awarded damages. The plaintiff in this case sent circulars to his customers replying to the claims of the defendant, which circulars contained some incorrect statements regarding the latter. Counter suit was brought against the plaintiff and damages recovered by the defendant.1 A manufacturer paid a foreman of his competitor 500 francs for the disclosure of the process of glazing copper used in the factory where the latter was employed. The foreman also assisted the manufacturer to the extent of installing in his factory the apparatus necessary to carry on the competition. Suit was brought to enjoin the manufacturer from using this process, and also to recover damages from both the manufacturer and the foreman. The court held that the process did not have the character of originality and novelty which would make it a secret of manufacture, and therefore refused to enjoin the defendant manufacturer from using it, but it declared that the act of the manufacturer in subsidizing the foreman in order to obtain the process, and the act of the latter in assisting the manufacturer to inaugurate the competition, were unfair and rendered them liable for damages.2 A Parisian tailor, by offering a higher salary to a forewoman of his competitor and also by agreeing to pay all costs falling upon her in case of prosecution, induced her to break her contract for hire of services and to sign a contract with him. The competitor brought suit against him for damages. The court held that, in aiding an employee of a competitive house to break her contract by promising to take care of all pecuniary consequences thereof, the defendant had committed a wrong for which the plaintiff could justly demand reparation. Upon appeal the highest court confirmed the judg ment, holding that the acts of defendant exceeded the rights of free competition and constituted an offense of a nature to render him liable.3 An industrial concern, upon opening a new branch, hired two employees of a rival establishment, one of whom was experienced in the manufacture and the other in the sale of sewing cotton. A suit for damages was brought. The court rejected it, however, on the ground that the two employees had not violated any contractual obligations in leaving their former employers and the defendants had not committed any reprehensible act of competition in hiring them.* 1 Douai, 30 janv. 1912, Petit c. Paquin; Annales 1913, p. 80. This decision is regarded as important by the Annales in that the court seems to admit that it is lawful for a person to defend himself against the injurious statements of others by addressing a circular letter to his customers, providing the statements are correct. * Cass. rej., 28 nov. 1898, Lecomte c. Lambert et fils et Debeauvais; Annales 1899, p. 241. * Cass. civ., 27 mai 1908, Doeuillet et Cie. c. Raudnitz: Dalloz, op. cit., 1908, I, p. 459. 4 Douai, 15 juill. 1887, Wallaërt frères c. Boutry Droulers; Annales 1891, p. 306. DIVULGING SECRETS.-The divulging of the secrets of manufacture by employees constitutes a penal offense under article 418 of the Penal Code. The revealing of processes of manufacture not presenting novelty or newness, which is the criterion of a secret of manufacture within the meaning of article 418, and the revealing of trade secrets other than those of manufacture are not protected by the above article. Divulging a detail of administration or a means of control purely financial or a list of customers, for instance, is not prohibited by this provision, but constitutes an injurious act, making the author liable for damages in a civil action.2 Article 418 relates only to the disclosure of secrets by an employee during the term of his employment. If the disclosure is made after he has ended his engagement, the act is not a penal offense, but is actionable under article 1382 of the Civil Code as constituting a disloyal act on the part of the former employee, for which damages can be claimed. DISLOYALTY OF FORMER EMPLOYEES.-According to French law an employee, upon the termination of his engagement, while entitled to profit in every legitimate way from the knowledge and experience acquired during his employment, is under obligation not to use the information so acquired in such a way as to injure his former patron or to divert the latter's clientele. He commits an act of unfair competition, for example, if he retains a copy of the names and addresses of the clients of his former employer or other memoranda that would be useful to a rival house; also if before the expiration of his engagement he solicits the clients of his employer in the interest of the concern which he intends to establish or to join.3 A few cases illustrating these principles follow: An employee who was about to leave a certain firm in order to establish a business of his own copied a part of the ledger for his own use, and also the