On March 25, 2014, the Supreme Court issued its ruling in Lexmark International, Inc. v. Static Control Components, Inc., No. 12-873, a case addressing the issue of standing to bring a claim for false advertising under the Lanham Act, 15 U.S.C. § 1125(a). In a unanimous opinion authored by Justice Scalia, the Court noted that the statutory cause of action "extends only to plaintiffs whose interests 'fall within the zone of interests protected by the law invoked,'" and "whose injuries are proximately caused by violations of the statute." Thus, the Court held that "to come within the zone of interests in a suit for false advertising under § 1125(a), a plaintiff must allege an injury to a commercial interest in reputation or sales." The plaintiff must show "economic or reputational injury flowing directly from the deception wrought by the defendant's advertising," which is "generally not made when the deception produces injuries to a fellow commercial actor that in turn affect the plaintiff." (Slip Op. at 10, 13, 15.)

The Court's holding rejected the three existing tests to determine standing that had been applied by the circuits in favor of its new guidelines based on the application of traditional principles of statutory interpretation. The first test is the "reasonable interest approach" adopted by the Second Circuit (and utilized by the Sixth Circuit in this case), wherein a Lanham Act plaintiff has standing if it demonstrates "(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."(citation omitted). The second test, adopted by the Third, Fifth, Eighth and Eleventh Circuits, is the application of "antitrust standing or the Associated General Contractors factors in deciding Lanham Act standing." And, the third test is a "categorical test, permitting Lanham Act suits only by an actual competitor," followed by the Seventh, Ninth and Tenth Circuits. (Slip Op. at 5, 9.)

Lexmark manufactures and sells laser printers that are designed to only work with its toner cartridges, which include a microchip that disables the cartridge when it runs out of toner. Static Control makes microchips that mimic the microchip in Lexmark's cartridges, and sells the microchips to "remanufacturers" who use them to refurbish and resell Lexmark's used cartridges. Lexmark sued Static Control, asserting that the microchips violated the Copyright Act and the Digital Millennium Copyright Act. (Slip Op. at 1, 2.)

Static Control counterclaimed, alleging that Lexmark violated the Lanham Act by (1) falsely advertising to its customers that they are legally bound to return the used cartridges to Lexmark after a single use, and (2) falsely advertising to the remanufacturers that it is both illegal to sell refurbished cartridges and to use Static Control's products in refurbishing those cartridges. Static Control also alleged that Lexmark's misrepresentations proximately caused injury by diverting sales and injuring Static Control's business reputation. (Slip Op. at 3, 4.)

Based on these allegations, the Court concluded that Static Control "comes within the class of plaintiffs whom Congress authorized to sue under § 1125(a)," and also sufficiently alleged that its injuries were "proximately caused by Lexmark's misrepresentations." Accordingly, the Court affirmed the Sixth Circuit's determination that standing exists (albeit under a different test), and held that "Static Control is entitled to a chance to prove its case." (Slip Op. at 18, 19, 22.)