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Sunday, November 18, 2012

Unfair competition in the Philippines

Unfair competition in the Philippines is a wide ranging illegality, especially powerful since it can be civil or criminal. It is sometimes used against parallel importers or those selling outside normal distribution arrangements. See here for the tussles over the right to sell genuine Red Bull drinks. Another example has now surfaced.

The Philippines National Police Criminal Investigation and Detection Group (CIDG) conducted a raid in early November for pirated software. A shop called Datablitz at Robinsons Ermita mall was raided after a complaint by XPlay Online Games Inc., the distributor of NBA 2K13 and other entertainment software products. Instead of relying on copyright, which is owned by the US copyright holder EpicSoft, the basis of the raids was unfair competition as Datablitz was found to be selling original software but without any license to do so.
  
"By selling the NBA2K13 Products without authority from EpicSoft and/or XPlay, the exclusive distributor thereof in the Philippines, Datablitz, Inc. took a 'free ride' on the good will  and marketing excitement established by XPlay, thereby engaging in 'unfair competition' to the prejudice of-Xplay and all of its rightful distributors most of which are small retail outlets," said XPlay.


To be fair there are other allegations about how they took advantage of Xplay's marketing and promotion.

But really this is a parallel import of some type. Assuming Datablitz acquired the product legally, the effect of the unfair competition law is to prevent the sale of goods to consumers outside contractual distribution channels established by IP holders. Worse it makes it a criminal offence, meaning the police are used to enforce market partition.
 

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