prevention of corruption of employees and are somewhat similar to the English Prevention of Corruption Act of 1906 (see p. 534). These four sections dealing with unfair practices are worded as follows:

SEC. 1. Whoever as business proprietor or in the service of such an one circulates untrue statements concerning a competitor or his goods or industrial services against better knowledge or in a grossly negligent manner, which are adapted to injure the competitor's business or credit, is punishable.

SEC. 2. He is punishable

1. Who induces employees or workmen of a third party, or those who were such, to divulge factory or other business secrets of said third party.

2. Who makes use of or gives out the business secrets of a competitor, which he has learned through his own punishable conduct or through the disloyalty of third parties.

3. Who acquires the knowledge of such secrets by virtue of his office or as a court expert and then makes use of them in competition or gives them out.

4. Who as an employee or workman reveals the secrets of his business to competitors, whether for the purpose of competition or with the intent of doing an injury to the proprietor of the business.

SEC. 3. He is punishable who offers, promises, or grants to the employee or agent of a third party presents or other advantages in order thereby to gain a preference in competition for himself or a third party.

Punishable also is the employee or agent of a business undertaking who, for such a purpose, demands presents or other advantages or allows them to be promised him or who accepts them when offered.

SEC. 4. He is also guilty of punishable unfair competition—

1. Who in published announcements or through other communications that are intended for an extensive group of persons knowingly or in a grossly negligent manner makes untrue statements concerning business relations, for example, concerning the quality or the price of his goods, or concerning the size of the stock, or concerning the source of supply or the method of supply or the occasion for the offer, which statements are adapted to create the impression of an unusually favorable offer.

2. Who announces or lists at a certain price goods which he does not keep, whether he demands a higher price from the purchasers or does not deliver them these goods at all.

3. Who in retail trade for goods which are sold by weight or measure does not announce the price for full weight or measure nor maintain them in a sale. 4. Whoever in retail trade does not give the price of goods in Swiss currency. Sections 5 to 8 forbid the holding of closing-out sales except under permits issued by the proper authority on payment of fees prescribed. Each application for holding such a sale must show what goods are to be offered and the reason for the sale. For general closing-out sales permits are not to be issued oftener than once in two years, and then only in case damage has been caused by the elements or the party contemplates retirement, removal, or transfer to another town. Stock-reducing sales may be held twice a year, but none can be held during the latter half of December. These four sections are given below:

SEC. 5. The permission of the proper Government department is required for conducting a closing-out sale. Permission is to be granted provided the following legal provisions are met:

The pale and among of de sus lntended fie the closing-out sale, as Te, as De two be the 19 steven sie, the indicated in the written

The and descent of a desingost sale may only occur with the statement of the name of the firm

The Busingent sale stall be envodacted only in the existing business premises. Cx-price sues which have the character of a clsinzont sale come under the provisi as of this law.

Sic. & Permission for a total elesinzert sale stall be granted only in case of prinz wat of business, change of ownership, removal of the business to another bwality, or a vidents d'ade to the eircetta

As a rule, tip these owners of a business are entitled to make application for a pertiit for a total closingout sule who have sold similar goods in the same community for at least two years.

Tie totul closingont sale stall not last longer than a half year.

The repetition of such a sale before the expiration of two years after the close of the prowling one is not permittel

During a total closing-out sale the replenishment of goods is forbidden.

SEC. 7. Only those owners of a business are entitled to make application for a permit for a partial closing-out sale who during at least one year have sold similar goods in the same community.

For the second half of the month of December no permits shall be granted. A partial closing-out sale shall be permitted only twice during a year and only with at least a three months' interval. The duration of a partial closingout sale shall not exceed two weeks.

SEC. 8. For every permit to conduct a partial closing-out sale a fee of from 15 to 40 francs, and to conduct a total closing-out sale a fee of from 50 to 200 francs is to be paid.

Section 10. Germany.

