Claims arising from infringement of the Anti-Unfair Competition Act — Part II

In the second Part of the article discussing claims for infringement of the law on combating unfair competition, we look at claims for damages, claims for unlawful benefits, and claims to judge an adequate amount for the social purpose of supporting Polish culture or protecting national heritage.

In the event of an act of unfair competition, a trader whose interest has been compromised or affected may request certain claims: failure to act; removal of the effects of unlawful actions; submission of a single or multiple statement of the appropriate content and in an appropriate form; repair of the damage caused, on a general basis; giving unwarranted benefits, on a general basis or judging an adequate amount of money for a specific social purpose, related to the promotion of Polish culture or the protection of national heritage, if the act of unfair competition was blamed. These claims can be claimed together or only some of them.

Compensation claim

The obligation to make good the damage caused to the trader by an act of unfair competition sets out a provision Article 18(1)(4) u.z.n.k. The use of this provision constitutes a defence mechanism for the entrepreneur affected by a person's delicate action third.

„The obligation to remedy the damage caused by unfair competition is constructed, as in the rules on the protection of exclusive rights (especially Articles 287(1) and 296(1) Pre-amendment version Act dated 9 May 2007 amending the Copyright and Related Rights Act and certain other laws, on general terms, by which the provisions governing the general principles of compensation (Article 361-363 (c) and rules on the grounds of liability for unlawful acts (Article 415 and n.k.c.; B.

Gawlik’ 1 .

„The damages claim in the Anti-Unfair Competition Act performs the same functions as the civil code damages claim. The overriding function of the compensation claim is the compensation function, which prejudges the obligation to compensate for damage caused in certain goods subject to legal protection.” 2 . „The compensation function determines the limits of liability for damage caused. According to Article 363(1) k.c. the compensation of the damage can be done in two ways – either by restoring the previous condition (restitutio in integrum) or by paying an appropriate amount in money. The damage caused by unfair competition largely falls within the hypothesis of standard with Article 363(1) sentence second k.c. and are subject to compensation by way of payment of monetary compensation. The primacy of the compensation function entails significant implications in determining the extent to which the damage is to be rectified; for the interests of the injured person, this scope determines the full value of the damage suffered (the principle of full compensation), while in the interests of the perpetrator, this scope is limited by the prohibition on enrichment of the injured person as a result of the compensation.’ 3

The doctrine also states that the obligation to remedy the damage caused has a preventive and educational dimension. Prevention in this case is to deter future perpetrators from committing delicacies due to the need to compensate for losses suffered by the entrepreneur as a result of unlawful acts.

In the case-law, however, liability for damages sometimes takes on a dimension of the form of repression against the perpetrator, as highlighted by the Supreme Court in the justification of the judgment dated 26 November 2004, And CK 300/04, But there are also different views in literature.

„The grounds for damages are:

• 1) the occurrence of injury;
• 2) damage caused by an event (fact) with which the law combines a compensation obligation, i.e. an act of unfair competition;
• 3) causal link between the injury and the event which caused it’ 4 .

With regard to the concept of injury itself, it should be noted that in the Civil Code and in the Act on Combating Unfair Competition, the legislature has not defined what is under this concept.

"However, literature has developed a coherent concept of understanding damage as a damage to legally protected goods, both in the property and non-material sphere. 5 The damage in question may be the loss, reduction or non-enlargement of assets or the formation or increase of liabilities of the injured person’ 6 .

Infringement by the entity third An act of unfair competition of intangible assets usually causes damage on the basis of an entity's relationship on a given market with other traders, counterparties and customers. In this case, the position on the market of the entrepreneur may change, deteriorate.

The precise determination of such injury is greatly impeded, as it is affected by many factors.

In addition, it should be borne in mind that not every breach of interests leading to the fulfilment of the conditions of an act of unfair competition causes damage to the property damage and gives rise to compensation liability on the part of the offender.

