What constitutes “unfair competition”? If a competitor bad-mouths you or your business, does that constitute unfair competition? What if an adversary buys domain names that include your company’s name, is that legal? How about contract shenanigans? Do they fall under the umbrella of unfair competition?
The answers to the above questions, and an easy-to-understand guide to unfair competition law, are below.
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 Law: A Simple 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.
What Business Tactics Are Considered “Unfair Competition”?
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.”
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:
- Intellectual property plaintiffs bear the burden of proving how the defendants profited from the alleged infringement; and
- 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.
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.
Another unfair competition tort: tortious interference. “Torture huh?” Tortious interference is lawyer-speak for, “meddling with other businesses’ contracts with their customers.”
Speak With An Unfair Competition Lawyer
Are you interested in exploring your legal options regarding, copyright, trade libel, tortious interference, antitrust or trade secrets? Get in touch with RM Warner Law, today. We are a law firm that caters to startups and online businesses, and as such, we’ve handled hundreds of unfair competition law matters.