Unfair Competition in Maryland Courts
Maryland courts enforce a civil cause of action or tort called Unfair Competition. In Maryland, Unfair Competition is a tort that a party can establish proving that a business or company damaged or jeopardized their business “by fraud, deceit, trickery or unfair methods.’” See Cavalier Mobile Homes, Inc. v. Liberty Homes, Inc.
Generally, Unfair Competition is a legal cause of action used by a company (the plaintiff) to claim that their competition (the defendant) has damaged their business through methods which should not be allowed under normal competitive circumstances. Maryland courts have explained that a prime example of Unfair Competition is where “the goods of one dealer are passed off as the goods of another, and the seller receives the profit which he would not have received except for such deception.” See GAI Audio of New York, Inc. v. Columbia Broadcasting System, Inc. In almost every situation, in Maryland, Unfair Competition has only been found when some type of fraud or deception has been proven by the plaintiff. Often, Competition is pleaded in a complaint along with an alleged violation of the Maryland Uniform Trade Secrets Act or Tortious Interference with Contractual Relations.
Additionally, the Court of Appeals and Court of Special Appeals have made clear that in evaluating competition claims, “courts must be careful to protect legitimate competition among business rivals.” See Command Tech., Inc. v. Lockheed Martin Corp. Maryland courts have noted themselves that they “must be careful to guard against extending the meaning of ‘unfair competition’ to cover acts which may be unethical yet not illegal.” See Edmondson Vill. Theatre v. Einbinder. This separation from the truly “unfair” competition and simply marketplace competition is important because almost every business faces some degree of competition within its industry. Thus, it is important for courts to only allow liability through Unfair Competition to those businesses which have legitimately been harmed through some type of fraud or deceit which should not exist in the regular competitive marketplace.
Thus, if there exists no evidence that a defendant engaged in any fraud, deceit, trickery, or unfair methods – actions which would be required for any competition to be found in favor of Plaintiffs – then Unfair Competition cannot be established in Maryland. Maryland Courts have been careful to guard against businesses simply suing competitors to gain a competitive advantage through the lawsuit. As stated by the Maryland Court of Appeals, Unfair Competition and other business causes of action “do not exist to allow courts to retroactively pick winners and losers in the marketplace but to enforce only minimum standards of conduct.” See Command Tech., Inc. v. Lockheed Martin Corp. Simply, Maryland Courts have been careful to emphasize that “lawful competition must be sustained and encouraged by the law.” See Knickerbocker Ice Co. of Baltimore City v. Gardiner Dairy Co.
Adam Van Grack and the other business attorneys at Longman & Van Grack have represented many parties related to competition, trade secret violations, and all types of contract disputes in Maryland, Virginia, and Washington, DC. Call (301) 291-5027 to speak with Mr. Van Grack or one of our other business litigation attorneys at Longman & Van Grack’s Bethesda, Maryland; Rockville, Maryland; Virginia; or Washington, DC offices.
