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This is in line with advanced thought, and in accord with the principles of the New Competition.
The law is a step in advance of older laws in that it extends to the employer, under certain circumstances, the liability for unfair practices by his employee.
Furthermore, the law has increased the maximum fines; it has added the possible punishment of imprisonment and payment of compensations to a maximum of 10,000 marks.
Remedies are by way of civil as well as criminal procedure. The civil remedies are actions for damages and for injunction. Criminal actions may be instituted either officially or privately.
Foreigners doing business within the German Empire are entitled to the benefits of this law only in so far as the laws of their own country give German merchants similar protection against unfair competition.
One of the most notorious cases of foreigners using the law of unfair competition for the protection of their business interests is connected with the famous Pilsen brewery. The original Pilsen brewery is an Austro-Hungarian firm. It has, under paragraph 16, succeeded before the German courts in a claim to the exclusive right to use the word "Pilsen for the beer brewed at its own brewery. Where the name "Pilsen" is to be used as a trade designation of a beer lightly brewed and in taste like the original "Pilsen," but brewed outside the original Pilsen brewery, the word "Pilsen" must be accompanied by some visible word or words clearly indicating the "non-Pilsen" origin of the beer.
In some cases the law treats acts committed abroad as offences committed within the German jurisdiction, e. g., letters containing offences against the law posted abroad, but received in Germany, or advertisements inserted in the foreign Press circulating in Germany.
The following is a schedule of paragraphs against unfair competition.
I. General clause; acts in course of business committed contra bonos mores.
2. What applies to "goods" applies also to agricultural produce, etc.
3. Action for injunction against unfair advertisements. 4. Penalty and (or) imprisonment for intentionally deceptive advertising.
5. Exception in case of "traditional” designations.
6. Sale of bankrupt's assets, if no longer part of bankrupt's estate, must contain no reference to the fact of bankruptcy.
7. (a) Advertisements of sale must announce reason of sale.
(b) Regulations concerning sales to be issued by superior administrative bodies.
8. Penalty and (or) imprisonment in case of restocking for the purpose of a sale.
9. (a) Selling off is to be regarded as a sale for the purposes of this law.
(b) Except in case of customary season sales, to be fixed by the superior administrative authorities..
IO. 10. Penalties or imprisonment for infringement of paragraphs 7 and 9.
II. Regulations for the retail sale of certain commodities to be fixed by the Federal Council.
12. (a) Penalty and (or) imprisonment in the case of wrongfully bribing employees for the purposes of competition. (b) The same penalty and (or) imprisonment to be inflicted upan employee accepting bribes.
13. (a) Persons entitled to bring action for injunction (under paragraphs 1 and 3; also under paragraphs 6, 8, 10 and 12).
(b) Liability to pay damages (sub-paragraph 3; also sub-paragraphs 6, 8, 11 and 12).
(c) Liability of employer for acts of employee committed (under paragraphs 6, 8, 10, 11 and 12).
14. (a) Statements capable of injuring business of a competitor, if not substantiated, give rise to actions for damages and injunctions.
(b) Confidential information supplied for reasons of a justifiable interest gives rise to an action for injunction only if untrue, and to an action for damages if the information is known to be incorrect by the person supplying it.
15. (a) Penalty and (or) imprisonment in case of false information concerning another's business given mala fide.
(b) Employer liable for such information given on the part of employee if made with employer's knowledge. 16. (a) Action for injunction against a person using another's name, etc., whereby a wrong impression might arise.
(b) Action for damages if person using such name ought to have known that a wrong impression might arise. (c) These remedies are granted also if certain other business contrivances are used.
17. (a) Penalty and (or) imprisonment for employe betraying business secret.
(b) Same consequences fall upon persons having (sub-paragraph 17 [a]) acquired knowledge of a secret to use it for purposes of competition.
18. Liability to penalty and (or) imprisonment if the person who is confidentially entrusted in course of business with a person's models utilizes them for purposes of competition, or communicates them to others.
The general principle of the law is stated in the first paragraph which is as follows:
"Whosoever commits in commercial intercourse for the purposes of competition acts which are contrary to 'good faith' can be brought before the courts, for the purposes of an injunction and the payment of damages."
It has been held that "acts" are deemed to be contrary to "good faith" if they are contrary to the sense of decency of the fair and just-minded among the class concerned; an act to fall within the operation of this general paragraph must have been committed in commercial intercourse, which is intended to embrace all acts which are undertaken for the purposes of "business"; the act must have been undertaken
with a view to competition. The value of this general clause is often questioned, chiefly because the judges are said to be inexperienced in commercial practices and have shown, as a rule, little ability in putting such general principles to practical use. The very fact that a later part of the law enumerates specific abuses increased at first the hesitation of the bench; it concentrates its attention upon these specific provisions, which, it argues, would be superfluous if the general clause were really intended for general application. But for the purpose of litigation the general clause is the most important provision of the law. Probably 99 per cent. of all actions against unfair competition are based upon it, solely, or jointly with other paragraphs. Its wording applying to all "acts contrary to good faith" is exceptionally elastic; it has in practice received a very wide interpretation by the higher courts, more especially the Reichsgericht, which is the Court of final instance. In consequence, this paragraph is now introduced into all pleadings, even if the action relies upon one of the other and more definite paragraphs. As a result of the decisions given by the Reichsgericht the lower courts are becoming more thoroughly imbued with the spirit of paragraph 1.
The criminal features of the law are not frequently resorted to, and cases of imprisonment are exceedingly rare. The penalties imposed are generally low.
Regarding the practical benefits of the law there is, naturally, a diversity of opinion, but that the law has a very pronounced effect in deterring unfair competitive practice there can be no doubt.
An Act To supplement existing laws against unlawful restraints and monopolies, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress Assembled, That "antitrust laws," as used herein, includes the Act entitled "An Act to protect trade and commerce against unlawful restraints and monopolies,” approved July second, eighteen hundred and ninety; sections seventy-three to seventy-seven, inclusive, of an Act entitled "An Act to reduce taxation, to provide revenue for the Government, and for other purposes," of August twenty-seventh, eighteen hundred and ninety-four; an Act entitled "An Act to amend sections seventy-three and seventysix of the Act of August twenty-seventh, eighteen hundred and ninety-four, entitled 'An Act to reduce taxation, to provide revenue for the Government, and for other purposes,' approved February twelfth, nineteen hundred and thirteen; and also this Act.
"Commerce," as used herein, means trade or commerce among the several States and with foreign nations, or between the District of Columbia or any Territory of the United States and any State, Territory, or foreign nation, or between any insular possessions or other places under the jurisdiction of the United States, or between any such possession or place and any State or Territory of the United States or the District of Columbia or any foreign nation, or within the District of Columbia or any Territory or any insular possession or other place under the jurisdiction of the United States: Provided, That nothing in this Act contained shall apply to the Philippine Islands.
The word "person" or "persons" wherever used in this Act shall be deemed to include corporations and associations existing under or authorized by the laws of either the United States, the laws of any of the Territories, the laws of any State, or the laws of any foreign country.