Plaintiff found to lack standing in unfair competition action
In Optica Alemana v Miranda, the Superintendency of Industry and Commerce has held that the plaintiff lacked standing to sue under the Unfair Competition Law (256/1996).
Optica Alemana opticians was established in Bogotá in 1922. Optica registered the trade name Optica Alemana with the Trademark Office in 1965 and the word mark OPTICA ALEMANA in 1999.
In 2003 an individual, Jeronimo Ezequiel Miranda, opened an opticians called Optica Alemana in the city of Apartadó (in the province of Antioquia). Optica filed an action for unfair competition against Miranda, claiming that Miranda's actions exploited the goodwill attached to its business and the OPTICA ALEMANA mark, thereby damaging its business.
In response, Miranda argued that he had never advertised or promoted his business with the intention of misleading consumers into thinking that his goods and/or services were those of, or were linked to, Optica Alemana opticians in Bogotá. Moreover, Miranda claimed that there was no evidence that Optica's goodwill had been damaged.
The Superintendency of Industry and Commerce (an administrative entity with jurisdiction over unfair competition actions) held that the infringement of IP rights does not always constitute unfair competition. The superintendency had to evaluate whether Miranda's acts:
- were unfair under the Unfair Competition Law; and
- had a negative impact on consumers and competitors.
Under the Unfair Competition Law, a plaintiff is entitled to file an unfair competition action if it:
- participates or demonstrates its intention to participate in the market at issue; and
- has suffered economic damages or demonstrates that its interests are threatened.
Based on these criteria, the superintendency found that Optica had failed to prove that it participated or intended to participate in the market of the city of Apartadó. Moreover, Optica did not provide any evidence that it had suffered damages as a result of Miranda's actions. Consequently, Optica lacked standing to file suit under the Unfair Competition Law.
Arguably, the superintendency erred in its interpretation of the applicable law. The Unfair Competition Law clearly states that a plaintiff is entitled to sue even if it does not compete directly with the defendant. The purpose of the law is to protect and guarantee the constitutional right to a fair and free economic environment. The term 'market' in this type of dispute refers to the whole country. Therefore, it would be inappropriate for a court to require that a plaintiff demonstrate its participation or intention to participate in the market in each region of Colombia.
Fernando Triana, Triana Uribe & Michelsen, Bogotá
Copyright © Law Business ResearchCompany Number: 03281866 VAT: GB 160 7529 10