On December 20 2007 Madrid Commercial Court 6 issued a judgment in proceedings brought under the Unfair Competition Act.  The claimant alleged that the defendant was selling in Spain agricultural sprayers which were a slavish copy of its own product.

The court found that in itself, this would apparently constitute an act of unfair competition under Article 11(2) of the Unfair Competition Act, which provides that it is considered unfair to imitate a third party's products if the public might make an association regarding the product or service, or if such imitation unfairly exploits the reputation or efforts of the third party, unless this association or exploitation of reputation is inevitable. 

The court cited a November 3 2006 decision of the Madrid Court of Appeal and held that any imitation to some extent bears the risk that the imitator's product will be associated with the genuine product or that the reputation of the genuine product on the market will be exploited. However, to ensure that the general principle of freedom to imitate products set out in Article 11(1) of the act still applies, the court held that illicit behaviour as set out in Article 11(2) must be determined following a restrictive interpretation in which the following circumstances coincide: (i) the existence of a unique, distinctive competitive feature in the original product, determined either by a unique competitive edge (ie, unique features which sufficiently distinguish it from other similar products) and by the sufficient establishment on the market of the original product; and (ii) the possibility of avoiding any likelihood of association or exploitation of reputation, so that if there are features which are absolutely necessary then unfair competition cannot be found.

In considering whether such circumstances coincided in the case at hand, the court reached the following conclusions:

  • The defendant's sprayers constituted a reproduction of the claimant's product which was not necessary in order for their technical function to be achieved; therefore, the likelihood of association or exploitation of reputation was avoidable. 
  • The claimant's product had been sufficiently introduced onto the market, as was borne out by the sales figures produced during the proceedings. 
  • In order to prove that a product has a unique competitive edge, it must be shown to have certain characteristics which distinguish it from other similar products in the sector. The court concluded that this was not the case with regard to the claimant's sprayer.

The failure to satisfy this final prerequisite led the court to conclude that the defendant's behaviour did not constitute an act of unfair competition.

In this regard, it seems that this final prerequisite may be a contradiction in terms, if one considers that the imitation of an original product is in itself an acknowledgement of its unique competitive edge.

For further information on this topic please contact Antonia Torrente at Grau & Angulo by telephone (+34 93 202 34 56) or by fax (+34 93 240 53 83) or by email ([email protected]).