Implications of new unfair competition legislation for IP practitioners

Until the recent approval of the Emergency Decree 274/2019 on 17 April 2019, the regulation of unfair competition in Argentina was characterised by its lack of organisation, narrow scope and lack of a general rule for standardising unfair competition behaviour.

This had become a cause of major concern, as in every modern legal system and within the framework of the market economy (primarily the knowledge economy), the vital role that unfair competition legal regimes play is widely recognised.

The situation changed radically after the approval of the new decree, which established a comprehensive system for regulating unfair competition.

Although there is no absolute definition of 'unfair competition', there is a general understanding that all punishable practices involve the use of means which are considered incorrect or reprehensible.

In this regard, Section 9 of the decree sets out the following:

General Clause: any action or omission that, by wrongful means, seems to be objectively capable of affecting the competitive position of a person or the proper functioning of the competitive process shall constitute an act of unfair competition.

In line with the above, the decree also stipulates the following:

Acts of unfair competition – whichever the form they adopt, the means by which they are performed, and the market in which they take place – are forbidden. There shall be no need to prove that certain damage, either current or potential, has been caused.

Many practices punished by the new unfair competition rules affect IP rights (eg, acts of imitation that lead to confusion by taking fraudulent advantage of another competitor's effort and reputation through the use of identical or similar distinctive signs).

The new legislation also establishes a series of provisions that are highly valued in the IP field, including the detailed regulation of comparative advertising and provisions referring to names of origin and trade secrets.

For further information on this topic please contact Daniel R Zuccherino at Obligado & Cia by telephone (+54 11 4114 1100) or email (dzuccherino@obligado.com.ar). The Obligado & Cia website can be accessed at www.obligado.com.