Academic journal article Washington and Lee Law Review

Filtering through a Mess: A Proposal to Reduce the Confusion Surrounding the Requirements for Standing in False Advertising Claims Brought under Section 43(a) of the Lanham Act

Academic journal article Washington and Lee Law Review

Filtering through a Mess: A Proposal to Reduce the Confusion Surrounding the Requirements for Standing in False Advertising Claims Brought under Section 43(a) of the Lanham Act

Article excerpt

I. Introduction

Wellwood Avenue is home to two of the best pizza parlors in the town of Lindenhurst, Carlo's and Giuseppe's. The two stores engage in heavy competition, but both have been consistently profitable. Last year, though, Carlo's began advertising its new "Healthy Pizza"-a pizza with zero grams of fat that tastes just like Carlo's traditional pizzas. Carlo's advertises its amazing new product throughout the town. The Healthy Pizza becomes the talk of Lindenhurst, and soon Carlo's profits have quadrupled. Giuseppe's, on the other hand, is floundering since the debut of the Healthy Pizza.

After three months of incredibly poor sales, Giuseppe's becomes desperate to discover the secret behind the Healthy Pizza and sends a sample of the amazing product to a laboratory to discover its ingrethents. After performing some tests, the laboratory informs Giuseppe's that there is no secret ingrethent in the Healthy Pizza-the pizza has just as many grams of fat as a typical pizza. Carlo's has been selling the same product it has always sold, just advertising it to be something different. Giuseppe's alerts the local media of the scam, and soon after, Giuseppe's sales return to what they were prior to the unveiling of the Healthy Pizza.

Giuseppe's, however, feels that Carlo's should compensate it for the sales it lost due to the Healthy Pizza, and retains an attorney to sue Carlo's. The attorney performs some research and discovers Section 43(a) of the Lanham Act,1 which seems tailor-made to protect a party like Giuseppe's. The attorney files suit in the federal district court in Lindenhurst, expecting the case to be an easy win. However, the case becomes complicated when Carlo's submits a motion to dismiss, arguing that Giuseppe's lacks standing to sue under Section 43(a)'s false advertising protection. The district court is located in a circuit that has yet to determine a standard for pmdential standing in Section 43(a) false advertising claims. The court, therefore, turns to the Section 43(a) false advertising standing jurisprudence of other circuits. After examining the decisions in which other circuits have developed standards for standing in Section 43(a) claims, the district court determines that Giuseppe's does not have standing to sue. Despite the fact that under the plain meaning of Section 43(a) Giuseppe's standing would seem apparent,2 the district court, through examining the Section 43(a) standing jurisprudence of the other circuits, is able to find that Giuseppe's lacks standing to make a Section 43(a) false advertising claim against Carlo's.

The above hypothetical may seem unrealistic, but the Eleventh Circuit's recent ruling in Phoenix of Broward, Inc. v. McDonald's Corp.,3 which prevented a Burger King franchisee from suing McDonald's for alleged false advertising under Section 43(a), lends it credibility.4 If rulings like the one against the Burger King franchisee become common, Section 43(a)'s protection against false advertising effectively will become a dead letter. This is troubling not only to commercial players who rely on Section 43(a) to prevent their competitors from engaging in activities like that in which Carlo's engaged, but also to consumers who are protected indirectly from false advertising by the liability Section 43(a) places on those who engage in false advertising.5 A clear standard for standing in Section 43(a) false advertising claims that can easily be applied in a consistent manner and is true to the plain meaning of the statute's language is, therefore, necessary.

The goal of this Note is to establish that the current state of Section 43(a) false advertising standing jurisprudence is unstable and that this instability in the law is troubling because it permits courts to reach outcomes which remove the teeth from Section 43(a)'s false advertising protection. Part II provides an explanation of standing in general. Part III gives a history of the Lanham Act, particularly its false advertising protection. …

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