Moldova’s New Competition Law Explained

A new Law on Competition no. 183 (the Competition Law) came into force in Moldova on March 14, 2013, replacing two earlier laws that regulated the acts of unfair competition:

• Law on Limitation of Monopolistic Activities and Development of Competition No. 906, from 1992; and
• Law on Protection of Competition No. 1103, from 2000.

The first law did not contain any provisions related to intellectual property rights, while the second contained one article dealing with the acts of unfair competition and, inter alia, the unauthorized use of IP objects.

The new Competition Law outlines unfair competition acts related to IPR infringement more clearly, in a separate Article 19 titled “Confusion”.

Although the provisions dealing with IPR infringement are similar to those that were covered by the previous legislation, the new Competition Law introduces two new criteria that should be met in order for the acts of unfair competition to violate the provisions of Article 19:

• The new law prohibits any unauthorized use of trademarks, business names, industrial designs or utility models, which may cause confusion with another company, its products or commercial activities; and

• The new law prohibits the copying of the form, packaging or trade dress of goods of another company, or copying of advertisements, if such acts may affect the interests of the company.

The first criterion was possibly introduced in order to harmonize the unfair competition and the IP, particularly trademark, legislation. However, it is not as obvious why the second criterion has been introduced into the Competition Law. This additional criterion may become an obstacle for protection of IPR, as it will require additional interpretation by the courts regarding what “affecting the interests” means for the purposes of this provision, as well as additional efforts of claimants to prove that their interests have been affected.

In accordance with the new law, unfair competition claims are considered by the Competition Council, a newly established independent authority reporting to the Parliament of Moldova. An unfair competition claim can be filed within six months from the date the claimant learned or should have learned about the acts of unfair competition infringing its rights. Upon receipt of a claim, the Competition Council considers it and decides whether an investigation of unfair competition acts is needed. If upon a preliminary consideration of the claim the Competition Council decides that the continuation of the alleged unfair competition acts may cause serious damage, it may apply interim measures to prevent or stop such damage.

If during the investigation the Competition Council confirms that an act of unfair competition has taken place, it can impose a fine on the infringer in the amount of 0.5 percent of its annual turnover in the previous financial year. In order to claim reimbursement for damages, the person whose rights or interests have been infringed should file an unfair competition court action with the corresponding court.

In other words, the mechanism for protection of IPR under the new Competition Law should be efficient for preventing IPR infringement, imposing interim measures and preventing further infringement. However, if the IPR owner is also interested in obtaining a compensation of damages from the infringer, he should seek protection through a court IPR infringement action or unfair competition action, which can be handled alongside the action before the Competition Council.

By: Taras Kulbaba

For more information, please contact Taras Kulbaba at our Belgium office.