The Lanham Act prohibits unfair competition. See 15 U.S.C. § 1125.
15 U.S.C. § 1125. False designations of origin, false descriptions, and dilution forbidden (a) Civil action (1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or devise, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which — (A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or (B) in commercial advertising or promotion, misrepresents the nature, characteristics, quahties, or geographic origin of his or her or another person's goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.
Courts have recognized that the Lanham Act represents an affirmative code of business ethics. See Gold Seal Co. v. Weeks, 129 F.Supp. 928 (D.D.C. 1995) Aff’d subnom. S.C. Johnson & Son, v. Gold Seal Co., 230 F.2d 832 (D.C. Cir. 1955), cert, denied. 352 U.S. 829 (1956). According to this business code, competitors may not destroy the basis of genuine competition by destroying the buyers' opportunity to judge fairly between rival products. Id.
For over a century, the United States Supreme Court has recognized that the primary reason for prohibiting unfair competition is to guard against public deception. See Laurence Mfg. Cn. v. Tennessee Mfg. Co., 138 U.S. 537 (1891). "[T]he touchstone of a Section 1125(a) unfair competition claim is whether the defendant's actions are likely to cause confusion." Matrix Essentials, Inc. v. Rmporium Drug Mart, Inc., 988 F.2d 587, 592 (5th Cir. 1993). Like claims for trademark infringement, claims for unfair competition under the Lanham Act require the same threshold showing of a likelihood of consumer confusion as to the source of the goods. See John Paul Mitchell Syst. v. Pete-N-Larry's, Inc., 862 F.Supp. 1020, 1023 (W.D. N.Y. 1994).
To determine if there is a likelihood of confusion, courts consider multiple factors. The Ninth Circuit Court of Appeals has recognized that eight non-dispositive factors should be considered when evaluating a likelihood of confusion: (1) the strength of the mark; (2) the proximity of the goods; (3) the similarity of the marks; (4) evidence of actual confusion; (5) the marketing channels; (6) the type of goods and the degree of care likely to be exercised by the purchaser; (7) the defendant's intent in selecting the mark; and (8) the likelihood of expansion of the product lines. See AMP, Tnr,. v. Sleekcraft Boats. 599 F.2d 341, 348-49 (9th Cir. 1976). Most commonly, these factors are used to determine the likelihood of confusion in trademark infringement cases. Id.