Competition is the activity where one party tries to win or prove superiority over others. Unfair competition is a market situation where a person or party tries to control market situation or gain profits by employing unjust or illegal trade practices.
“Any act of competition contrary to honest practice in industrial and commercial matters is unfair competition.”-Paris Convention article 10.
Unfair competition can be in the form of-
- Selling goods below the standard price.
- Imitating an established brand and selling it.
- Confusing customer/consumer by wrong advertisement.
- Using established trademarks without license.
- Using trade mark similar to established ones.
- Unauthorized substitution of one brand of goods with another.
- False representation of goods or services.
- Unauthorized use of confidential information or trade secrets.
- Trade defamation.
- Comparative advertising.
Unfair competition results in huge financial loss and dilution of good will of competitors .it also affects the balance of economy and may discourage creativity and R&D. It basically destroys the trust in development of market and product.
Laws have been framed to prevent unfair competition, unfair competition prevention Act has been prepared to curb the situation. The purpose of this act is to provide measure for prevention of unfair competition and compensate for damages caused by unfair competition.