What Constitutes Unfair Competition?
Unfair competition occurs when individuals or companies in the same market are not able to compete on equal terms because of certain wrongful acts of one of the parties, usually a deceptive or unfair trade practice. Generally, the term “unfair competition” refers to situations where the actions of one competitor are designed or have the effect of confusing consumers as to the origin of the product. Issues related to illegal monopolies, collusion or acts in restraint of trade typically are not considered unfair competition, but fall under the general topic of antitrust.
The Laws Governing Unfair Competition
Legal actions claiming unfair competition can be based on violation of statute, or may be filed as common law claims. Much of the law of unfair competition is governed by state law, but the federal Lanham Act also provides businesses with protection against certain deceptive or unfair trade practices.
Under the Lanham Act, which was originally designed to provide remedies for trademark infringement, a business suffering economic injury may take legal action to recover for losses caused by:
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