Stopping acts of unfair competition

A competitor is diverting your customers through disloyal means. They copy your branding, trade name or packaging. They publicly disparage your products or services to your clients. They poach your employees to gain access to your files or know-how. Or they ride on your coat-tails to profit from your investment without spending anything themselves – this is parasitisme (free-riding), a form of unfair competition under French law that does not even require a direct competitive relationship between the parties.

These situations call for a swift response. The unfair competition action (action en concurrence deloyale) is grounded in Article 1240 of the French Civil Code, the general provision on tortious liability: any wrongful act causing damage obliges its author to make reparation. The French Supreme Court (Cour de cassation) recognises that an act of unfair competition necessarily causes commercial disruption. But to obtain compensation for material loss – lost profits, turnover decline, business disruption – the claimant must prove the damage. The lawyer plays a decisive role in building that case.

How we assist you

  • Building the evidentiary file and collecting witness statements
  • Pre-action investigative measures (Article 145 of the Code of Civil Procedure) to secure evidence before trial
  • Detailed letter before action (mise en demeure)
  • Interim proceedings (refere) to obtain a cease-and-desist order with penalty payments (astreinte)
  • Full trial before the Commercial Court to recover damages

Legal focus – Article 1240 of the French Civil Code

‘Any act of a person which causes damage to another obliges the person by whose fault it occurred to make reparation.’ This provision is the sole legal basis for unfair competition claims under French law. Fault is assessed objectively, by reference to accepted standards of fair commercial dealing. There is no need to prove an intention to cause harm: a mere departure from the norms of fair competition suffices.

The 5 stages of an unfair competition claim

1

Gathering evidence

2

Letter before action

3

Interim relief (urgent cessation)

4

Full trial on the merits

5

Appeals

Defending against an unfair competition claim

Being sued for unfair competition can expose your business to injunctions with penalty payments, substantial damages and a judicial publication order that harms your reputation. The claim may come from a direct competitor, a former business partner or a party with whom a contract has been terminated.

Not every accusation is well-founded. The claimant must prove fault, damage and a causal link between the two – the three elements of tortious liability. The Cour de cassation strictly controls the conditions: any injunction must be limited to the specific disloyal or parasitic conduct identified. The court cannot impose a blanket prohibition on carrying on a commercial activity in the name of unfair competition. This principle of proportionality protects the freedom of trade.

Our firm defends you at every stage of the proceedings. We analyse the allegations, verify whether the elements of tortious liability are made out, and where appropriate challenge the claimed loss and the claimant’s method of quantification. We represent your interests before the Commercial Court, the Court of Appeal and, where necessary, the Cour de cassation.

The four forms of unfair competition under French law

French case law distinguishes four categories of unfair competitive acts, each subject to specific conditions. Correctly identifying the applicable category determines the litigation strategy.

Confusion

Confusion consists in creating a risk that the public will confuse the products or services of two competing businesses. The Cour de cassation requires a global assessment: the court must consider whether the combination of various copied elements, taken as a whole, creates a likelihood of confusion. This form of unfair competition is common online. Typical examples include copying a website, imitating a trading name or sign, or reproducing packaging or branding.

Disparagement (denigrement)

Disparagement is the public dissemination of information likely to bring discredit upon a competitor, their products or their services. A recent judgment of the Commercial Chamber of the Cour de cassation clarified that merely informing third parties of a possible infringement, without holding a judicial ruling confirming it, constitutes disparagement. Disparagement may occur via social media, comparative advertising, press releases or in direct communications with clients.

Free-riding (parasitisme)

Free-riding is the act of riding on the coat-tails of another economic operator to profit from their efforts and know-how without incurring any expense. Free-riding differs from classical unfair competition in that it does not require a direct competitive relationship. A business in an entirely different sector may be held liable. The Cour de cassation has, however, set limits: a competitor who develops its own well-known motif in line with market trends does not commit an act of free-riding.

Disorganisation

Disorganisation covers conduct aimed at destabilising a competitor’s internal operations or the market as a whole. The most common instance is the systematic poaching of employees, but case law also sanctions the appropriation of a competitor’s confidential information brought by a former employee, even where that employee was not bound by a non-compete clause. The systematic violation of regulations to gain a competitive advantage also falls under the heading of market disorganisation.

Frequently asked questions

How do you prove unfair competition under French law?

You must establish three elements: fault constituting conduct contrary to fair commercial dealing, damage suffered, and a causal link. The most effective evidence is a bailiff’s report (constat d’huissier), carried out in premises or online. In complex cases, your lawyer can apply for pre-action investigative measures under Article 145 of the Code of Civil Procedure, enabling evidence to be gathered before proceedings are issued. An expert may also be appointed to quantify the loss.

Which court has jurisdiction over unfair competition in France?

If the dispute is between two commercial companies, the Commercial Court has jurisdiction. If one party is not a trader, the ordinary civil court (tribunal judiciaire) has jurisdiction. For anti-competitive practices or restrictive practices under Articles L. 442-1 et seq. of the Commercial Code, designated courts have exclusive jurisdiction.

What is the limitation period for an unfair competition claim?

The claim is time-barred after five years from the date on which you became aware of the disloyal conduct. Where the practices are ongoing – for example, a permanent imitation – each new act triggers a fresh limitation period.

Can you combine a passing-off claim with an unfair competition claim?

Yes, provided the unfair competition claim is based on facts distinct from those founding the intellectual property infringement action. This combination is common where a competitor not only infringes a trademark or copyright but also engages in independent acts of free-riding or disparagement.

What damages can be recovered?

Non-pecuniary loss is irrebuttably presumed: it suffices to establish fault. Material loss – lost turnover, lost profits – must, however, be proved by the claimant. Where the loss is particularly difficult to quantify, the courts may take into account the undue competitive advantage obtained by the wrongdoer, adjusted in proportion to the respective volumes of business of the parties. Our lawyers assist you in assessing and demonstrating your loss.