INTRODUCTORY.—In combating the rapid spread of unfair business practices during the last half century German courts did not utilize general provisions of law, as the French courts did, but resorted in the main to special legislation. Although the principle contained in article 1382 of the French Civil Code prevailed in the law of a considerable part of the German Empire prior to the adoption of the present Civil Code, and especially in Prussia, the courts made practically no application of it to the field of unfair competition.1

The first attempts of the Imperial Government to curb unfair competition were contained in various laws for the protection of patents, trade-marks, and other forms of industrial property. Of these the most important was the trade-mark law of 1894, which adopted the first provision especially directed against unfair competition. It was shortly followed by the enactment of the special law of May 27, 1896, against unfair competition, which after 13 years was superseded by the new law of June 7, 1909.

Various provisions of the Civil Code, especially sections 823 to $26, have also been applied to cases of unfair competition, as well as several provisions of the Penal and Commercial Codes.

Fuld, Das Reichsgesetz gegen den unlauteren Wettbewerb vom 7. Juni 1909 (Hannover 1910), 8 2 6; Rosenthal, Handwörterbuch der Staatswissenschaften, 1909, Bd. 8 (Wettbewerb, unlauterer), 8. 799,

SPECIAL LAWS.

PATENT LAW.-Section 40 of the patent law of May 25, 1877,1 in addition to the penalties for infringement of patents, contains two paragraphs relating in a general way to the subject of unfair competition. They are as follows:

With a fine of not more than 150 marks or arrest is punished:

1. Whoever provides objects or their wrappers with a designation which is adapted to cause the mistaken idea that the objects are protected by a patent in accordance with this law.

2. Whoever in advertisements uses a designation upon his signboards, business cards, or in similar announcements which is adapted to cause the mistaken idea that the objects referred to therein are protected by a patent in accordance with this law.

This provision, as will be noted, makes the false claim or misuse of a patent right a penal offense. Civil actions to enjoin the practice and to recover damages can also be brought under other laws.

The practices forbidden by the two paragraphs of this section are regarded as acts of unfair competition, since they awaken the impression that the goods which are falsely claimed to be patented are more useful and more valuable than competing goods. The public may be deceived thereby and competitors injured.2

TRADE-MARK LAW.-Three sections of the trade-mark law of May 10, 1894, prohibit the usurpation or misappropriation of certain designations used to distinguish competing products. Section 14 relates to the misappropriation of names, firm names, and trademarks; section 15 relates to the misappropriation of decorations used as distinctive marks; and section 16 relates to the misuse of designations of provenance of a geographical nature. The language of these three sections is as follows:

SEC. 14. Whoever, knowingly or as a result of gross negligence, unlawfully provides goods, containers, or wrappers, or announcements, price lists, business letters, recommendations, bills, or the like, with the name or the firm name of another, or with a trade-mark protected by the regulations of this law, or puts on sale or sells such goods illegally marked, is bound to compensate the injured party for the damage.

If he has knowingly committed the act, he is also punished with a fine of from 150 to 5,000 marks or with imprisonment up to six months. The criminal prosecution takes place only upon complaint. The recall of the complaint is permissible.

SEC. 15. Whoever, for the purpose of deception in trade and commerce, provides goods or their containers or wrappers, or announcements, price lists, business letters, recommendations, bills, or the like, with a dress which within the particular branch of business is a distinctive mark of another for like goods,

1 Patentgesetz vom 25. Mai 1877, Reichsgesetzblatt, 1877, S. 501, S. 509.

2

* Allfeld, Grundriss des Gewerblichen Rechtsschutzes, 1910, S. 55.

3 Gesetz zum Schutz der Waarenbezeichnungen vom 12. Mai 1894, Reichsgesetzblatt, 1894, S. 441.

without his acquiescence, or whoever for the same purpose puts on sale or sells goods marked in this way, is obligated to the injured party for the injury, and is punished with a fine of from 100 to 3,000 marks or with imprisonment up to three months. The criminal prosecution takes place only upon complaint. recall of the complaint is permissible.

