The Law behind Unfair Competition in Business

by Rainier Policarpio

Unfair competition practices in business indeed create negative effects to the California corporate community especially to those companies that are directly affected. At certain point, these illicit performances of some individuals and companies may prevent another company from having more clients and better profits from their business operations. Thus, in order to address this problem, several provisions prohibiting these activities were included in the Civil Code of 1872.

The Unfair Competition Law seeks to prevent business closures and bankruptcies and protect businesses from various acts like:

• Business fraud
• Product misrepresentation
• Tortuous meddling
• Unpaid debt
• Misappropriation of intellectual properties
• Trade secret theft
• Trademark law violation
• False advertising

The statutes prohibiting such actions have been the cause of numerous civil actions filed by plaintiffs and public prosecutors. These have threatened those unruly parties from being engaged in such law infringements. However, many companies found the penalties not enough to give them justice completely. Only then, in 1977, was the California Unfair Competition Law has been stretched out to cover compensatory damages provided for the affected parties.

For example, if a company has been proven utilizing another company’s trade logo in selling their products, they will have to pay the affected business with such amount of compensation depending on the possible losses sustained. Another case is if an employee has been forced by his present company to divulge his former company’s trade secrets, it may also initiate the filing of legal action.

Usually, the infringed parties send cease requests to the law violators before filing a formal court complaint. This document contains the plaintiff’s demand for the defendant to stop their wrongful business practices. If in case the infringing party ignored such call, the plaintiff may then result in bringing a lawsuit in court to recover suitable damages and compel the defendant to discontinue their illegal practices.

Yet, even though the Unfair Competition Law offers great benefits and remedies for victimized companies, some of them are still having difficulties in pursuing their cases. These scenarios particularly happen if the plaintiffs refuse to appoint a business attorney to handle their cases. Because of this, many of them have lost their cases and their opportunity to recover appropriate damages.

Legal matters and problems necessitate the aid of a legal professional who expertly understand the laws and procedures applicable for a certain legal action. Thus, in pursuing an unfair business competition lawsuit, companies should definitely consult a legal counsel to ensure a favorable court decision.



For more information about Unfair Competition Laws, consult with competent business law attorneys

About the author
Rainier used to work in a publishing company as a writer and eventually became an associate editor. He dealt in writing instructional materials for secondary and tertiary students. His passion in writing inspired him to read a lot and subsequently enabled him to gain more knowledge and skills.