Supreme Court Clarifies Standing For False Advertising Cases

On March 25, 2014, the United States Supreme Court issued a unanimous decision resolving an important issue that has implications for companies seeking redress for false advertising and disparagement. In Lexmark International, Inc. v. Static Control Components, Inc., the Court determined that standing to bring false advertising claims under the federal Lanham Act is not limited to commercial competitors. Any commercial entity suffering lost sales or damage to reputation has standing to sue, as long as those injuries are "proximately caused" by the defendant's advertising.

While many false advertising cases involve disputes between direct competitors, Lexmark did not. Lexmark manufactures laser printers designed to work only with Lexmark toner cartridges. To try and prevent competition from remanufacturing companies that refurbish and sell used Lexmark cartridges, Lexmark's cartridges contain a microchip that disables the spent cartridge until the microchip is