UGBS UGBS COMMERCIAL LAW I COMMERCIAL LAW I

CLASSCLASSUNFAIR COMPETITION LAWUNFAIR COMPETITION LAW

2012/2013 ACADEMIC YEAR 2012/2013 ACADEMIC YEAR

Rowland Atta-Kesson Esq.Rowland Atta-Kesson Esq.

WHAT IS UNFAIR WHAT IS UNFAIR COMPETITION? COMPETITION?

• Unfair competition are statutorily Unfair competition are statutorily prescribed by the Protection Against prescribed by the Protection Against Unfair Competition Act, 2000 (Act 589) as:Unfair Competition Act, 2000 (Act 589) as:– Causing confusion with respect to another’s Causing confusion with respect to another’s

enterprise or its activitiesenterprise or its activities– Damaging another person’s goodwill or Damaging another person’s goodwill or

reputationreputation– Misleading the publicMisleading the public– Discrediting another person’s enterprise or its Discrediting another person’s enterprise or its

activitiesactivities– Unfair competition in respect of secret Unfair competition in respect of secret

informationinformation– Unfair competition in respect of national and Unfair competition in respect of national and

international obligationsinternational obligations

Confusing another’s Confusing another’s enterpriseenterprise

• Sec 1(1) of the Protection Against Sec 1(1) of the Protection Against Unfair Competition Act, 2000 (Act Unfair Competition Act, 2000 (Act 589) defines unfair competition as:589) defines unfair competition as:

• An act or a practice, in the course of An act or a practice, in the course of industrial or commercial activities, industrial or commercial activities, that causes, or is likely to cause, that causes, or is likely to cause, confusion with respect to another confusion with respect to another person’s enterprise or its activities, in person’s enterprise or its activities, in particular, the products or services particular, the products or services offered by that enterprise, constitutes offered by that enterprise, constitutes an act of unfair competition.an act of unfair competition.

• The confusion may, in particular, The confusion may, in particular, be caused with respect tobe caused with respect to

• (a)(a) a trademark, whether a trademark, whether registered or not,registered or not,

• (b)(b) a trade name,a trade name,• (c)(c) a business identifier other a business identifier other

than a trademark or trade name,than a trademark or trade name,• (d)(d) the presentation of a product the presentation of a product

or service, oror service, or• (e)(e) a celebrity or well-known a celebrity or well-known

fictional character.fictional character.

Damage to one’s Damage to one’s goodwillgoodwill

• Where an act or a practice in the Where an act or a practice in the course of industrial or commercial course of industrial or commercial activities, damages or is likely to activities, damages or is likely to damage the goodwill or reputation damage the goodwill or reputation of another person’s enterprise or of another person’s enterprise or its activities, such an act or a its activities, such an act or a practice constitutes an act of practice constitutes an act of unfair competition, whether or not unfair competition, whether or not the act or practice causes the act or practice causes confusion. SEC 2 of Act 589confusion. SEC 2 of Act 589

• Damaging another person’s goodwill Damaging another person’s goodwill or reputation may, in particular, or reputation may, in particular, result from the dilution of the result from the dilution of the goodwill or reputation attached togoodwill or reputation attached to– (a)a trademark, whether registered or (a)a trademark, whether registered or

not,not,– (b)a trade name,(b)a trade name,– (c) a business identifier other than a (c) a business identifier other than a

trademark or a trade name,trademark or a trade name,– (d)the appearance of a product,(d)the appearance of a product,– (e)the presentation of a product or (e)the presentation of a product or

service, orservice, or– (f)a celebrity or a well-known fictional (f)a celebrity or a well-known fictional

character.character.

