Introductory considerations

To begin, and for better understanding, we will explain the distinction between competition law (antitrust) and unfair competition. Competition law is a branch of law that ensures market participants conduct business and compete in a way that does not disrupt the normal functioning of the market. In the Republic of Serbia, competition protection is primarily regulated by the Law on Protection of Competition. Competition law safeguards the public interest by protecting each market participant from unlawful practices of others, and it governs issues such as the permissibility of agreements between participants, abuse of dominant market position, and control of concentrations. The normal functioning of the market is based on the principle of optimal resource allocation according to the laws of supply and demand and equal conditions for market access.

On the other hand, unfair market practices—i.e., unfair competition—are regulated by the Law on Trade. The object of protection here is more of a private-law nature; unfair competition refers to actions by market participants that violate codes of business ethics and good commercial practices, and that cause or may cause harm to a competitor. Serbian law explicitly lists practices considered forms of unfair competition and provides the possibility of filing a lawsuit within a subjective period of six months and an objective period of three years. Although the scope of protection against unfair competition may appear broad, the enumerated examples show that it is closely linked to business reputation, intellectual property, and trade secrets of merchants and service providers.

What has changed since 1896?

Back in 1896, Oliver R. Mitchell wrote about the emergence of unfair competition, linking it to trademark protection. The earlier development of trademark law had positioned it as an independent legal field, while unfair competition, according to Mitchell, represented a more generic concept. He cites the case Knott v. Morgan from 1836 as the first (or nearly the first) case related to unfair competition—where the defendant attracted customers through misrepresentation, or as Mitchell described it, by “accumulating similarities,” essentially “dressing up” his brand to resemble that of the plaintiff. Acts of unfair competition did not consist of a single activity but rather a combination of actions and characteristics that revealed the defendant’s intent to make his products and/or services appear similar to those of the plaintiff.

In 1919, Charles Grove Haines, in his article for the Yale Law Journal, sought to describe unfair competition more precisely. He emphasized that the term was initially used in connection with trademark protection. Trademark protection was already legally defined, while unfair competition was adopted as a term to denote the harm caused when a trader attempted to present another trader’s goods as his own. Haines noted that the concept of unfair competition was expanding to include other types of conduct by which one trader inflicted harm on another and his business.

Today, unfair competition is a broad concept, the existence of which is determined in each individual case.

For more information, see our article on protection against unfair competition as well as our article on parasitism.

To add a domestic example: in a 2016 decision (Higher Court in Belgrade, P4 5/13, July 4, 2016), the plaintiff’s appeal was rejected and the lower court’s judgment upheld. The court found that the plaintiff had committed an act of unfair competition by registering a trademark without prior notice to the defendant, contrary to the principles of good faith and fairness, despite knowing that the defendant’s long-standing use of the name had established its recognition and meaning.

Mitchell was not far from the truth—unfair competition remains a generic concept encompassing many activities and must be assessed in each individual case. If you suspect that your actions or those of your competitors may fall under unfair competition, the consistent recommendation is to engage a law firm with expertise and experience in this field.

The global battle for trademark protection and defense against unfair competition – Christian Louboutin

We begin with the lawsuit between Christian Louboutin and Zara – in which Zara ultimately prevailed. In November 2000, Christian Louboutin registered a trademark in France for his famous red sole. Toward the end of the 2000s, Zara France began selling a collection of women’s shoes with red soles, prompting Louboutin to sue, claiming that one of Zara’s models resembled his Yoyo design. The Paris trial court ruled in favor of Louboutin, but the Paris Court of Appeal overturned that decision and dismissed his claims. Without delving into technical details, the appellate court held that Louboutin could not monopolize the red sole, reasoning that his French trademark appeared to protect a two-dimensional object. The court added that the outer sole is a functional aspect of a shoe and does not add distinctive character. Louboutin’s French trademark no. 003067674 was annulled, though he was permitted to file a new application specifying the Pantone shade of red and incorporating three-dimensional aspects.

In Christian Louboutin v. Yves Saint Laurent (2012), the U.S. Court of Appeals for the Second Circuit addressed whether a single color could serve as a trademark in the fashion industry. Louboutin sued YSL over its plan to launch a line of monochromatic shoes entirely in red, arguing that consumers might be confused by the red soles. The appellate court broke the analysis into several questions: whether a single color can qualify as a trademark in fashion and beyond; whether the red sole is functional; and whether it can be protected under the U.S. Lanham Act. The court concluded that if there is a contrast between the red sole and the rest of the shoe, protection is possible. However, YSL’s monochromatic red shoe lacked such contrast, and therefore no infringement occurred.

A new issue arose in 2015, when Louboutin attempted to register his trademark in Japan, unsuccessfully. The Tokyo court ruled that no one could exclusively own the famous red sole, describing it as a common design element in the footwear industry. The lawsuit, based on unfair competition, targeted shoe manufacturer Eizo Collection. The defendant argued that red soles in Japan were neither original nor distinctive, citing traditional footwear and modern examples. The court considered factors such as sole construction, pricing, and consumer perception. It held that luxury shoe buyers were unlikely to mistake Eizo’s products for Louboutin’s, since such purchases rely on clear brand identifiers like logos, labels, and retail environments.

