Meddling between competitors - Part three: Unfair competition
Unfair competition
The tort of Unfair Competition encompasses a variety of wrongs that occur between competitors. These wrongs fall into two major categories: (1) Intellectual property concerns and (2) misleading actions.
Examples of IP issues include infringement/dilution of trademarks and service marks, theft of trade secrets, copyright infringement, and other misappropriation of another business’s IP. I’ve written a bit about these areas here, here, here, and here, so I won’t go into detail on them. Suffice it to say that it is a prudent move to have someone (preferably and attorney) evaluate your IP ideas before you use them, especially if a new employee introduces you to a fantastic idea that might have come from a prior employer - lots of money at stake in IP matters.
A business has one major concern under the “misleading actions” category. Commercial defamation, also known as product disparagement, when a business makes false communications regarding another business or another business’s products. If a communication deters individuals or businesses from dealing with the business subject to the communications, whoever made the communication is liable for damages. Communications can come in print (libel) or via oral statements (slander). Bear in mind that a statement is defamatory if it tends to harm the reputation of another so as to lower him (it) in the estimation of the community or to deter third persons (or parties) from dealing with him (it).
I have not delved into all the potential business competitor torts out there because business torts, as is frequently the case with the law, are highly fact dependent. However, it is good business sense for a business owner to know about potential bases of liability. I hope my posts at least open some eyes of Wisconsin business owners.
Chris Moander is an Attorney handling business law matters, business litigation, and collections matters throughout Wisconsin.
