Ligue Internationale Du Droit De La Concurrence
LIDC
LIGUE INTERNATIONALE DU DROIT DE LA CONCURRENCE
INTERNATIONAL LEAGUE OF COMPETITION LAW
INTERNATIONALE LIGA FÜR WETTBEWERBSRECHT
Estonian National Report prepared by:
Indrek Eelmets, Sorainen
QUESTION B:
What are the criteria that determine the unfairness of so-called “look-alikes”; what are the prohibitions and the appropriate sanctions?
1. Scope of protection
1.1. Is there any protection granted to the producer of commercialised productsand/or services besides that granted by intellectual property?
May the protection granted by unfair competition be used:
a. In addition to a counterfeiting action?
b. As a substitute to a counterfeiting action?
Besides intellectual property protection the producer of commercialised products can rely on the Competition Act which prohibitsunfair competition (subsection 50 (2) of the Competition Act). Unfair competition is taken to mean dishonest trading practices and acts which are contrary to good morals and practices, including: 1) publication of misleading information, presentation or ordering of misleading information for publication, or disparagement of a competitor or the goods of the competitor; 2) misuse of confidential information or of an employee or representative of a competitor (subsection 50 (1) of the Competition Act).
Misleading information is incorrect information which, given ordinary attention on the part of the buyer, may leave a misleading impression of an offer or which harms or may harm the reputation or economic activities of another undertaking. Publication, or presentation or ordering for publication, of misleading information concerning either oneself or another undertaking participating in a goods market or concerning the goods or work equipment of such undertaking is prohibited, except in cases where publication of such information has been ordered from the publisher of the information or the publisher is not responsible for the correctness of the information presented thereto. According to subsection 51 (3) of Competition Act, such information means information concerning the origin, qualities, method of production, means or sources of supply, as well as the preferential rights, financial status and other qualities of the undertaking.
Additionally, upon misleading, unfair, or denigratory information deemed as advertising, the provisions of Advertising Act shall be applied pursuant to subsection 50 (3) of Competition Act. According to 4 (1) of Advertising Act, advertising shall not directly or by implication degrade or in some other manner denigrate a person, a person’s name, trade mark, geographical indication, activity, area of activity, goods, service or event and provide misleading information (clauses 4 (1) 9 and 11 of the Advertising Act). Advertising is considered misleading in particular if it, inter alia, provides misleading information concerning the manufacturer of the product or service provider, the manufacturer's or service provider's area of activity and qualifications, membership in occupational associations, observation of codes of conduct, intellectual property rights, official recognition, award of a medal, prize or diploma, sustainable activity and endorsement for public or charitable causes or any other sponsorship.
The protection granted by unfair competition may be used in addition to a counterfeiting (infringement) action.
1.2. What claims can be asserted?
Within a counterfeit action (a civil court action)the claimant may claim:
-termination of infringing actions;
-violation to be refrained from in the future;
-compensation of losses and moral damages;
-recalling or withdrawing from the market the counterfeit goods;
-destruction of the counterfeit goodsand equipment used for the production of counterfeit goods;
1.3. Can the unfair nature of the commercialisation of similar products be limited by
freedom of trade and industry?
Such a limitation is not provided in Estonian laws or practice.
2. Nature of the action
2.1. Is an action against the commercialisation of copies typically a civil, criminal or
administrative one?
The action could be both criminal and civil. It may be civil in any case, if the proprietor of the intellectual property makes a civil claim against the infringer. It may be criminal, if the infringement is intentionaland the infringer infringed rights knowingly.In addition, pursuant to Estonian Penal Code trade in counterfeit goods is a criminal act (section 227).
The existence or absence of unfair competition shall be ascertained in a dispute between parties held pursuant to civil procedure (section 53 of the Competition Act). Thus, unfair competition claims alone do not constitute an independent ground for a criminal action.
In order to prevent importation and exportation of counterfeit goods it is also possible to file an application with customs. Customs can initiate misdemeanour procedure when they discover suspected counterfeit goods at the border. In such cases a holder of intellectual property rights is not party to the procedure but only has to provide its opinion as to the authenticity of the goods.
2.2. Is it typically successful? Is it a source of a significant number of decisions in yourcountry?
Success depends on individual cases. If it is a clear-cut infringement then these actions are usually successful. But unfair competition is rarely used as a ground for such claims, actions for infringement of intellectual property rights are more common in Estonia..
3. Necessary conditions for an action
3.1. Who is entitled to bring an action: manufacturers, distributors and/or consumers?
The civil counterfeiting claim may be brought by the proprietor of the intellectual property rights or, with the proprietor’s consent, also the licensee. Thus, it may be a manufacturer or a distributor, depending on the circumstances.
The unfair competition action may be brought by the market participant who is harmed by the unfair competition activities, thus it can also be both a manufacturer and a distributor.
A consumer might bring a complaint on a breach of the prohibition of unfair commercial practices or on a breach of consumer rights (e.g., if the consumer was intentionally mislead that he was buying an original instead of a counterfeit) to the Police or Consumer Protection Board.
3.2. Who is the defendant: the manufacturer, the distributor, the wholesaler or theretailer?
The defendant may be the manufacturer, the distributor, the wholesaler or the retailer depending on each particular case, nature of the act of unfair competition and the legal basis of the claim.
3.3. Are there any time limits for filing an action?
There is no specific time limit for filing an unfair competition or misleading advertising action.The general limitation period of 10 years provided in the subsection 149(1) of the General Part of the Civil Code Act should apply. The limitation period for a claim for refrainment from an act shall commence as of violation of the obligation to refrain.
