In today’s business world, where reputation and differentiation are key to success, unfair competition represents a growing challenge. Unfair practices, such as deception, confusion, imitation, or the undue exploitation of another’s reputation, affect not only intellectual or industrial property rights holders but also consumer trust. In Argentina, these practices and their penalties are regulated by Decree No. 274/2019, which is implemented by Resolution No. 241/2020 of the former Secretariat of Domestic Trade.
Below, we will examine how commercial loyalty regulations are linked to or complement trademark regulations:
Deceptive and Confusing Acts
Among the most common forms of unfair competition are deceptive and confusing acts, which can mislead consumers regarding various aspects of goods and services.
According to Decree 274/2019, deceptive acts are those that induce “error regarding the existence or nature, mode of manufacture or distribution, main characteristics, purity, mixture, fitness for use, quality, quantity, price, terms of sale or purchase, availability, expected results of use, and, in general, regarding the attributes, benefits, or conditions of goods and services.” (Art. 10, Sec. a).
On the other hand, confusing acts seek to “mislead regarding the business origin of the activity, establishment, goods, or services, in such a way that they are perceived as having a different origin than they actually do.” (Art. 10, Sec. a).
One example of this type of act is the use of a confusingly similar trademark or signs that create a false association with a competitor’s brand.
If the competitor’s trademark is registered, Trademark Law No. 22.362 applies, allowing the trademark owner to take legal action under the law’s provisions.
However, unfair competition can also occur when a competitor’s unregistered but widely used trademark is misused. In such cases, Commercial Loyalty Regulations become relevant, as they provide legal grounds for action if there is evidence of a risk of misleading consumers.
Undue Exploitation of Reputation and Another’s Effort
Another unfair practice regulated by Decree 274/2019 is the so-called “undue exploitation of another’s reputation”, described as: “Carrying out acts that unduly take advantage of another’s image, credit, fame, prestige, or business or professional reputation, misleadingly associating one’s own goods, services, activities, distinctive signs, or establishments with those of another.” (Art. 10, Sec. g).
This type of act occurs, for example, when someone uses or registers trademarks similar to those that have already gained significant prestige in the market. By doing so, the unfair competitor benefits from consumer confusion or association with a well-known brand, avoiding the investment and effort made by the competitor to build its reputation.
As a result, the unauthorized use of a renowned trademark may lead to a trademark infringement claim under Law 22.362 and, simultaneously, an unfair competition claim under Decree 274/2019.
Unfair Imitation
Decree 274/2019 also defines “unfair imitation” as an unfair competition act, which refers to the imitation of goods, services, or business initiatives “that is likely to generate confusion regarding the origin of the goods or services or involves an undue exploitation of another’s reputation or effort.” (Art. 10, Sec. h).
This type of act does not only occur when a trademark or other industrial or intellectual property right is infringed, but also when other aspects of a business or commercial activity are imitated, such as the distinctive appearance of a commercial establishment (interior or exterior decoration), color schemes, employee uniforms, advertising, etc.
When the imitation creates a real risk of consumer confusion or constitutes undue exploitation of another’s reputation, legal action can also be taken based on Decree 274/2019.
Conclusion
Unfair competition regulations provide key tools to combat practices that not only infringe the exclusive rights of trademark owners but also affect other essential aspects of certain business initiatives.
Understanding this legal framework and the conditions for its application in each case allows for the design of more comprehensive and effective defense strategies to protect business assets.
If your company is facing unfair competition or requires legal advice to safeguard its intellectual property rights, contact us.