Misleading the publicMisleading the public• An act or a practice in the course An act or a practice in the course

of industrial or commercial of industrial or commercial activities, that misleads or is activities, that misleads or is likely to mislead the public, with likely to mislead the public, with respect to an enterprise or its respect to an enterprise or its activities, in particular, the activities, in particular, the products or services offered by products or services offered by that enterprise, constitutes an act that enterprise, constitutes an act of unfair competition. SEC 3 of Act of unfair competition. SEC 3 of Act 598598

• Misleading may arise out of advertising Misleading may arise out of advertising or promotion and may, in particular, or promotion and may, in particular, occur with respect tooccur with respect to– (a) the manufacturing process of a product;(a) the manufacturing process of a product;– (b) the suitability of a product or service (b) the suitability of a product or service

for a particular purpose;for a particular purpose;– (c) the quality or quantity or other (c) the quality or quantity or other

characteristics of a product or service;characteristics of a product or service;– (d) the geographical origin of a product or (d) the geographical origin of a product or

service;service;– (e) the conditions on which a product or (e) the conditions on which a product or

service is offered or provided; orservice is offered or provided; or– (f) the price of a product or service or the (f) the price of a product or service or the

manner in which the price is calculated.manner in which the price is calculated.

Discrediting another’s Discrediting another’s enterpriseenterprise

• A false or an unjustifiable A false or an unjustifiable allegation in the course of allegation in the course of industrial or commercial activities industrial or commercial activities that discredits or is likely to that discredits or is likely to discredit another person’s discredit another person’s enterprise or its activities, in enterprise or its activities, in particular, the products or services particular, the products or services offered by that enterprise, offered by that enterprise, constitutes an act of unfair constitutes an act of unfair competition. SEC 4 of Act 589competition. SEC 4 of Act 589

• Discrediting may arise out of Discrediting may arise out of advertising or promotion and may, advertising or promotion and may, in particular, occur with respect toin particular, occur with respect to– (a) the manufacturing process or a (a) the manufacturing process or a

product;product;– (b) the suitability of a product or (b) the suitability of a product or

service for a particular purpose;service for a particular purpose;– (c) the quality or quantity or other (c) the quality or quantity or other

characteristics of a product or service;characteristics of a product or service;– (d) the conditions on which a product (d) the conditions on which a product

or service is offered or provided; oror service is offered or provided; or– (e) the price of a product or service or (e) the price of a product or service or

the manner in which the price is the manner in which the price is calculated.calculated.

Secret informationSecret information• An act or a practice in the course of An act or a practice in the course of

industrial or commercial activities, industrial or commercial activities, that results in the disclosure, that results in the disclosure, acquisition or use by another person acquisition or use by another person of secret information without the of secret information without the consent of the rightful owner of that consent of the rightful owner of that information and in a manner information and in a manner contrary to honest commercial contrary to honest commercial practices constitutes an act of unfair practices constitutes an act of unfair competition. SEC 5 of Act 589competition. SEC 5 of Act 589

• Disclosure, acquisition or use of Disclosure, acquisition or use of secret information by another secret information by another person without the consent of the person without the consent of the rightful owner may, in particular, rightful owner may, in particular, result fromresult from– (a) industrial or commercial espionage;(a) industrial or commercial espionage;– (b) breach of contract;(b) breach of contract;– (c) breach of confidence;(c) breach of confidence;– (d) inducement to commit any of the (d) inducement to commit any of the

acts referred to in paragraphs (a) to (c);acts referred to in paragraphs (a) to (c);– (e) acquisition of secret information by (e) acquisition of secret information by

a third party who knew or was grossly a third party who knew or was grossly negligent in failing to know, that an act negligent in failing to know, that an act referred to in paragraphs (a) to (d) was referred to in paragraphs (a) to (d) was involved in the acquisition.involved in the acquisition.

• An information is “secret An information is “secret information” ifinformation” if

• (a)it is not, as a body or in the precise (a)it is not, as a body or in the precise configuration and assembly of its configuration and assembly of its components, generally known among components, generally known among or readily accessible to persons within or readily accessible to persons within the circles that normally deal with the the circles that normally deal with the kind of information in question;kind of information in question;

• (b)(b) it has commercial value because it it has commercial value because it is secret; oris secret; or

• (c)(c) it has been subject to reasonable it has been subject to reasonable steps under the circumstances by the steps under the circumstances by the rightful owner to keep it secret.rightful owner to keep it secret.

