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Claims for Unfair Competition in Pennsylvania

The Pennsylvania Court of Common Pleas has defined unfair competition according to its definition in the Restatement (Third) Unfair Competition § 1 (1995)See e.g. Babiarz v. Bell Atl.-Pa., Inc., 2001 WL 1808554, at *9 (Pa.Com.Pl. July 10, 2001); Lakeview Ambulance & Med. Servs., Inc. v. Gold Cross Ambulance & Med. Serv., Inc., 1995 WL 842000, at *1-2 (Pa.Com.Pl. Oct. 18, 1995). Under the Restatement (Third), “[o]ne who causes harm to the commercial relations of another by engaging in a business or trade is not subject to liability to the other for such harm unless … the harm results from … other acts or practices of the actor determined to be actionable as an unfair method of competition.” According to Comment G of the Restatement (Third), “[a]s a general matter, if the means of competition are otherwise tortious with respect to the injured party, they will also ordinarily constitute an unfair method of competition.” Hence, tortious interference may form the basis of a claim for unfair competitionID Security Sys. Canada, Inc. v. Checkpoint Sys., Inc., 249 F.Supp.2d 622, 688 (E.D.Pa.2003).

Several judges in the Eastern District of Pennsylvania have applied the Restatement (Third) definition of unfair competition when faced with a Pennsylvania state law unfair competition claimSee, e.g., Synthes (USA) v. Globus Med., Inc., 2005 WL 2233441, at *9 (E.D.Pa. Sept. 14, 2005); Id Security, 249 F.Supp.2d at 688; Air Products and Chemicals, Inc. v. Inter-Chemical, Ltd.,2003 WL 22917491, at *12 (E.D.Pa. Dec. 2, 2003); Fresh Made, 2002 WL 31246922, at *9. To date, however, no appellate court in Pennsylvania has applied the Restatement (Third) to the common law tort of unfair competition.

According to the Third Circuit, “[a] claim of unfair competition under Pennsylvania law requires proof that the defendant has ‘passed off’ the goods of one manufacturer or vendor as those of another, thus creating confusion between his own goods, and those of the rival.” Scanvec Amiable Ltd. v. Chang, 80 Fed.Appx. 171, 180 (3d Cir.2003) (citing to Penn. State Univ. v. Univ. Orthopedics, Ltd., 706 A.2d 863, 870-71 (Pa.Super.Ct.1998)) (“The gist of the action lies in the deception practiced in ‘passing off’ the goods of one for that of another.”) Bldg. Materials Corp. of Am. v. Rotter, 535 F.Supp.2d 518 (E.D.Pa.2008).

If you have a claim for unfair competition, please contact an attorney at Sidkoff, Pincus & Green, with attorneys licensed in Pennsylania and New Jersey and offices in Philadelphia, Pennsylvania.