While deceptive trade practices by businesses are generally addressed by state statutes, the Lanham Act (Act) provides federal protection against unfair competition for those engaged in commerce.  The Act prohibits commercial promotion that distorts another entity’s business activities. This includes the use of any word, symbol or misleading factual description that leads to such misrepresentation. The plaintiff must demonstrate likelihood of success on the merits to obtain a preliminary injunction against the misleading behavior under the Act.

False and misleading. The claimant must establish that the subject advertisements are false or misleading. Falsity in this context means either literally false or statements that may be true but give a false impression, which can be regarded as deceptive advertising. The determination of falsity in either context requires an examination of the message in its entirety. In addition, the claim must be one of fact rather than opinion. Specifically, statements that do not give rise to a claim include vague statements that constitute mere opinions and inflated statements that could not be reasonably relied upon.

Consumer deception. When the advertisement is determined to be misleading even though it is true (as opposed to literally false), the party claiming unfair competition must submit evidence of deception. The claimant must present evidence such as expert testimony to succeed in a claim for injunctive relief. There is no requirement to provide extensive market research to make this claim.

Materiality. When a defendant’s advertisement has been determined to be false in a literal sense, the plaintiff must still substantiate that the deception is materially related to the purchasing decisions of the consumers. This may consist of statements pertaining to the health and safety of a product which would presumably influence a consumer’s decision to purchase a particular product.

Potential for injury. Finally, the claimant is required to demonstrate that he may be injured as a result of the false advertising. The injury must be regarded as irreparable to establish cause for both a preliminary injunction and a false advertising claim.

Contact Shane Coons at 949-333-0900 or visit his website at www.ShaneCoonsLaw.com to find out more about his practice.