When you launch a business, it likely seems as though your possibilities are endless. You may draw from others' concepts to develop your unique strategy. Yet, there may be a limit to what you can do with that knowledge.
Fair market competition can have a positive influence on your company decisions. However, when it comes to intellectual property (IP), there are some lines you must not cross. Furthermore, you should explore your options if another company's unfair competition infringes upon your rights.
Three examples of unfair competition
Consumer laws prohibit businesses from misleading potential customers. Unfair competition legislation also protects your IP.
While circumstances vary, another business may not sell products or services in a way that could have a negative effect on your sales. This could come in the form or imitating your color scheme, company name or packaging to mislead consumers.
Additional examples of unfair competition include practices such as:
- Misappropriation of trade secrets. Your employees must possess specific job-related information. The use of this data outside of your employ could be problematic.
- Rumor mongering. Making public false statements about a competitor could turn their client base against them, thereby decreasing customer loyalty and profits.
- Bait-and-switch. Advertising low availability of a high-demand product that is not in stock often results in consumers’ willingness to pay more for a similar product.
Unfair competition could surface in a variety of ways among different industries. As a consumer, it may be reassuring to know there are regulations in effect to protect you. Yet, remembering you have the ability to protect your rights can help you succeed in business as well.