„As in the general civil law, against the background of the bill, one can distinguish between two injury: actual injury (damnum ergens) and loss of profit (lucrum cessans). The actual damage corresponds to a change in the property of the injured person either by reducing his assets or by increasing his liabilities. The loss of profit is a benefit (asset) which the injured would have obtained with a high degree of probability if it had not been harmed” 7 .

Given the actions of unfair competition and the notion of actual injury or loss of benefits, the distinction between these concepts in a particular factual situation poses considerable difficulties.

The losses incurred by the entrepreneur are reflected in various fields of his activity, including infringement of the reputation of the entrepreneur, the right to signs or imitation of certain products.

‘The literature assumes that the actual damage consists, inter alia, of the expenditure made on the production of goods or the provision of services which the trader is unable to recover as a result of an act of unfair competition, increased advertising and an explanation of the market situation aimed at reducing or eliminating the effects of an unauthorised action, lost depreciation costs, the cost of modifying the product range or the way in which the goods are manufactured, the costs associated with the detection of unlawful activity, and the value of the protected good (especially in the case of indications and know-how)’ 8 .

According to the judgment of the Court of Appeal in Poznań, an example of the actual damage suffered by the entrepreneur as a result of unfair competition, consisting in copying its goods by a former counterparty (which Consequently, has withdrawn from cooperation with the reason), investment costs related to the need to withdraw original goods and the costs of developing a new line of goods are lost[9].

Given the case law on unfair competition of the trader, it can be concluded that they are much more frequent with a compensation claim in the form of lost profit.

In order for the injured entrepreneur to be able to make good the damage, he should demonstrate with a high degree of probability that he would have achieved a certain profit during the specified period, which he was deprived of due to the delicacy he committed.[10].

In such a case, the entrepreneur is not obliged to demonstrate that the assumed profit would certainly be achieved, it is sufficient to demonstrate that the advantage lost by the unlawful action of another person could actually be achieved, taking into account all aspects.

The injured party should demonstrate that the loss of benefit was real (highly probable) not only objectively, given the model of a careful entrepreneur, but also that it was real in a particular individual situation of the injured party.

„Commanding the amount of lost profit, due to the variety of its forms and causes, can be accomplished by various means of evidence and based on different requests. one from the available methods of command of the amount of profit lost is a comparison of the level of turnover of the goods concerned before and after the act of unfair competition on the basis of commercial books; evidence from the expert on the demand for the goods in a certain period, proof of production capacity, etc.’ 11 .

A person who has committed acts of unfair competition and has been obliged to make good the damage caused shall be liable solely for the damage which is directly attributable to a minor. Therefore, the correct demonstration of injury in unfair competition cases is highly complicated in practice.

This was also seen by the Supreme Court, which in the justification one of the judgments, he pointed out: “Reparation of damages resulting from acts of unfair competition, as well as infringements in the area of industrial property, faces, in the current state of the law, evidence difficulties in particular with regard to the extent of the damage suffered, in view of the diversity and intensity of the consequences of such acts, not always identifiable and familiar.

These are phenomena and facts which are difficult to grasp, because concerning the reaction of a wide range of customers, the causes of the decline in interest in goods, the costs necessary to restore the market position of the injured, increased advertising or strained if not even reduced reputation of the company and other vulnerable businesses.

Therefore, it is always possible for the perpetrator to declare an action contrary to the Court of First Instance’s determination, arguments and criticism of those findings and to assess the existence and extent of the harmful consequences in the property of the injured persons’ 12 .

At the same time, the Supreme Court draws attention to the possibility of repairing the damage to the full extent, not only in some part of the ‘Concluded under Article 18(1)(4) u.z.n.k. the reference to general principles also covers the principle of full compensation of damage caused (Article 361(2) k.c.).

The compensation granted to the injured party to unfair competition should compensate for all damage caused by unlawful action in the property of the injured party, which is served by this differential method." 13 .

In view of the difficulties in practice in establishing the amount of damage actually suffered in the field of intangible goods, the case law and literature seek other methods of calculating the amount of damage or compensation.

