The Lanham Act has long served as a vehicle for businesses to bring civil actions for false advertising claims, but the tests to determine who may sue and under what circumstances have varied significantly among the circuits. Three different tests for standing had been applied by the federal courts. The U.S. Supreme Court resolved the conflict on March 25, 2014, in Lexmark Int’l v. Static Control Components,1 by setting forth a uniform test to determine the circumstances under which a party may bring false advertising claims under Section 43(a) of the Lanham Act.2 Because the court adopted a relatively lenient test to establish standing, the opinion paves the way for an expanded universe of potential false advertising plaintiffs throughout most of the country.
Three circuits (the Seventh, Ninth and Tenth) had used a categorical test that limited claims to actual competitors; four circuits (the Third, Fifth, Eighth and Eleventh) applied a five-factor balancing test sometimes referred to as “antitrust standing”; and the Second Circuit had been following the “reasonable interest” approach, under which a Lanham Act plaintiff has standing if it can demonstrate: (1) a reasonable interest to be protected against the alleged false advertising; and (2) a reasonable basis for believing that the interest is likely to be damaged by the alleged false advertising.
