Unfair competition law, case I CKN 1319/00

December 7th, 2008, Tomasz Rychlicki

Lego system A/S, Lego Trading A/S, Kirkbi A/S from Denmark and Lego Polska spólka z o.o. sued Polish companies “COBERT” spólka z o.o. and “COBI” for unfair competition (the delict of imitating a product) based on regulations included in article 13 of the Polish Act of 16 April 1993 on Combating Unfair Competition – CUC – (in Polish: ustawa o zwalczaniu nieuczciwej konkurencji), Journal of Laws (Dziennik Ustaw) No. 47, item 211, with subsequent amendments.

Article 13.1. Imitating a finished product by way of technical means of reproduction, to copy an external image of such product where it may mislead customers as to the identity of the producer or product, shall be the act of unfair competition.

2. Imitating functional features of a product, in particular its make, structure and form ensuring its usefulness shall not be deemed the act of unfair competition. Where the imitation of functional features of a finished product requires including its characteristic form, which may mislead customers as to the producer or product identity, the imitator is under obligation adequately to mark the product.

COBERT is a manufacturer of plastic bricks. These bricks are structurally compatible with LEGO’s bricks and externally; some of them are very similar to LEGO’s. There is a “Cobi” trade mark impressed on each brick. The right for protection was granted by the Polish Patent Office on 6 September 1993 (R-77743). Each packaging is printed in colour and in addition there is a clearly visible “Cobi” sign in six different places of the packaging. There is also a sign of the manufacturer, with an indication of his exact address. The court of first instance noted that colours and themes of packaging for COBERT bricks are different than those used by LEGO. Those findings were acknowledged by the court of appeal. The court also held that the average customer can not be confused as to the origin of these bricks. According to the Court, the plaintiffs did not show any evidences that would allow them to base its claims on the so-called “unnamed delict” as afforded by regulations included in Article 3(1) of the CUC.

The act of unfair competition shall be the activity contrary to the law or good practices which threatens or infringes the interest of another entrepreneur or customer.

LEGO filed a cassation complaint before the Polish Supreme Court in which it requested the Supreme Court to overrule the court of appeal’s jugdment and to order the court of appeal to hear the case again or to change the appealed judgment by the SC and to issue a ruling as to the facts and costs of proceedings. The SC dismissed the cassation complaint. The Court noticed that parties had provided both extensive and exhaustive arguments about the conditions leading to qualify an act as unfair competition delict. Those arguments included economic, legal, even ethical issues. However, the Court held that imitation of others’ products is not reprehensible and blameworthy per se. The progress of civilization is possible thanks to the past legacy. Therefore, the development and improvement of each product is in the public interest. The Supreme Court found that CUC regulations are designed to ensure the accuracy of the behavior and activities of business entities in conditions of free competition and access to the market on an equal footing.

The Polish Supreme Court in its judgment of 11 July 2002 case file I CKN 1319/00 found that implementation of the constitutional principle of economic freedom also justifies the search for balance between market freedom and the freedom of goods circulation and the objectives of the CUC. The court found that the ban on other’s products imitation would lead to the emergence of unlimited monopoly against exploitation of technical solution (technology) and would prevent or at least hindered from entering the market for other companies engaged in the same or similar business activity. In Court’s view that was based on the principle of economic freedom and the rules of fair competition, such ban would be in contradiction with the law. The mere imitation of goods of another business, imitation of goods that are not enjoying any special protection by exclusive rights, does not conflict with the pursuit of competition and does not justify the interpretation of article 13 or 3 of the CUC that it is a delict of unfair competition, even if copies are in the same size as the original brick. As regards the packaging the SC held that comprehensive and clear indication of the manufacturer which is placed on a product packaging, and permanent placement of a trade mark on each product, which are put on the market, excludes the possibility of consumer confusion as to the identity of the manufacturer or the product.