The last of the grounds for seeking compensation for unfair competition is the existence of a causal link between the injury and the unfair competition which caused it.

In this respect, in case law and literature, views are strongly divided, Supreme Court In one of the judgments, he considered that there was a causal link between the act of unfair competition in the imitation of packaging and the loss of profit equivalent to the profit achieved by the infringer[14].

On the other hand, the position is quite different in literature. Professor Ryszard Skubisz noted that the position of the Supreme Court in practice could not be entirely in line with the facts, since the profit achieved by the offender is “the result of many factors (e.g.

the scale of the company, the way it is conducted, the quality of the goods and services offered)” 15 .

However, regardless of the views expressed in the case-law or doctrine, the causal link should be assessed on a case-by-case basis in accordance with the general civil law. ‘This assessment belongs to the court of judgment, acting in accordance with its own knowledge and life experience’ 16 . On the other hand, in cases where a court needs expertise assistance, it is able to receive expert assistance[17].

As far as liability for the damage suffered is concerned, the infringer shall be liable on a fault basis. Under the notion of guilt are included two elements: unlawful action and wine in a subjective sense.

The ground of unlawfulness is demonstrated in any case by the finding that the act of the perpetrator fulfils the marks of an act of unfair competition within the meaning of the bill in question. By their nature, unfair competition is illegal[18].

In fact, it is difficult to show the perpetrator of the crime because it is necessary to distinguish the fault of intent when the perpetrator was aware that the actions he took were illegal, from the fault of unintentionally, when the perpetrator should have known that the action was illegal.

The demonstration of these circumstances is quite complicated in practice. In cases of unfair competition, an enhanced due diligence measure is applied, taking account of the economic activity of the perpetrator. Businesses are required to know the law and the consequences of it for their activities. 19 .

Since in the event of an action for damages in cases of unfair competition, an appeal shall apply to general provisions i.e. Article 363(1) k.c., it is for the injured person to choose the form of compensation. The entrepreneur may choose to return to the previous state or to pay an appropriate monetary sum.

Restoration of the former in the case of infringements of the anti-unfair competition Act is not entirely satisfactory in practice, as this function does in some cases fulfil Article 18(1)(2)(3) and the application Article 18(2) u.z.n.k.

‘The claim for the removal of the consequences of the infringements and the application for a judgment on the objects directly related to the delinquent committed shall normally have the same function as the natural restitution, and their investigation shall not require evidence of fault on the part of the perpetrator’ 20 .

On the other hand, where it is not possible to make good the damage in its entirety and only in part "in such situations it may be allowed to grant the injured person an additional cash compensation which aims to "complement" the natural restitution to the limit of full compensation" 21 .

In addition, the Supreme Court indicated in its judgment that it saw the possibility of pursuing a claim for compensation including a claim for undue benefit. 22

It should also be remembered that not only the person who actually did it can be held liable for damages, but also the helper, the instigator or the person who benefited from such damage.

Claims for unlawful benefit

A claim for unlawful advantage through unfair competition is concluded under Article 18(1)(5) e.z.n.k.

As in the case of an action for damages, a claim for unlawful benefit may be made in accordance with the general principles contained in the under Article 405 k.c., which is also confirmed in the judgment of the Court of Appeal in Kraków[23].

A claim for unlawful benefit may be filed together with other claims as well as itself, as evidenced by the caselaw in the judgments ‘the claim is self-serving and may be brought together with other claims from Article 18(1) U.z.n.k.

or separately, as well as regardless of possible claims serving the plaintiff from other legal titles, in particular for defaulting contractual obligations." 24

The purpose of the claim for unlawful benefit is to regulate the property status of the injured entrepreneur before the act.

The grounds for the claim with Article 18(1)(5) U.z.n.k. are:

• 1) act of unfair competition;
• 2) enrichment of the perpetrator;
• 3) poverty and
• 4) cause-effect relationship between enrichment and impoverishment.

