Protection Against Unfair Competition

Protection against unfair competition has been recognised as one of the main objectives of intellectual property system. It does not grant exclusive rights to the owners with respect to the subject concerned, like in the case of patents, trade marks, etc. Infact, it prohibits any act of competition that is contrary to honest practices in industrial or commercial matters, referred to as "unfair competition".

The acts of unfair competition not only adversely affect the competitors, which tend to lose their customers and market share; but also affect consumers as they are likely to be misinformed and mislead and tend to suffer economic and personal prejudice.

The following acts of unfair competition are closely related to IP and are directly relevant to consumer protection:-

• all acts of such a nature as to create confusion by any means whatever with the establishment, the goods, or the industrial or commercial activities, of a competitor
• false allegations in the course of trade of such a nature as to discredit the establishment, the goods, or the industrial or commercial activities, of a competitor
• indications or allegations the use of which in trade is liable to mislead the public as to the nature, manufacturing process, characteristics, suitability for their purpose or quantity, of the goods.

Whatever form unfair competition may take, it is in the interest of the honest and legitimate entrepreneur, the consumer and the public at large that they should be prevented from it as early and as effectively as possible. Free and fair competition between enterprises is considered to be the best means of satisfying supply and demand in the economy as well as of serving the interests of consumers and economy as a whole. This stimulates innovation and productivity and leads to the optimum allocation of resources in the economy; reduces costs and improves quality; as well as accelerates economic growth and development. Hence, In India, the Government has formulated a Competition Policy which protects the interests of consumers and producers by promoting and sustaining a fair competition.

Further, fair play in the market place cannot be ensured only by the protection of industrial property rights. A wide range of unfair acts, such as misleading advertising, violation of trade secrets, etc., are usually not dealt with by specific laws on intellectual property. Thus, it is necessary to enforce Unfair Competition law to supplement the intellectual property laws and to grant fair protection to consumers.