The

SEC. 16. Whoever falsely provides goods, containers, or wrappers, or announcements, price lists, business letters, recommendations, bills, or the like, with a national coat of arms, or with the name or coat of arms of a place, municipality, or larger communal organization, for the purpose of causing a mistaken idea regarding the quality and value of the goods, or who for a like purpose sells or puts on sale goods so designated, is punished with a fine of from 150 to 5,000 marks or with imprisonment not exceeding six months.

The use of names which serve to designate certain goods according to commercial usage, without intending to designate their provenance, does not fall under this provision.

In addition to registered trade-marks, these three sections protect family names, firm names, the exterior appearance of goods, wrappers or containers, and designations of provenance when used as distinctive marks of products. Section 16 of the law of 1909 against unfair competition affords similar protection to designations of estab lishments. (See p. 639.) The designations of products which have become generic are not protected by these provisions. Likewise according to section 16 of the Trade-Mark Law, designations which no longer refer to the provenance, but have become the common name of goods, are specially excepted.

The distinctive marks specified in these sections may be affixed to the products which they distinguish or they may be used on announcements and advertisements of various kinds regarding the goods. The use of such distinctive marks by others is considered an act of unfair competition, since it leads to confusion between products and thereby injures the rightful possessors.

During the passage of this measure in 1894 another provision of much broader scope was proposed, but was finally dropped, with the understanding that a special law regarding unfair competition should be introduced. Two years later, in accordance with this arrangement, the law of May 27, 1896, was enacted.

UNFAIR COMPETITION LAW OF 1896.-The Law of May 27, 1896,1 for the Suppression of Unfair Competition contained 16 sections, which dealt with the following practices: 2

1. Deceptive advertising of one's own goods or services-sections 1 to 4, inclusive.

2. Deception in respect to quantity or quality of goods in retail trade section 5.

1 Gesetz zur Bekämpfung des unlauteren Wettbewerbes vom 27. Mal 1896; Reichsgesetzblatt, 1896, S. 145–149.

2 Wassermann, Der Unlautere Wettbewerb nach Deutschem Recht (Leipzig, 1907), S. 9.

3. Disparagement or misrepresentation of another's business, goods, services, etc.-sections 6 and 7.

4. Misappropriation of another's business designations-section 8. 5. Unauthorized disclosure of trade secrets-sections 9 and 10. The last five sections of the law dealt with matters of procedure, compensation, etc.

The law of 1896 had a salutary effect in curbing the several varieties of unfair competitive acts specifically mentioned. All other forms of unfair competition remained beyond the reach of the law until this weakness was remedied by the application of section 826 of the new Civil Code, which became effective in 1900, and the enactment in 1909 of a new law against unfair competition of much broader scope, which supplanted the earlier law.

UNFAIR COMPETITION LAW OF 1909.-The Law of June 7, 1909,1 against Unfair Competition preserves the principal features of the earlier law, but makes certain additions and modifications which experience showed to be necessary. The most important additions are a general clause fashioned after section 826 of the Civil Code but confined to business affairs, a section relating to the corruption of employees, and several sections relating to bankrupt and closing-out sales. The law also extends to the employer, under certain circumstances, liability for the unfair acts of his employee. The penalties are also increased.

The new law contains in all 30 sections, which relate to the following practices:

1. Acts in business which are contrary to good morals-section 1. 2. Deceptive advertising of one's own goods or services-sections 3 to 5.

3. Methods of advertising and conducting closing-out sales or sales of goods from a bankrupt stock-sections 6 to 10.

4. Deception in respect to quantity or quality of goods in retail trade section 11.

5. Bribery or corruption of employees for competitive purposes— section 12.

6. Disparagement or misrepresentation of another's business, goods, or services-sections 14 and 15.

7. Misappropriation of another's business designations-section 16. 8. Unauthorized disclosure of trade secrets-sections 17 to 20. Sections 2, 13, and 21 to 30 contain provisions regarding definitions, procedure, penalties, compensation, the rights of foreigners, etc. General clause.-Section 1 of the law of 1909 provides that acts in business which are repugnant to good morals afford ground for an

1 Gesetz gegen den unlauteren Wettbewerb vom 7. Juni 1909; Reichsgesetzblatt, 1909, 8. 499-506. See full translation on p. 806.