Lanham Act

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As the rest of us prepare for the Super Bowl by buying avocados to make guacamole, installing new big-screen TVs, and donning Ram/Bengal-themed face paint, select corners of corporate America are preparing for the biggest advertising day of the year.

In 2021, companies spent approximately $485 million on ad slots during the big game, and the average cost of a 30-second commercial slot was about $5.6 million. With such high stakes, plus the intensive “Standards and Practices” review employed by the TV networks, one would assume that anything that makes the cut is above reproach. (The review board won’t even let advertisers use “Super Bowl” because it’s trademarked, which is why you often hear “the Big Game” in ads.)

However, the following examples of legal challenges to your favorite Super Bowl commercials demonstrate that the world of advertising law can be tricky to navigate, and companies that advertise simply cannot mitigate their litigation risk to zero.…

Continue Reading Defending Against the Blitz: Examining the Legal Issues Surrounding Super Bowl Ads

A recent decision in the Ninth Circuit sheds new light on whether, and the standard by which, a false advertising claimant must prove equitable damages under the Lanham Act. In Grasshopper House, LLC v. Clean & Sober Media, LLC, the Plaintiff obtained a jury verdict finding the Defendants liable for false advertising. But the district court cancelled the damages phase of the jury trial after the exclusion of Plaintiff’s damages expert, which the court reasoned was Plaintiff’s only evidence concerning actual losses as a result of Defendants’ misrepresentations. Therefore, the district court held a bench trial concerning equitable relief, where it entered a permanent injunction against Defendants’ false advertising, but denied Plaintiff’s requests for disgorgement of profits, attorneys’ fees, and costs.

Plaintiff appealed to the Ninth Circuit, and the appeals court affirmed the district court’s exclusion of Plaintiff’s damages expert and cancellation of the damages phase of the trial, but found that the Court had erred in denying Plaintiff’s requests for disgorgement of profits, attorneys’ fees, and costs. First, the appeals court found that after the Supreme Court’s subsequent decision in Romag Fasteners, Inc v. Fossil, Inc., the district court was now incorrect to require proof of willfulness to sustain a finding of disgorgement. Romag Fasteners, Inc. established that while mental state is a highly important consideration in determining whether to award disgorgement under the Lanham Act, there is no categorical rule that willfulness is necessary. Therefore, the appeals court here ordered the case remanded for the district court to consider “Defendants’ mental state – whatever that may be – when determining what award of profits is appropriate.”…

Continue Reading Ninth Circuit Clarifies Standards for Equitable Damages in False Advertising Cases

A case about golf and advertising was too good for us not to write about. Recently, the U.S. District Court for the Central District of California issued a tentative preliminary injunction against GolfzonDeca, Inc. for marketing its GolfBuddy rangefinder. For you non-golfers, a rangefinder is a device that tells a golfer how far they are from the hole or other point on the course.[1] Golfers continually strive for equipment that might help them lower their scores, and we are reminded of the prescient equipment tip from Arnold Palmer: “I have a tip that can take five strokes off anyone’s game. It’s called an eraser.” Plaintiff SkyHawke Technologies, LLC brought several Lanham Act claims alleging misrepresentations with respect to (1) the source of GolfBuddy’s GPS data and (2) the GolfBuddy’s accuracy. As a competitor in the rangefinder marketplace, SkyHawke contended that it was entitled to a preliminary injunction with respect to these false statements.
Continue Reading Getting the Yardage: District Court Locks in on Rangefinder Company’s False Claims

In a victory for plaintiffs bringing Lanham Act claims to protect their trademarks, the Supreme Court held on April 23, 2020, that a plaintiff is not required to show that the defendant “willfully” infringed its trademark in order to recover the defendant’s ill-gotten profits under the Act. The ruling favors Lanham Act false advertising plaintiffs as well.

In Romag Fasteners, Inc. v. Fossil, Inc., 140 S. Ct. 1492 (2020), Romag and Fossil signed an agreement allowing Fossil to use Romag’s fasteners in Fossil’s handbags and other products. Romag later discovered that the production factories Fossil hired in China were using counterfeit Romag fasteners while Fossil did little to stop them. Romag alleged that Fossil infringed on Romag’s trademark rights and falsely represented that Fossil’s fasteners came from Romag. The jury agreed and found that Fossil had acted “in callous disregard” of Romag’s rights. However, the jury also found that Fossil did not act willfully. Relying on Second Circuit precedent requiring a plaintiff seeking profits to prove that the defendant’s infringement was willful, the district court ruled that Romag could not recover Fossil’s profits. After the Federal Circuit affirmed, the Supreme Court agreed to resolve the circuit split on this issue.…

Continue Reading Supreme Court’s Lanham Act Ruling Paves Easier Path to Profits for False Advertising Plaintiffs

A recent decision involving both antitrust and Lanham Act claims sheds light on the risks of false advertising. On March 23, 2020, the District Court of Colorado granted and denied in part Johns Manville’s (“JM”) motion to dismiss Chase Manufacturing’s (“Chase”) complaint alleging that JM violated the Sherman Act by engaging in tying and monopolization and the Lanham Act for false advertising. Both JM and Chase sell calcium silicate, known as calsil, which insulates pipes, tanks, and other equipment in industrial facilities. JM accounts for the majority of the domestic calsil market.

