Advertising Law Tool Kit - Ninth Edition | 2021

Venable / 85 84 / Venable Be Prepared: Lanham Act Litigation If you are contemplating or are threatened with Lanham Act litigation, here are some things to consider: • Develop both offensive and defensive strategies. Sometimes it is important to “think like a plaintiff” and brainstorm ways to attack your competitors’ advertising claims. The best defense may be a good offense. • Identify and evaluate “implied” advertising statements. Lanham Act cases rarely turn on what is expressly stated in advertising – use surveys to identify any implied statements, and determine whether substantiation exists for the implied claims. • Assemble a multidisciplinary team. Lanham Act cases typically require collaboration among marketing, science, and regulatory/legal personnel. • Engage independent experts early. Experts are needed early in the areas of consumer perception, science/substantiation, and damages. • Prepare for fast-paced litigation. Preliminary injunction hearings are “mini-trials” that proceed on an emergency basis and often occur within weeks of the start of a case. Early planning is vital. • Money damages are more common. Cases are not only about injunctions anymore – both plaintiffs and defendants should have a damages strategy from the outset of a case. • Plan for impact outside of the litigation. Competitor lawsuits over advertising campaigns can be high visibility. Consider having a media relations strategy, prepare for regulatory or other parallel proceedings, and ensure that you have contingency planning for ongoing promotional and advertising activities. For example, in the event that a court orders a modification to an advertising statement, it is good to have “Plan B” ready to roll. The Lanham Act is the federal statute that authorizes companies to sue competitors whenever they have suffered competitive injury caused by false or misleading statements used in “advertising or promotion.” Section 43(a) of the Lanham Act extends broadly to any “false or misleading representation of fact” that “misrepresents the nature, characteristics [or] qualities” of the advertiser’s (or another person’s) goods, services, or commercial activities. The Lanham Act applies equally to consumer-facing promotional statements and business-to- business statements. For example, emails to retailers or distributors are actionable under the Lanham Act. The only requirement is that the targeted statement be used in “commercial advertising or promotion” (i.e., those communications intended to induce a commercial transaction). Remedies for Lanham Act violations include injunctions (which can issue from a court within days or weeks of the commencement of a lawsuit), money damages, and recovery of attorneys’ fees. Injunctions can also include an order compelling the advertiser to issue corrective advertising. Lanham Act lawsuits between competitors often include claims and counter-claims. The most important event in Lanham Act litigation often is a preliminary injunction hearing, which is a very quick “mini-trial” in which the parties are able to present evidence and obtain an emergency order, either stopping or permitting challenged advertising. The decision on the preliminary injunction motion frequently leads to settlement of a case, although, increasingly, competitors are proceeding to an actual trial on the merits in order to recover monetary damages. Nicholas M. DePalma nmdepalma@Venable.com +1 703.905.1455 Roger A. Colaizzi rcolaizzi@Venable.com +1 202.344.8051