Contemporary Unfair Competition Practices in the Digital World

During the 2018‒2019 Committee Term, Task Force 2 of INTA’s Unfair Competition Committee’s Policy Development Subcommittee conducted research and analysis into various forms of unfair practices adopted on e-commerce platforms-such as online marketplaces, online service providers, and auction sites-that affect trademark use and reputation. Here, the Task Force reports on its findings.

Background

Over the past two decades, globalization and e-commerce have eased the flow of products, services, labor, technology, and data across territorial borders. Globalization has also enabled companies to customize product offerings for specific consumer niches on a global scale, and today, consumers in multiple jurisdictions can access products of equal quality. These marketplace developments have forever changed how businesses operate.

The Internet and e-commerce have become essential in reaching consumers globally. Today, e-commerce platforms are able to facilitate every step in the promotion, sale, and trade in goods and services, without the need for users to reach out to different providers or trade channels to conduct their business.

The Task Force 2 Report

While e-commerce creates new opportunities and permits new business-to-consumer relationships, it also gives rise to fierce and dishonest competition. With this in mind, Task Force 2 searched, identified, and delineated 12 specific practices that are disruptive to trademark use, and classified them as “Contemporary Unfair Competition Practices.” These practices were identified through searches across a variety of jurisdictions, including Brazil, China, Colombia, Germany, Guatemala, India, Israel, and the United States. It should be noted that this is not a comprehensive list and other forms of unfair competition practices exist in business transactions that also affect trademark use.

The Contemporary Unfair Competition Practices identified by Task Force 2 are dishonest behaviors not encountered in trade prior to the advent and spread of the Internet and e-commerce, and are nevertheless detrimental to trademarks. The practices identified and analyzed in this report have been categorized in the following groups:

1. Practices that are unfair in the virtual space (such as typosquatting and brand hijacking through the use of trademarks as search keywords);
2. Online disparagement (such as comparison of brands based on untruthful or distorted information and fake news);
3. Practices related to entertainment business (such as ambush marketing in cultural events);
4. Misappropriation of trademarks (for example, trademark use as expressive content in video games and zombie trademarks); and
5. Practices related to cross-border trade (decoding of trademarked products).

The detailed report issued by Task Force 2 is available here.

The following Unfair Competition Committee members contributed to the report:

• Dolores Cañadas Arcas (ZMP IP Services, Spain)
• José Carlos Vaz E Dias (Vaz E Dias Advogados & Associados, Brazil)
• Ximena Castellanos (Castellanos & Co., Colombia)
• Heather Dunn (DLA Piper, USA)
• Sandra Iriarte (Palomo Y Porras, Guatemala)
• Cindy Kang (Beijing Cozen Law Firm, China)
• Paulo Monteverde (Baptista, Monteverde e Associados, Portugal)
• Raka Roy (Galadari advocates and consultants, United Arab Emirates)
• Philipp Strommer (Grünecker Patent- und Rechtsanwälte, Germany)
• Tom Williams (Ullmer & Berne LLP, USA)

The Unfair Competition Committee plans to conduct further research and studies in the near future, and will be issuing updates on this work.

Although every effort has been made to verify the accuracy of items in the INTA Bulletin, readers are urged to check independently on matters of specific concern or interest.

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