The Law Office of Kurt H King

May 8, 2012

Elements Of An Unfair Competition Case

Filed under: Litigation — kurthking @ 4:30 pm
Tags: , ,

What can you do when one of your own starts up a company doing the same thing as yours and mimics your advertising and marketing practices?  Well, one thing you can do is sue them in state court in Missouri for Unfair Competition. 

But what do you have to prove?  There is currently no MAI jury instruction listing the required elements of proof–not even one close enough to modify.  Thankfully, a non-MAI verdict director was recently approved by the Eastern District of the Missouri Court of Appeals in American Equity Mortgage v. Vinson Mortgage Services, ED97103 (filed April 24, 2012). 

That case arose when an ex-husband started up Vinson Mortgage Services (VM) and basically copied the radio commercials and other advertising  of his former wife’s company–the plaintiff American Equity Mortgage.   VM’s deceptive marketing apparently caused customers to call American Equity asking for VM and Mr. Vinton (the ex-husband).  Copy by VM went beyond the use of certain phrases and slogans; rather, VM’s advertisements were “virtually identical.”

On these circumstances, the court of appeals affirmed the $300,000 jury verdict for plaintiff American Equity, rejecting VM’s argument that the key jury instruction–the verdit director listing the elements the jury must find to decide in favor of the plaintiff–was erroneous.  Thus, the elements of such unfair competition as approved by the court are:

1.  VM engaged in conduct likely to deceive or mislead prospective cusotmers; and,

2.  Such conduct caused the mistaken belief that: (i) VM’s business was that of American Equity, or (ii) VM is American Equity or an agent, affiliate or associate of American Equity, or

     (iii) VM’s mortgage services were produced, sponsored, or approved by American Equity; and,

3.  Such conduct by VM damaged American Equity.

 

(An instruction said to follow Restatement of Unfair Competition, Section 4.)

To conclude, while unfair competition cases may arise due to wrongful acts different from those in the case discussed here, and so may require a verdict director altered from that approved here, at least the court of appeals lends us a general road map on what a proper verdict director needs to say for the trial court to safely give it to the jury.

Kurt H. King

Law Office of Kurt H. King, 20 E. Franklin, Liberty, Clay County, Missouri 64068

816.781.6000

www.kurthking.com

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