Parasitic unfair competition: what is the limit of similarity between activities in the same sector?

It is normal that there exists a certain degree of similarity between activities that, although belonging to different owners, are in the same field (for example, two supermarket or two perfumeries chains).

The question is: to what extent your business can lawfully resemble to another one which is already in the market without incurring the prohibition of parasitic unfair competition.

For example what are the limits that cannot be overcome in setting up your store or in the organization of an exhibition? How to prevent your direct competitor from accusing you of having copied it and to have been not correct?

In order to avoid the accusation of unfair competition you certainly must avoid systematically imitating all that your competitor does and copying all his initiatives, studies and researches. The Courts have repeatedly considered as parasitic unfair competition the behavior of the suject:

“who makes profit form the studies, the costs of preparation and penetration of others and, using the already experienced achievements, avoids the risk of failure”

(Italian Corte di Cassazione, 16 February 1988 n.1667).

Thus, for example, judges considered parasitic unfair competition the behavior of the one that used not only a distinctive sign identical to that of its competitor for the same type of product but used also the same decorative elements in the products, the same advertising images and, finally, the same methods of advertising promotion.

In another occasion the Court (Court of Milano, n. 11416/2015 of 13 October 2015) considered parasitic unfair competition the commercial activity of a chain of perfumeries imitating another chain of perfumeries in the following elements: identity in the clothing of the shop assistants; similarity of the format of the respective websites; imitation of the commercial activities (imitation od the commercial promotions of the competitor, also in the graphic and color configuration), imitation of the products (identical form, same names and recovery of the innovative products developed by the competitor).

Parasitic unfair competition often occurs in presence of a succession of imitative acts during a period of time but this does not mean that it is not parasitic competition:

“Activity that, in one fell swoop, or in a single moment, imitates “all” the initiatives taken by the competitor, provided that also in this case we can see the reprehensible systematic exploitation of the work and creativity of others”

because

“there is no reason to think that repetitiveness over time of several imitative acts is indispensable, since it is perfectly logical that sistematicity and continuity can also be simultaneous and expressed in the “quantitative imitation” characters.

(Italian Corte di Cassazione 5852/84 and 1667/1988)

Eva Troiani law firm, in the event you think you are affected by unfair competition, can assist you with a legal opinion on the existence of the case of unfair competition and can suggest the most appropriate legal remedies.