Understanding the Complexities of the Lanham Act
Do you own a California business and notice that one of your competitors seems to be advertising falsely? Are you worried that this will negatively affect your business? These questions can lead to real stress and hurt your reputation. The good news is that the Lanham Act protects competitors against false and misleading advertising. You will, however, need to take action, and the process of protecting your business may require the involvement of a knowledgeable trademark enforcement and litigation attorney.
The San Diego trademark attorneys with the law firm of Trestle Law know trademark statutes well and can help your business hold other competitors accountable.
What is the Lanham Act?
The Lanham Act, enacted as federal law in 1946 (15 U.S.C. §§ 1051 et seq.), was created to protect trademark owners from confusion, misleading marks, and false advertising. In other words, it is meant to protect the owner of federally registered trademarks against the following:
The use of marks that are similar if such use will likely confuse consumers
Trademark dilution, which leads to diminishing the public’s perception of that mark and can affect market share
The intent behind such false or misleading statements is often to deceive consumers and affect interstate commerce. Anyone who uses false or misleading information believed to cause harm or damage to another in their commercial advertising or promotions can face civil action brought by a competitor.
What Are the Elements of False Advertising Under the Lanham Act?
There are several components and parts to the Lanham Act, and to file a successful lawsuit, you will need to meet specific elements under the act’s unfair competition provisions. The following elements must be met to prove false advertising.
Misleading Claims
There must be an obvious use of a false or misleading statement of fact. While a false message may be easier to prove, a misleading statement can be more ambiguous. If the effect of the statement will likely lead to confusion, deception, or misleading of consumers, and is shown not to be just opinion or puffery, it may be viewed as false advertising by the court.
Deception
Deception, either actual or likely, is another element in a successful lawsuit. If the advertisement is clearly a false representation of fact, it is easier to prove deception. For an advertisement that combines truth with portions that intend to mislead, proving that it will likely affect most of the intended audience will be more challenging. However, extrinsic evidence, such as the results of a targeted consumer survey showing confusion, can help.
Competitive Injury
A third essential element of a Lanham Act false advertising lawsuit is that competitive or commercial harm or injury is occurring or will likely occur. Showing actual economic injury may convince the federal courts to allow you to recover damages. However, proving actual damages is not always necessary if there is enough to show that such injury could occur.
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What Type of Ads Usually Contains False Advertising?
False advertising may be found in any information that, by its sheer design, is meant to influence consumers' purchasing decisions. The advertiser must also disseminate the ad to the degree that it reaches the relevant audiences.
To be more specific, false advertisements are misrepresentations that entice someone to take a particular action, such as making a purchase or visiting a retail or service location. These advertisements may use deceptive or misleading terms (e.g., natural, light, organic, etc.), use false endorsements or scientific claims (e.g., per the FDA), include misleading photos or illustrations, or make false claims of the inclusion of certain ingredients or the quantity of those ingredients. False advertising can also include deceptive pricing, such as excluding hidden fees.
When your competitors use unfair tactics to gain an advantage, you may be able to sue them. Here are common places where false advertising or misconceptions can appear.
TV and print ads
Websites
Internet ads
Emails
Labels
Who May Enforce a Claim for False Advertising Under the Lanham Act?
It is important to note that only commercial competitors can bring forward a claim, or cause of action, under the Lanham Act. Consumers cannot make such a claim, even if they have been confused or deceived. Thus, enforcing a Lanham Act claim for false advertising falls on you.
The reasoning behind this is that the competitors understand and have knowledge about the marketplace and the type of marketing and sales strategies that consumers rely on to make purchasing decisions, more so than the regulators. Such competitors are more likely to seek to protect their interests and, when guided by an experienced trademark enforcement and litigation attorney knowledgeable in federal and state law, can see a successful outcome.
Remedies for Trademark Infringement and Unfair Competition
The Lanham Act provides several remedies for trademark cases involving unfair competition. These remedies can include injunctive relief, damages, and attorney’s fees.
Injunctive Relief
The most common remedy for trademark infringement and unfair competition is injunctive relief. Often, the ability to calculate monetary relief is adequate or inclusive at the time of the filing. By seeking a permanent or preliminary injunction, the court orders the offending party to cease their infringing commercial activities immediately.
Affirmative Relief
Affirmative relief often accompanies an injunction and requires the defendant to take certain measures to eliminate continual infringement. The court’s decision may order product recalls, disclaimers, corrective advertising, or for the defendant to remove or destroy all infringing articles. These infringing articles may include signs, packaging, wrappers, labels, prints, and advertisements. They also include the means for making a product or providing a service, such as plates or molds.
Monetary Relief
You can also be granted monetary relief as a legal remedy in trademark infringement and unfair competition cases. However, federal courts have much leeway in determining a monetary amount for an award. If the court finds monetary damages to be justified, you may recover:
Any profits gained by the defendant as the result of the trademark infringement
Any monetary losses suffered due to the defendant’s infringement actions
Monetary awards for attorney fees and costs
To learn more about these potential remedies for a false advertising claim, reach out to an experienced trademark attorney for legal advice and guidance.
Why Do I Need an Attorney if a Competitor is Infringing on My Trademark?
A trademark is how businesses identify the various goods and services they sell to consumers. Often, it’s the most valuable asset a company has. When your business’ reputation is tied to the trademark you’ve established, protecting it becomes incredibly important. This is because a competitor who misappropriates your trademark or puts out false ads can create a situation where consumers start to believe those false ads or that the other competitor is actually you. If that competitor’s goods or services are of lower quality, it can hurt your business’s reputation.
What’s more, your trademark has tangible value. You can use it to secure financing, license it, and more. Failing to secure your brand inevitably lowers its overall value, which doesn’t help you if you are, for example, trying to use it to secure a loan.
Many believe they can just “handle” a trademark dispute by sending a cease-and-desist letter. However, most people fail to do the necessary background investigation relating to priority and don’t understand the nuance of a trademark dispute. This leaves many people reaching out without enough certainty to know how the tone of their letter should read, or worse, excusing the behavior altogether in their writing. This act alone can put the claimant at a significant disadvantage.
Thus, to protect your company's reputation and value, you should hire a California trademark attorney at the outset of discovering infringement, even if you have no intention of filing suit.
Handling Unfair Competition Across California
In today's marketplace, businesses must protect their reputation, intellectual property, and trade secrets. If not met head-on, false advertising and trademark infringement can wreak havoc and even destroy what you have already so diligently built. Let Trestle Law help!
Our San Diego-based law firm has experience handling unfair competition across California, including false advertising litigation. We stand ready to help you now. Find out how by scheduling a complimentary consultation. Call us at 619-343-3655 or use our convenient online meeting request forms to decide the kind of consultation meeting is best for your business. We also provide various resources so you learn more before our meeting.