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Identifying and Protecting Yourself from Unfair Competition Practices

  • Sep 02, 2020
  • The Harr Law Firm

Businessman pushing over ladder while another tries to climbCompetition is an inevitable (and entirely necessary) part of running a business. While your competition can be brutal at times and may even threaten your business, for the most part, it’s just the way business goes. However, there are certain limits on what your competition can do, and if they cross the line, you may be able to take legal action. But what exactly is considered to be an “unfair” competition practice? Moreover how can you protect yourself from these practices and recognize them when they happen to you? Keep reading for more information.

Defining Unfair Competition

Unfair competition is defined as trying to gain a competitive advantage over other businesses using fraudulent or deceptive practices. There are laws in place that protect your business from falling victim to such practices, but there typically won’t be any action taken against the offender unless someone files a lawsuit against the company. This is because, in most cases, the unfair practice isn’t immediately apparent to outside parties. So, if you want to ensure that a business using unfair competition practices is punished for their actions, you’re going to have to take action yourself.

What Qualifies as Unfair Competition?

There’s a reason that we’re all so familiar with the phrase, “It’s just business.” Companies are constantly trying to show up their competition, and the race to the top of your industry can be a brutal one. Obviously, you can’t claim unfair competition any time your competitors’ actions have a negative impact on your business. It is only when they go beyond what is clearly fair and legal that you can take action against them. Some of the most common examples of unfair competitions practices include:

  1. Trademark infringement – This is defined as the unauthorized use of a trademark or service mark. It is often used in a manner intended to cause confusion or to deceive consumers.
  2. Product disparagement – This is similar to slander or libel, but instead of being a false claim about your character, it’s a false claim against your product. For example, if your competitor claims that your product is faulty or has severe adverse side effect in an attempt to impact your sales, this would be product disparagement.
  3. Stealing confidential information – Corporate spies are a major problem for some businesses. If you have evidence that a competitor stole product designs, trade secrets, or other confidential information through spies, hackers, or other means, then you’ll have a strong case against them.
  4. Trade dress violation – Businesses work hard to build a recognizable “brand” via their product packaging, advertisements, and more. If a competitor copies the packaging or overall physical appearance of your products in a clear attempt to mislead consumers, this is an unfair competition practice.
  5. Breach of restrictive covenant – Restrictive covenants are part of your contractual agreements with your employees, and may include items such as non-disclosure agreements and non-compete clauses. If an employee breaches these covenants, you can pursue litigation against the individual employee, and potentially against your competitor, if they pressed the employee to breach the restrictive covenants.
  6. Misrepresenting the source of a product – Many consumers are very conscientious of where their products come from. If your competitor is misrepresenting where their products are produced or where the materials are sourced from in order to gain an advantage in the market, this is an unfair competition practice.

These are only the most common examples of unfair competition practices that often lead to litigation. However, they are not the only instances that may validate pursuing a court case. If your competitor is engaging in any practice that is blatantly dishonest, give us a call. We may still be able to help.

Protecting Yourself from Unfair Competition

Your business is protected from unfair competition practices through both state and federal laws, including the Federal Trade Commission (FTC). However, as we’ve already mentioned, you may have to take action and pursue litigation before the business in question faces any repercussions. While it is possible that their unfair practices will be noticed and stopped without you having to step forward, why would you want to subject your business to further losses because of these practices? The best way to protect yourself from unfair competition is to take action the moment you have proof of the fraudulent behavior.

If your business has been harmed by your competitors’ dishonest or fraudulent actions, contact The Harr Law Firm today. We’ll sit down with you to discuss your options, determine the strength of your case, and pursue reparations in court. Give us a call to schedule your consultation today.