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Unfair Competition

Unfair Competition refers to actions which cause economic injury to a business through deceptive wrongful action, or any fraudulent, deceptive, or dishonest trade practice that is prohibited by statute, regulation, or the common law.  An example of this deception is imitating or counterfeiting the name title, size, color scheme, patterns, shape or distinctive peculiarities of the a competitors product or package in such as way as to mislead the general public or deceive an unwary purchaser. Acts of unfair competition are generally characterized by deception, bad faith, fraud or oppression, or as against public policy because of their tendency to unduly hinder competition.

Unfair Competition law seeks to do five main things:

  1. Protect the economic, intellectual, and creative investments made by businesses in distinguishing themselves and their products.
  2. Preserve the good will that businesses have established with consumers.
  3. Deter businesses from appropriating the good will of their competitors.
  4. Promote clarity and stability by encouraging consumers to rely on a merchant’s good will and reputation when evaluating the quality of rival products.
  5. Increase competition by providing businesses with incentives to offer better goods and services than others in the same field.

Although the law of unfair competition is focused on protecting consumers, the remedies to cure such injuries are available only to business entities and proprietors. A business can seek (and obtain) injunctive relief to restrain the competitor from engaging in a particular fraudulent or deceptive practice and/or money damages to compensate for any losses suffered by an injured business.  Consumers who are injured by deceptive trade practices must seek protection under the state and federal Consumer Protection laws.

Generally, a business will not be penalized a for being successful in the marketplace or held liable just because it is aggressively marketing its product. The law assumes, however, that for every dollar earned by one business, a dollar will be lost by a competitor. Accordingly, the law prohibits a business from unfairly profiting at a competitor’s expense.

What constitutes unfair competition varies according to the cause of action asserted in each case. These include actions for the infringement of patents, trademarks, and copyrights; actions for the wrongful appropriation of Trade Dress, trade names, trade secrets, and service marks; actions for the publication of defamatory, false, and misleading representations; and false advertising.

For more information about unfair competition and your rights, contact the Business Lawyers at the PLK Law Group today.