Unfair Competition

1
Unfair Competition

• Zone of Expansion, Anti-dilution, Misappropriation

2
To Refresh . . .

• Unfair competition in its elementary state
  involves passing off ones work as that of
  another -- sort of reverse plagiarism, like
  selling as a Rolex a knock-off, fake Rolex
  look-alike on a NYC street
• A plaintiffs case is easier (i.e., no need to
  show actual confusion) if it can first show
  secondary meaning (market significance of a
  business name) then likelihood of confusion is
  enough

3
Zone of Expansion Doctrine

• An established user has rights to a name if the
  conflicting use it is within the established
  companys likely zone of market expansion see
  n.5 p. 71 (Hanover Star Milling)
• But if all a plaintiff need do is show secondary
  meaning to make out a case of unfair competition,
  then mere presence in a marketplace would be
  enough to keep competitors at bay under ZOX
• An exception emerges to protect the interests of
  blossoming growth businesses

4
The Sample, Inc. v. Porrath

• The setting Two womens apparel store chains
  using old names not of the strongest order of
  originality are the parties
• The local plaintiff did not show secondary
  meaning, so the growing interloper, The Sample,
  Inc., was allowed to invade the plaintiffs turf
  if using a distinguishing name, The Sample of
  Buffalo, Inc.

5
Constructive Notice

• A major exception to the Sample exception now,
  there is no doubt that trademark registration
  will make it impossible to claim innocent
  infringement
• Today, it is hard to show a violation of UC if
  the trademark is registered

6
Dilution

• Defined by its general effect -- diminishing a
  names value
• Two types blurring and tarnishing
• Factors contributing to blurring (1) similarity
  of marks, (2) similarity of products/services,
  (3) consumer sophistication, (4) predatory
  intent, (5) renown of senior mark, (6) renown of
  junior mark
• Tarnishing commercial tarnishers only targeted,
  or parodists too?

7
Anti-Dilution Statutes

• Unauthorized use in another market of a name that
  tarnishes the originals value is a violation of
  an anti-dilution statute
• No violation of such a statute in the exemplary
  Lexus/Lexis case

8
Mead v. Toyota Lexis v. Lexus

• If only one percent of the public know Lexis is
  from Mead, then it would be hard to show that
  Lexus dilutes much of anything
• A proper rationale?

9
Misappropriation

• INS v. AP the seminal caseCapitol v. Spies
  another example
• Board of Trade v. Dow Jones recent example
  even absent competition, a finding of
  misappropriation possible
• Expansion of tort, quasi-k

10
Next class Rights in Names, Trade Secrets and
Covenants