FALSE ADVERTISING /
LANHAM ACT

In order to prevail in a false advertising Lanham Act lawsuit, a plaintiff must establish that:

• it suffered commercial or competitive injury
• the injury resulted from false or misleading statements of fact used by a competitor in advertising or promotional materials in interstate commerce
• the false or misleading statements were likely to materially deceive or confuse consumers

Even when marketing statements are literally true, they can violate the Lanham Act if made in a misleading or confusing manner.

Actionable statements may include:

• direct and explicit false or misleading criticism of a plaintiff’s business
• comparative advertising that falsely suggests or portrays a competitor’s product or service as equal to or better than that of the plaintiff’s

Obvious exaggerations (puffery or hyperbole) that a reasonable consumer is unlikely to believe do not constitute false or misleading advertising under the Act.

A large percentage of false advertising suits involve false or misleading statements by one business about a competitor’s business or product. A computer maker’s untrue statement that a competing computer maker produced an inferior product is an example of this type of Lanham Act injury.

The U.S. Supreme Court has also construed the Act to protect businesses against competitors’ false or misleading statements about a business other than the plaintiff’s (i.e., a non-competitor) that injure the plaintiff’s business. This may occur, for example, if a computer manufacturer (the defendant) issues an untrue and damaging statement about a component supplier (a non-competitor) used by the manufacturer’s competitor (the plaintiff). Although the defendant did not directly criticize a competitor or its product, the defendant’s competitor (the plaintiff) may lose sales as a result of the damaging statement about its supplier.

While consumers are not entitled to bring false advertising claims under the Lanham Act, they may obtain damages for losses caused by false advertising through False Advertising Consumer Lawsuits.

Plaintiffs in false advertising Lanham Act lawsuits may obtain injunctions preventing defendants from:

• continuing in-progress false advertising, and/or
• carrying out threatened false advertising

Courts may also order defendants to publish corrections of false or misleading statements and to pay plaintiffs damages for losses caused by actual commercial or competitive injuries.