The law of unfair competition is mainly governed by state common law (state unfair competition). A few states, including Illinois, have enacted legislation dealing with types of state unfair competition, such as the Uniform Deceptive Trade Practices Act (UDTPA) and the Consumer Fraud & Deceptive Practices Act (CFA).

State Unfair Competition - TrademarkConsumer Fraud & Deceptive Practices Act (CFA)

Several states have codified some form of Consumer Fraud Act. Illinois is one state that has done so, codified at 815 ILCS 505/1 as the Consumer Fraud & Deceptive Practices Act (CFA). The CFA make unlawful unfair or deceptive acts or practices which take place “in the conduct of any trade or commerce” The act is defined broadly, covering transactions in services, goods & property.

Unlawful practices are defined in the code as deception, fraud, false pretense, false promise, misrepresentation, concealment, omission of material fact, with intent that others rely on the concealment or omission. A material fact is one where a person would have acted differently knowing the correct information or which concerns the type of information upon which a person would be expected to rely on making a decision.

Consumers do not need to show intent to deceive; a violation may be based on innocent or negligent misrepresentation. However, only people who suffer actual damages as a result of the misappropriation can bring an action under the act. Thus, to state a claim, a consumer must prove reliance on the misrepresentation.

 Uniform Deceptive Trade Practices Act (UDTPA)

The purpose of the UDTPA is to prevent dishonest businesses from doing injury to those honest businesses competing in their markets. Injunctive relief is available to protect individual consumers, where they are likely to be damaged in the future by a deceptive trade practice of another. No damages remedy is available under the UDTPA, but damages for violations of the UDTPA are available under the CFA. To prevail under the UDTPA, a plaintiff need not prove monetary damage, intent to deceive, or even actual confusion or misunderstanding. The prevailing plaintiff may be awarded costs and attorneys fees, but only if the court finds that the defendant willfully engaged in a deceptive trade practice.

Trademark Deceptive PracticesA person engages in a deceptive trade practice (trademark infringement) when, in the course of his business, he:

  • Passes off goods or services as those of another;
  • Causes likelihood of confusion or misunderstanding as to the source, sponsorship, approval or certification of goods or services;
  • Causes likelihood of confusion or misunderstanding as to affiliation, connection or association with another;
  • Uses deceptive representations or designations of geographic origin in connection with goods or services;
  • Represents that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits or quantities that they do not have or that a person has a sponsorship, approval, status, affiliation or connection that he does not have;
  • Represents that goods are original or new if they are deteriorated, altered, reconditioned, reclaimed, used or secondhand;
  • Represents that goods or services are a particular standard, quality or grade or that goods are a particular style or model, if they are not;
  • Disparages the goods, services or business of another by false or misleading representation of fact;
  • Advertises goods or services with intent not to sell them as advertised;
  • Advertises goods or services with intent not to supply reasonably expected public demand, unless the advertisement discloses a limitation of quantity;
  • Makes false or misleading statements of fact concerning the reasons for existence of or amounts of price reductions;
  • Engages in any other conduct which similarly creates a likelihood of confusion or misunderstanding.