Unfair Competition in Swiss Law (UCA/LCD)
The Federal Act against Unfair Competition (UCA/LCD) of 19 December 1986 protects companies and consumers against unfair commercial practices that distort fair competition. The UCA/LCD complements trademark law (TmPA/LPM), patent law (PatA/LBI) and copyright law (CopA/LDA) in the protection of commercial assets and the reputation of companies. PBM Avocats defends companies that are victims of unfair competition in Geneva and Lausanne.
Acts of Unfair Competition Under the UCA/LCD
The general clause of art. 2 UCA/LCD prohibits any deceptive or bad-faith commercial behaviour or practice. Art. 3 UCA/LCD lists specific examples:
| Unfair Act | Art. UCA/LCD | Practical Examples |
|---|---|---|
| Denigration | Art. 3 para. 1 let. a | False or excessive criticism of a competitor on social media |
| Misleading allegations | Art. 3 para. 1 let. b | False qualifications, fictitious titles, non-existent labels |
| Risk of confusion | Art. 3 para. 1 let. d | Copying the design of a competing product, imitating packaging |
| Breach of trade secrets | Art. 6 UCA/LCD | Using a former employer's client lists |
| Unfair comparative advertising | Art. 3 para. 1 let. e | Inaccurate comparison with a competing product |
| Abusive general terms and conditions | Art. 8 UCA/LCD | Unbalanced GTC imposed on consumers |
Denigration: Conditions and Defences
Denigration is one of the most common unfair acts in practice. To be established under art. 3 para. 1 let. a UCA/LCD:
- The allegations must relate to the products, services, prices, activities or reputation of a competitor
- The allegations must be inaccurate, misleading or unnecessarily hurtful (true and proportionate criticisms are in principle lawful)
- A connection with the competitive relationship is necessary (between competitors or in the relationship with clients)
Note: even true allegations may constitute denigration if they are formulated in a disproportionate, humiliating manner or if their dissemination exceeds the limits of fair criticism.
Civil Actions Provided by the UCA/LCD (art. 9-11 UCA/LCD)
- Action for cessation: request the court to order immediate cessation of the unfair practice
- Action for declaration: have the unlawfulness of a past unfair act declared
- Action for damages: compensation for the economic loss suffered
- Action for restitution of profits: restitution of profits made through the unfair act
- Provisional measures: in urgent cases, the court may order provisional measures (even super-provisional measures) very quickly, without the other party being heard
- Publication of the judgment: possibility of having the judgment condemning the unfair practice published
Criminal Sanctions for Unfair Competition (art. 23 UCA/LCD)
The UCA/LCD provides for criminal sanctions for certain serious unfair acts:
- Misleading allegations about goods or their origin
- Violation of manufacturing or trade secrets (economic espionage)
- Corruption in business relations (active and passive)
The sentence may be up to 3 years' imprisonment or a significant fine. Prosecution is in principle on complaint (art. 24 UCA/LCD), but certain acts may be prosecuted ex officio.
UCA/LCD and Trademark Law: Complementarity
The UCA/LCD and the TmPA/LPM (Trademark Protection Act) complement each other:
- The TmPA/LPM protects trademarks registered with the IPI and confers an exclusive right of use
- The UCA/LCD protects distinctive signs (unregistered trademarks, trade names, designs) against confusion and parasitism, even without formal registration
- An action may be based simultaneously on the TmPA/LPM and the UCA/LCD for maximum protection
Frequently Asked Questions About Unfair Competition in Switzerland
What is unfair competition in Swiss law?
Unfair competition (art. 2 UCA/LCD) is any deceptive or bad-faith commercial behaviour or practice that influences relations between competitors or between suppliers and clients. It may take the form of denigration, confusion, deception of clients, violation of trade secrets, aggressive practices, etc. It may be committed by natural or legal persons.
May damages be claimed for unfair competition in Switzerland?
Yes. Art. 9 UCA/LCD provides for several civil actions: action for cessation (stopping the unfair practice), action for declaration of unlawfulness, action for damages, and action for restitution of profits. The victim may also request publication of the judgment. Urgent provisional measures (super-provisional measures) may be ordered very quickly by the court.
Is denigration punishable in Switzerland?
Yes. Art. 3 para. 1 let. a UCA/LCD prohibits any denigration of the products, works, services, prices or business of another party through inaccurate, misleading or unnecessarily hurtful allegations. True allegations may also be unfair if they are formulated in an unnecessarily hurtful manner or if their dissemination is disproportionate to the purpose pursued.
What is the risk of confusion in unfair competition law?
The risk of confusion (art. 3 para. 1 let. d UCA/LCD) arises when a company uses distinctive signs (trademark, company name, design, packaging) that may be confused with those of a competitor. The UCA/LCD thus protects companies' investments in their distinctive signs, complementing trademark law (TmPA/LPM). Protection applies even without trademark registration if a sign is notorious.
Are there criminal sanctions in matters of unfair competition?
Yes. Art. 23 UCA/LCD provides for criminal sanctions (imprisonment or fine) for certain serious forms of unfair competition: misleading allegations about goods, violation of manufacturing or trade secrets, active and passive corruption in commerce. Criminal prosecution is in principle on complaint by the victim (art. 24 UCA/LCD).