Do You Have A Lanham Act Claim?

Do You Have A Lanham Act Claim?

Client Resources | October 2, 2018

You may not have heard of the Lanham Act.  Even some lawyers are likely not familiar with it.  Lawyers that are aware of the Lanham Act may think of it primarily as having something to do with trademarks.  But this federal statute goes beyond trademarks and protects against certain kinds of false advertising.  And those kinds of false advertising may be surprisingly common.

Here’s a better question than the title of this article.  Has your competitor said things about your business or about its products or services that are not true and are confusing to your customers or potential customers?  If so, is there a lot of money at stake?  If the answer to both questions is yes, you should consider using the Lanham Act.

Overview of Lanham Act

Enacted in 1946, the federal Lanham Act prohibits activities including trademark infringement, trademark dilution, and false advertising.  Let’s focus on the last one.  To succeed on a false advertising claim, a plaintiff must establish that

  1. the advertisements of the opposing party were false or misleading;
  2. the advertisements deceived, or had the capacity to deceive, consumers;
  3. the deception had a material effect on purchasing decisions;
  4. the misrepresented product or service affects interstate commerce; and
  5. the [plaintiff] has been—or is likely to be—injured as a result of the false advertising.[1]

Effectively, to establish an injury, a plaintiff could be anyone who could’ve serviced a customer that a competitor gained through misleading ads.

Establishing a false advertising claim permits a plaintiff to seek several types of relief, including actual damages, lost profits, disgorgement of the defendant’s profits, injunctive relief, corrective advertising, and attorney’s fees.

Recent Case Examples

Recent cases from around the Eleventh Circuit[2] confirm that the Lanham Act is broad, but with limits.  These cases show that the Lanham Act can cover many types of advertising but also show that a plaintiff needs to have evidence that the statements are actually false or that customers are being misled.

For example, telling other general contractors that a supplier “had stolen customers as well as trade secrets, and was under investigation” could be false advertising.[3]  So could using photographs of previous work by employees while at other employers on a website without clear labeling.[4]

But showing someone on an advertisement may not mislead customers.[5]  Similarly, paying for positive online reviews is not necessarily a Lanham Act violation, and merely using search engine optimization does not create a false or misleading statement.[6]

Conclusion

The Lanham Act is a powerful tool in competition litigation.  And one that may be underused.

[1] Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256, 1260 (11th Cir. 2004).

[2] The federal appellate court that binds Georgia, Alabama, and Florida federal courts.

[3] Taslidzic v. Luther, No. 9:18-CV-80038, 2018 WL 3134419, at *5 (S.D. Fla. May 21, 2018).

[4] Preston P’ship, LLC v. ADG Design Studio, LLC, No. 1:17-CV-2846-WSD, 2018 WL 307147, at *7 (N.D. Ga. Jan. 5, 2018).

[5] Lancaster v. Bottle Club, LLC, No. 8:17-CV-634-T-33JSS, 2018 WL 2151729, at *6 (M.D. Fla. May 10, 2018) (“Plaintiffs have not offered other evidence of consumer deception, like statements by Eyz Wide Shut patrons or others who have viewed the advertisements that they believed Plaintiffs endorsed the swinger activities or would be present at the club or hotel.”).

[6] GhostBed, Inc. v. Casper Sleep, Inc., No. 0:15-CV-62571-WPD, 2018 WL 2213002, at *6 (S.D. Fla. May 3, 2018).

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