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15 June 2009
This update analyzes two different, but closely related, legal issues and their situation in Argentina: the unfair competition legal regime and the comparative advertising legal regime.
In all modern legal systems and within the framework of the market economy (mostly the knowledge economy), the vital role of the unfair competition legal regime is widely recognized. Although there is no absolute definition of 'unfair competition', there is a general understanding that all punishable practices involve the use of means which are considered incorrect or reprehensible.
Many of the practices that are punished by unfair competition rules affect IP rights - for example, acts of imitation that lead to confusion by taking fraudulent advantage of another competitor's effort and reputation through the use of identical or similar distinctive signs. Therefore, in IP infringement cases it is always important to analyze the possibility of basing the claim on rules that punish unfair competitive practices.
Taking advantage of a third party's effort in a manner that leads to confusion is the main aspect of unfair competitive practices. In comparative law, such practices are punished either by a special law or by the application of the general principles of law. In Argentina, several different statutes may be applied to unfair competitive practices. In addition to Section 10bis of the Paris Convention and Section 39 of the Agreement on Trade-Related Aspects of Intellectual Property Rights, the applicable statutes are, among others, Section 159 of the Criminal Code, the Commercial Loyalty Law (22,802) and the Confidentiality Law (24,766).
Section 159 of the Criminal Code reads as follows:
"Any person who by fraudulent contrivances or malicious suspicions, or by any kind of unfair propaganda, tries to divert to his benefit the clientele of a commercial or industrial establishment, shall be punished with a fine from Pesos 2,500 to Pesos 30,000 (amount fixed in accordance with Law 24,286)."
Such a proliferation of applicable statutes results in a lack of systematic enumeration of illicit practices and even leads to contradictions among the types of unfair competitive practice described in the Argentine rules. Thus, a legislative amendment to systemize the law relating to unfair competition is needed.
Advertising activity is constitutionally protected as a manifestation of freedom of expression. However, such constitutional protection does not imply a release from liability for infringement of the law through such activity.
Comparative advertising is a method of advertising that is carried out by comparing one's own product or service with a competing product or service. If such advertising refers or mentions specifically the trademark or name of the competing product or service, this constitutes explicit or direct comparative advertising. If neither the trademark or name of the competing product or service are mentioned, but may be easily ascertained by consumers, this constitutes implicit or indirect comparative advertising.
Comparative advertising originated in the United States in around 1930 when, during an advertising campaign, Chrysler invited consumers to compare its automobile with the vehicles marketed by General Motors and Ford suggesting that they "try the three of them". Although in recent decades comparative advertising has become a widely used advertising method, in Argentina it is seldom used. This is due to the uncertainty and risk of engaging in such practices in the absence of any specific legislation to function as a legal framework.
Several rules have been applied to comparative advertising, including:
Nonetheless, there is no specific legislation relating to comparative advertising.
Judicial decisions on these issues have evolved from the leading 1971 judgment in Rolex v Orient, in which comparative advertising was directly considered an act of unfair competition and an illegal form of advertising, to subsequent judgments (eg, Navarro Correas, Tango and Pepsi Challenge), in which the judges no longer issued such categorical decisions. For example, in the 1991 Navarro Correas Case the court understood that making a mere reference to a third party's trademark in a comparative advertisement was not prohibited per se according to Argentine law, unless the third party's rights were injured by the discredit or denigration of the product or compared trademark.
However, authoritative legal authors are not unanimous in their opinions of this advertising method. It is clear that until specific legislation is enacted in this respect, any comparative advertising activity entails risky and uncertain legal consequences.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
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