As regards the need to demonstrate the grounds for poverty, another position is presented by the Poznań Court of Appeal, which indicated that: “The claim for the benefit obtained is a stand-alone basis of responsibility, different from the groundless enrichment (from Article 405 and n. c.). There is therefore no reason to refuse to take into account a claim for them because the plaintiff has not shown his impoverishment." 25

On the other hand, the concept of a causally-effectual relationship between enrichment and impoverishment also means "codependency".

The claim in question allows the injured person, upon request, to give any benefit which the offender has obtained directly or indirectly at the expense of his assets. 26

Practice shows that the benefits that might be achieved by the perpetrators of unfair competition are many.

Due to the open catalogue of unfair competition under Article 3(1) u.z.n.k., the directory of unwarranted benefits is also open, which requires each individual condition to be verified from Article 18(1)(5) the circumstances of the particular case.

Taking into account the case law and the doctrine of the claim for undue advantage in the event of an infringement of exclusive rights, the following examples of enrichment can be identified.

"Enrichment on the part of the offender may include the value of what the perpetrator has saved due to failure to conclude a contract with the injured person for the use of the damaged goods (this applies only to those goods which may be the subject of licensing agreements, e.g. signs, industrial design objects, know-how).

The calculation of the equivalent of the use of the goods concerned shall be based on objective criteria, i.e. on the basis of the market value of that use, corresponding to the royalty the offender would have to pay in order to use it with the consent of the injured party.” 27

Enrichment may also consist in gaining economic benefits at the expense of losing part or all of the market to the injured party. Depreciation in the property of the injured person will therefore, in particular, be the loss of the economic benefit of the use of its intangible assets or market power.

28 In literature, there is a view that it is necessary to judge separately and independently the notion of enriching the perpetrator from his profit.

In practice, there may be a situation in which the perpetrator of the unlawful act does not achieve any profit, for example due to the destruction and termination of this act at the beginning.

Nevertheless, the injured entrepreneur has the right to obtain and in such a case compensation corresponding to the value of the use of the protected good. 29

At the same time, the recipient of the benefit should take account of the fact that it should not demand all the profit that the offender has made, but only the part that is directly linked to the amount of impoverishment on his side.

In practice, it may happen that the remainder of the benefit obtained by the perpetrator derives from his own investments on which the injured entrepreneur had no influence. Therefore, the injured party cannot demand that those benefits which have not been obtained at the expense of his impoverishment, but thanks to his own efforts.

30 The perpetrator's fault is not relevant to the claim for undue advantage. At the same time, it may be relevant to the obligation to repay the advantage if the unlawful use or loss of the advantage obtained.

In the event of an action for unfair competition, the calculation of the extent of the damage, benefits, profits always poses considerable difficulties.

Given that under the concept of benefit, the profit is a broad spectrum of various types of rich, we are talking about both the actual profit enriched and the expenditure saved by it, which would be borne, for example, in the form of unpaid royalties.

‘The object of the claim for undue advantage is only the actual profit which derives directly from the unlawful exercise of the right to a trade mark. It does not constitute an advantage of saving expenditure by the infringer (e.g. unpaid remuneration for the use of the trade mark)’ 31 .

Consequently, the amount of the claim in question should leave the profit to the extent of impoverishment in the assets of the injured entrepreneur.

Furthermore, it should be borne in mind that it is possible to jointly pursue a claim for undue benefit together with a claim for compensation, the amount constituting the sum of the benefit claimed must not exceed the damage suffered by the injured entrepreneur. In other words, the amount of the benefit in question must not result in an entrepreneur becoming rich at the expense of the infringer. The doctrine also presents such a position[32].

Claims to judge an appropriate amount for social purposes related to the promotion of Polish culture or the protection of national heritage

The claim to judge an adequate amount for social purposes related to the promotion of Polish culture or the protection of national heritage has been regulated under Article 18(1)(6) u.z.n.k. The purpose of this claim is primarily to impose a perceived penalty on the perpetrator of unfair competition.

