I am not lawyer, and I do not provide legal advice. The below statements are based on my personal experience and research with copyright'd material.
Copyright Infringement (in the US)
Making a work, based on your competitors existing work is considered creating a derivative work. If you do not have explicit permission (license) to create the derivative work, you are committing copyright infringement.
Creating a work from scratch, that is similar—in part or in whole—to another work, is not copyright infringement—but could be patent infringement.
Your leadership has asked you to commit copyright infringement. If this is willful and for profit, then it is a criminal misdemeanor. Otherwise, it's a civil offense of "innocence", "ordinary", or "willful".
I would reach out to your compliance officer or legal representation for clarification and escalation. In certain businesses, the appropriate actions to take are generally outlines in a code-of-conduct or something similar.
If you don't have a method to escalate the issue, I would make the best (written and documented) effort to clarify the issue—as to not be insubordinate.
Ethical conduct versus Moral conduct
Generally speaking, morals are defined by the individual—you—and ethics are defined by a third party—the business, the government, etc.
I've always taken it to mean, morals are socially constructed (religion, culture) and ethics are legally constructed (policy, laws, etc.)
Not all businesses will identify your situation as being unethical. That is, as being against company policy. However, it still may be a lawful offense.
Ethically: Remember, you are performing work on behalf of the company. If the company decides to commit copyright infringement against your warning, they are responsible—not you. I would make my best, reasonable effort to warn the company of the possible outcome of such a decision.
Morally: If you morally disagree with performing the work, that is a personal decision that you are liable for. Generally, if the company retaliates against your failure to follow management/policy—which I would consider their right—you are legally protected because they asked you to perform a crime. Moverover, those situations typically don't preserve the relationship between you and the company.
Hopefully, I objectively and accurately framed the ideas surrounding your question so you can make a more precise judgement on how to precede.
I would approach the situation as working on behalf of the company and present it as concern for the companies interests (with as much hard documentation as possible). Then finally, if the company insists—and there are no 3rd-party escalation requirements left (unlike healthcare and government)—I would decide personally if I had moral objections to their request and the consequences of those objections.