National & International National & International ObligationObligation

• An act or a practice in the course of An act or a practice in the course of industry or commercial activity that industry or commercial activity that results in the breach of a law of results in the breach of a law of Ghana or international or regional Ghana or international or regional obligation to which a person engaged obligation to which a person engaged in business or commercial activity in in business or commercial activity in Ghana is subject and in a manner Ghana is subject and in a manner contrary to honest business practices contrary to honest business practices constitutes an act of unfair constitutes an act of unfair competition. SEC 6 of Act 589competition. SEC 6 of Act 589

• Breach of international or regional Breach of international or regional obligations may in particular result fromobligations may in particular result from– (a) breach of protocols agreements or other (a) breach of protocols agreements or other

obligations entered into under the World obligations entered into under the World Trade Organization,Trade Organization,

– (b) breach of protocols agreements or other (b) breach of protocols agreements or other obligations entered into pursuant to the obligations entered into pursuant to the Treaty establishing the Economic Community Treaty establishing the Economic Community of West African States as revised,of West African States as revised,

– (c) an act or a practice by which a foreign (c) an act or a practice by which a foreign producer of goods or services is granted producer of goods or services is granted special advantages in the country of special advantages in the country of production, including but not limited to production, including but not limited to direct subsidies and preferential tax direct subsidies and preferential tax treatment, which results in significant treatment, which results in significant distortion of competitive strength in Ghana distortion of competitive strength in Ghana compared to Ghanaian producers.compared to Ghanaian producers.

RemediesRemedies• Section 8 of Act 589 provides that a person Section 8 of Act 589 provides that a person

who is damaged or considers that that who is damaged or considers that that person is likely to be damaged by an act of person is likely to be damaged by an act of unfair competition may bring an action forunfair competition may bring an action for

• (a)an order of injunction to prevent the act (a)an order of injunction to prevent the act or further acts of unfair competition,or further acts of unfair competition,

• (b)(b) a provisional order to prevent unlawful a provisional order to prevent unlawful acts or to preserve relevant evidence,acts or to preserve relevant evidence,

• (c)(c) the award of damages as the award of damages as compensation, orcompensation, or

• (d)(d) any other remedy that the Court may any other remedy that the Court may consider fit to order.consider fit to order.

• Again the aggrieved person may also initiate Again the aggrieved person may also initiate an action under any other enactment to an action under any other enactment to enforce his intellectual property rights.enforce his intellectual property rights.

Are there other unfair Are there other unfair competition?competition?

• Section 7 of Act 589 indicates that the Section 7 of Act 589 indicates that the what constitute unfair competition is what constitute unfair competition is not exhaustive and that in addition to not exhaustive and that in addition to the acts and practices enumerated the acts and practices enumerated above, an act or a practice in the above, an act or a practice in the course of industrial or commercial course of industrial or commercial activities that is contrary to honest activities that is contrary to honest practices constitutes an act of unfair practices constitutes an act of unfair competition.competition.

• This means that one may look at the This means that one may look at the common law for instances of unfair common law for instances of unfair competition competition

Economic TortsEconomic Torts• This is about acts done intentionally to This is about acts done intentionally to

cause harm to another’s right to earn a cause harm to another’s right to earn a living by wrongful means. living by wrongful means.

• They seek to protect the sanctity of They seek to protect the sanctity of contracts and trade generally.contracts and trade generally.

• For this reason, we have to distinguish For this reason, we have to distinguish between acts donebetween acts done– As genuine competition; and As genuine competition; and – Pressure with interferes with the trade or Pressure with interferes with the trade or

contract of another through illegal means.contract of another through illegal means.• e.g. a supermarket which sets up next to e.g. a supermarket which sets up next to

a street corner shop and thereby kills a street corner shop and thereby kills another's business is not committing an another's business is not committing an economic tort. economic tort.

