## Unfair competition in North Carolina **"Unfair competition"** is a broad category covering many business torts: false advertising, trade libel, tortious interference, trade-secret theft, palming-off, and state-specific business misconduct. ## Federal claims **Lanham Act (15 USC § 1125):** **Section 43(a) — False advertising:** - False or misleading statements about products / services - About own products (false advertising) - About competitors' products (commercial disparagement) - In commercial advertising / promotion - Material deception - Likely to influence purchasing - Specific damage / likelihood **Section 43(c) — Trademark dilution:** - Famous marks - Blurring (loss of distinctiveness) - Tarnishment (negative association) - No likelihood of confusion required **Trademark infringement (15 USC § 1114):** - Use of similar mark - Likely to cause confusion - Specific factors (Polaroid, AMF, Sleekcraft) ## State unfair competition law **${s.name} likely has:** - Common-law unfair competition - ${s.name} unfair / deceptive trade practices act (UDTPA) - Specific business tort statutes - State trademark provisions - Specific industry regulations **Common state statutes:** - California Unfair Competition Law (UCL § 17200) - New York General Business Law § 349 - Florida Deceptive + Unfair Trade Practices Act (FDUTPA) - Massachusetts Chapter 93A - Most states have similar ## False advertising claims **Elements:** 1. **False or misleading statement** 2. **In commercial advertising / promotion** 3. **Material** 4. **Likelihood of deception** 5. **Likely to influence purchasing decision** 6. **Causing or likely to cause damage** **Types of false advertising:** **Literally false:** - Provably untrue statements - Strict scrutiny - Easier to prove **Misleading by implication:** - Technically true but misleading - Consumer survey often required - Specific evidence of confusion **False establishment claims:** - Test results / certification claims - Independent verification claims - Specific scientific support claims **Comparative advertising:** - Specific competitor mentions - Specific product comparisons - Higher scrutiny - Substantiation requirements ## Specific scenarios **Marketing claims:** - "Best" / "#1" claims (puffery vs facts) - Test results without basis - Health / efficacy claims - Environmental / "green" claims - Product origin claims - Ingredient claims **Pricing claims:** - False reference prices - Bait and switch - Deceptive savings claims - Inadequate disclosures **Endorsements:** - Material connections undisclosed - FTC endorsement guides - Influencer disclosures - Specific industry rules ## Trade libel / commercial disparagement **Elements:** 1. **False statement** 2. **About plaintiff's goods / services / business** 3. **Communicated to third party** 4. **Made with malice or negligence** 5. **Resulting in pecuniary loss** **Distinguished from defamation:** - About business not person - Specific pecuniary harm required - Different elements - Sometimes overlapping ## Tortious interference **Two types:** **Tortious interference with contract:** 1. Existing contract 2. Defendant's knowledge 3. Intentional interference 4. Without justification 5. Causing breach 6. Damages **Tortious interference with prospective economic advantage:** 1. Reasonable probability of business relationship 2. Defendant's knowledge 3. Intentional interference 4. Improper means / motive 5. Causing harm to relationship 6. Damages **Common scenarios:** - Hiring competitor's employees with NDAs - Inducing breach of supply contract - Interfering with customer relationships - Disrupting business deals - Sabotage / interference with operations ## Palming-off / passing-off **Common-law unfair competition:** - Selling goods as those of another - Trade dress imitation - Confusing customers - Reputation appropriation - Often paired with Lanham Act ## Trade-dress claims **Lanham Act § 43(a):** - Distinctive product / packaging design - Not functional - Acquired distinctiveness OR inherently distinctive - Likelihood of confusion - Specific evidence required ## Right of publicity **State-law claim:** - Use of name / likeness / identity - Without permission - For commercial purposes - ${s.name} may have specific statute - Damages for unauthorized use - Important for celebrities / influencers ## Misappropriation **Common-law tort:** - Taking another's intangible business value - Hot news doctrine (INS v. AP) - Limited specific application - Specific factual scenarios ## Cybersquatting / typosquatting **Anti-Cybersquatting Consumer Protection Act (ACPA):** - Bad-faith registration of domain - Identical / confusingly similar to mark - Specific damages + injunction - UDRP arbitration alternative ## Damages **Lanham Act:** - Defendant's profits - Plaintiff's actual damages - Cost of action - Treble damages (exceptional cases) - Attorney's fees (exceptional) - Injunctive relief **State law:** - Compensatory damages - Punitive damages - Statutory damages (some statutes) - Attorney's fees (UDAP statutes) - Treble damages (some) - Injunctive relief **Equitable relief:** - Permanent injunction - Preliminary injunction - TRO - Disgorgement of profits - Specific corrective advertising - Account / accounting - Recall of products ## Common defenses **Truth:** - Statement actually true - Verifiable basis - Specific support **Puffery:** - Subjective claims - Hyperbole - Not actionable - Examples: "the best," "world-class" **Privilege:** - Absolute (legislative, judicial) - Qualified (employer references, etc.) - Specific protections **No materiality:** - Not influence purchasing - Not significant - Specific evidence **Lack of damages:** - No actual harm - No causation - Specific evidence **Statute of limitations:** - Lanham Act borrows state SOL (typically 3-6 years) - State law SOL specific - Specific accrual rules **First Amendment:** - Limited applicability (commercial speech less protected) - Specific protections - Often limited defense ## Strategic considerations **For plaintiffs:** - Preliminary injunction often crucial - Specific damages calculation - Evidence of actual harm - Witness preservation - Survey evidence sometimes - Industry expert testimony - Multiple claims often **For defendants:** - Strong defenses available - Truth + privilege defenses - Damages challenges - Insurance coverage analysis - Settlement considerations - Reputational considerations ## Industry-specific issues **Healthcare:** - FDA + FTC enforcement - Specific advertising rules - Substantiation requirements **Financial services:** - SEC + FINRA - Specific advertising rules - Disclosure requirements **Tech / SaaS:** - Performance claims - Privacy claims - Security claims **Consumer products:** - FTC enforcement - State AG actions - Class actions common **Food + beverage:** - FDA - State law - Many class actions ## Insurance coverage **Often disputed:** - Advertising injury coverage - Personal + advertising injury - Coverage exclusions - Duty to defend issues - Specific policy language ## Recent developments **Trends:** **"Greenwashing" claims:** - Environmental claims scrutiny - FTC + state enforcement - Class actions - Specific case law developing **AI-generated content:** - Authentic representations - Specific disclosure issues - Right of publicity issues **Influencer marketing:** - FTC endorsement guides - Specific disclosure requirements - Material connection issues **B2B disparagement:** - Industry-specific issues - Trade libel cases - Specific damage calculations ## What you should do If you have unfair-competition claims in North Carolina: hire commercial-litigation attorney with IP / Lanham Act experience. Most North Carolina business attorneys handle these matters. Cost typically $25K-$500K+. Consider preliminary injunction urgency. Evaluate insurance coverage. Cease-and-desist often resolves smaller disputes. --- *This guide is general information about federal + North Carolina law as of mid-2026 and is not legal advice. Unfair competition is technical. Talk to a licensed North Carolina business attorney about your specific situation.*