April 02, 2019
Making your mark in the marketplace can take years to accomplish – and mere moments to undo when faced with unfair competition. Considered a legal “term of art,” the notion of unfair competition has a well-settled place in the legal arena, and courts have historically required truly unscrupulous unfair competitors to pay up big time. However, resorting to litigation and lawsuits is generally a last resort in this type of situation, and a well-crafted cease and desist letter can sometimes get the job done quickly and efficiently. As well, proof of at least one attempt at sending a cease and desist letter is usually favored by the judicial system as showing a conscientious attempt to resolve the matter before resorting to the courts. So, lets get started on Exhibit “A.”
What is unfair competition?
Before beginning a cease and desist letter for unfair competition, it is vital to understand the elements of the cause to ensure the situation fits. Depending on the state, “unfair competition” may be spelled out plainly by statute, or it may require some legal research into historic case law. Under federal law, the Lanham Act addresses the issue of deceitful and confusing marketing practices, sometimes known as “deceptive trade practices” or “trademark infringement.” Unfair competition may include any of the following misdeeds:
- Theft of protected trade secrets/intellectual property (which can also carry criminal consequences in some situations);
- False advertising
- Misrepresentation
- “Bait and switch” tactics
- Violation of non-compete clauses
- Breach of contract
- Trademark infringement
- False representation of a brand or product
The main gist of unfair competition laws is the protection of both consumer and business from marketplace confusion. If a company is unfairly marketing its goods or services as affiliated with or comparable to another entity without permission or consent, this could be considered unfair competition. Moreover, the law prohibits vendors from rendering products purposely designed to mimic or copy the products of another, so as to create disorientation for consumers.
How a cease and desist letter can help
A cease and desist letter for unfair competition can be a cost-effective measure to put a stop to unruly marketplace behavior before a lawsuit becomes necessary. A well-drafted letter will thoroughly explain the nature of the problem to the reader, as well as close with clear direction on what the writer is asking the recipient to do (or refrain from doing). The more succinct, the better – and always avoid overly-verbose language or threatening language. In some cases, the recipient may be willfully ignorant to the fact their behavior is causing an issue, and the conduct will stop immediately. Other times, the recipient will vehemently disagree that a misdeed is afoot, and it may then be necessary take the next legal step.
Contents of a thorough letter
Begin the letter with strong – but professional – language introducing the problem as a problem (e.g., “It has come to our attention that you have [describe unfair competition]). If the offenses require a timeline or a technical explanation, do not be afraid to lay out the information in the most understandable and readable way possible, including infographics or other mechanisms to make the issue clear.
From there, insert a very brief recitation of the applicable law in the jurisdiction – which can come from statute, but will most likely derive from state common law. One way to begin this paragraph could be: “Under [state] law, the concept of “unfair competition” is defined by our courts to mean the following: [insert legal language].” Of course, any cites to legal authority must be truthful and accurate, and never resort to “fudging” or creating legal language to threaten the recipient (as this is considered misconduct of a whole other sort).
Lastly, be extremely explicit – with no room for interpretation – as to what you would like the recipient to do or stop doing. This is not a time to mince words, and clarity is key. For instance: “We hereby demand you immediately cease and desist the following activities: [describe conduct].” From there, be sure to include the date upon which the letter takes effect (either “upon receipt” or a specific date), as well as the intended next steps. For example: “In the event you do not adhere to this demand by [time] on [date], we will commence immediate and thorough legal action.”
Additional points to consider
Be sure to take the time to craft a thorough and well-thought out cease and desist letter for unfair competition. Never include personal attacks, threats to anyone’s safety, or irrelevant matters. Moreover, proper grammar and spelling is essential, as this letter could wind up as an Exhibit in a lawsuit someday, and it is important to maintain professionalism. As well, be sure to send the communication in a manner that ensures proof of receipt – and always send the communication in hardcopy, not email.
