Building a reputation for quality in the free market is a long and complex process, filled with a number of challenges. Winning consumer trust requires consistency and uncompromising commitment on the part of the the manufacturer. Imitation of a product or service is a serious threat, as it is an unfair way of drawing on the prestige and reputation of a competitor. The Commission for Protection of Competition (CPC) addressed this very issue in a ruling earlier this year.
What is the negative result of the purposeful imitation of a product? It is undoubtedly the creation of the false impression in the mind of the consumer that he is buying a specific product from a specific manufacturer, when in fact it is a different product from a different manufacturer. It is in this sense that Article 35(1) of the Protection of Competition Act (PCA) is laid out, in the light of which the CPC carries out its analysis. In other words, the consumer’s ability to understand with a high degree of certainty exactly what he is buying without having to acquaint himself in detail with the product is compromised.
This circumstance makes it possible to identify the basic preconditions for the assessment of imitation between two products.
- First, the CPC notes, there must be a genuine supply of the good or service on the market
The condition does not need much elaboration. All that is necessary is that there is an actual supply of the good or service at the time of the ruling, i.e. that the supply has not ceased before that time.
- The second mandatory condition for the application of Article 35(1) of the PCA is a certain prominence of the good/service sold or offered by one producer
A seemingly relative condition, but necessary for the negative effect of imitation of a product outlined above to manifest itself. On the one hand, the condition is necessary in order for there to be an actual interest on the part of a producer to reproduce with a high degree of similarity the appearance of a product offered by another producer. The objective in this case would naturally be a better chance of selling the product on the market.
Although there is no specification as to the criteria for determining the popularity of a good or service, the Commission makes its assessment on the basis of the duration of supply and alternatively uses the term ‘recognisability’. The criterion here is therefore the degree of familiarity of the good or service to the average buyer/consumer. In the context of the present case, the CPC finds that products offered for more than 10 years are ‘well recognisable’.
- In order for there to be imitation, the product must have features which mislead or are likely to mislead as to essential characteristics
The key points here are threefold. On the one hand, the meaning of ‘features’ must be specified. The Commission lists alternatively (but not exhaustively) appearance, packaging and name. It thus lists the most common factors on which imitation between two products is based, but leaves room for judgement on the basis of a different or additional feature, depending on the specificities of the goods and services.
Secondly, attention should be drawn to the fact that deception can be both manifested and potential. It is not necessary that the misrepresentation has manifested itself; it is sufficient that there is an objective possibility of deception.
Last but not least, by ‘essential characteristics’ the Commission means the origin, the manufacturer, the seller, the manner and place of production. The elements are again listed alternatively and non-exhaustively in view of the variety of goods and services.
If the essential preconditions are present, the next step in the assessment of the presence (or absence) of imitation must be taken. The assessment is based on the actual perception of the product by the average informed consumer, namely in view of the overall appearance and the leading elements of visual perception. These are, first and foremost, the images and color schemes that form the overall design.
The CPC notes that most consumers perceive and remember similar products primarily in view of the similarities in the essential elements of the overall appearance. Therefore, the analysis should be made precisely in the light of the identified similarities in the leading visual elements of the compared products and not according to the differences between them. Moreover, the presence of a small number of minor and insubstantial differences in the secondary complementary visual elements, if they are not in themselves capable of altering the overall appearance, does not preclude the application of Article 35(1) of the PCA.
If the combination of visual elements is capable of misleading the consumer as to the product or the manufacturer (an established competitor on the market), there is potentially prohibited imitation at hand.