What Constitutes Unfair Competition?

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What Constitutes Unfair Competition?

Unfair competition occurs when a business uses deceptive or dishonest business practices to gain a competitive advantage. Some of the most common types of unfair competition impacting businesses and business owners include:

  • Trademark infringement
  • Misappropriation of trade secrets or use of confidential information
  • “Bait and switch,” the unauthorized substitution of one type of goods for another
  • False advertising
  • False representation of products or services
  • Price fixing and discrimination

Laws Governing Unfair Competition

There are federal and state unfair competition laws as well as court rulings under common law that have established legal precedents.

On the federal level, the Commerce Clause of the U.S. Constitution (Article 1, Section 8, Clause 3) provides for the regulation of unfair competition by Congress. The Lanham Act — also known as the Trademark Act of 1946 — covers the violation of trademark rights and false advertising.

Virtually every state, including Arizona, has laws that prohibit deceptive trade practices. Typically, these laws grant the state attorney general power to take legal action against alleged offenders. Most states, including Arizona, have adopted a version of the Uniform Trade Secrets Act to define and protect trade secrets. In addition, Title 44, Chapter 9 of the Arizona Revised Statutes addresses a number of fraudulent trade practices.

Civil Remedies

If your business has been harmed by unfair competition, you can file a lawsuit for injunctive relief in order to stop another business from competing unfairly. You can also seek monetary relief to compensate your business for any losses it may have suffered as the result of unfair competition. Depending on the circumstances of your case, these remedies may be available in both state and federal court.

In awarding damages for unfair competition violations, courts typically taken into consideration the length, nature and seriousness of the violations, whether the misconduct was willful or not; and the alleged offender’s financial condition.

Williams Commercial Law Group, L.L.P., provides strong legal advocacy for companies involved in business lawsuits. We are known for using our skills, experience, and cutting-edge technology to get great results, whether after trial or through a favorable settlement. Call us today at (602) 256-9400 and schedule an appointment to meet with us about your case.

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