When someone invents something and wants to protect it from being copied, they will often try to patent or trademark it. However, it is still possible for someone to try and imitate the original creation. Furthermore, others can try to substitute or deceive consumers by marketing their counterfeit product as the same as the original. In the world of intellectual property, scenarios such as this constitutes as unfair competition.
Patents are potentially subject to unfair competition when someone takes their product that imitates an original creation and fraudulently substitutes it as the original. The counterfeiter, in this case, does this to deceive the public. However, trademark infringement can be considered as unfair competition too. An example of this would be if someone placed a Sunkist logo on a generic brand of orange soda in attempts to pass off the generic as Sunkist.
Another form of unfair competition is false advertising. This takes place when a competitor claims that their product has the same benefits as the original when in reality it doesn’t.
Bait and switch is another very common form of unfair competition. An example scenario of this would be if a store advertised a product at a low price. If customers come to the store only to find out that the advertised product is “out of stock”, and that the retailer is substituting it with something of similar value, then the store has engaged in bait and switch tactics.
When it comes to trade secrets, it is unlawful for someone to steal and exploit the trade secrets of another. For example, if a person were to come across or steal the secret formula to make Coca Cola and then began making the soda on their own under a different name, then they could be accused for misappropriating trade secrets.
Selling items at a price that is below cost is also considered unfair competition. It is particularly unlawful if the only reason why a retailer is selling below cost is to gain market share by taking customers away from their competitors. Retailers who engage in dumping, or selling a product abroad for less than one could sell it for locally, can also be seen as unfair competition.
Furthermore, creators should beware of a popular unfair competition tactic known as rumor-mongering. Although common, it is illegal for competitors to leak misleading or false information to the press or media about a product with the motive to discredit another manufacturer’s claims.
California judges are regularly asked to hear unfair competition cases. Most copyright and trademark cases are heard in federal court. An experienced IP attorney can help you determine if some type of impropriety occurred, and if so, help you decide what steps to take in your case.