Pursuant to section 150 of the General Part of the Civil Code Act the limitation period for a claim arising from unlawfully caused damage is three years as of the moment when the entitled person became or should have become aware of the damage and of the person obligated to compensate for the damage. If a person obligated to compensate for damage receives gain at the expense of the entitled person in connection with the damage caused, such person is, even after the expiry of the limitation period (three years), required to return the gain pursuant to the provisions concerning unjust enrichment. Regardless of the above, a claim arising from unlawfully caused damage expires not later than ten years after performance of the act or occurrence of the event which caused the damage.
4. Criteria for assessing an unfair copy
What are the criteria for assessing whether a copy as unfair?
What elements must be established? Who carries the burden of proof?
Are there any legal/jurisdictional/other (disputable) presumptions?
There are no specific criteria for assessing unfair copy established in the Estonian law or practice. The Competition Act prohibits publication of misleading information, i.e.incorrect information which, given ordinary attention on the part of the buyer, may leave a misleading impression of an offer or which harms or may harm the reputation or economic activities of another undertaking [clause 50(1)1]. For example, in trademark conflicts the courts follow the principles of assessing likelihood of confusion, i.e. global appreciation of the visual, aural or conceptual similarity of the marks, bearing in mind their distinctive and dominant elements.
As a general rule, every party to the dispute must prove those circumstances on which they ground their claims and other statements in the court.
4.1. Reproduction
4.1.1. Is it sufficient to show the similarity of products to deem behaviour as unfair orare further elements necessary (e.g., a certain degree of individuality of theoriginal product, market launch of the original product, exploitation of reputationof the original product, savings with regard to development costs, intentionalimitation)?
There are no precise criteria either in the law or in practice. The court should assess this on case by case basis.
4.1.2. Is it relevant in deciding if reproduction is unfair whether the reproduced work (inparticular, a product’s design) is solely dependent on technical or functionalcircumstances?
In a trademark dispute over similar packages (case No. 2-04-871), Estonian County Court found that the packages in question had similar features (shape of bottles, colour combinations used etc) but these were only descriptive and functional. Thus, confusion on the part of consumers was unlikely.
4.2. Confusion risk
4.2.1. Is the confusion risk taken into account and, if so, to what extent?
Yes, the risk of confusion is taken into account. The wording of clause 50(1)1 of the Competition Act (… incorrect information which, given ordinary attention on the part of the buyer, may leave a misleading impression …) also indicates that it is not necessary to prove that actual confusion has taken place.
4.2.2. How is confusion assessed (e.g., overall global approach, according todifferences/similarities)?
There is no separate test for the confusion within unfair competition claims. The court would use the test adopted in trademark similarity cases (likelihood of confusion).
4.2.3. Is the assessment based on the perception of an average consumer, aprofessional or an informed professional?
Within trademark disputes, the court generally applies the notion of the "average" or "relevant" consumer.
4.2.4. How can the existence of a confusion risk be proved (testimonies, surveys, other)?
The question of likelihood of confusion is legal not factual issue. However, surveys, testimonies, letters by consumers can be taken into account.
(Is it sufficient to demonstrate a confusion risk with regard to one single person?)
It is likely to be not sufficient, as a single case does not demonstrate a general confusion risk.
4.3. Depreciation
May inferior quality or a lower price be considered an unfairness criterion?
There is no such criterion provided in the law or in practice. However, the court may take this into account along with other circumstances.
5. Compensation conditions
5.1. Is the termination and withdrawal of a product during the distribution stagepossible? What about an urgent temporary procedure?
The court may secure a civil action at the request of the plaintiff if there is reason to believe that failure to secure the action may make the enforcement of the judgment difficult or impossible. The court may also, by way of securing an action, provisionally regulate a disputed legal relationship and, above all, the intended purpose of a thing, if this is necessary for the prevention of significant damage or arbitrary action or for another reason.
In addition, in order to secure an action based on infringement of intellectual property rights, the court may, among other, seize the goods concerning which there is doubt of infringement of intellectual property rights or impose an obligation to hand over such goods to prevent the putting on the market or distribution of such goods.
Normally the application for a preliminary injunction must be filed together with the actual action.
Usually it takes a court at least one business day to issue an order of preliminary injunction. Sometimes it may take more than one business day but rarely more than two business days.
5.2. How is financial compensation assessed (e.g., must a detrimental effect onturnover be proved, breach of brand image, more general commercial damage)?Does the damage award include payment of profits earned by the unfaircompetitor?
There is very little court practice on the assessment of the financial compensation.Pursuant to the law, in addition to the damage, a payment of profits earned by the unfair competitor may be requested.
5.3. Does judicial publication constitute the main or a complementary form ofcompensation? Is it possible in an urgent temporary procedure?
If the court has established infringement of copyright or related rights or industrial property rights in a judgment, the court may, at the request of the plaintiff, prescribe by the judgment that the information contained therein must be made public at the expense of the defendant in the manner determined by the court, or that the judgment must be published in part or in full (subsection 445(5) of the Civil Procedure Code).
6. Advisable evolution
6.1. Would you prefer a legislative, regulatory or judicial evolution in order to furtherenforce the protections established in your legal system?In which case; about what subjects?
We would prefer a judicial evolution to enforce the protections established in our legal system, as all the main legislative and regulatory preconditions are already in place. However, the unfair competition clauses are rarely used and mainly infringement actions are filed based on provisions of intellectual property protection.