Unfair competition results when one business causes an economic injury to another business through a deceptive or wrongful business practice.

Unfair Competition Example

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There are two broad categories of unfair competition. Unfair competition typically refers to business practices that are meant to confuse consumers as to the source of a product or service. Trademark infringement is the most common example of unfair competition. "Unfair trade practices" typically refers to other forms of unfair competition such as interfering with business relationships or attempting to illegally expand the scope of protection offered by a patent, copyright, or trademark.

Unfair competition may also include misappropriation of a business' intangible assets that are not necessarily protected by trademark law, copyright law, etc. Other practices that are considered unfair competition include false advertising, "bait and switch" selling tactics, unauthorized substitution of one brand of goods for another, use of confidential information by a former employee to solicit customers, theft of trade secrets, breach of a restrictive covenant, trade libel, and false representation of products or services.