should not deliver goods to certain firms which the association blacklisted. A retail druggist in Danzig sold these articles below the established price. Suit was brought under section 1 of the law of 1909 by the manufacturers' association, and also by an association of retail druggists organized for the purpose of fighting unfair competitive methods. It was shown that the defendant was fully cognizant of the conditions which attached to these identified articles, that he had procured his supply by unfair means, especially by deception and by causing a breach of contract on the part of certain middlemen. In answer to these charges the defendant claimed that the prices fixed by the manufacturers' association were excessively high and that the means used to maintain these prices were unfair. The court enjoined the defendant from securing these articles by unfair means and permitted the manufacturers' association to publish the judgment in five different papers for a period not exceeding two months.1 COMPELLING PRICE MAINTENANCE BY BOYCOTT OR INTIMIDATION.The boycott is the weapon most frequently used to compel price maintenance. Intimidation is also used for this purpose. Both acts may be prosecuted as unfair competition under the general provisions. The following cases illustrate its application:

A book dealers' cartel sought to maintain the prices fixed by the publishers by binding its members not to give rebates. To compel nonmembers to maintain the fixed prices it entered into an agreement with a large number of publishers not to deliver to those dealers who were designated by the cartel committee as having cut prices, or to deliver to them only at a reduced discount. The cartel also issued a circular letter at stated intervals containing the names of dealers to be boycotted. A dealer who was thus discriminated against brought suit against the cartel on the ground that the boycott was repugnant to good morals in the sense of sections 823 and 826 of the Civil Code and the circulation of his name as a price cutter was a disparagement in the sense of section 824 of the Civil Code and section 6 of the law against unfair competition of 1896. The Imperial Court refused to accept this view of defendant's acts. It said, however, that if the plan adopted by the cartel had threatened the existence of plaintiff's business, to the extent of weakening or undermining it and of substantially injuring his credit or his standing in the business world, it would have been repugnant to good morals and contrary to section 826 of the Civil Code.2

An association of merchants in Dresden addressed a circular letter to the proprietors of certain concerns which gave special price reductions, announcing that it would publish the names of such proprietors and would expose the unfairness of this practice. In the newspapers

1 Landgericht Danzig, Urt. v. 6. Juli 1911; Markenschutz und Wettbewerb, Bd. XI, S. 17. 2 Urt. v. 14. Dez. 1902; Entscheidungen des Reichsgerichts in Civilsachen, Bd. 56, S. 271.

it stated that this practice was not permissible and was against good morals. An association representing those favoring the practice of giving special rebates brought suit against the defendant association under sections 1 and 14 of the law of 1909 against unfair competition. The lower court enjoined the defendants from publishing the names of the rebate-giving proprietors and from stating that this practice of giving rebates was unlawful, holding that such acts would be repugnant to good morals and a violation of section 1. Upon appeal the Imperial Court affirmed this view. It also stated that section 14 was not applicable in this case, because the plaintiff only under the general provisions. The following cases illustrate this form of unfair competition:

ENTICING CUSTOMERS.-This is another class of cases prosecuted only under the general provisions. The following cases illustrate this form of unfair competition:

Defendant's store was located across the street from the store of a competitor. On one occasion defendant's husband followed two persons who were going in the direction of the other store and induced them to visit defendant's store. On another occasion an employee of defendant distributed handbills to persons going to the plaintiff's store, which contained statements laudatory of defendant's business. Most of these handbills were distributed directly in front of plaintiff's show windows and entrance. The employee distributing them even advised persons not to patronize plaintiff, but to go to defendant's store, where they could buy more cheaply. Suit was brought under section 1 of the law of 1909. The court held that these acts exceeded permissible competition and enjoined defendant from such practices.2

