Unfair competition encompasses a series of practices contrary to the principles of loyalty, commercial good faith, and honesty in the market. These practices may include actions such as customer diversion, disorganization, confusion, deception, comparison, imitation, among others, acts regulated under Law 256 of 1996.
The aforementioned Law aims to guarantee free and fair economic competition by prohibiting acts and behaviors known as "unfair competition," for the benefit of all market participants and the national economy, in accordance with Articles 333 and 334 of the Political Constitution. Thus, behaviors and acts that are unfair and have as their object or effect one of these behaviors established in the law, and furthermore, are contrary to good commercial customs, the principle of commercial good faith, and consumer decision freedom, are not only prohibited by the legislator but are also subject to penalties.
In order to prevent, protect, and penalize such acts and behaviors, the Law has granted to those legitimately aggrieved: the declaratory and condemnatory action; and the preventive or prohibitory action; however, such actions are subject to a prescription period for their exercise, regulated in the aforementioned Law 256 of 1996, specifically, in Article 23, as follows:
"ARTICLE 23. PRESCRIPTION. Actions for unfair competition prescribe in two (2) years from the moment the aggrieved party becomes aware of the person who committed the act of unfair competition and in any case, by the lapse of three (3) years counted from the moment of the act."
As observed, the prescription established for this type of actions aims to penalize inactivity, resulting in the extinction of the right and the respective action for its claim.
Similarly, the cited article presents two scenarios: (i) a subjective prescription after two (2) years from when the aggrieved party has knowledge of the unfair act or behavior; and, (ii) an objective prescription of three (3) years from the performance of the conduct or unfair act, regardless of whether they are continuous or instantaneous acts”
As observed, the prescription established for this type of actions aims to punish inactivity, attributing as a consequence the extinction of the right and the respective action for its claim. Likewise, the aforementioned article presents two scenarios: (i) subjective prescription after two (2) years from the legitimate party's knowledge of the unfair act or behavior, and (ii) objective prescription of three (3) years from the occurrence of the unfair act or behavior, regardless of whether they are continuous or instantaneous acts.
On this particular topic, recently, the Supreme Court of Justice in a judgment issued on October 10, 2023 (SC370-2023), held that the prescription referred to in the aforementioned Article 23 of Law 256 of 1996 establishes a special extinctive prescription term for this type of actions that begins to be computed or counted from the occurrence or performance of said acts or behaviors.
In the words of that Honorable Corporation:
"[…] the text of Article 23 of Law 256 of 1996 does indeed comprehensively regulate the extinctive prescription of acts of unfair competition, regardless of whether they are continuous or instantaneous. The reason is simple: omitting to differentiate between the moment when the behavior occurs to determine the day it prescribes, shows that this is indifferent and that both kinds of behaviors, continuous or instantaneous, have the same prescription rules.
[…]
It is highlighted that if the aggrieved party is aware of the unfair behavior, but not yet of its perpetrator, the subjective prescription term cannot begin to be counted. However, in any case, it cannot, in any case, exceed three years from the other form of prescription to be referenced later."
In conclusion, in our legal system, the calculation or computation of the extinctive prescription of actions for unfair competition does not differentiate between continuous or instantaneous acts or behaviors. They either prescribe after two (2) years "from the moment the aggrieved party becomes aware of the person who committed the act of unfair competition" and/or, in any case, prescribe after "three (3) years" following the occurrence of the act. However, it is crucial to prove for formulating the action for unfair competition whether it is objective or subjective prescription. Stated differently: it is fundamental to prove from which moment the infringer (defendant party) was known or identified, for which there are two (2) years for the exercise of the action; otherwise, there will be a prescriptive term of three (3) years counted from the moment when knowledge of the occurrence of the unfair act was known.
