Product Copying – Can a Competitor Copy Your Product If You Haven’t Protected It?

Product copying by a competitor may constitute an infringement of your rights even when the product as a whole has not been formally protected. Legal protection depends on what has been copied: a name or logo may be protected by a trademark, the appearance of a product by an industrial design, a technical solution by a patent, and original photographs, texts and illustrations by copyright. In certain circumstances, the rules on unfair competition may also apply. It is therefore crucial to determine in good time which elements of a product constitute intellectual property and how they should be protected.

Example from Practice: A Similar Product, an Almost Identical Name

We recently encountered the following situation:

A client has had a product on the market, both domestically and internationally, for several years. Its trademark is protected in Serbia, as well as in the relevant foreign markets.

Employees noticed on social media that a competing company was announcing the launch of an almost identical product from the same category, under a very similar name. The names were not identical, but they had practically the same meaning (one of the key words had been replaced with a synonym). The similarity was such that it could very easily have caused confusion among consumers.

Once this was noticed, the competitor was warned that such conduct infringed intellectual property rights. In the end, the announced product never even appeared on the market.

However – what would have happened if the client’s product had not been protected?

We will see in the text that follows, because from the perspective of intellectual property law, a product is not necessarily one single thing. It may contain several different elements, each of which generally has a different protection regime.

Would You Be Completely Unprotected Without a Registered Trademark?

Even when you do not have a registered trademark, you have certain protection mechanisms available. However, the legal position would be different.

In the example from the beginning of the text, the problem was relatively easy to identify: the competitor intended to place a product from the same category on the market under a very similar name, while our client had a registered trademark.

But let us imagine a slightly different situation:

The competitor did not copy the product name. It came up with a completely different name, created a different logo and began selling under it a product that looks almost identical to yours – the packaging is almost identical.

Or the product does not resemble yours externally at all, but uses a technical solution that you spent years developing.

Or the product itself is sufficiently different, but your photographs, illustrations and parts of your text have appeared on the competitor’s website.

In all these cases, colloquially, we can say the same thing: “The competitor copied us.” From a legal perspective, however, these are several different things. Therefore, the first question that should be asked is:

What exactly was copied?

This is precisely why product copying cannot be viewed merely as a question of whether someone has made a product that looks like yours. A single product may contain several elements of intellectual property – a name, logo, external appearance, technical solution, software, photographs, texts, illustrations, packaging – and each of them may enjoy a different type of protection.

If a Competitor Has Copied the Name or Logo

Let us return to our example. A trademark protects a sign whose purpose is to distinguish the goods or services of one person from the goods or services of another. This may be a product name, logo, combination of words and graphic elements, or another sign that meets the requirements for protection.

Moreover, the competitor does not necessarily have to copy your sign literally. A problem may also arise when a similar sign is used for identical or similar goods or services, if there is a likelihood that such similarity may cause confusion among the public.

In our example, the products belonged to the same category, and the names, although not identical, were sufficiently similar to potentially cause confusion among consumers. The registered trademark gave its owner a clear right on the basis of which it could take action.

But what if the trademark had not been registered?

The situation would then be more complex. Long-term use of a particular name is not the same as having a registered trademark. Depending on the specific circumstances, protection may also be sought on other grounds – for example, unfair competition, infringement of rights to a business name, or copyright. However, the position of a company that has protected its sign by registering a trademark in good time is significantly more favourable.

In other words, the value of trademark registration lies precisely in the fact that you have resolved the issue of rights to the sign before a conflict arises.

If the Appearance of the Product Has Been Copied

Let us now change the example: the competitor has come up with a completely different name, so there is no risk of confusion between the signs.

But when you place its product and yours side by side – they look almost identical.

In that case, we are no longer talking about trademark protection, but rather about the protection of industrial design.

When appearance is what makes a product recognisable on the market, product protection may involve precisely the protection of its design.

Industrial design protects the external appearance of a product or part of a product, as determined by its visual characteristics, particularly lines, contours, colours, shape, texture or the materials from which the product is made or with which it is decorated.

This can be highly significant for products where a distinctive appearance is an important part of their market value: packaging, furniture, lighting, fashion items, jewellery, tableware, devices and many other products.

Imagine, for example, that a company develops a highly distinctive bottle for its product. Over time, consumers recognise it even before reading the name on the label. If a competitor gives its product a different name but places it in an almost identically shaped bottle, the relevant issue is no longer whether the sign is protected, but whether it is copying the protected appearance of the product.

An industrial design may enjoy protection if it meets the requirements prescribed by law, including novelty and individual character.

However, this does not mean that the design must be registered before you first present the product to the public. The law provides for a certain grace period: if the design has been disclosed to the public by the author, the author’s legal successor or a third party on the basis of information obtained from them, such disclosure will not affect the novelty of the design provided that less than 12 months have passed before the filing of the application.

Therefore, the decision: “First we will see whether the product sells well, and then we will protect its appearance” nevertheless carries a risk.