The former agents of an insurance company sent a circular letter to the policyholders of this company advising them to cancel their policies and take out new policies with them. The policyholders were asked to forward the notices of cancellation to the former agents and were supplied with envelopes for this purpose. They were also advised that the former agents would call upon them personally for the purpose of taking out the new policies. Action was brought under section 1 of the law of 1909. The court held that it was repugnant to good morals for the defendants to thus solicit the policyholders of the plaintiff company to sever their business connections with it and to establish business connections with them; that defendants had attempted systematically to entice a whole group of customers, and, furthermore, by requesting the policyholders to mail them the notice

1 Reichsgericht, Urt. v. 3. Mai 1912; Markenschutz und Wettbewerb, Bd. XII, S. 247. 2 Kammergericht, Urt. v. 4. Februar 1911; Markenschutz und Wettbewerb, Bd. X (1911), S. 220.

of cancellation, had attempted to procure a weapon which they might use at an opportune time to bring pressure to bear upon the plaintiff.1

If

SUBSIDIZING A STRIKE AGAINST COMPETITORS.-The unlawful acts of strikers may be actionable under section 826 of the Civil Code. the strike is instigated or subsidized by a competitor, it constitutes an act of unfair competition, which can be prosecuted either under section 826 of the Civil Code or section 1 of the law of 1909, or both. This practice is not covered by any of the special provisions. The following is a typical case (see also p. 262):

A goldbeaters' cartel induced a labor union, which was conducting a strike against two competing concerns not members of the cartel, to continue the strike for a year. The latter concerns brought suit against certain directing members of the cartel under section 826 of the Civil Code.2 The Imperial Court said in part:

If a business proprietor or a number of them wilfully induce a union of workmen, especially one of such size and influence as the German Metal Workers' Union, to forbid workmen belonging to the union to take employment with a certain employer, and if this happens for the purpose of making the operation of the latter's business impossible or difficult, and thereby eliminates competition, then this act of the proprietors concerned not only is repugnant to the principles by which persons of high mind and fine sense of propriety are guided in business, but it far exceeds that which according to the general public conscience and the moral conceptions of all reasonable and upright thinking persons is permissible in business competition.

COMPELLING EXCLUSIVE PATRONAGE. To injure a competitor by threatening to discriminate against persons patronizing the latter, in order to compel exclusive patronage, is unfair competition.

A steamship company which operated from Hamburg, Bremen, and Antwerp to several Australian ports threatened a large shipper with higher rates than those given in its regular tariff if he continued to patronize a competing group of sailing vessels. The shipper brought action under section 826 of the Civil Code to enjoin the steamship company from discriminating against him. The Imperial Court granted relief, holding that the act of the defendant was repugnant to good morals. The court said in part:

According to the prevailing ideas of propriety and honesty in business the act of a shipping company which excludes an individual or even a certain group of individuals from the general tariff rates announced to the public is an infraction of good morals if it is done for the purpose of unfair competition.

1 Kammergericht, Urt. v. 3. Jan. 1912; Die Rechtsprechung der Oberlandesgerichte, Bd. 25 (1912), S. 341.

2 Urt. v. 2. Feb. 1905; Entscheidungen des Reichsgerichts in Civilsachen, Bd. 60, S. 94, 104.

3 Urt. v. 11. April 1901; Entscheidungen des Reichsgerichts in Civilsachen, Bd. 48, S. 114, 127.

DISLOYALTY OF FORMER EMPLOYEES.-The unfair acts of employees in accepting bribes for giving a competitive advantage to another or in revealing the secrets of commerce and industry, as already noted, are made penal offenses by section 12, second paragraph, and section 17, first paragraph, respectively of the law of 1909. The second paragraph of section 17 also makes it a penal offense for ex-employees to disclose or utilize trade secrets confided to them or obtained unfairly by them during their employment. Other unfair practices of ex-employees, however, may be ground for civil suits under the general provisions. A case of this kind follows:

