False Advertising Lawsuit

Experienced Trial Counsel for False Advertising Litigation

Attorney Nick Oberheiden
Lanham Act Team Lead envelope icon

Commercial advertising is subject to accuracy requirements under both state and federal laws. Federal false advertising laws—including the Federal Trade Commission Act (FTC Act) and Lanham Act—prohibit companies from making deceptive claims in their advertising and marketing materials, and state laws include similar prohibitions as well. When companies engage in deceptive advertising, their competitors can take legal action, and engaging an experienced false advertising lawyer is the first step in the process.

At Oberheiden P.C., we represent companies in commercial litigation involving false advertisements and other deceptive business practices. If your company has suffered losses—or if your company is at risk of suffering losses—due to a competitor’s false statements or implied misrepresentations, our lawyers can take all necessary and appropriate legal action on your company’s behalf. We handle cases involving other fraudulent business practices as well; and, whether your company needs to seek injunctive relief, monetary damages, or both, we can use our experience to target a favorable resolution as efficiently and cost-effectively as possible.

We Help Companies Pursue False Advertising Claims Under Federal and State Law

We represent clients in a broad range of false and deceptive advertising cases in state and federal courts. When companies use misleading statements to lure consumers away from their competitors, they can—and should—be held accountable through the legal process. While consumer protection attorneys will often file class action lawsuits seeking damages for consumer fraud, companies that suffer losses due to competitors’ fraudulent advertising practices will need to assert their legal rights in many cases as well.

Understanding What Constitutes False or Misleading Advertising

False and misleading advertising practices can take many different forms. They can involve a broad range of claims, and they can involve claims published in all traditional and online media. Some examples of potential grounds for companies to pursue false advertising lawsuits against their competitors include:

Making false claims about the features or benefits of a company’s product or service
Making other false product claims (i.e., claims about ingredients or materials)
Making statements do not comply with the Food, Drug, and Cosmetic Act (FDC Act)
Publishing misleading advertisements or promotions that fail to disclose hidden fees
Publishing misleading advertisements or promotions that involve bait-and-switch sales tactics

While many false advertising lawsuits involve outright false statements, misleading consumers by implication can also provide clear grounds for companies to pursue legal action against their competitors. Any false, incomplete, or otherwise misleading statements that have the potential to influence consumers’ purchasing decisions can potentially justify a false advertising claim under state or federal law.

Understanding the Potential Remedies in a False Advertising Lawsuit

When deciding whether to pursue false advertising litigation, companies must work with their legal counsel to assess the remedies that are available under the circumstances at hand. Broadly, potential remedies in commercial false advertising lawsuits fall into two categories:

Injunctive Relief

Under the Lanham Act, companies can seek injunctive relief barring their competitors from engaging in deceptive advertising if they can show that they are likely to suffer any one or more of the following:

Loss of revenue due to lost sales
Loss of market share
Loss of goodwill (harm to the company’s reputation)

The key word here is “likely.” To seek an injunction against false advertising under the Lanham Act, proof of actual loss is not required. The law allows companies to seek injunctive relief prospectively in order to avoid the need to pursue recovery of actual losses.

Monetary Damages (Compensation for Actual Losses)

With that said, if a competitor’s false advertising leads to actual losses, then a claim for monetary damages may also be warranted. In these cases, plaintiffs must be able to show that their competitors’ deceptive trade practices have resulted in either actual customer diversion or actual reputational harm. There are various ways to prove both types of losses, and our false advertising attorneys work closely with trusted experts to prove our clients’ claims for damages when warranted. Broadly, the bases for seeking monetary damages in false advertising lawsuits are:

Actual lost profits resulting from lost sales or sales made at discounted prices
Actual costs of corrective advertising
Quantifiable loss of goodwill (i.e., devaluation of the company’s brand and reputation in the marketplace)

Disgorgement and treble (triple) damages may also be awarded in some cases, and the Lanham Act allows plaintiffs to recover their attorneys’ fees in some cases as well. Once we assess the situation at hand, we will be able to provide a preliminary assessment of any damages your company may be entitled to recover, and then you can use this information to make sound and strategic decisions about your company’s next steps.

Understanding When Your Company Can (and Should) Take Legal Action

With all of this in mind, when can (and should) companies take legal action for false advertising? If your company is facing actual or potential losses due to a competitor’s false advertising, acting promptly could be critical for protecting your company—both now and in the future. The longer your company’s competitor is allowed to mislead consumers unchecked, the greater your company’s losses could become. While you don’t want to seek injunctive relief prematurely (because there are standards for when judges will enjoin competitive activities), you also don’t want to wait too long. Here too, our false advertising attorneys can help you make informed decisions about how best to proceed.

If your company is already suffering losses due to a competitor’s false advertising, then immediate legal action may be warranted. Our attorneys are able to take emergency legal action on behalf of our clients when necessary. If your company is facing lost sales, loss of market share, or reputational harm due to a competitor’s false or misleading representations in the marketplace, we strongly encourage you to speak with one of our attorneys right away.

FAQs: Suing a Competitor for Violating False Advertising Laws

Can Companies Sue Their Competitors for Engaging in False Advertising?

Yes, companies can sue their competitors for engaging in false advertising under the Lanham Act and under various state laws and common law causes of action. If your company is at risk of facing losses—or is actively suffering losses—due to a competitor’s false or misleading representations, you will want to consult with an experienced false advertising attorney promptly.

Is False Advertising Considered a Form of Unfair Competition?

Yes, false advertising is considered a form of unfair competition. However, while companies can pursue unfair competition claims in many cases, they can also pursue direct causes of action for false advertising under state and federal law. For example, under Section 43(a) of the Lanham Act, a company can sue any competitor that, “uses in commerce any . . . false or misleading description of fact, or false or misleading representation of fact, which . . . in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities.”

How Do Commercial False Advertising Lawsuits Differ from Consumer Protection Lawsuits?

While commercial false advertising lawsuits differ from consumer protection lawsuits in a variety of ways, perhaps the most significant difference is the remedies that are available. Although consumers’ financial recoveries in class action lawsuits are usually fairly limited, companies that have grounds to pursue false advertising lawsuits against their competitors will often have claims for substantial damages. Even if your company cannot prove actual damages resulting from a competitor’s false advertising, it may still be possible to secure an injunction that protects your company going forward.

Can Companies Sue Their Competitors if Influencers Are Making False or Misleading Claims?

Companies can sue their competitors for false and misleading claims that influencers make on a competitor’s behalf. The law is clear that companies cannot escape liability for false advertising by relying on influencers to deceive consumers for them. If a company provides influencers with misleading scripts or false social media posts, for example, both of these can provide clear grounds for competitors to pursue legal action.

How Do You Prove that Customers Are Making Purchasing Decisions Based on False Advertising?

Proving that customers are making purchasing decisions based on false advertising can be among the more challenging aspects of pursuing a false advertising lawsuit. With that said, there are several well-established means available. From obtaining sworn consumer statements to conducting consumer surveys and focus groups, our lawyers may be able to use various means to prove that a competitor’s false or misleading claims are leading your company’s potential customers to make uninformed purchasing decisions.

Schedule a Complimentary Consultation with a False Advertising Lawyer at Oberheiden P.C.

If you need to know more about filing a false advertising lawsuit against a competitor, we encourage you to contact us promptly. Once you get in touch, we will arrange for you to speak with one of our senior false advertising lawyers in confidence as soon as possible. To schedule a complimentary consultation at Oberheiden P.C., please call 888-680-1745 or tell us how we can help online today.