How Do I Defend My Company Against A Claim Of Unfair Competition?

There’s healthy competition, and there’s unfair competition. Not all forms of enterprise that give one company an edge over another are legal. Businesses that are hit with allegations of unfair competition can find themselves put on the defensive. Fortunately, you don’t have to defend against these claims alone. The business defense attorneys of Rosenbaum & Taylor can fight unfair competition lawsuits.

Defending your company against unfair competition starts with knowing what it may include. Unfair competition is a broad term that covers a variety of business practices. Fairly competing is one thing, but causing economic injury to a competitor can land your organization in court. Some examples of unfair business tactics in New York include:

  • Stealing or misappropriating intellectual property
  • Imitating or counterfeiting a competitor’s products
  • Deliberately misleading consumers
  • Convincing a party to breach a contract with a competitor
  • Making false claims to try to damage another company’s reputation

Theft or misuse of intellectual property is a common complaint that gives rise to a claim of unfair competition. A trademark, for example, is designed to associate a product with a reliable manufacturer. This creates consumer trust and brand loyalty. If you know a company makes a particular product of good quality, you will want to keep buying. The trademark identifies the creator of that product.

A lawyer from Rosenbaum & Taylor sitting in his office at his desk.

Unfortunately, this can be tempting to many companies, who consequently infringe on trademark and other protections. It can be difficult to defend against an allegation that you are misusing a competitor’s intellectual property. But an allegation is not proof. Competitors routinely use their intellectual property as a sword rather than a shield, trying to stifle legitimate competition.

There are many cases in which companies legitimately learn how to make a product protected by intellectual property. A classic example of this is reverse engineering. This is a process by which a good is deconstructed to learn its functionality and design. Done correctly, this is a perfectly legal manner by which a company may learn how to improve its own products. If you’re facing an allegation of stealing intellectual property, this may be a defense – among others.

On the other hand, unfair competition would be using underhanded tactics to learn this sort of information. Examples may include hacking into a competitor’s database to extract confidential schematics. Or, impersonating the employees of another company to gain access you would not otherwise have. These are some clear-cut examples of wrongdoing.

The problem with unfair competition is that practically speaking, there are few clear-cut examples. Companies that find themselves on the receiving end of unfair competition allegations may pose a threat to competitors. But it could be a legitimate threat because they provide a quality good or service. It’s not enough to allege that you are doing better in the market. A plaintiff must demonstrate that you used unethical, illegal, fraudulent, or otherwise wrongful tactics to gain that advantage.

If your company is alleged to have engaged in unfair competition, the potential damages could be significant. They may include, at the outset, an injunction to prevent further use of the supposed unfair tactic. That alone could pose harm to your organization if the tactic is in reality legitimate. But monetary damages can deal a financial blow to your business. These damages are designed to compensate the plaintiff for the economic loss your actions allegedly caused. Having a knowledgeable business defense attorney is essential to protecting your company and minimizing its losses.

Defending The Rights And Interests Of Your Business

At Rosenbaum & Taylor, we take a comprehensive approach to business defense litigation. That means not only defending against the underlying claims made against your company. It also includes defending against the alleged damages the plaintiff suffered. While we fight to clear the good name of your organization, we recognize that juries can get things wrong. For that reason, we work to show that the compensation demanded by the plaintiff is unrealistic or unfair.
No matter what sort of business lawsuit you are defending against, we are here to help. Call Rosenbaum & Taylor today to set up a consultation.

Here are links to our other frequently asked questions:

How Do I Start A Business In New York?

What Is A Good Defense Against Allegations Of Fraudulent Inducement?

Why Your Business Needs (or Should Update) a Company Handbook

What to Know About Breaches of Contract

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