A mechanical engineer while employed in a factory acquired knowledge of the construction of a machine. At the conclusion of his employment he made use of this information for his own profit, and also hired one of the employees of the factory to help him operate the machine. Suit was brought against him under section 826 of the Civil Code. The Imperial Court held that it was not repugnant to good morals for anyone to make use of the knowledge which he had acquired in the business of another, even if it was a secret of manufacture or trade, unless while employed he secretly and without the consent of his employer made drawings of the machine or committed some other act of similar nature. The court also held that it was not repugnant to good morals to hire the employee of the factory, since it was not shown that there was any breach of contract or other violation of contractual obligations. The court declared, however, that if it was established that the defendant from the beginning proceeded with the idea of competing against the plaintiff and, during his employment, through a violation of his contractual obligations, procured the data needed for this purpose, the decision would be justified that his whole course of action was contrary to good morals.1

DISPARAGEMENT.-Cases involving disparaging statements appear to be prosecuted more frequently under section 1 of the law of 1909 and section 826 of the Civil Code than under the special provisions of sections 14 and 15 of the law of 1909. A large number of cases of disparagement are prosecuted annually under these two general provisions. A few examples follow:

Defendant placed two large placards in his store, where they might easily be seen and read by every visitor, as follows:

No business can give away 5 per cent as a present. Trading stamps must always be paid for. A wise buyer, therefore, buys only where no trading stamps are given.

Suit was brought under section 1. The court held that this announcement of the defendant did not, as the defendant claimed, represent simply an opinion, which the one who reads it may or may not

1 Reichsgericht, Urt. v. 29. März 1912; Markenschutz und Wettbewerb, Bd. XII, S. 404.

share. On the contrary, the defendant had made the positive statement of fact that every person who buys in a store that grants trading stamps must pay a higher price than he who buys in a store that does not grant trading stamps. The defendant was also aware that it was impossible to adduce proof of his claim. He had, nevertheless, made his statement, relying upon the guilibility of a part of the public, in order to discredit the trading-stamp stores by passing off a wholly vague statement as an established fact and in exploiting the gullibility of the public. By that means he attempted to draw to himself the customers of the trading-stamp stores. Such a method, amounting to a deception of the public, was held by the Imperial Court to be unfair and repugnant to good morals.1

A person who had obtained a court decision against a competitor for unfair competition published the decision as an advertisement in the newspapers during the Christmas shopping season, several months after the judgment was obtained. The advertisement was set in heavy type, a conspicuous title and a heavy black border, so that it would attract special attention. Suit was brought under section 1 and the court held that the unauthorized publication of the decision at the particular time and in the manner noted was contrary to good morals and therefore a violation of the section invoked.2

Defendant on two occasions published some disparaging statements regarding the product of a competitor. Suit was brought under sections 1 and 14 of the law of 1909 against unfair competition and section 826 of the Civil Code. It was shown that as the statements were true there was no violation of section 14. But the lower court held that under certain circumstances the circulation of true statements might be repugnant to good morals in the sense of section 1, and on this ground enjoined the defendant from publishing certain of the statements. Upon appeal the Imperial Court overruled this view, holding that the circulation of true statements for the purpose of competition was permissible, except under special circumstances, such as when the facts were no longer of interest to the public and such circumstances were not found in this case.3

Brewing interests in attacking the mineral-water manufacturers, who made besides so-called nonalcoholic drinks, published and distributed a pamphlet containing the following statements:

And as for the so-called nonalcoholic drinks, very suspicious chemicals were found therein, in addition to an alcoholic content of as much as 2 per centthat is, as much as in a light beer-and a customary quite insipid taste. Anilin, to give a very beautiful color, which is always the best in this "hell brew";

1 Reichsgericht, Urt. v. 28. Oktober 1913; Das Recht, 1914, Beilage No. 268.

2 Oberlandesgericht Kiel, Urt. v. 25. März 1913; Markenschutz und Wettbewerb, Bd. XIII, S. 328.

Reichsgericht, Urt. v. 20. März 1914; Markenschutz und Wettbewerb, Bd. XIII, S. 489. 30035°-16-42