The U.S. Supreme Court has decided to review whether an entity may bring a claim for false advertising under the Lanham Act against a defendant that is not its competitor. Lexmark Int’l, Inc. v. Static Control Components, Inc., No. 12-873 (U.S., cert. granted June 3, 2013). The Third, Fifth, Eighth, and Eleventh Circuits allow parties that are not actually competitors to bring such claims, if they satisfy the factors set forth in Associated General Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519 (1983) (addressing standing for those seeking damages under the Clayton Act for harm arising from violation of antitrust laws). The Seventh, Ninth and Tenth Circuits have adopted a categorical test under which only an actual competitor may bring such litigation. The Second and Sixth Circuits apply their own variations of a more expansive “reasonable interest” test.
The issue arises in the context of copyright and patent infringement claims brought by Lexmark against Static Control involving the latter’s purported manufacture and sale of microchips that remanufacturers use when making toner cartridges for Lexmark’s laser printers. Static Control counterclaimed for false advertisement under the Lanham Act, alleging that Lexmark falsely told Static’s customers that Static’s products infringed Lexmark’s intellectual property. The Sixth Circuit agreed that Static Control had standing to bring the claim even though it did not make laser printers and was thus not a direct competitor.
A number of consumer-fraud actions brought in recent years against product manufacturers have included false advertising claims under the Lanham Act, which claims have been dismissed for lack of standing because consumers are not the manufacturers’ competitors. A U.S. Supreme Court ruling on the issue could affect whether consumers may bring Lanham Act claims.