What Source of Laws Addresses Unfair Competition?



When learning how to deal with unfair competition practices, it is important to know what laws address these matters in the courts and how to deal with the issues the behavior causes to the companies. Knowing the source material is beneficial to the lawyer in leading the case, sticking liability to the defendant and pursuing compensation for the victim.

Unfair competition has a source of law in torts where economic injury causes a business to need to file suit against the perpetrator. The deceptive, wrongful and intentional practices of other companies harm the business through these actions. The unfair competition has two broader categories that govern the legal side in the courts. These are the torts, or unfair competition and unfair trade practices. The torts cover the deception in trade practices that mislead and misinform the consumer. The trade laws govern all other fair competition. Sometimes these are both used in the courtroom, but many only have one category in the claim.

What Is Unfair
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Competition in Torts?

Any unfair competition through which the business suffers economic harm because of the practices of the other company may have coverage through the torts. When a company uses an advertisement or marketing campaign to target another business, it could go through torts in the courtroom. Usually, the entity uses these tactics to draw revenue away from the business by misleading the public about the products or services. Sometimes, the entity may misinform the consumer about the ingredients, effects or use of products or services of the other company, and this could attract half or more of the customer base away from sales.


Unfair Trade Practices Explained

While the torts usually comprise the bulk of litigation against a company, the unfair trade practices also occur with frequency. Some of these may comprise trademark infringement and misappropriation of trade secrets. By using or copying a trademark, the other company may confuse the public into buying the product of the rival business. This will often weaken the brand, and the competing entity may also engage in unfair and unreasonable trade practices. This could harm the reputation of the business and lead to customers leaving for another brand that practices better business transactions. These issues often end in court with the judge making a determination about the trademark.

Unfair does not encompass monopolies or antitrust, but it does deal with misappropriation of trade secrets. When someone steals, copies or discloses a trade secret to another party, he or she may damage the product or service permanently. This could ruin the company in the long-term. Only when the business has another method to maintain revenue does this action not cripple the entity completely. The special ingredient in a product is often a safeguarded secret. To remain a trade secret, it must provide the business with a competitive edge and have a use to sell products or services.

Pursuing Action against the Unfair Competition

Because most of the practices that lead to unfair competition comprise the source of torts, the company negative impacted may seek litigation to acquire compensation or another remedy to the situation. It is important to consult with a lawyer before progressing to the next step. The processes in seeking compensation or a stop to the behavior often lead to the courtroom and a judge making a determination about the action of the other company. Because of this, the entity suffering from the activity needs to have enough evidence and details to show him or her. The case needs strength.

The owner may need to explain about false advertising, bait and switch tactics in selling if one brand of products has substitutions that it should not when the other company detracts customers and even if there is a theft of trade secrets. The company engaging in these tactics may use trade libel, a breach of covenants in place, false representation of products the affected entity is selling and other actions. Due to the unfair competition rules and regulations, it is possible to seek compensation for the negative impact on the company from the practices the other company participates in.

The Business Lawyer in Unfair Competition

With the help of a business lawyer, the affected company may seek a remedy and compensation in these circumstances of negative practices that cause economic damage. The other company may use a trademark closely related to the company, and through a lawsuit, it is possible to remove it from use or seek compensation and stop the usage.

Provided by HG.org


Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.

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