Unfair Competition and Federal Law: Constitutional Restraints on the Scope of State Law

Abstract

Plaintiffs who bring federal claims for trademark infringement under the Lanham Trademark Act' often assert pendent claims alleging violation of state unfair competition law. When courts determine that Lanham Act violations have occurred, they often issue injunctions that place nationwide limitations on the infringer's right to market its products.2 But even when a Lanham Act claim fails, courts nevertheless often issue similar multistate injunctions based on the pendent state law claims.3 These injunctions, in effect, subject national unfair competition suits to regulation by the laws of a single state. This comment argues that courts should decide interstate unfair competition claims solely under federal law. More particularly, the comment argues that the multistate injunctions issued by courts on the basis of state law claims violate the commerce, due process, and full faith and credit clauses of the United States Constitution. While it may be theoretically possible to remedy the constitutional defects in these state law injunctions by crafting the injunctions more carefully, this remedy would be difficult to implement in practice. The great problems inherent in drafting constitutionally sound multistate injunctions based on state unfair competition law provide good reason for courts to consider seriously the possibility that the Lanham Act preempts state regulation of unfair competition. Exclusive application of federal law in this context would avoid the constitutional concerns that arise when courts issue multistate injunctions pursuant to a single