False advertising can do more than mislead customers. It can take sales from a competitor, damage a company’s reputation, and create legal exposure for the business making the claim. For California companies and brands operating nationwide, the Lanham Act is one of the main federal laws used to address false or misleading advertising in the marketplace.
Jafari Law Group helps businesses, entrepreneurs, and brand owners evaluate advertising disputes, trademark concerns, and unfair competition claims. When a competitor’s statements cross the line from marketing puffery into false or misleading factual claims, legal action may be available.
What Is the Lanham Act?
The Lanham Act is the federal law that governs trademarks, unfair competition, and certain forms of false advertising. While many business owners associate the Lanham Act with trademark infringement, Section 43(a) also allows claims based on false or misleading statements made in commercial advertising or promotion.
Under 15 U.S.C. § 1125(a)(1)(B), liability may arise when a business uses a false or misleading description or representation of fact in commercial advertising or promotion that misrepresents the nature, characteristics, qualities, or geographic origin of its own or another party’s goods, services, or commercial activities.
In practical terms, this means a business may face a Lanham Act claim if it makes a factual advertising statement that is false or misleading and that harms a competitor.
What Counts as False Advertising Under the Lanham Act?
Not every exaggerated marketing statement creates a Lanham Act claim. A company saying it offers “the best service in California” may be using opinion or sales language, often called puffery. A company claiming its product is “clinically proven to reduce defects by 80%,” however, is making a factual statement that may need support.
Courts generally look for several elements in a Lanham Act false advertising claim. In the Ninth Circuit, which includes California, a plaintiff typically must show that the defendant made a false statement of fact in a commercial advertisement, that the statement deceived or had the tendency to deceive a substantial segment of the audience, that the deception was material to purchasing decisions, that the statement entered interstate commerce, and that the plaintiff was or is likely to be injured by the statement.
A false advertising claim may involve statements about price, performance, ingredients, origin, certifications, customer results, testing, safety, availability, or comparisons to a competitor.
Literal Falsity vs. Misleading Advertising
A Lanham Act claim can be based on a statement that is literally false or on a statement that is technically true but misleading in context.
A literally false statement may be easier to identify. A business that advertises a product as “Made in the USA” when it is manufactured overseas may be making a false factual claim. A company that claims its software has a specific feature that it does not have may face a similar issue.
Misleading advertising can be more difficult to evaluate. A statement may be accurate in isolation but presented in a way that gives customers the wrong impression. Claims based on misleading advertising often require evidence showing how customers understood the message.
Who Can Bring a Lanham Act False Advertising Claim?
Lanham Act false advertising claims are generally brought by competitors or commercial parties that suffered, or are likely to suffer, business harm. The law is not mainly a consumer protection statute for individual customer complaints.
The U.S. Supreme Court addressed this issue in Lexmark International, Inc. v. Static Control Components, Inc., explaining that a plaintiff must fall within the “zone of interests” protected by the statute and must show injuries proximately caused by the alleged violation.
This means a business usually needs to connect the false advertising to commercial harm, such as lost sales, damaged goodwill, loss of market share, or harm to reputation.
Common Examples of Lanham Act False Advertising
False advertising disputes can arise in many industries. A competitor might claim that its product is certified, lab-tested, patented, organic, locally made, or endorsed when that is not true. A company might compare itself to another brand using outdated, incomplete, or manipulated data. A service provider might advertise guaranteed results that it cannot support.
A Lanham Act issue may also arise when a business misstates another company’s goods or services. For example, if one company tells customers that a competitor’s product is unsafe, obsolete, unauthorized, or noncompliant without a factual basis, that statement may create legal risk.
Online marketing has made these disputes more common. Website copy, digital ads, marketplace listings, social media campaigns, influencer promotions, and comparison charts can all become evidence in a false advertising case.
What Businesses Should Do Before Making Advertising Claims
Before publishing advertising claims, businesses should review whether each factual statement can be backed up with reliable evidence. Claims involving measurable results, studies, customer outcomes, rankings, certifications, endorsements, or competitor comparisons should receive close review before publication.
Companies should be careful with words such as “proven,” “certified,” “guaranteed,” “official,” “exclusive,” “number one,” and “clinically tested.” These terms can create factual impressions that require support.
A practical advertising review should ask:
- Can we prove this statement if challenged?
- Is the claim current, complete, and not misleading?
- Does the claim rely on accurate testing or data?
- Are any comparisons fair and based on the same criteria?
- Would a reasonable customer understand the claim differently than intended?
Careful review before publication can reduce the risk of disputes, demand letters, and litigation.
What To Do If a Competitor Is Making False Claims
If a competitor is making false or misleading advertising statements, businesses should preserve evidence right away. Screenshots, archived webpages, ad copies, emails, product listings, social media posts, and customer communications may become important. The date, location, platform, and audience for each statement can matter.
The next step is to assess whether the claim is factual, whether it is false or misleading, whether it is material to customer decisions, and whether it is causing business harm. Some disputes can be addressed through a demand letter or negotiated correction. Others may require litigation, especially when the advertising is ongoing or causing significant harm.
Potential remedies may include injunctive relief, corrective advertising, monetary damages, disgorgement of profits, and, in some cases, attorneys’ fees. The available remedies depend on the facts, the evidence, and the claims asserted.
False Advertising Claims Require Strong Evidence
Lanham Act false advertising cases are evidence-driven. A business bringing a claim should be ready to show more than frustration with a competitor’s marketing. Courts often look for proof of the challenged statement, proof that the statement is false or misleading, proof that it matters to purchasing decisions, and proof of likely or actual business injury.
Evidence may include consumer surveys, sales data, expert analysis, customer communications, market reports, internal records, and side-by-side advertising comparisons. The stronger the factual record, the better positioned a business may be to evaluate its legal options.
Speak With a Lanham Act Attorney
False advertising can distort competition and harm the value of a brand that took years to build. At the same time, businesses accused of false advertising need to respond carefully and avoid making the dispute worse.
Jafari Law Group works with businesses, entrepreneurs, and brand owners on Lanham Act matters, trademark disputes, and unfair competition claims. If you believe a competitor is making false advertising claims, or your business has received a demand letter, we invite you to contact us for a free case evaluation.