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State Law of Unfair Competition

The body of law governing unfair competition is comprised of a combination of federal and state legislation and state common law. Below is a sampling of state court decisions decided at least in part based on their own state’s statutory law, common law, or both.

CALIFORNIA: A manufacturer’s price policy, which set minimum resale prices for its products and informed retailers that the manufacturer would refuse to sell products to any retailer who did not comply, was permissible under the state’s unfair competition law. West’s Ann.Cal.Bus. & Prof.Code §§ 16720 et seq. Chavez v. Whirlpool Corp.,—Cal.Rptr.2d—, 2001 WL 1324737 (Cal.App. 2 2001).

HAWAII: Where the seller of a solar water heating unit incorrectly represented to a purchaser that it had been in business for 16 years and that it had licensed engineers on its staff, and then failed to scientifically tailor an efficient water heating system for the purchasers’ home, installed the system knowing it was defective in design, and failed to provide a reasonable and effective service and repair program to correct the faulty system after its installation, the seller’s conduct and representations constituted acts or practices violating the state’s statute governing unfair competition and deceptive trade practices. HRS § 480-2. Rosa v. Johnston, 3 Haw.App. 420, 651 P.2d 1228 (Hawaii’ App. 1982).

ILLINOIS: A competitor of a flashlight bulb distributor was free to copy the bulb’s information chart and reorder card that was used by the distributor in connection with the sale to retail merchants of bulbs that were not copyrighted, and the only restriction imposed by the state law of unfair competition was that the competitor sufficiently identify the source of the chart and card to customers by providing proper labeling. S.H.A. ch. 121 =, § 312. 15. Duo-Tint Bulb & Battery Co., Inc. v. Moline Supply Co., 46 Ill.App.3d 145, 360 N.E.2d 798, 4 Ill.Dec. 685, (Ill.App.3 Dist. 1977)

INDIANA: The appropriate remedy for the misappropriation of a university’s name or likeness by a professor for his website and e-mail addresses was under the state’s unfair competition law, trademark statutes, and the common law of tortious interference with business relations. West’s A.I.C. 24-2-1-1 et seq. Felsher v. University of Evansville, 755 N.E.2d 589, (Ind. 2001).

NEW JERSEY: The “rule of reason” analysis, rather than a “per se” approach, is required for restraint of trade claims alleging conspiracy to damage or eliminate a competitor by unfair means, and thus a distributor’s failure to establish probable or actual injury to competition caused by a processor’s conduct precluded the imposition of liability upon the processor. Ideal Dairy Farms, Inc. v. Farmland Dairy Farms, Inc., 282 N.J.Super. 140, 659 A.2d 904, (N.J.Super.A.D. 1995).

NEW YORK: The plaintiff’s allegations failed to state a claim for unfair competition arising out of miscellaneous business relations, where the complaint did not state the requisite elements of a confidential business relationship between the parties or indicate that the parties had entered a valid agreement to refrain from the alleged acts of unfair competition. Ponte and Sons, Inc. v. American Fibers Intern., 222 A.D.2d 271, 635 N.Y.S.2d 193 (N.Y.A.D. 1 Dept. 1995).

OHIO: Actions under the state’s deceptive trade practice and unfair competition law have been restricted by court interpretation of federal copyright law to lawsuits seeking to redress violations of a company’s trade dress and labeling so as to prevent purchasers from being misled as to the source of goods. 17 U.S.C.A. § 301. George P. Ballas Buick-GMC, Inc. v. Taylor Buick, Inc., 5 Ohio Misc.2d 16, 449 N.E.2d 805, 1983 Copr.L.Dec. P 25,550, 5 O.B.R. 236 (Ohio Com.Pl., 1981).

WASHINGTON: A state court’s issuance of an injunction against a national bank’s use of a name was inconsistent with the authority of the Comptroller of Currency to approve names for national banks, and thus the court’s reliance on the state’s law of unfair competition was preempted by the Comptroller’s congressionally-approved discretion to approve bank names. National Bank Act, 12 U.S.C.A. § 30. Pioneer First Federal Sav. and Loan Ass’n v. Pioneer Nat. Bank, 98 Wash.2d 853, 659 P.2d 481 (Wash. 1983).

Inside State Law of Unfair Competition