Legal disputes between business competitors can involve a wide range of legal claims, including claims for unfair competition and tortious interference. While both of these claims can be used to seek legal remedies against competitors that are attempting to gain an unfair advantage in the marketplace, they are focused on different practices, and understanding the differences is important for executives and company owners who are evaluating their options in the face of a potential dispute.
Unfair competition law focuses on business practices that seek to illegitimately take advantage of another company’s intellectual property or other intangible assets. Causes of action for unfair competition exist under state and federal law (including the Florida Deceptive and Unfair Trade Practices Act and the U.S. Lanham Act), and can be used to take legal action against competitors engaged in activities such as:
- Unlicensed use of a company’s trademarks
- Unauthorized use of a company’s trade secrets
- Price fixing or other antitrust violations
- Fraud, false advertising and other misrepresentative practices
- Business defamation
When a competitor is engaged in unfair competition under state or federal law, a prompt response can be critical to mitigating any potential harm. While informal methods of resolution may be sufficient in some circumstances (for example, if a company executive was not aware that one of the company’s employees was making use of another company’s trademark), it will often be necessary to seek preliminary injunctive relief in court to prevent further damage.
In contrast to unfair competition, which encompasses a variety of unlawful business practices, tortious interference is a specific type of legal claim focused on wrongful obstruction or intervention in an existing business relationship. This relationship can either be contractual or non-contractual. In order to pursue a claim for tortious interference against a competitor, a company must be able to prove that:
- The company had a valid contractual or non-contractual business relationship;
- The competitor knew of the business relationship;
- The competitor deliberately took action to disrupt the contract or induce one party to end the relationship;
- The competitor lacked legal justification for the interference; and,
- The interference resulted in commercial harm.
Depending upon the factual circumstances involved, tortious interference claims can often be difficult to prove. Competitors can avoid liability by demonstrating that any one of the five elements listed above has not been satisfied, and questions of fact can lead to complex business litigation. However, due to the potential economic impact of tortious interference, companies concerned about competitors’ actions affecting their commercial relationships should promptly seek legal advice. Similar to unfair competition, tortious interference can quickly lead to long-term (and potentially-irreversible) damage, and seeking preliminary relief in the courts may be the only way to prevent unnecessary harm.
Speak with a Business Litigation Attorney at Michael L. Feinstein, P.A.
Our Fort Lauderdale business litigation lawyers provide experienced legal representation for unfair competition and tortious interference claims throughout South Florida. If you have concerns and would like to speak with an attorney about protecting your company’s interests, you can call (954) 767-9662 or contact us online for a confidential initial consultation.