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Edward Schwartz, Jul 28, 2014
The cola wars. The Apple “I’m a PC” ads. “Miller Lite Has More Taste Than Bud Light.” For as long as there have been advertisements and marketing, companies have been favorably comparing their products and services to those of their competitors and sometimes engaging in outright disparagement in doing so. Not infrequently, the aggrieved company shifts the field of battle from the marketplace to the courthouse, as when DirectTV sued Dish, and when AT&T sued Verizon, alleging that the defendant crossed the line by relying on falsities to damage the plaintiff’s reputation.
Plaintiffs sometimes bring such cases under the Sherman Act, alleging that the defendant’s conduct harmed not only the plaintiff’s reputation but competition as well. However, the courts’ reluctance to bless antitrust claims predicated upon tortious conduct has frustrated the efforts of most plaintiffs bringing such claims. As a result, plaintiffs have more often turned to another statute that was intended to “protect persons engaged in . . . [interstate] commerce against unfair competition”: Lanham Act Section 43(a), which in relevant part prohibits unfair competition in the form of “false or misleading description of fact, or false and misleading representation of fact” that “misrepresents the nature, characteristics, qualities, or geographic origin of [a company’s] or another person’s goods, services, or commercial activities.”
In two cases decided this term, the Court both adopted an expansive view of Lanham Act standing and removed a potential defense to Lanham Act liability that had previously been available to companies in some regulated industries. These two cases will undoubtedly cause more companies to seek judicial protection from the marketing slings and arrows of their competitors and others.