Although Christian Louboutin has successfully registered his red sole trademark in more than 50 jurisdictions, the Japanese ruling illustrates how authorities differ in their approaches.

Finally, one victory: in September 2022, the Beijing Intellectual Property Court ruled in favor of Christian Louboutin against Guangdong Wanlima Industrial Co. Ltd. in an unfair competition case. The court noted that Louboutin had provided evidence showing that since 2011 he had sold shoes in China with significant sales volume. His sales, marketing, and media presence covered a wide territory, earning reputation and recognition in the relevant market. The court concluded that the red sole, as a decorative element, constitutes a sign with influence under China’s law on the prevention of unfair competition.

Is it time for new understandings?

Article 10bis of the Paris Convention for the Protection of Industrial Property defines unfair competition as any act of competition contrary to honest practices in industrial or commercial matters. Article 10bis explicitly prohibits:

• acts that may cause confusion, by any means, with the enterprise, goods, or industrial/commercial activities of a competitor;
• false allegations in the course of trade that are of such a nature as to discredit the enterprise, goods, or industrial/commercial activities of a competitor;
• indications or allegations the use of which may mislead the public as to the nature, manufacturing process, characteristics, suitability for use, or quantity of goods.

This article is considered to establish a flexible and minimal standard of protection against unfair competition, with emphasis on violations of honest business practices in industrial or commercial dealings. The WTO Panel in Australia – Tobacco Plain Packaging noted that the concept of honest practices also depends on temporal and market parameters.

The notion of unfair competition and the acts it encompasses evolve alongside technological development. Some authors point to the need for new provisions and more precise categorization of unfair competition in the domain of digital technologies. There are also doctrinal views suggesting that greater attention should be paid to the principle of competitive neutrality, avoiding excessive intervention in online competition so as to ensure equal business conditions.

The Chinese solution

Amendments to China’s Anti-Unfair Competition Law (AUCL) came into force on October 15, 2025. The revised law represents a new approach to regulating market behavior in the digital era, responding to changes brought about by the expansion of e-commerce, the development of artificial intelligence, and the digitalization of economic activities.

Regarding unfair competition, the law expanded protection against acts that may cause consumer confusion. The old law prohibited unauthorized use of well-known product names, packaging, and trade dress of other businesses—adequate for physical goods and services, but leaving legal gaps in the digital environment. The revised provision extends protection to a broader range of digital identifiers, including domain names and digital platforms, account names, mobile app names and icons, as well as interfaces and character designs in online games.

This provision is significant because it reflects the understanding that in the digital economy, brand identity is increasingly expressed through digital identifiers. Furthermore, the law sets a clear standard: if a rights holder can prove that a digital identifier of its brand has acquired a certain level of influence in China, it can be protected against unauthorized use likely to cause consumer confusion. The law also provides greater protection for the overall visual identity of a product or service that has acquired secondary meaning.

Why Is This Useful? On the internet, it is easy to replicate the look and feel of another successful online service. Trademark and copyright law provide protection to a certain extent, but often are insufficient to cover the entire user experience. Additionally, the new law introduces provisions protecting against improper acquisition and use of data lawfully held by another entity. In the era of big data, this reflects a broader understanding of trade secrets, encompassing customer transaction data, user behavior patterns, and analytical insights. As datasets, such information can represent significant competitive resources.

In lieu of a conclusion

The inevitable development of technology necessitates the redefinition of legal norms. The open question remains whether legislators will in the future opt for broader protection or a more flexible approach. Unfair competition is a concept that evolves in step with market demands and trends—a generic notion whose complex nuances are revealed only through the analysis of specific cases within a given temporal and market context.

Note: This text reflects the personal opinion of the author and does not constitute legal advice.

References:

• Oliver R. Mitchell, Unfair Competition, Harvard Law Review, Vol. 10, No. 5, 1896, pp. 275–298.
• Charles Grove Haines, Efforts to Define Unfair Competition, The Yale Law Journal, Vol. 29, No. 1, 1919, pp. 1–28.
• Agnieszka A. Machnicka, French Cour de cassation invalidates Louboutin’s red sole mark, Journal of Intellectual Property Law & Practice, Vol. 8, Issue 2, 2013, pp. 105–107.
• Martin Senfleben, Article 10bis of the Paris Convention as the common denominator for protection against unfair competition in national and regional contexts, Journal of Intellectual Property Law & Practice, Vol. 19, Issue 2, 2024, pp. 81–89.
• Xuan Wang & Xiugin Lin, China’s regulations on new types of unfair competition in the digital age: Internet Provision and Data Provision, Journal of Intellectual Property Law & Practice, Vol. 19, Issue 2, 2024, pp. 143–148.
• Paris Convention for the Protection of Industrial Property, March 20, 1883.
• Christian Louboutin S.A. v. Yves Saint Laurent Am. Holdings, Inc., 696 F.3d 206 (2d Cir. 2012).