False Advertising

False advertising occurs when one competitor makes a false statement in an advertisement or promotion about a product or service that it sells or that a supplier or competitor sells. When this occurs, a harmed competitor (or in some cases a harmed supplier) can bring suit for false advertising under the Lanham Act, which is codified at 15 U.S.C. §§ 1051 et seq. 

To prevail on a claim, the following matters must be proved by the victim of false advertising (usually a harmed competitor, but sometimes a harmed supplier): (1) the false advertiser ran or displayed an advertisement or promotion that stated or implied one or more false facts about its own offerings or those of a competitor or supplier; (2) the false advertisement misled or had a tendency to mislead a significant share of the prospective purchasers to whom it was shown—which can be proved by customer surveys, expert testimony, and customer testimony; (3) the misleading statement in the false advertisement likely affected the purchasing decisions of those misled by it (proved by the same evidence listed directly above); (4) the harmed competitor or supplier therefore lost sales to the false advertiser or suffered harm to its goodwill, i.e., its sales and profits were “diverted” to the false advertiser—which can be proved under a relaxed standard; and (5) the advertisement affected interstate commerce—a requirement that can usually be satisfied under the modern definition of interstate commerce.

A harmed competitor can also seek related redress under California Business & Professions Code Section 17500 if the false advertising deceives customers or harms a business located in California.

We have substantial experience litigating claims for false advertising on behalf of plaintiffs and defendants. Recognized for his experience, Mr. Markham was recently interviewed at length by Vice Media about about a prominent false advertising case.