Unfair Competition

Unfair competition refers to all wrongful acts committed by a business to harm the interests of another business by deviating from honest commercial and industrial practices. In French law, it is primarily governed by the general principle of tort liability.

Main Characteristics:

• Legal Basis: Unfair competition is based on Article 1240 of the French Civil Code, which states that “any act of man that causes damage to another obliges the person by whose fault it occurred to repair it.” Thus, any unfair act causing harm to a business may engage the liability of its perpetrator.

Main Manifestations:

• • Denigration: Dissemination of statements aimed at discrediting a competitor, its products, or services.

  • Confusion: Use of distinctive signs (trademark, logo, packaging) similar to those of a competitor, misleading the public about the origin of products or services.

  • Disorganization: Practices disrupting the internal operations of a competing business, such as the mass poaching of employees or the misappropriation of client files.

  • Parasitism: Unjustified exploitation of a competitor’s reputation or investments to benefit without making any effort of its own.

• Connection with Intellectual Property: Unfair competition is often invoked alongside an infringement action. For example, a company may be sued for trademark infringement and, at the same time, for unfair competition if it engages in unfair behavior distinct from the act of infringement.

Applicable Legal Provisions:

• Article 1240 of the French Civil Code: Establishes the general principle of liability for fault, which serves as the basis for unfair competition actions.

• Article L. 615-17 of the French Intellectual Property Code (CPI): Specifies that patent infringement actions can be combined with unfair competition claims.

• Article L. 716-5 of the CPI: States that trademark infringement actions can be combined with unfair competition claims.

In summary, unfair competition constitutes a violation of fair business practices, protecting companies from abusive actions by their competitors. It is sanctioned under the principle of tort liability and closely linked to intellectual property law.