Passing offPassing off• This is the purest economic torts. This is the purest economic torts. • Its purpose is almost exclusively the Its purpose is almost exclusively the

protection of economic interests. protection of economic interests. • We can begin consideration of this We can begin consideration of this

tort by contrasting it with the tort of tort by contrasting it with the tort of deceit. deceit.

• While deceit protects a business man While deceit protects a business man who is the direct target of a who is the direct target of a fraudulent misrepresentation, fraudulent misrepresentation, passing off protects traders against passing off protects traders against misrepresentations aimed at their misrepresentations aimed at their customers, which are calculated to customers, which are calculated to damage their trade or goodwill. damage their trade or goodwill.

• The common law at first confined The common law at first confined the action to the use by A of B’s the action to the use by A of B’s trade name or trade mark in trade name or trade mark in connection with A’s business or connection with A’s business or goods in a way intended to make goods in a way intended to make B’s customers believe the goods B’s customers believe the goods were produced by B. were produced by B.

• So the action was aimed at So the action was aimed at dishonest competitive practices. dishonest competitive practices.

• In In Reddaway v. Banham Reddaway v. Banham the the plaintiff manufactured machine plaintiff manufactured machine belting for many years, with the belting for many years, with the name “Camel Hair Belting”name “Camel Hair Belting”

• The defendant, who had The defendant, who had previously been in the plaintiff’s previously been in the plaintiff’s employment, went into business employment, went into business and started stamping his goods and started stamping his goods as “Camel Hair Beltings”as “Camel Hair Beltings”

• This was held to be passing off. This was held to be passing off.

• In In White Hudson & Co Ltd v. Asian White Hudson & Co Ltd v. Asian Organization LtdOrganization Ltd the appellant sold the appellant sold cough sweets in red paper wrappers cough sweets in red paper wrappers called “Hacks.”called “Hacks.”

• The majority of their customers were The majority of their customers were person not able to read English.person not able to read English.

• They acquired the habit of simply calling They acquired the habit of simply calling for “red per cough sweets”for “red per cough sweets”

• Five years later, the respondent began Five years later, the respondent began selling sweets in Singapore in similar selling sweets in Singapore in similar wrappers but marked “PETCO PECKOS”wrappers but marked “PETCO PECKOS”

• The appellants were given an injunction The appellants were given an injunction to restrain the respondents from selling to restrain the respondents from selling their sweets in the same type of their sweets in the same type of wrappers without distingusing them in wrappers without distingusing them in some way. some way.

Interference with Interference with contractual relationscontractual relations

• It is a tort for A to intentionally It is a tort for A to intentionally induce B to break his contract induce B to break his contract with C, or to prevent B from with C, or to prevent B from performing it, both to the performing it, both to the damage of C. The damage is damage of C. The damage is what C would suffer in the what C would suffer in the ordinary course of business, as ordinary course of business, as well as the intended dage. well as the intended dage.

• The point is illustrated by the The point is illustrated by the decision in decision in Lumley v. GyeLumley v. Gye Johanna, Johanna, a niece of the German composer, a niece of the German composer, Richard Wagner, contracted to Richard Wagner, contracted to sing exclusively in the plaintiff’s sing exclusively in the plaintiff’s theatre. theatre.

• The defendant, who was fully The defendant, who was fully aware of this contract persuaded aware of this contract persuaded her not to performher not to perform

• The defendant was held liable in The defendant was held liable in tort. tort.

ConspiracyConspiracy• This action is an off-shoot of the criminal law. This action is an off-shoot of the criminal law. • It consists in a n agreement between two or It consists in a n agreement between two or

more persons to injure X by unlawful means more persons to injure X by unlawful means or in a combination to do a lawful act to injure or in a combination to do a lawful act to injure X or to do a lawful act by unlawful means. X or to do a lawful act by unlawful means.

