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What Constitutes Unfair Competition in Business?

copyright-unfair-competition.jpgPer The Wall Street Journal, a trademark case that has been ongoing for the past 16 years has reached the Supreme Court. The basis of the case is built upon the fact that the names of the company, Sealtight and Sealtite, are phonetically similar, causing unfair competition. Sealtight alleges copyright infringement, stating that consumers are confused between the two brands and the products they sell. Is the company losing business due to this allegation? The Court is still deciding.

Generally speaking manufacturers or business use specific identifiers for their companies including:

  • Words;
  • Phrases;
  • Symbols; and
  • Logos.

    Legal registered trademarks may also include shapes, sounds, and colors. In order for there to be eligibility for trademark protection, a company must meet two basic requirements. It must be used or have an intent to be used for commerce and it must be distinctive enough to distinguish one particular good or service from another.

    Allegations of trademark infringement may also arise if there is a possibility of consumer confusion. Entrepreneur magazine referenced the example of two health clubs with similar-sounding names and the court that used several factors to determine if trademark infringement took place. It covered and analyzed:

    • The strength of the mark, the stronger and more distinctive for the business, the better;
    • Proof of confusion by consumers, found to be true based on a Yelp review;
    • Similarity of services; and
    • The intent of the business.

      In short, if a business decides to create a business name or logo similar to that of a competitor, there automatically becomes a gray area for possible trademark violations. It doesn't mean they are immediately subject to penalty, but should be aware of the complexities of the law before proceeding.

      Simply put, a person can't take another trademark and put it on their own goods for profit. An individual couldn't start a cafe and copy the Starbucks logo for their cups without infringing on trademark law. If the 16-year-old case of Sealtight vs. Sealtite tells us anything, it's that trademark infringement cases can be drawn out, requiring years of investigation and proof of evidence.

      If you have questions regarding copyright or trademark infringement in California, contact a San Jose business law attorney with experience handling these types of cases. We can advise you of all your options under the law and make sure you and your business are protected. 

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