New commercial loyalty law

Argentina
  • The Argentine Executive has passed a new law regulating commercial loyalty
  • The law contains sections on unfair competition, comparative advertising, advertising and promotion, denominations of origin and product identification
  • The law lists certain acts of unfair competition that are directly or indirectly associated with trademarks

 

A new law regulating commercial loyalty has been passed as an executive order of the Argentine Executive.

In relation to trademarks, the new law contains the sections outlined below.

Unfair competition

The new law lists certain acts of unfair competition that are directly or indirectly associated with trademarks, namely:

  • misleading consumers;
  • creating confusion;
  • breaching laws and regulations;
  • selling below cost;
  • unduly exploiting the reputation of others;
  • imitating or copying products, services or business activities in such a way that leads to confusion or undue profiting of third-party efforts;
  • acts of denigration;
  • violating trade secrets; and
  • conducting comparative advertising that is contrary to the provisions of the law.

Acts that take place in other jurisdictions are also prohibited, provided that they have an effect in or impact on the local market.

Comparative advertising

As part of the new law, which is aimed at penalising acts of unfair competition, comparative advertising that explicitly or implicitly refers to a competitor, its trademarks or the products or services that it offers will be authorised if all of the following requirements are met:

  • The advertising does not lead to fraud, error or confusion.
  • The advertising draws a comparison among products or services covering the same needs and this comparison is based on essential and demonstrable characteristics of the products or services, including price.
  • The aim of the advertising is to inform consumers about the advantages of the products or services advertised.
  • The IP rights of competitors are not infringed.
  • The advertising does not unduly profit from the reputation of a competitor’s trademark or denomination of origin.
  • The advertising does not display a product or service that is an imitation or copy of a product or service protected under a registered trademark or name.
  • Where the products are protected by a denomination of origin or geographical indication (GI), the comparison is drawn only with products of the same denomination or GI.

Advertising and promotion

In addition to prohibiting misleading advertising that contains inaccuracies and concealments, this section of the law prohibits:

  • offering or delivering prizes or gifts for the purchase of products or for contracting services when such prizes are awarded by chance;
  • promoting contests, competitions and raffles when participation therein is conditional on the purchase of a product or on contracting a service; and
  • delivering money or products in exchange for redeeming packs, conditioning materials, parts thereof or the product sold if the value given exceeds the current value of the products redeemed.

Denominations of origin

The new law prohibits the use of a denomination of origin – whether domestic or international – to identify products or services that are not sourced in the relevant area. This rule is supplemented by a definition of a ‘denomination of origin’.

Regarding denominations of general and widespread use, those that have become a name or type of product based on use may be freely used.

Product identification

Finally, the new law sets out a series of requirements that must be met by all products, whether made in Argentina or imported from abroad. The wording used on products, packaging, labelling or wrapping must be written in Spanish, except for:

  • foreign words of common use;
  • registered trademarks; and
  • other signs that – although not registered as a trademark – are used and may function as such.

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