Lanham Act False Advertising Injunction Entered on Advertising Sent Only to National Retailers, Not the Ultimate Consumer

Recently, a federal court in Manhattan issued a preliminary injunction to stop advertising messages regarding rodenticides, which were conveyed to large national retailers like The Home Depot, Wal-Mart, Lowe's, CVS/Pharmacy, Walgreens, Wegmans, Kroger, Safeway, and other national retail chains. The case, Reckitt Benckiser Inc. v. Motomco Ltd., involved Reckitt Benckiser's d-CON® brand rodenticides. Reckitt alleged that competitor Bell Laboratories, Inc. (conducting business under the name of Motomco Ltd.) made false promotional and disparaging statements. Specifically, Reckitt filed suit alleging that Motomco, seller of TOMCAT® brand rodenticides, made false statements about environmental "regulations" that, in fact, did not exist. The false statements included: The use of "White Papers" that appeared as if they issued by government agencies but were really created by Motomco; Statements that government regulators had enacted a "law or regulation" adversely affecting certain rodenticides; and That retailers could face fines if they purchased d-CON®. The Court issued a Preliminary Injunction against Motomco, ordering, among other things, Motomco cease: Using its White Papers that created a "misleading impression" that the documents were created by regulators. Stating that regulators issued a "law or regulation" or "anything else having current legal force." Stating that retailers who choose to carry d-CON will face regulatory action "or any words to that effect, without making clear that [Motomco] is only expressing its opinion about possible future actions by regulators." The Court held that regulators had not taken any legally binding action, that it was unclear what the regulators would do in the future, and, "at the very least, a long process would be required before [regulators] could force" the kind of changes Motomco suggested had already occurred. The Court also partially enjoined Reckitt Benckiser, Inc. from making certain statements, but left its advertising largely intact, rejecting most of Motomco's retaliatory counterclaim. Reckitt Benckiser, Inc. denies making any false statements. The case illustrates that the Lanham Act reaches a very broad range of commercial advertising, including those sent to retailers, businesses, resellers, or "sophisticated" purchasers, rather than just individual consumers. The ABA Private Advertising Litigation Committee is hosting a teleseminar on this topic this coming Friday, April 15 at 12:30PM EDT. To register for the free event, click here. – Randy Miller

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