This way of punishing the perpetrator of the act does not fully find understanding in part of the doctrine, which critically looks at such a repressive function. second from the functions of the claim in question is a preventive function, deterring from acts of unfair competition.

Often, in practice, money claims provided for under Article 18 u.z.n.k. does not fully meet the expectations of the injured person, especially considering a number of requirements that the victim must demonstrate or prove what is actually difficult.

In the light of these difficulties, it happens that the perpetrator of unfair competition will be enriched at the expense of the injured entrepreneur, and such a prospect gives the perpetrator a feeling that illegal action gives profit and satisfactory effect.

Such a perspective is opposed to the objective of this claim, which consequently aims to reduce the cost-effectiveness of unfair competition and allows for a more complete performance of this function.

The grounds for the claim with Article 18(1)(6) U.z.n.k. is the culprit's fault. The degree of guilt in this case is not reflected in the possibility for the injured party to pursue a claim. However, a low degree of guilt should lead to a change in the amount of the social objective.

„The social objective should be "appropriate". Among the criteria to be applied to assessing the adequacy of the requested amount are: the size and frequency of the infringements, the range of addressees of the act, the mode of action of the perpetrator, the type of interests concerned by the infringement’ 33 .

Other criteria affecting the amount of penance are: the behaviour of the offender after judicial proceedings have been opened against him, in particular the respect or disregard of any prior provision for granting the security; the severity of the effects of the act on the injured entrepreneur.

Because of a similarity to the institution of the settlement of the regulated compensation under Article 448 k.c., when assessing whether the amount of penance requested is appropriate, the directives developed in the case-law against the provisions laid down may also be used in an auxiliary manner.

In particular, the amount claimed may depend on the degree of fault of the offender, the extent and intensity of the harm, the form and extent of the negative consequences resulting from the act.[34].

Included in the recipe Article 18(1)(6) u.z.n.k., the wording of the "judgment (...) for a given social purpose" is vague. It should be borne in mind that the award of the benefit should only take place in favour of a particular legal entity that will be able to enforce that claim in enforcement proceedings in the future. Such entities may include foundations, associations, but also commercial law companies and natural persons who meet the criteria set out above. Under Article 18(1)(6) U.z.n.k.

The law allows the benefit to be judged directly in favour of the claimant, but only if it meets the criteria, including cumulatively judging it with the settlement of monetary claims envisaged under Article 18(1)(4) and 5 u.z.n.k. However, if the beneficiary of the benefit carries out other additional activities, the amount charged may be used exclusively for the purposes listed above under Article 18(1)(6) U.z.n.k.

At the time when the court decides to pay the amount to a particular beneficiary, once that judgment has been finalised, it is only that entity that has the right to have that amount in its entirety. At this moment, the reason – the injured entrepreneur – is losing the ability to dispose of this amount in any way.

The execution of the claimed benefit depends on the decision of the beneficiary, who becomes a creditor within the meaning of the Code of Civil Procedure on enforcement proceedings and is entitled to conduct in his own name and on his own behalf the amount ordered by the defendant.

The beneficiary is also entitled to apply for a declaration of enforceability to a judgment in the field of the penitentiary judgment (Article 782 k.p.c.). The creditor in the enforcement proceedings is the person for whom the benefit to be recovered was judged.

The position of the enforcement creditor does not always coincide with that of the plaintiff in the process (...). Nor do they always... in enforcement proceedings appear as parties to the same entities as in exploratory proceedings)[35].

Summary

Content of the provision Article 18(1) The anti-unfair competition Act contains a catalogue of claims with which an entrepreneur whose interest has been damaged or threatened may appear.

In the event of unfair competition, the trader may demand: the omission of unlawful actions; the removal of the effects of unlawful actions; the submission of a single or multiple statement of appropriate content and in an appropriate form; the compensation of the damage caused, on a general basis; the issue of undue benefits, on general principles or the determination of an adequate amount of money for a given social purpose linked to the promotion of Polish culture or the protection of national heritage – if the act of unfair competition was blamed.

These claims can be claimed together or only some of them.

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