Compared to the old competition legislation, the Competition Act regulates in a more detail the practices of unfair competition. Alongside other illegal practices1, Unauthorised Use of OIP is also deemed a practice of unfair competition.
In relation to Unauthorised Use of OIP, Art.19(1) of the Competition Act prohibits any actions that may cause, by any means, confusion with a competing undertaking, product or economic activity of a competing undertaking, and which are realised by partial or integral illegal use of a mark, service logo, name, design or any other objects of intellectual property, if such use may cause confusion with one legally used by another undertaking.
Unauthorised Use of OIP in the Competition Act versus intellectual property legislation
Different from the currently valid legislation on intellectual property2, the Competition Act takes a different approach when it comes to Unauthorised Use of OIP. The interdiction inserted by Art.19(1) of the Competition Act (see above) aims to develop a competing environment, whereas the Competition Act as such does not impose on undertakings the obligation to register intellectual property rights before invoking the stated norm. Under the intellectual property legislation, however, rights are generally conferred upon registration and have an individual character (ie, possibilities indicated in the intellectual property legislation are for the sole benefit of the holder of an intellectual property right).
Investigations of Unauthorised Use of OIP
Under the new legislation, Unauthorised Use of OIP is investigated by the Competition Council of Moldova (Competition Council). An investigation may be initiated only at the request of an undertaking whose interests are prejudiced.
A request to investigate acts of Unauthorised Use of OIP must be submitted in writing using a template submission approved by the Competition Council (Art.51(1) of the Competition Act). Failure to use the template is considered by the Competition Council only as an information communication (Art.51(4) of the Competition Act) and might not trigger an investigation.
The request to initiate examination of acts of Unauthorised Use of OIP is subject to a six-month statute of limitations (Art.14(5) of the Competition Act) starting from when the undertaking knew or should have known about the acts of Unauthorized Use of OIP committed by other undertaking(s). Failure to meet the statute of limitations is a ground for the Competition Council to refuse examination. Such failure does not, however, block the damaged undertaking from claiming prejudice separately in a civil (commercial) action (Art.14(6) of the Competition Act).
A Competition Council investigation generally consists of two phases: (i) the preliminary examination of a request (Art.53 of the Competition Act); and (ii) the investigation in fact (Art.55 of the Competition Act). The second phase can be initiated only if the Competition Council has reasons to suspect infringement of the competition legislation. For the purpose of an efficient examination and to avoid higher prejudices, the Competition Council may apply interim measures (Art.41(3) of the Competition Act) such as interdiction to use a mark or sell products.
Under the Competition Act, upon finalising an examination, the Competition Council may sanction the undertaking responsible for Unauthorised Use of OIP with a fine of up to 0.5% of its annual turnover registered in the previous financial year (Art.77(1) of the Competition Act). The Competition Act also provides solutions on how to sanction undertakings with no previous turnover.
It is not clear whether the fine applied by the Competition Council excludes, totally or partially, penal liability of the breaching undertaking. The Competition Act stipulates that the application of a fine by the Competition Council is a measure of derogation from Art.246¹ of the Penal Code. Hence, since the Competition Act does not reflect the extent of the applied derogation, it is not clear whether the derogation applies only to the fine, as a penal sanction, or also to other types of sanction (eg, imprisonment of natural persons or deprivation of the right to perform an activity by the breaching undertaking).
Competition Council sanctions are administrative. Accordingly, an undertaking that suffered prejudice from an Unauthorised Use of OIP may still bring civil (commercial) claims (Art.77(2) of the Competition Act). Sanctions against the infringing undertaking may be reliable proof of damages.
Different from the currently legislation on intellectual property, the Competition Act takes a different approach when it comes to Unauthorised Use of OIP.
1Eg, instigation to terminate the agreement with a competing undertaking, illegal use of the competing undertaking’s trade secrets, etc.
2Eg, Act No. 38⁄2008, Act No. 161⁄2007, etc.