Suing for Unfair Competition in the Philippines

Suing for Unfair Competition in the Philippines Nicolas and De Vega Law Offices Image

The Business of Competition

When it comes to business, competition is a business itself. In the Philippines, competition is in fact encouraged and with that, Republic Act No. 10667, or otherwise known as the Philippine Competition Act (PCA), which is the primary competition policy of the Philippines for promoting and protecting competitive market, was enacted. As stated in the law’s State policy, the efficiency of market competition as a mechanism for allocating goods and services is a generally accepted precept.

When is competition considered against the law? What is unfair competition as a crime and how can you sue someone for unfair competition?

Law Governing Unfair Competition

Republic Act No. 8293, or otherwise known as the Intellectual Property Code of the Philippines (“IPC”), is the law which punishes unfair competition, to wit:

“168.2. Any person who shall employ deception or any other means contrary to good faith by which he shall pass off the goods manufactured by him or in which he deals, or his business, or services for those of the one having established such goodwill, or who shall commit any acts calculated to produce said result, shall be guilty of unfair competition, and shall be subject to an action therefor.

168.3. In particular, and without in any way limiting the scope of protection against unfair competition, the following shall be deemed guilty of unfair competition:

(a) Any person, who is selling his goods and gives them the general appearance of goods of another manufacturer or dealer, either as to the goods themselves or in the wrapping of the packages in which they are contained, or the devices or words thereon, or in any other feature of their appearance, which would be likely to influence purchasers to believe that the goods offered are those of a manufacturer or dealer, other than the actual manufacturer or dealer, or who otherwise clothes the goods with such appearance as shall deceive the public and defraud another of his legitimate trade, or any subsequent vendor of such goods or any agent of any vendor engaged in selling such goods with a like purpose;

(b) Any person who by any artifice, or device, or who employs any other means calculated to induce the false belief that such person is offering the services of another who has identified such services in the mind of the public; or

(c) Any person who shall make any false statement in the course of trade or who shall commit any other act contrary to good faith of a nature calculated to discredit the goods, business or services of another.” (Emphases and underscoring supplied.)

Cases Constituting Unfair Competition

There had been a plethora of cases that reached the Supreme Court concerning unfair competition. In the case of Superior Commercial Enterprises, Inc. vs. Kunnan Enterprises Ltd. And Sports Concept & Distributor, Inc., G.R. No. 169974, 20 April 2010, the Supreme Court defined unfair competition as follows:

“From jurisprudence, unfair competition has been defined as the passing off (or palming off) or attempting to pass off upon the public of the goods or business of one person as the goods or business of another with the end and probable effect of deceiving the public. The essential elements of unfair competition are (1) confusing similarity in the general appearance of the goods; and (2) intent to deceive the public and defraud a competitor.

Jurisprudence also formulated the following “true test” of unfair competition: whether the acts of the defendant have the intent of deceiving or are calculated to deceive the ordinary buyer making his purchases under the ordinary conditions of the particular trade to which the controversy relates. One of the essential requisites in an action to restrain unfair competition is proof of fraud; the intent to deceive, actual or probable must be shown before the right to recover can exist.” (Emphases and underscoring supplied.)

Penalty for Unfair Competition

What is the criminal penalty for unfair competition? Under Section 170 of the IPC, a criminal penalty of imprisonment from two (2) years to five (5) years and a fine ranging from Fifty thousand pesos (P50,000) to Two hundred thousand pesos (P200,000), shall be imposed on any person who is found guilty of committing unfair competition. The penalty shall be independent of the civil and administrative sanctions imposed by law.

About Nicolas and De Vega Law Offices

If you need assistance in enforcing your intellectual property rights or your trademark, or need help regarding unfair competition, we can help you. Nicolas and de Vega Law Offices is a full-service law firm in the Philippines.  You may visit us at the 16th Flr., Suite 1607 AIC Burgundy Empire Tower, ADB Ave., Ortigas Center, 1605 Pasig City, Metro Manila, Philippines.  You may also call us at +632 84706126, +632 84706130, +632 84016392 or e-mail us at [email protected]. Visit our website www.ndvlaw.com.

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