Antitrust authority refuses to rule on trademark dispute

The Central Preventive Commission has outlined new stricter criteria to delineate unfair competition claims from trademark infringement claims, thereby limiting antitrust authorities' jurisdiction in cases involving trademark infringement.

Under the old regime, the jurisdiction of antitrust authorities extended to certain types of trademark infringement claim. The manufacturer of a trademarked product could initiate legal proceedings before the antitrust authorities against a manufacturer of a similar product that imitated the branding, colours or other aspects of the original product. It was argued that such practices constituted unfair competition, since fake products are sold at much lower prices and benefit from the legitimate product's prestige.

The decision of the Central Preventive Commission in J S Staedtler GmbH & Co v Comercial Golden House Limitada (CPC 1226-2002) highlights a new stricter approach to the differentiation of unfair competition and trademark infringement law.

J S Staedtler, a pencil manufacturer and owner of the registered trademark STAEDTLER, brought an unfair competition suit against Comercial. Staedtler argued that Comercial was selling pencils that were an exact copy, save minimal differences, of its STAEDTLER NORIS CLUB brand of coloured pencils.

Comercial contended that its pencils were labelled with the phrase 'Victor Noris Club', not 'Staedtler Noris Club', and that the shape, colour and other characteristics of the packaging and content were common to a number of brands of pencil. It stated that there was no intention to imitate Staedtler's products or alter fair competition in this area. Comercial also argued that Staedtler's claim was for trademark infringement and not unfair competition. Therefore, the claim should have been brought before the Industrial Property Department.

The Central Preventive Commission agreed with the latter argument. The commission held that, although Comercial's behaviour could be considered an act of unfair competition, "given the existence of direct and immediate trademark regulations on the matter and on the jurisdictional bodies in charge of enforcing them, it is not for the antitrust authorities to decide on them."

Juan Pablo Egaña, Sargent & Krahn, Santiago