The Law Behind Unfair Competition in Business
unfair competition Business practices actually create negative effects for California’s corporate community, especially those businesses that are directly affected. At a certain point, these illegal actions of some people and companies can prevent another company from having more customers and better profits from its business operations. Thus, to deal with this problem, several provisions were included in the Civil Code of 1872 that prohibited these activities.
Tea Unfair Competition Law seeks to prevent the closure of companies and bankruptcies and protect companies from various acts such as:
- business fraud
- product misrepresentation
- tortuous interference
- unpaid debt
- Misappropriation of intellectual property
- trade secret theft
- Trademark law violation
- false advertising
Laws prohibiting such actions have been the subject of numerous civil actions brought by plaintiffs and prosecutors. They have threatened the rogue parties to engage in such breaches of the law. However, many companies found that the penalties were not enough to do them full justice. Only then, in 1977, was the California Unfair Competition Law extended to cover compensatory damages intended for affected parties.
For example, if a company has been shown to use the commercial logo of another company in the sale of its products, it will have to pay the affected company compensation based on the possible losses suffered. Another case is that if an employee has been forced by his current employer to divulge the trade secrets of his former employer, he too can initiate legal action.
Infringing parties typically send cease and desist requests to violators of the law before filing a formal lawsuit. This document contains the plaintiff’s demand that the defendant stop his unlawful business practices. Yes, in the event that the offending party ignored such a call, the plaintiff can file a lawsuit in court to recover proper damages and force the defendant to stop their illegal practices.
However, despite the fact that the Unfair Competition Law offers great benefits and remedies for victimized companies, some of them still have difficulties in pursuing their cases. These scenarios occur particularly if plaintiffs refuse to appoint a commercial attorney to handle their cases. Because of this, many of them have lost their cases and their opportunity to recover damages.
Legal issues and problems require the help of a legal professional who expertly understands the laws and procedures applicable to a given legal action. Therefore, when filing an unfair business competition claim, businesses should definitely consult legal counsel to ensure a favorable court decision.
For more information on unfair competition laws, consult with experienced business law attorneys.
