Unfair Competition in Europe: Its Present Theory and Unfair Trade Practice

Abstract

1. Some time ago in this Journal, Mr. Derenberg 1 drew the attention of American jurists to the European concept of unfair competition. The interest of this comparison is notable because it offers a marked example of differing approaches and methods respecting a subject of universal application, which, in view of the very similar development of commercial and industrial activities in Europe and America, should rather give rise to uniform methods and results. Indeed, in America, the ban on unfair competition has led to extension of the law protecting trade-marks to cases which in reality do not involve passing-off. Thus, in 1918 the famous decision in International News Service v. Associated Press,2 placed a check upon profits gained solely from the exploitation of work done by others, but not without dissent. In fact, prohibition of unfair competition has not acquired in the United States the same general character as in Europe, but is to be seen in many different guises according to the cases. Thus, in some situations, an action for libel is appropriate, while in others the sole remedy lies in disciplinary action of a spontaneous and cooperative nature instituted by the interested parties through the National Better Business Bureau. There must also be considered the protection of free competition by administrative antitrust authorities and the intervention of the Federal Trade Commission. It even happens that conduct apparently repugnant to basic commercial propriety, such as advertisements based on disparagement of others' products or their servile imitation (which is the graver in view of the lack of protection of industrial patterns in the United States), are not unanimously condemned by American courts. It may be added that since the notable decision of the Supreme Court in Erie v. Tompkins in 1938,3 holding that in matters reserved to the states, which include commercial competition, the federal courts in diversity of citizenship cases must follow the laws of the state in which action is brought, any possibility of a consistent and uniform development of this branch of jurisprudence has been arrested.