The possibility of subsequent protection is not unlimited, and waiting for a competitor to appear may mean that valuable time for filing an application has already been lost. Therefore, it is better to consider design protection before the product is placed on the market or shortly thereafter, rather than only once a problem arises.

If a Technical Solution Has Been Copied

Sometimes the most valuable part of a product is not visible at all.

A company may have developed a new technical solution that allows the product to work faster or more efficiently, consume less energy, solve a particular technical problem or achieve a result in a different way from existing products.

This brings us to patent law. A patent protects an invention in any field of technology that meets the requirements prescribed by law – among other things, it must be new, involve an inventive step and be industrially applicable.

Therefore, not every good idea is patentable. It is not enough that you were the first to think that it would be useful to make a product that does something in a particular way. There must be a specific invention that meets the requirements for patent protection.

But once a company has developed a new technical solution, protection should not be left until later. Novelty is one of the basic requirements for patent protection. Therefore, publicly presenting a technical solution before checking whether it can be protected may create a serious problem.

In other words, if you have developed something that could be patentable, the issue of protection should be addressed before presenting it at a trade fair, publishing detailed information on a website or social media, or otherwise publicly disclosing the invention.

If Photographs, Texts or Illustrations Have Been Copied

Product copying, however, sometimes does not concern the product itself at all, but rather the content used to present it to the market.

Here we are considering, conditionally speaking, the simplest case: the competitor has copied neither the name, nor the appearance, nor the way the product functions. It has simply taken product photographs from your website, copied a description you wrote, or copied an illustration you used on the packaging.

We are talking about copyright, where there is a very important difference compared with the previous examples. Copyright arises upon the creation of a copyrighted work itself, provided that it meets the requirements prescribed by law.

Registration with a competent authority is not required for copyright to arise, which does not mean that anyone may freely copy and use a photograph, text or illustration simply because you have not “registered” it.

Companies also often encounter another issue here that has nothing to do with competitors: who owns the rights to the content that has been created?

If the photographs were taken by a professional photographer you engaged, the illustration was created by an external designer, and certain content was created by an agency you worked with, the fact that you paid for their work does not in itself answer every question relating to copyright. It is important that business and technical cooperation agreements with external associates clearly regulate rights to the results of their work.

Only once you know which rights you have can you properly assess which of your rights someone else may have infringed.

When Does Product Copying Become Unfair Competition?

The Trade Act defines unfair competition as an act by a trader directed against another trader that violates business ethics and good business practices and causes or may cause damage to another trader.

The law then lists certain examples of such conduct, and the most relevant for our purposes is the sale of goods bearing signs, information or a form that justifiably creates confusion among consumers regarding the origin, quality and other characteristics of those goods.

Product copying may also be relevant from the perspective of the rules on unfair competition.

The fact that a company has not registered a particular element of a product does not automatically mean that a competitor is permitted to present its product in a way that creates confusion among customers or to use the results of someone else’s work in a manner that constitutes unfair market conduct.

However, caution is required here. It is not enough to say: “Their product looks a lot like ours.”

The specific circumstances must be analysed – what was copied, how the products are presented, who they are intended for, whether there is a possibility of confusion, how the competitor has behaved and whether there are other elements relevant to the application of the rules on unfair competition.

This is precisely why product protection begins with identifying its key intellectual property elements. The legal situation is significantly simpler when a company identifies and protects those elements in good time than when, after a competing product appears, it tries to find a legal basis on which it can take action.

You Haven’t Protected Your Product – Does That Mean You Have No Rights?

If someone infringes your unprotected product, return to the initial steps. Let us assume that you spent two years developing a particular product.

You have the first sketches, prototypes, correspondence with designers and engineers, original files, contracts, invoices, photographs of different stages of development and documentation showing when and how the product was created. If another company merely claims “We have been using this for years, everyone knows we were first,” you have a fairly strong case.

Therefore, when relevant facts are being proven in proceedings, the difference between these two situations can be enormous.

At the same time, the opposite assumption is also incorrect: the fact that you were the first to create something does not mean that you can prevent anyone else from making something similar.

Product Protection Begins Long Before a Competitor Appears

As we have seen, a “product” is not a single intellectual property right. It is not decisive whether or not you have protected every individual segment of your product. The much more relevant question is:

what is valuable about your product, what distinguishes you from your competitors on the market, and which right can you use to protect it?

Product protection and potential product copying are issues that should be considered as early as possible.

If you discuss this while the product is still being developed, with appropriate legal support, you have the opportunity to choose what makes sense to protect, in which markets and in what way.

If you seek legal advice only when you see an announcement on social media of a competing product that looks or is named almost exactly like yours, product copying has already become a concrete problem, and the options available to you will depend on what you did – or did not do – much earlier.

In the case from the beginning of this text, the company took action before the disputed product even reached the market. That is certainly a much better position than trying to resolve the problem only once the two products are already sitting side by side on the shelf.

Petrović Mojsić & Partners Law Firm