HomeOpinionIntellectual Property Perspectives: Species of unfair trade practices (II)

Intellectual Property Perspectives: Species of unfair trade practices (II)

IN this  installment, we proceed with the brief exploration of species of unfair competition in context of intellectual property rights (IPRs) exploitation.Report by Richard Pasipanodya
Recontexualising the phenomena
The concept of unfair competition builds upon greed, malice, ruthlessness and unscrupulousness in misappropriating the achievements of competitors’ creative ingenuity. On the international scene it is thus Article 10bis of the Paris Convention for the Protection of Industrial Property (Paris Convention) was inserted to keep abreast with technological realities on the global marketplace.

 
Misleading concept
By misleading is meant statements or indications of signs which imprint false or deceptive impressions upon the sub-conscious mind of the class of consumers to which they are intended. Even factually true statements may intrinsically be misleading in essence, because though literally true on the surface, they may yet inadequately deliver a deceptive impression on the recipient’s mind as is the case with laudatory or superlative advertisements. In the aftermath, whether the eventual product so advertised is of superior or inferior quality is irrelevant. Of importance is that the advertisement enticingly evokes a desire for the product by the affected consumers.

 
The determination of whether or not a statement is misleading varies from jurisdiction to jurisdiction. This is owed to the disparities in levels of sophistication and socio-economic development of the individual countries. That notwistanding, however, the determination of misleading is invariably centered on; establishing what target group of consumers is to be protected, whether the determination is assessed from empirical evidence or by the judge’s overall estimation. And numerically, whether an insubstantial or substantial number of addresses would suffice.

 
Communication prerequisite
To be misleading the statements or indications must be communicated to the targeted audience. In this regard, the exact manner, mode and form of communicating the message is irrelevant. As such, the message may be conveyed digitally, literally, orally, or even symbolically. Of importance here is the effect that the misleading statement has on the addressee of such communication. In this sense, the concept of misleading concerns itself with indications that create phenomenal misconceptions on the minds of the likely class of consumers.

 
Additionally, the misconception must be concrete as opposed to vague positive feelings about the product. The misleading statement does not necessarily have to be positive either as even half-truths qualify yet to be misleading statements. It follows then that exaggerations by their very nature are half-truths or half-lies, hence aptly misleading statements.

 
Further, misleading statements need not be made in bad faith as even shrewd business people may fortuitously make statements which may not be clearly understood by their intended audience. It is for these reasons that the law seeks to protect the consuming public and competitors alike against whatever form or type of commercially deceptive statements.

 
Discrediting competitors
Discrediting or disparaging a competitor is the act of deliberately making false and malicious allegations about the integrity of a competitor’s business establishment, and whose effect is to likely harm the commercial goodwill of the targeted enterprise. Though, like misleading statements, the motive is to unscrupulously entice customers at the expense and to the detriment of the competitor, this is not achieved by false or deceptive statements which laud the offender’s products over those of the competitor, but by casting untruthful aspersions on the qualities of either the competitor’s personality, their goods or their services.

 
Disparagement may either be targeted to an individual enterprise or to a chain of businesses. The disparaging statements need not expressly name the target, but this can be deciphered by the addressee of the statement from the surrounding circumstances. Further, although Article 10bis of the Paris Convention had in mind competitive relationship, most developed countries have innovatively broadened this concept to encompass non-competitive relationships to include even consumer associations.

 
The subject matter of disparaging attacks is typically remarks that are likely to harm the goodwill or reputation of the targeted enterprise(s) whether it is with respect to the goods, pricing mode, employee aptitudes and credit rating. It may also focus on the credentials of the entrepreneur’s personal standing be it race, ethnicity, nationality, religion or political affiliation — so called “personal references.”

 
Disparaging can also even occur with statements communicated in good faith where such statements are believed to be truthful by the author thereof. Of importance under the circumstance is likely harm to the goodwill of the targeted enterprise(s). It is for this reason that the law seeks to prevent undue or undeserved harm of the reputation or goodwill of enterprises by envious or malicious third parties. In this pursuit it is thus not necessary to prove actual harm or intent to cause harm.

 
Violation of trade secrets
At the moment there is no universally accepted standard of what constitutes trade secret or confidential information. What is universally acknowledged though is that to be protectable as trade secret the information must be known to a limited class of people within the enterprise, and not generally known by experts or competitors in the field of operations. In this sense, therefore, to be considered as trade secret:

  • The information must not be known to the public or within the relevant industrial or commercial sector;
  • There must be some investment in time, money, labour and effort expended in developing the information;
  • The information must be of value to both the creator and the competitors alike insofar as competitive advantage and market share is concerned;
  • The efforts and measures employed to safeguard the secrecy or confidentiality of the information must be reasonably adequate, and
  • The ease or difficulty with which third parties could access and acquire the information must be substantial.

 

From the foregoing it then follows that publications and information which is readily and easily available to the public do not qualify to be treated as trade secrets. However, to qualify as trade secrets it is not necessary that the information be of absolute secrecy as business partners can always exchange expertise. Inasmuch, confidential information would not be discredited where it is legitimately acquired by the employees to improve efficiency in the performance and discharge of their mandated functions.

 
Alternative mechanisms for the protection of trade secrets appear to be available under patent law. However, this is not to be as some such information may lack the requisite threshold of novelty or inventiveness for patentability. Criminal remedies may also be provided in array of different statutes.

 
Meanwhile, employees, consultants and independent contractors may be prevented from disclosing confidential information through their employment contract. In this case, where the behavior of employees, business partners, consultants and independent contractors is in substance tantamount to embezzlement, theft, industrial espionage or conspiracy then they will clearly be a breach of fudiciary duty, thus liable to own up and pay their dues under both available civil and criminal remedies.

 

 

  • Pasipanodya is an IP consultant who writes in his own capacity. Feedback on: mobile +263 775053007, or e-mail: henripasi@gmail.com

 

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