Trademark use in public procurements: anti-monopoly authority finds no unfair competition

• The defendants took part in public procurements for the supply of Beckman Coulter products, even though they we not duly authorised to use the mark
• The anti-monopoly authority considered a range of criteria based on competition law
• As all four criteria were not met, the authority found that there was no unfair competition on the defendants’ part

If a company has trademark rights, they may serve as an advantage in a public procurement procedure over other participants that have no such rights.

Background

The case involved several Belarusian companies supplying medical devices (including some of foreign origin). These companies participated in public procurements, under which medical devices marked with the trademark BECKMAN COULTER had to be supplied to Belarusian state organisations. The claimant, one of the Belarusian participants, was an of~cial supplier of Beckman Coulter products in Belarus, and was duly authorised to use the trademark BECKMAN COULTER. The other participants (‘the defendants’) were not authorised to use the trademark, but stated otherwise during the public procurements without presenting any evidence in that respect.

The claimant argued that the defendants had no right to import and sell products bearing the trademark. Therefore, it applied to the Belarusian anti-monopoly authority, claiming unfair competition on the defendants’ part. According to the claimant, the defendants had misled the organisers of the public procurements. As a result, supply agreements were concluded with the defendants, which were unable to supply the respective medical devices bearing the trademark. Eventually, the claimant supplied these medical devices.

Decision

Following the anti-monopoly investigation, in late March 2024 the anti-monopoly authority found that there was no unfair competition on the defendants’ part. While deciding on the case, the authority considered a range of criteria based on competition law, which may be seen as an unfair competition test. All criteria should be met to establish that unfair competition has occurred.

First criterion: competitive relations in the commodity market

The claimant and the defendants were competitors. According to the anti-monopoly authority, the parties carried out their business activities in the same product market (medical devices) and geographical market (Belarus). The first criterion was thus satisfied.

Second criterion: acquiring advantages in entrepreneurial activities

The anti-monopoly authority found that the defendants had not acquired advantages in entrepreneurial activities. The reason was that the defendants did not supply the medical devices marked with the trademark and did not receive additional pro~ts, even though they participated in the public procurements. Moreover, such supply was impossible because the defendants had no right to use the trademark, including via the supply of medical devices bearing the mark. Therefore, the second criterion was not satisfied.

Third criterion: violation of Belarusian law or of the requirements of good faith and reasonableness

The authority found that the defendants’ actions contradicted the provisions of the anti-monopoly law:

• The defendants’ behaviour could mislead business entities: the defendants entered into public procurements knowing that they had no right to sell and distribute medical devices bearing the trademark.
• The defendants violated the principle of good faith: they knew that the public procurements required due authorisation to use the trademark, but still participated.

The third criterion was thus satisfied.

Fourth criterion: causing loss/damage to the business reputation of competitors

No possibility to cause loss/damage to the claimant’s business reputation was established. The reason was that the agreements on supply of the medical devices bearing the trademark were eventually concluded with the claimant.

Therefore, the fourth criterion was not satisfied.

This article first appeared on WTR Daily, part of World Trademark Review, in January. For further information, please go to www.worldtrademarkreview.com.