According to Chase’s complaint, JM’s sales managers allegedly told customers that Chase’s calsil “may have asbestos and may put…customers and employees at risk,” was poor quality and could not be “trusted to meet specifications,” and was “Chinese” (meaning it was produced in China). A JM sales representative asked a purchaser why it would “risk buying an unproven product that may not meet specifications.” Chase alleged that that two of the five largest distributors heard these comments. JM’s sales managers also allegedly told a smaller distributor that JM never sold calsil that was made in China. Finally, JM’s website FAQ page stated “[w]hile we are aware of one other manufacturer in Asia that produces water resistant calcium silicate, it is an expensive, custom-order product that is not readily available.”…

Continue Reading Truth or Consequences: The Multiple Perils of False Advertising

You want to start taking supplements, so you turn to a guide containing consumer reviews. Is the guide just a collection of advertisements? Last month, the Southern District of California again confronted this question, and also took into consideration whether the reviews should be afforded First Amendment protection. The court reiterated its prior finding that the Lanham Act does not apply to a nutritional supplement guide that faced a false advertising challenge.

In the fifth edition of the NutriSearch Comparative Guide to Nutritional Supplements (the “Guide”), NutriSearch recognized four companies—but not Ariix—with the Gold Medal of Achievement, even though NutriSearch allegedly acknowledged Ariix met the standards for the distinction. For its part, NutriSearch explained that it was reworking its awards recognition program for the sixth edition of the Guide, and that the fifth edition Gold Medal winners were merely prior winners who were grandfathered in. Ariix filed suit against NutriSearch and the Guide’s author, Lyle MacWilliam, claiming that the failure to award the Gold Medal amounted to a false representation that Ariix or its products are not as good as its main competitor, Usana, or Usana’s products. Ariix also alleged that the Guide claims to be objective and neutral, but is actually a shill for Usana, because of a previously undisclosed business relationship between MacWilliam and Usana.…

Continue Reading To Be an Ad or Not to Be an Ad: That is the Question

Bimbo Bakeries and U.S. Bakery recently found out that consumer confusion, like politics, is local, and that “local” means what the local consumer says it means. Let’s unbraid this loaf.

In Bimbo Bakeries USA, Inc. v. Sycamore, No. 2:13-CV-00749, 2019 WL 1058234 (D. Utah Mar. 5, 2019), the jury originally awarded Bimbo $8,027,720 in damages on its false advertising claim against U.S. Bakery, which tried multiple times to convince the court that what makes bread “local” is really a matter of the seller’s opinion, or at least that claiming bread is “local” is mere puffery. According to U.S. Bakery, “local” is a geographical term, but not a geographically descriptive term entitled to Lanham Act protection, because “local” is not a specified location.…

Continue Reading Let’s Get This “Local” Bread!

diamond ringsTiffany & Co., a world-renowned jeweler and specialty retailer, successfully won a judgment that Costco was appropriating its Tiffany® trademark. Federal Judge Laura T. Swain ordered Costco to pay Tiffany & Co. $19.4 million for trademark infringement and trademark counterfeiting under the Lanham Act, as well as unfair competition under New York state law, in the latest round in a long-running legal battle over the sale of engagement rings bearing the mark “Tiffany” as a standalone term. The decision reaffirms the strength of the Tiffany® trademark and will likely have a drastic effect on the way Costco and other wholesalers conduct business.

The world-famous Tiffany® mark has been used in commerce in the United States since 1868. In 1886, Tiffany & Co. introduced an engagement ring that highlights the diamonds by lifting the stone off the band. This famous ring was named the Tiffany®. This six-prong configuration has been called the “Tiffany setting” by other jewelers.…

Continue Reading Tiffany Setting the Standard

DNA StrandEighty-eight percent of consumers are willing to pay more for healthier foods. Manufacturers have responded by focusing marketing campaigns on the health and safety benefits of their products, often at the expense of their competitors. But when Arla Foods portrayed a seven-year old girl defining a common hormone used to increase milk production in cows as “weird stuff” akin to a “six-eyed monster” with “razor sharp teeth” and electric fur, a Wisconsin federal judge decided the ad went too far and would likely mislead consumers. Despite Arla’s reliance on a small disclaimer and “scientific debate” over the health and safety of dairy products made from cows treated with rbST, the Court enjoined Arla’s campaign, finding it was likely to mislead consumers into thinking rbST was unsafe, unhealthy, weird, and “altogether something you should not feel good about feeding your family.”

On April 25, 2017 Arla launched a $30 million advertising campaign targeting “ingredient savvy” U.S. consumers seeking more information about the products they are eating and feeing their families. The centerpiece of the campaign is a 30-second commercial titled, “Arla Cheese Asked Kids: What is rbST?”…

Continue Reading Arla’s Dairy Campaign Goes Sour After Court Enjoins Ad Claims Attacking rbST

Demand for Olympic merchandise in the United States is resurrected every 4 years by the fervor of the televised Games. Officially, authorized and licensed gear is readily available in stores and on the Internet; however, every iteration of the Games brings with it a flood of counterfeit Olympic goods as well. The broadcasting of this year’s Olympics in Rio de Janeiro has, as expected, beckoned all sorts of counterfeit Olympic items to the U.S. market. From t-shirts illegally emblazoned with “Team USA”, to phony gold medals inscribed with the Olympic Rings. This blog post explores the laws that protect consumers and Olympics rights-holders in the United States from counterfeit Olympic goods.

Under 15 U.S.C. § 1127, a counterfeit is an article that includes unauthorized use of a logo, name, or other trademark that is “identical with, or substantially indistinguishable from” a registered trademark. The widely recognizable signs, symbols, and words affiliated with the Olympics, Paralympics, and Pan-American games are all registered trademarks. This includes, but is not limited to, the torch, the five interlocking rings, and the words “Team USA.”…

Continue Reading Golden Rules: Counterfeits and the Olympics