Trademarks, the Lanham Act, and Your Business

The Lanham Act Reexamined

In recent months, the U.S. Supreme Court has issued two opinions that clarify the scope of the Lanham Act.  In March, the court ruled on Lexmark International v. Static Control Components, which addressed the issue of standing, including the issue of who could bring a claim, thereby clarifying the Lanham Act’s broad language which states that “any person who believes that he or she is or is likely to be damaged” by another person’s false advertising could bring a civil action.  The high Court’s Lexmark ruling confirmed the right of one competitor to sue another competitor for “false or misleading” statements in advertising and labeling, and dismissed prior complex tests for proving standing to bring Lanham Act claims.In June, following Lexmark, the court ruled in Pom Wonderful v. Coca-Cola, that Lanham Act claims were not pre-empted by Food and Drug Administration (FDA) labeling regulations.  In both of these cases, the court outlined the importance of the Lanham Act and the rights of competitors to use the Lanham Act to address false and misleading statements in both advertising and labeling on products, for the benefit of the consumer.

The Pom case is illustrative, in that it is a very simple example of a Lanham Act claim by a competitor.  Pom sells pure pomegranate juice, which it claims has health benefits.  Pom sued competitor Coca-Cola under the Lanham Act alleging that the label on one of its juice products misleads consumers into believing the product consists predominantly of pomegranate and blueberry juice as it prominently displays the wording “pomegranate blueberry”, when it in fact, the product contains only 0.3% pomegranate juice and 0.2% blueberry juice.  In its opinion, the Supreme Court reviewed the intersection between two bodies of federal law-the Lanham Act, and the FDA’s labeling requirements.  Coca-Cola claimed that Pom’s Lanham Act claims were barred because Congress intended the FDA labeling rules to govern product labeling issues.  The high Court disagreed with Coca-Cola, ruling that Pom Wonderful may pursue claims under the Lanham Act against competitor Coca-Cola for alleged false claims on its product labels. (Ironically, Pom Wonderful is appealing a decision of the Federal Trade Commission that concluded Pom’s health claims on its products were deceptive.)

According to a Bloomberg article, “the ruling means that food labels will come under increasing scrutiny, and it’s possible many won’t fare well.”

While this is an important ruling for food manufacturers, the decision extends to all types of businesses.  Indeed, the general issues of unfair competition, and false advertising create a potential Lanham Act claim for any operating business.

Your Business and the Lanham Act

Any business, regardless of whether it sells labeled products, should be aware that it, in addition to other regulations, may be subject to claims of unfair competition and/or false and deceptive advertising under the Lanham Act.  Here are a few tips for consideration to help avoid such claims:

1.  Review your product labels, website, advertising and other written materials.  Ask whether your company’s product labels and advertising is accurate and truthful.  Do they claim that your product or service does more than it really does?  Could your claims be considered misleading to consumers?  Could your product or service claims be confusing to the average customer or client?  If so, maybe it is time for a re-write before you find yourself fending off claims by competitors.

 

2.  Consider your competitors’ claims.  Are your competitors claiming that their products can do more than they really do, in a way that is harming your business?  Could competitor statements be misleading or confusing to consumers?  If your competitors are making fraudulent or misleading claims, and those claims are harming your company’s bottom line, bringing a Lanham Act claim might be one way to fight back.

 

If you have questions about trademarks, or the Lanham Act, and the intersection between the Lanham Act and your intellectual property, you need an experienced trademark attorney.  Anna Vradenburgh is a well-respected, business-mind expert in trademark issues with extensive experience prosecuting domestic and foreign trademarks.  In addition to her prosecution practice, Anna also assists clients in the selection and use of trademarks and represents clients in trademark opposition matters, domain name dispute matters, and before the federal Trademark Trial and Appeals Board.  Anna can also assist your company in licensing maters, including drafting and negotiation of trademark licensing agreements.  For more information visit the Eclipse Law Group website, or contact Anna at (818) 488-8146.

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