Unfair Competition - General Principles

The freedom to pursue a livelihood, operate a business, and otherwise compete in the marketplace is essential to any free enterprise system. Competition creates incentives for businesses to earn customer loyalty by offering quality goods at reasonable prices. At the same time, competition can also inflict harm. The freedom to compete gives businesses the right to lure customers away from each other. When one business entices enough customers away from competitors, those rival businesses may be forced to shut down or move.

The law of unfair competition will not penalize a business merely for being successful in the marketplace. Nor will the law impose liability simply because a business is aggressively marketing its product. The law assumes, however, that for every dollar earned by one business, a dollar will be lost by a competitor. Accordingly, the law prohibits a business from unfairly profiting at a competitor's expense. What constitutes unfair competition varies according to the CAUSE OF ACTION asserted in each case. These include actions for the infringement of PATENTS, TRADEMARKS, and copyrights; actions for the wrongful appropriation of TRADE DRESS, trade names, trade secrets, and service marks; and actions for the publication of defamatory, false, and misleading representations.