Navigating India’s Fragmented Framework of Unfair Competition: A Case for Consolidation

As with other common law countries, India lacks a unified statutory basis for protection against unfair competition. While civil law countries have enacted dedicated statutes to address unfair competition, India has addressed unfair competition with a strong, though fragmented, statutory framework, with specific statutes, common law torts, and equitable actions to comply with its international obligations concerning protection against unfair competition.

India needs a single, cohesive statute which would cover all the facets of protection against unfair competition. However, creating a new regime from scratch may not be feasible. Instead, it would be more practical to amend existing statutes, such as the Trade Marks Act, 1999 (TM Act), in order to consolidate core protections through a clear, general prohibition on unfair competition that mirrors internationally accepted language already used in India’s Geographical Indications of Goods (Registration and Protection) Act, 1999 (GI Act).

The focus of this article is exclusively to analyze the necessity and feasibility of consolidating unfair competition protection within the TM Act through targeted amendments. Although other statutes, such as the Competition Act, 2002 and the Consumer Protection Act, 2019, provide complementary protection against unfair competition, their reform is beyond the scope of this analysis.

Existing Unfair Competition Regulations in India

Different Indian laws govern various forms of conduct considered unfair or anti-competitive. These include the following:

The Competition Act, 2002: This statute is the primary legislation regulating anti-competitive conduct, such as the abuse of dominant position, anti-competitive agreements, and combinations, that have, or are likely to have, an appreciable adverse effect on competition within India.

The Consumer Protection Act, 2019: This statute regulates unfair trade practices, including false and misleading advertisements, misrepresentation of goods or services, and deceptive pricing, among others. Section 2(47) offers a comprehensive definition of “unfair trade practice.”

The Trade Marks Act, 1999 (TM Act): This Act already addresses many facets of unfair competition; for example:

Section 29 addresses infringement of registered trademarks;
Section 27(2) preserves the common law remedy of passing off for unregistered marks; and
Section 30(1) permits comparative advertising by allowing the use of a registered trademark to identify goods or services, provided that:

1. Such use complies with honest practices in industrial or commercial matters; and
2. It does not take unfair advantage of, or cause detriment to, the distinctive character or repute of the trademark.

Although the TM Act does not define trade dress explicitly, it is dealt with by different provisions under the TM Act. For example, Section 2 includes definitions for “mark,” “trademark,” and “package,” which cover essential elements of trade dress protection.

Geographical Indications of Goods (Registration and Protection) Act, 1999 (GI Act): This statute goes a step further and explicitly refers to acts of unfair competition in Section 22(1)(b) as a form of infringement. The Act provides a clear and potent definition of “unfair competition,” in line with Article 10bis of the Paris Convention for the Protection of Industrial Property. It lays a strong legislative foundation that the TM Act should replicate.

Overall Framework and the Need for Reform

Taken together, these statutes demonstrate that the Indian legal framework, far from ignoring unfair competition, addresses it through a multi-pronged approach. The challenge is not a lack of remedies but rather the lack of a single, cohesive statute containing a standalone provision that prohibits unfair acts of competition in general. Making targeted amendments to the TM Act, which already addresses many aspects of unfair competition, could close this gap.

“The challenge is not a lack of remedies, but the lack of a single, cohesive statute containing a standalone provision that prohibits unfair acts of competition in general.”

Delineating Statutory Lacunae: Addressed and Unaddressed Forms of Unfair Competition in Indian Law

The TM Act effectively addresses direct forms of unfair competition, such as passing off and trademark infringement, but leaves significant gaps in relation to broader conduct contrary to honest commercial practices. It makes limited accommodation for comparative advertising through the “honest practices” standard and contains a degree of protection against disparagement through common law doctrines such as trade libel. However, these remedies require demonstrable confusion, misrepresentation, or reputational harm.

Parallel statutes, including the Competition Act, 2002 and the Consumer Protection Act, 2019, expand the regulatory framework to address anti-competitive agreements, abuse of dominance, and misleading advertisements, among others. However, these regimes remain issue-specific and contingent upon thresholds such as appreciable adverse effect on competition or demonstrable consumer harm. Consequently, although India provides a multi-pronged enforcement architecture, it does not address several significant forms of unfair competition.

Most notably, Indian law lacks a general “catch-all” prohibition against acts contrary to honest commercial practices, resulting in the exclusion of conduct such as parasitic competition, misappropriation of commercial value, and free-riding on another’s reputation, even in the absence of consumer confusion. Further, without a registered design or registered trademark, practices such as slavish imitation of product design can escape liability, unless they satisfy the stringent requirements of passing off.

In India, if a design can be registered under the Designs Act but is not, copyright protection ceases once the article has been industrially reproduced more than 50 times. This leaves a significant gap for creators of unique but non-registered industrial designs who find that competitors have “slavishly” imitated their aesthetics.

Furthermore, Indian courts have rejected doctrines such as “hot news” misappropriation, leaving data-driven enterprises vulnerable to the rapid replication of time-sensitive information. The absence of a codified trade secrets regime has widened this gap. Collectively, these omissions demonstrate that, while the existing framework addresses clear instances of deception and consumer confusion, it fails to capture a broader spectrum of unethical competitive practices, thereby underscoring the need for a single, cohesive statute covering all the facets of unfair competition.

