Unfair competition laws

Courts are frequently asked to intervene when one business uses unfair tactics to
compete with another business. Among the unfair tactics the courts have condemned
is a business trying to lure customers away from a competing business by
confusing customers as to which business or products they are dealing with. The
most common way to confuse customers is for a second business to market its
goods or services under a name or other mark that is confusingly similar to that
used by the first business on its goods or services.

Although courts originally decided these types of disputes without the benefit of a
legislative enactment, Congress and most state legislatures have now legislated the
basic principles developed by the courts to deal with unfair business practices. All
together, these court decisions and statutes are termed unfair competition law.
And under this body of law, a business may obtain a court order preventing a
competitor from engaging in unfair business practices.

Unfair competition is not usually considered a separate branch of intellectual
property law, as it targets general business practices rather than intellectual property
as such. However, because the use of misleading names and marks to improperly
lure customers away from another business is also very much what trademark law
is concerned with, the two types of law often overlap.

EXAMPLE: The name used by Richard’s Cuisine is very ordinary and not distinctive
enough to be considered a trademark. If, however, another business opens up
down the street under a “Richards’s Cuisine ” sign, the courts may use unfair competition
laws to force the second user to modify the name to distinguish it from the first.