Online Unfair Competition Law: Legal Standards, Case Studies, and Assistance

What constitutes unfair competition? Can ceompetitors trash your business without consequence? Is it legal for adversaries to buy domains that include your company's name? What about contract shenanigans? Do they also fall under the umbrella of unfair competition?

The answers await below.

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Where is Unfair Competition Codified Under U.S. Law?

Title 15 of the United States Code

"[U]nfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are...unlawful."

Unfair Competition: A Simple Legal Definition

Unfair competition is an umbrella term for several torts that address business legalities. In the simplest terms, unfair competition laws are used when one party inappropriately manipulates a market advantage over another party -- usually a business competitor.

Intellectual Property Infringement

Intellectual property torts – copyright, trademark and trade dress – are arguably the most litigated unfair competition cases in the United States. Every state has a set of intellectual property laws. Additionally, the Lanham Act covers infringement-related actions on the federal level.

Two main things to remember about U.S. intellectual property law:

  1. Intellectual property plaintiffs bear the burden of proving how the defendants profited from the alleged infringement; and
  2. Parody and satire are legal.

Misappropriation of Trade Secrets

Stealing trade secrets is an actionable offense that falls under the unfair competition banner. An important aspect in trade secret cases are temporary restraining orders. Trade secret laws are state laws, and most states adhere to standards outlined in the Uniform Trade Secrets Act (USTA). Legalities regarding trade secrets are also addressed in the Economic Espionage Act of 1996.

Trade libel

Free speech is a top priority in the U.S., but publicly lying about a business, with the intent of causing harm, is libelous and against the law. Bottom line: you can’t lie about the competition – or a company you don’t like -- in an attempt to damage its bottom line or gain a market advantage. Doing so is called trade libel — and it's another type of unfair competition law.

Antitrust

Monopolies stifle competition and are against the law. To test the limits of antitrust law, companies may accuse a market leader of monopolistic behavior (i.e., think Google). These types of cases fall under the banner of unfair competition law.

Tortious Interference

Another unfair competition tort: tortious interference, which is lawyer-speak for, "meddling with other businesses' contracts with their customers."