International Models of Broader Unfair Competition Protection

The EU Framework

The European Union provides an exemplary model of embedding unfair competition protections within trademark law. Article 9(2)(c) of the EU Trade Mark Regulation (EUTMR) protects marks with reputation even against dissimilar goods or services where use would be detrimental to the mark’s distinctive character or reputation. This creates a standalone basis for infringement rooted in protecting against unfair free-riding and parasitic conduct. Additionally, Article 10’s extension to preparatory acts involving packaging demonstrates how trademark law can be leveraged to protect against broader competitive practices beyond traditional confusion.

The U.S. Lanham Act Framework

The United States provides another compelling comparative example through Section 43(a) of the Lanham Act. This section provides a robust unfair competition framework covering both registered and unregistered marks as well as a unified cause of action that businesses can use directly against competitors. Section 43(a)(1)(A) prohibits “false designation of origin,” which extends beyond registered trademark infringement to address any use of marks or trade dress likely to cause confusion about the source, sponsorship, or affiliation of goods. Section 43(a)(1)(B) addresses false advertising, prohibiting misrepresentations about the “nature, characteristics, qualities, or geographic origin”of goods or services. This provision has enabled American courts to address deceptive marketplace practices comprehensively within a single statutory framework. India’s TM Act, by contrast, lacks this consolidation.

The Blueprint for Reform: The GI Act’s Definition of Unfair Competition

The GI Act provides a ready-made, statutorily approved definition of unfair competition that serves as a perfect model for reforming the TM Act. Section 22(1)(b) of the GI Act defines infringement to include the use of a geographical indication in a manner that “constitutes an act of unfair competition.” Explanation 1 to Section 22(1)(b) goes on to define an “act of unfair competition” as “any act of competition contrary to honest practices in industrial or commercial matters.”

The second explanation of the section clarifies that the following acts shall be deemed to be acts of unfair competition:

(i) All acts of such a nature as to create confusion by any means whatsoever with the establishment, the goods or the industrial or commercial activities, of a competitor;

(ii) False allegations in the course of trade of such a nature as to discredit the establishment, the goods or the industrial or commercial activities, of a competitor; and

(iii) Geographical indications, the use of which in the course of trade is liable to mislead the persons as to the nature, the manufacturing process, the characteristics, the suitability for their purpose, or the quantity, of the goods.

The GI Act’s language is significant here because it directly mirrors the obligation under Article 10bis of the Paris Convention. Therefore, the GI Act not only recognizes unfair competition but also defines it in line with international best practices. This precedent is invaluable. The logical step forward is to import this well-established and internationally recognized definition into the TM Act, ensuring a single, cohesive statute that can deal with all forms of unfair competition.

“The GI Act provides a ready-made, statutorily approved definition of unfair competition that serves as a perfect model for reforms to the TM Act.”

Roadmap for Amendment: Strengthening the TM Act

To build a more robust and cohesive jurisprudence for unfair competition, India could make a series of strategic and targeted amendments to the TM Act.

Introduce a Standalone, General Prohibition on Unfair Competition

In essence, what unfair competition jurisprudence needs is the consolidation of remedies provided under different statutes. Introducing a new, standalone provision in the TM Act that establishes a broad, overarching prohibition against any “act of unfair competition” would be the most effective way of doing this. The explanation to this section should define unfair competition similar to that of the GI Act, drawn from Article 10bis of the Paris Convention. This would establish a general prohibition against all forms of unfair competition conduct, in alignment with international best practices.

Expand Infringement and Passing-Off Clauses

In addition to the new general prohibition, policymakers could make specific targeted amendments to the existing sections of the Act to further strengthen the framework. In particular, they could amend Section 29, which addresses infringement of registered trademarks, to explicitly include “unfair competition” as a distinct ground of infringement, supplementing this by adding an explanation clause that defines unfair competition, mirroring the clear and effective language of the GI Act.

Similarly, India could amend Section 27(2), which preserves the right of action for passing off of unregistered marks, to include “unfair competition” within its ambit. Policymakers could supplement this amendment by adding an explanation clause that defines unfair competition, mirroring the GI Act

Ensure Effective Remedies

To ensure the effectiveness of the proposed amendments, a corresponding amendment to Section 135, which stipulates relief in suits for infringement or passing off, is essential. An update to this section should explicitly include “unfair competition,” clarifying that plaintiffs who bring a successful unfair competition claim can avail themselves of the full range of remedies, including injunctions, damages, and an account of profits. This would remove any ambiguity and ensure the enforceability of the proposed provisions.

Together, these proposals form a coherent and practical roadmap for reform.

Comprehensive Provision Needed

While India does not lack statutory recognition for unfair competition, the law needs a standalone provision that can prohibit all acts of unfair competition. The fragmented remedies that are available create legal uncertainty and impose unnecessary costs on businesses. The current framework lacks comprehensive tools to combat the full spectrum of dishonest market practices.

India does not need a new statute to strengthen its unfair competition regime. The most pragmatic and effective path forward is to amend the TM Act in a targeted way by doing the following:

Prohibiting all forms of unfair competition conduct;
Incorporating a definition of unfair competition modeled on the GI Act;
Expanding the scope of infringement for registered marks and passing off of unregistered marks; and
Ensuring effective remedies.

These reforms would allow India to build upon its existing legal foundations while providing greater clarity and certainty for businesses, as they would offer stronger protection for brand owners and foster a commercial environment that is not only honest but fundamentally fair.

First published on the INTA Blog at:

https://www.inta.org/perspectives/features/navigating-indias-fragmented-framework-of-unfair-competition-a-case-for-consolidation/