substance of letters addressed to the firm by its clients, and, finally, on his last trip made at the expense of his employers, he reserved for himself some of the orders which he had taken until he should become established. The court held such acts 1 Art. 418. Every manager, agent, workman of a factory who shall communicate or attempt to communicate to foreigners or to Frenchmen residing in foreign countries any secrets of the factory in which he is employed shall be punished with imprisonment from two to five years and a fine of from 500 to 20,000 francs. In addition, he may be deprived of the rights mentioned in article 42 of the present Penal Code for not less than 5 and not more than 10 years, counting from the day on which his penalty begins. If these secrets have been communicated to Frenchmen residing in France the penalty shall be imprisonment from three months to two years and a fine of from 16 to 200 francs. The maximum penalty pronounced by paragraphs 1 and 3 of the present article must be applied if it is a question of the secrets of manufacture of arms and munitions of war belonging to the State. Pouillet, op. cit., p. 1169. Pouillet, op. cit., pp. 1027–1029. to be unfair competition and awarded damages. Countersuit was brought in this case against the former employer for disparaging the ex-employee to the principal supply house and for trying to prevent the sale of raw materials to him. The court declared this act to be unfair competition, for which damages were awarded.1 In another case the court held that the former employees of a firm who write to the customers of that firm with whom they have been in touch in their capacity as employees, and who make use of that former position in the interest of their new employer, commit acts of unfair competition, rendering them, as well as the new employer, liable for damages.2 SUBSIDIZING STRIKING EMPLOYEES OF COMPETITOR.-This appears to be a rather novel form of unfair competition in France. The first important case occurred in Paris in 1913. The mechanicians of several taxicab companies went on a strike, as a result of which only about one-fourth of the number of taxicabs normally in service continued running. The proprietors of those taxis still in service subsidized the strike committee, thus prolonging the strike to their profit. The plaintiffs claimed that this was unfair as well as unlawful competition. The defendants maintained that the strike was lawful, and therefore, to aid it with funds could not be regarded as unlawful. The court rejected this argument, holding the acts to be at least unlawful if not unfair, and submitted the case to a referee to confirm the facts and ascertain the amount of damages. Upon appeal the lower court was sustained. The Court of Appeal of Paris said, in part: If the intervention in a labor strike by workmen belonging even to different unions is, in principle, lawful, and can not expose its authors to any action at law, it is on the express condition that this intervention take place without recourse to any unfair or unlawful procedure; a further condition is imposed upon the merchant or manufacturer whose competitor is the victim of the strike, namely, that of not favoring or encouraging in any way a cessation of his competitor's work in order to derive profit thereby; the rules of fairness in business are imperative on this point; to violate them is to commit a wrongful and reprehensible act which can give occasion for a suit for damages. The court in this case did not inquire specifically as to the existence of wrongful intent, an essential element of unfair competition, but adopted the convenient phrase "the wrongs set forth constitute acts of competition at least unlawful if not unfair."3 IMPLIED OBLIGATION NOT TO REENTER BUSINESS.-An agreement entered into between an employer and his employee or between the 1 Cour de Lyon, 29 juin 1904, Geoffray, Jacquet et Guillermain c. Maurage; Annales 1905, p. 34. Trib. civ. Seine, 30 juin, 1913, Massiot c. Baudin; Annales, 1914, p. 27. * Paris, 9 mai 1913; Faivre et autres c. Soc. Française des Automobiles de Place; Annales, 1914, pp. 10, 17. seller of a business and the purchaser or between an associate and his coassociates not to engage in a similar business is legal in France. if not unlimited in respect to time and space.1 In the absence of such agreements former employees are under no obligation to refrain from engaging at any time in a similar business in the same locality (see p. 585). In the case of the sale of business establishments, especially retail stores, however, the seller is obligated not to reestablish within a certain time or within a given locality, even if the bill of sale carries no clause to this effect. The sale of a business is understood to include not only the tangible property, but also the clientele and good will. Therefore should the seller