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Unfair Competition by Misappropriation

Mar 4, 2013

What must a party prove when claiming unfair competition by misappropriation?

A party claiming unfair competition by misappropriation must prove: "(i) the creation of plaintiff's product through extensive time, labor, skill and money, (ii) the defendant's use of that product in competition with the plaintiff, thereby gaining a special advantage in that competition (i.e., a 'free ride') because defendant is burdened with little or none of the expense incurred by the plaintiff, and (iii) commercial damage to the plaintiff." Dresser-Rand Co. v. Virtual Automation Inc., 361 F.3d 831, 839 (5th Cir. 2004). Claims for unfair competition by misappropriation are subject to a two-year limitations period. See Tex. Civ. Prac. & Rem. Code § 16.003 (two-year limitations period for injury to or conversion of the property of another); see also Daboub v. Gibbons, 42 F.3d 285, 290 (5th Cir. 1995).

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