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False Advertising May Apply to Narrowly Distributed Statements

False advertising claims could be brought in a variety of less-public situations in which someone misrepresents aspects of what they do or supply. Consider this cause of action if a business competitor makes false assertions about itself for the purpose of winning coveted engagements or business. A run-of-the-mill false advertising claim relates to a widely distributed false or misleading fact about a product or service. However, liability under the federal statute, The Lanham Act, is when a person “misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities.” Under this language, a party could take action against a competitor, or someone else in their industry, who falsely describes their product, the nature of their service, their experience, their qualifications, their resume or their biographical information, if that false statement would likely cause a potential client seeking the party’s service to choose the competitor instead. A successful claim needs to show that the statement was a false or misleading statement of fact, made in interstate commerce, that is used in a commercial advertisement or promotion, that deceives or is likely to deceive in a material way, and that caused or is likely to cause competitive or commercial injury. The misrepresentation does not have to be made in a widely broadcast advertisement, but merely has to be provided to those who would use the goods or services. When a company loses a bid or a person sees peers or competitors being selected or hired, consider if the Lanham Act may provide a cause of action to stop the harm and provide damages.

Ned T. Himmelrich
410-576-4171 • nhimmelrich@gfrlaw.com