Every entrepreneur knows well that running a business involves various types of risks. One of these risks is the possibility of infringement of personal rights, which can deliver a serious blow to the company’s image. However, it is important to understand that a business’s personal rights are legally protected, and the individuals or entities whose personal rights are violated have specific legal remedies. In the age of the Internet and marketing largely conducted through websites and social media, this topic is even more relevant and deserves attention.
The business vs. the entrepreneur
To begin with, it is worth noting that the term “enterprise” (przedsiębiorstwo), according to the Civil Code, refers to an organized set of intangible and tangible components intended for conducting business activities. In this sense, the personal rights of the enterprise itself cannot be violated. However, it is entirely possible for the personal rights of the entrepreneur, a legal entity, or an organizational unit—which, although not a legal entity, is granted legal capacity (i.e., the ability to hold rights and obligations)—to be infringed.
Personal rights of the enterprise
The concept of an enterprise should be understood broadly, meaning that both a single-member limited liability company and an international corporation qualify as an enterprise. As a consequence of guaranteeing and protecting the principle of economic freedom, enterprises are granted subjective rights aimed at protecting the conduct of business activities. Among these subjective rights are personal rights, which the Polish legislator grants special protection because they represent socially recognized values considered essential, even decisive for the existence of a given entity. Protection of personal rights for legal persons and organizational units that are not legal persons but are granted legal capacity by law (so-called “imperfect legal persons,” e.g., a registered partnership) is provided by Article 43 of the Civil Code. According to this provision, regulations concerning the protection of personal rights of natural persons apply accordingly to legal persons. Legal persons benefit from protection of personal rights as laid out for natural persons because, given the similar nature and scope of protected values, it was unnecessary to duplicate the provisions.
Personal rights do not have a legal (statutory) definition; however, the legislator has provided several examples concerning natural persons that may indicate potentially protected values. Accordingly, for enterprises, protected personal rights may include, for example:
- freedom,
- image (reputation)
- confidentiality of correspondence,
- inviolability of premises,
- scientific, inventive, and innovative creativity.
The essence of personal rights lies in their open catalog, which means there is no exhaustive list of protected values. As a rule, protection is granted to socially accepted goods—those whose violation will almost always meet with ostracism and opposition. However, nothing prevents new types of values, which may develop due to technological progress and social changes, from being granted protection.
The Supreme Court aptly stated that the concept of a personal good should be related to the current level of technological and civilizational development, accepted moral and legal principles in society, and the existing types of social, economic, or even political relations. Furthermore, the notion of infringement of a particular personal good is dynamic over time and depends on specific environments. Consequently, the assessment of whether a personal good has been violated cannot be based solely on the individual measure of the injured party; it must take into account not only the subjective feelings of the claimant but also the objective reaction of society’s opinion.
Personal rights are non-material in nature; they cannot be expressed in economic terms and, consequently, cannot be valued financially. However, their violation may have financial repercussions for the injured party, causing damage and costs related to its remedy. Some personal rights can be commercialized—that is, their exploitation can generate profits for the entitled person or others, for example, by endorsing products with their name. Moreover, personal rights are inalienable, meaning one cannot renounce the right to protect their good name or privacy. It is only possible to refrain from enforcing these rights, but completely relinquishing them is impossible.
In the following part of the article, three specific examples of personal rights will be discussed, such as:
- trade secrets,
- identifying marks,
- goodwill of the company,
and also the consequences of their violation. It is worth noting in passing that for natural persons conducting business activity, the rules relating to the protection of personal rights of individuals will apply. However, due to the general nature of personal rights, the considerations regarding enterprises (legal persons and so-called incomplete legal persons) will also be relevant for individual entrepreneurs.
Trade secret
The concept of a trade secret is defined in Article 11(2) of the Act of April 16, 1993, on Combating Unfair Competition, according to which, a trade secret is understood as technical, technological, or organizational information of an enterprise, or other information having economic value, which, as a whole or in a specific combination and collection of its elements, is not generally known to persons who usually deal with this type of information or is not easily accessible to such persons, provided that the party entitled to use or dispose of the information has taken, with due diligence, measures to maintain its confidentiality.
The breach of a trade secret (its use or disclosure) constitutes an act of unfair competition.
Name, identifying signs
Every business has signs that distinguish it from other entities operating in the market. Primarily, this includes the name (which is the equivalent of a person’s first and last name), as well as the logo, trademarks used by the entrepreneur, other identifying marks, and the names of the products it offers.
In this context, it is worth noting the Act of 30 June 2000 – Industrial Property Law. According to the definition contained in this act, a trademark may be any sign that can be represented graphically, provided that such a sign is capable of distinguishing the goods of one enterprise from those of another. In particular, this refers to elements such as a word, drawing, ornament, color composition, three-dimensional form (including the shape of the product or its packaging), as well as a melody or other sound signal. According to the currently binding regulations, trademark protection is granted by the Patent Office of the Republic of Poland. Trademark protection is also regulated at the level of the European Union. The protection of trademarks is ensured through their registration.
Violations of personal rights in this area most often involve the use of someone else’s names, logos, or logotypes, or those that are deceptively similar.
Good name (reputation, goodwill) of the company
Every entrepreneur knows very well how important an impeccable reputation of their company is. Building a good name takes years and often requires a great deal of effort. For this reason, everyone strives to ensure that no one undermines the trust in the business they run.
The loss of a company’s good name cannot be directly translated into monetary terms, although in certain situations it may have financial consequences. In this context, it is worth noting the judgment of the Supreme Court of 9 June 2005 (case no. III CK 622/04), in which it was stated that the good name of a legal entity is associated with the opinion held about it by others, due to the scope of its responsibilities. This includes not only the reputation resulting from the entity’s past activities, but also the presumed (anticipated) reputation from the moment of its establishment.
A violation of an entrepreneur’s good name may, in practice, consist of spreading negative opinions about the entrepreneur or the goods or services they offer, making unfounded accusations, or other statements that damage the company’s reputation.Such actions may take various forms, including comments published on the Internet.
In some cases, a negative opinion about an employee, a member of the management board, or a partner in a company may significantly affect the reputation of the company itself.
Consequences of Infringement of Personal Rights – Legal Remedies
Enterprises are entitled to the same rights to protect their personal rights as natural persons. In the event of a threat to a personal right, in order to protect its interests, a company whose personal right is endangered may demand that the infringing action be ceased—unless the action is not unlawful. To this end, the company may file a claim with the competent court requesting the cessation of specific actions.
In a situation where a personal right has already been violated, the entitled party may demand that the person responsible for the violation take actions necessary to eliminate its consequences—particularly by issuing a statement of appropriate content and form, such as an apology or a correction of information. Although a legal entity does not experience emotions such as harm, and an apology does not directly affect its well-being, such actions do influence how the entity is perceived by third parties. They are also genuinely felt by the members of its governing bodies and individuals associated with the entity. The company may also seek monetary compensation for non-material harm or request payment of an appropriate sum to a designated social cause. Additionally, it may demand compensation for damages caused by the violation, including reimbursement of incurred costs and losses.
Do you have any questions? Have your personal rights as an entrepreneur been violated?
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Attorney Aleksandra Diskau adiskau@ajlaw.pl