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• The law of unfair competition emerged from common law doctrine.
  • Unfair competition can take a number of forms, such as "passing off", "dilution", and "misappropriation".
• In unfair competition claims, one competitor usually brings an action against another.
  • These types of claims, in a direct sense, are not designed to provide consumer protection.
    

• Both state and federal bodies of law in this subject area exist (See "Constitutional Authority for Federal Intellectual Property Legislation", and particularly its discussion of the significance of "interstate commerce" in trademark law). Most states have enacted one of the following two model statutes in order to codify their law of unfair competition.

  • Uniform Deceptive Trade Practices Act - this model statute has been adopted by a number of states.

  • Model State Trademark Bill - this model legislation has been adopted by a slightly larger number of states.

Basic Elements of Unfair Competition and the Scope of Its Protection

Galt House, Inc. v. Home Supply Co., 483 S.W.2d 107, Ct. of App. Ky. (1972)

• In this case the defendant operated a business under the trade name "Galt House", which was identical to the plaintiff's as yet unused corporate name.
  

Non-functionality requirement:

Crescent Tool Co. v. Kilborn & Bishop Co., 247 Fed. 299 (2d Cir. 1917)

• Crescent Tool, the plaintiff, made a novel wrench which was not protected by any patent(s).
• Kilborn & Bishop, the defendant, introduced a very similar wrench after Crescent's wrench became commercially successful.
  • The plaintiff then sought to use unfair competition law to enjoin defendant's sale of the similar wrench.
    • The trial court granted a temporary injunction to this effect and the defendant appealed.
• Only non-functional product features which had acquired secondary meaning were found by the appeals court to be capable of being protected by unfair competition law.
  • Absent attainment of secondary meaning, non-functional designs were held, like unpatented functional ones, to be in the public domain.
    • "Nonfunctional" was stated in this context to refer to non-essential elements of the product in issue.
• The case was remanded for findings consistent with the rule that the defendant could copy the plaintiff's wrench in minute detail, but could not sell its own wrenches as the plaintiff's.
  • See Sears v. Stiffel, 376 U.S. 225 (1964) for a discussion of the pre-emption of state unfair competition law based on the functionality of subject matter. This case laid the groundwork for current pre-emption standards relating to intellectual property rights.

• In this case one brother opened an art gallery near the other brother's already established and successful art gallery.
  • Actual confusion between the galleries was shown by the plaintiff, David Findlay.
• The court issued an injunction prohibiting the defendant, W. Findlay, from using his own last name in close proximity to his brother's gallery.
  • If the defendant were to have moved to another part of the city, the use of his own name would then have become permissible.

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