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IN THIS VIDEO WE DISCUSS, WHAT IS UNFAIR COMPETITION?🤝BUSINESS LAWYER EXPLAINED | #LAWFIRM #LAWYER
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UNFAIR COMPETITION

Unfair Competition, both the Common Law tort and the Federal statute, attempts to enforce a certain level of "honest practices in industrial or commercial matters."

A State law cause of action for Unfair Competition consists of: passing off, contributory passing off, reverse passing off, and misappropriation. Passing off involves the Defendant ìpassing offî the product as if it is coming from the Defendant. Contributory passing off involves the Defendant assisting or inducing another, such as a retailer, to pass off a product as if it is coming from another source. Reverse passing off involves the Defendant trying to pass off the Plaintiffís product as if it is Defendantís own product, for example by putting on a different label on Plaintiffís product.

An injured party brings Federal Unfair Competition claims under section 43(a) of the Lanham Act. Because the Lanham Act is a Federal statute, there must be some degree of interstate commerce involved. Unlike trademark infringement claims under the Lanham Act, Unfair Competition claims do not require any Federal registered marks. As a result, section 43(a) involves all Federal trademark infringement claims and extends further to cover other unfair business practices. Section 43(a) claims break down into two categories: likelihood of confusion and false advertising.

As in Federal trademark infringement analysis, a likelihood of confusion exists when there is confusion as to the source, sponsorship, or association between goods or services. The elements to prove a section 43(a) claim based on likelihood of confusion are:

(1) One uses any word, term, name, symbol, device, or combination,
(2) In interstate commerce, and
(3) Which is likely to cause confusion as to source, sponsorship, or association.

The elements for a section 43(a) claim of likelihood of confusion are comparable to trademark infringement except one does not need a Federal registered trademark.

One seller unfairly competes with another seller by adopting and using a trademark that is confusingly similar to the prior adopted and used the trademark of the first seller. It is easy to see why this type of practice is prohibited by the law. If it were otherwise, consumers would be confused as to the origin of a certain product and, thus, could not rely on receiving consistent quality. In addition, there is something inherently unfair in letting an infringer get the benefit of the first seller's time, money, and effort in building goodwill for the trademark.
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