Lookalikes: a wealth of confusion… brand-owners vs own-branders | competition law vs law of unfair competition

By Pat Treacy and Kate Shires

As this blog testifies, the tension between intellectual property (IP) and competition mainly plays out in the traditionally patent-heavy industries of hi-tech and pharma. Towards the ‘softer’ end of IP however — in the world of copyright, designs and trademarks — tensions between IP rights and competition also exist, although they play out very differently, both in the market and also in their legal framework.

One such area is lookalikes; they are an age-old problem as brand-owners try to protect their brands from copying or leveraging by retailers or others. Such conduct can be dealt with by the law in various ways. Several European jurisdictions have a law of ‘unfair competition’ to prevent parasitic copying. In the UK, IP law provides various options such as passing off or trademark or design right infringement. It has been argued that ‘competition law’ rather than ‘unfair competition law’ might provide a remedy for aggrieved brand-owners. Sometimes the two are confused; certainly the names do not help.

To add insult to injury, in the case of lookalike products created by retailers, the parties are often in a direct trading relationship: the retailer is both customer and competitor of the brand-owner. For brand-owners it can feel as if, when it comes to own brands, retailers call all the shots — after reflecting the general look and feel of a branded product, they are in a privileged position in their capacity as customers enabling them (with advance notice of the brand-owner’s price, marketing, product development/evolution and discount plans) to undercut the brand-owners on price (or to use them as a price umbrella, or a loss leader) while ensuring superior product placement for lookalikes on shelves well within the eye line and reach of consumers’ hands…

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