• Sometimes an act if done by an individual will Sometimes an act if done by an individual will be lawful, but becomes unlawful by virtue of be lawful, but becomes unlawful by virtue of the fact that is done in combination.the fact that is done in combination.

• This is because of the power of combination. This is because of the power of combination. • The unlawful acts may be The unlawful acts may be

– CriminalCriminal– Tortious or Tortious or – Acts in breach of statuteActs in breach of statute

Intimidation Intimidation • This tort is committed if the defendant threatens This tort is committed if the defendant threatens

to use unlawful means to compel A to comply with to use unlawful means to compel A to comply with his wishes and does so to his detriment, or his wishes and does so to his detriment, or threatens to use unlawful coercion against A and threatens to use unlawful coercion against A and compels him to act to the detriment of B.compels him to act to the detriment of B.

• In In Rookes v Barnard, Rookes v Barnard, the BOAC case, the plaintiff, the BOAC case, the plaintiff, an employee of BOAC (being dissatisfied with the an employee of BOAC (being dissatisfied with the union) resigned from his union but continued to union) resigned from his union but continued to work for BOAC. work for BOAC.

• Union officials, some of whom were employees of Union officials, some of whom were employees of BOC and were anxious to main a BOC and were anxious to main a closed shop, closed shop, threatened BOAC with strike acting, unless they threatened BOAC with strike acting, unless they dismissed the plaintiff. dismissed the plaintiff.

• Strike action would have involved breaches of Strike action would have involved breaches of contract by the employees concerned. contract by the employees concerned.

• BOAC dismissed the plaintiff and he sued the BOAC dismissed the plaintiff and he sued the defendants for intimidating BOAC. defendants for intimidating BOAC.

• The House of Lords held the plaintiff could recover. The House of Lords held the plaintiff could recover.

Causing Loss by Unlawful Causing Loss by Unlawful MeansMeans

• It has been suggested that the tort of It has been suggested that the tort of intimidation is only a variant of a broader intimidation is only a variant of a broader tort known as “causing loss by unlawful tort known as “causing loss by unlawful means.means.

• The tort was recognized by Lord Reid in The tort was recognized by Lord Reid in J.T. Stratford & Son Ltd v. Lindley when J.T. Stratford & Son Ltd v. Lindley when he said.he said.– ““the respondents’ action (in calling a strike) the respondents’ action (in calling a strike)

made it practically impossible for the made it practically impossible for the appellants to do any new business with the appellants to do any new business with the barge-hirers. It was not disputed that such barge-hirers. It was not disputed that such interference with business is tortuous, if any interference with business is tortuous, if any unlawful means are employed.”unlawful means are employed.”

Injurious falsehoodInjurious falsehood• Care should be taken not to confuse this tort with Care should be taken not to confuse this tort with

defamation. defamation. • The tort protects interests in the reputation and goodwill The tort protects interests in the reputation and goodwill

of one’s business. of one’s business. • The law was thus stated by the English CA in The law was thus stated by the English CA in Ratchlife v. Ratchlife v.

EvansEvans– ““an action will lie for written or oral falsehood…where an action will lie for written or oral falsehood…where

they are maliciously published, where they are they are maliciously published, where they are calculated in the ordinary course of things to produce, calculated in the ordinary course of things to produce, and where they do produce, actual damage. Originally, and where they do produce, actual damage. Originally, this tort address unwarranted attaches on the title to this tort address unwarranted attaches on the title to land; hence it was know as land; hence it was know as slander of titleslander of title. Later, it . Later, it was extended to goods-was extended to goods-slander of goods slander of goods ””

• Any type of interest in land, trade marks, patent, trade Any type of interest in land, trade marks, patent, trade names, copyright, company shares-can found action in names, copyright, company shares-can found action in this tort. this tort.