes these behaviors and in Colombia there are two jurisdictions to institute this action: a judicial proceedings before civil courts, and an  administrative proceeding before  the Superintendency of Industry and Commerce (Trademark Office),  the latter entity  which we find more favorable in the event of a claim for unfair competition because it is the  specialized office  in trademark law.

Finally it is important to remark  that the action for unfair competition is not only a tool of defense for the owner of trademark rights when they are infringed,  but it is also a tool of defense for consumers who can avoid incurring in the risk of confusion and association, thus preventing their consent to be flawed.  Likewise, the market will favor with loyal participants in the competition.