Supreme Court To Clear Up Static Over Standing To Bring False Advertising Claims

To resolve splits among the federal appellate courts concerning the proper test for standing to bring false advertising claims under the Lanham Act, the Supreme Court of the United States granted Lexmark International, Inc.'s petition for a writ of certiorari in Static Control Components, Inc. v. Lexmark International, Inc. (697 F.3d 387 (6th Cir. 2012)). In that case, the U.S. Court of Appeals for the Sixth Circuit ruled, among other things, that Static Control Components, Inc. had standing to bring a counterclaim alleging that Lexmark "falsely informed customers that [Static's] products infringe Lexmark's purported intellectual property...." Static originally filed its counterclaim in response to Lexmark's allegations that Static had infringed patents relating to the ink cartridges used in Lexmark's laser printers (claims that ultimately were not successful). The Sixth Circuit held that although Static was not Lexmark's competitor, it had standing to bring this false advertising counterclaim under the "reasonable interest" standard.

The Supreme Court will decide whether standing to bring false advertising claims under the Lanham Act should be analyzed through (1) a version of the "reasonable interest" test followed by the Sixth and Second Circuits; (2) the Supreme Court's antitrust standing factors, which are considered in false advertising cases by the Third, Fifth, Eighth and Eleventh Circuits (factors established in Associated General Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519 (1983) (AGC)); or (3) the "categorical" test embraced by the Seventh, Ninth and Tenth Circuits (e.g., in Waits v. Frito-Lay, Inc., 978 F.2d 1093 (9th Cir. 1992), cert. denied, 506 U.S. 1080 (1993)).

The reasonable interest test requires a claimant to show only the following for standing: (1) a reasonable interest to be protected from false advertising and (2) a reasonable basis for the belief that the interest is likely to be damaged by the alleged false advertising. Over 30 years ago the Sixth Circuit adopted this test for standing to bring a false association claim. Frisch's Restaurants, Inc. v. Elby's Big Boy of Steubenville, Inc., 670 F.2d 642 (6th Cir. 1982). More recently, the Second Circuit repeated the reasonable interest test language in holding that the plaintiff had sufficiently pleaded standing to bring false advertising claims. Famous Horse, Inc. v. 5th Ave. Photo, Inc., 624 F.3d 106 (2d Cir. 2010).

Hoping...