Unfair Competition in Business

Prohibited Activities under State and Federal Laws

While the American free enterprise system promotes competition for the benefit of consumers, there is still are requirement that the forms of competition engaged in follow some basic rules. When another company or individual engages in actions that wrongfully affect your business or your market share, those acts may constitute “unfair competition.” That may involve a broad range of violations:

• Interference with or infringement of your intellectual property rights—Federal laws protect a wide range of intellectual property matters, including patents, trademarks, copyrights and trade dress. As a general rule, if you own certain IP rights, you can control who uses or exploits those rights and can seek damages for loss of business. You may also be able to recover what are referred to as “statutory” damages, an amount fixed by law for each violation of your rights.
• Unauthorized use or disclosure of trade secrets—Trade secrets are commonly protected through non-disclosure or confidentiality agreements. When a party to such an agreement wrongfully uses or discloses protected information, you can seek damages for the breach of that agreement.
• Breach of other confidentiality agreements—Often, an employee with access to confidential customer lists or other sensitive information will wrongfully use or take that information to a competitor to interfere with your business
• False statements about your products by a competitor—Also known as “trade” libel, this involves intentionally misleading factual statements about your business or your products, designed to undermine trust or confidence in your customers or business associates
• False advertising—When a competitor makes statements in advertising that are untrue, you can typically ask the Federal Trade Commission to investigate and impose sanctions, if appropriate.
• Tortious interference with a contract or business relationship—This involves a wrongful interference with an existing contractual relationship, such as impeding the delivery of goods contracted for

Contact Attorney Howard N. Sobel

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