reestablish himself immediately and draw to himself the whole or a part of his former clientele he would violate article 1625 of the Civil Code, which requires that the seller must deliver what he has contracted to sell, and he would also commit an act of unfair competition against the purchaser, who is apt to lose his clientele.2 In case the seller reserves the right to reestablish himself or reestablishes outside the sphere of activity of his former establishment he must refrain from all unfair means of competition, such as writing to his former customers. The following cases will illustrate the attitude of the courts on this question: The Dupont Co., at Périgueux, published a paper under the name l'Echo de la Dordogne. Upon the dissolution of the company the liquidator made an appraisal of the property, in which he did not place a definite value on the name, clientele, and good will, but, nevertheless, took care to set forth their importance. It was shown that the purchaser of the property in considering the price also gave due consideration to these factors, and especially to the fact that there was no other paper of this kind in the place. After the sale of the paper to plaintiff one of the former associates started a rival journal, to which he gave a similar name and which he pretended was a continuation of the earlier one. He sent copies to the former clientele and invited their subscriptions and resorted to various other practices injurious to the former publication. The Tribunal of Commerce ordered a cessation of the publication of the rival journal and awarded damages. Upon appeal the court of Bordeaux affirmed the decision, declaring in part as follows (p. 283): The sale or transfer of an industrial establishment with the clientele and the good will has as a result, in the absence of an agreement to the contrary, the prohibition of the seller or assignor from exercising a similar industry in the neighborhood or in the sphere of activity of the establishment sold. In the case of a voluntary sale or transfer the prohibition results from the very nature of the contract by application of article 1625 of the Civil Code. 1II. Allart, op. cit., p. 260; Pouillet, op. cit., p. 912. The court held, however, that in the case of a voluntary or forced auction sale the associates are bound only by an agreement not to reestablish, but such an agreement existed in this case, although disputed by defendant. The case was again appealed. The court of cassation confirmed the decisions of the lower courts, holding that the above agreement, which was unlimited as to time but limited to the Department of Dordogne, was legal and binding upon the defendant.1 A grain merchant sold his business and moved to another town. After several years he opened a competing establishment in the neighborhood of the one he had sold. The court held that while the seller of a business, after a number of years sufficient to permit the purchaser to definitely attach to himself the clientele, can establish in the same town a similar business, he can not establish himself in the immediate neighborhood of the former establishment with the intention of competing against the new owner.2 Section 4. Belgium. INTRODUCTORY.-The laws of Belgium respecting unfair competition are similar to those of France. Several special laws, especially the patent law of May 24, 1854, and the trade-mark law of April 1, 1879, contain provisions prohibiting certain unfair acts. Several provisions of the Penal Code are also applicable to such cases, especially article 191 relative to the usurpation of trade names, and article 309 relative to the divulging of secrets of manufacture. All unfair acts not covered by these special provisions are prosecuted under the general provisions of law contained in articles 1382 and 1383 of the Civil Code, which are the same as the corresponding articles of the French Civil Code. In 1914 a bill for a special law against unfair competition was under consideration by the Belgian parliament, but apparently was not adopted. The Government's bill was presented November 12, 1912.3 PENAL CODE.-The use of trade names, firm names, and names of organizations to distinguish products is protected by article 191 of the Penal Code which corresponds closely to the French law of 1824. (See p. 560.) The language of this article is as follows: ART. 191.-Whoever shall affix to manufactured articles or cause to be affixed to them by addition, curtailment, or by any alteration whatever, the name of a manufacturer other than the one who is the producer or the firm name of a 1 Bordeaux, 9 fev. 1885; Cassation, 16 mars, 1886, Laporte c. Paul Dupont fils; Annales 1886, p. 275. 2 Trib. civ. Lannion, 9 juin 1908; Henri Morvan c. Société Morvan frères; Annales 1908, II, p. 87. 3 Verhandlungen der Mittel-Europäischen Wirtschaftskonferenz in Budapest, 1914, S. 305. |