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
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.