Thursday, March 9, 2017

Lanham Act: False Advertising By a Business Competitor

Do I Have a Lanham Claim Against My Competitor for False Advertising? 

If your competitor’s advertising is false or misleading, you are not helpless. You might have a federal claim under Section 43(a) of the Lanham Act. Although the Lanham Act is often known as a trademark statute, it also protects businesses against the unfair competition of misleading advertising or labeling.

A plaintiff that prevails on a Lanham Act claim can obtain an injunction against the false or misleading advertising, as well as damages and, in certain cases, attorneys’ fees. Importantly, consumers do not have standing under the Lanham Act, only competitors.

The Supreme Court in POM Wonderful LLC v. Coca Cola, recently explained why the Lanham Act utilizes competitors as its enforcement mechanism: “Competitors who manufacturer or distribute products have detailed knowledge regarding how consumers rely upon certain sales and marketing strategies. Their awareness of unfair competition practices may be far more immediate and accurate than that of agency rulemakers and regulators.” Thus, the “Lanham Act draws upon this market expertise by empowering private parties to sue competitors to protect their interests on a case-by-case basis.” 

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