Who Has Standing?

Your sales decrease as a result of a false advertising campaign by a manufacturer of a competing product. One avenue to remedy this unfair competition is a suit under Section 43(a) of the Lanham Act, right? Not according to the Third Circuit Court of Appeals.

Who has a right to sue for unfair competition under the Lanham Act? On its face, the statute appears to confer standing on virtually any person affected by a defendant's actions in violation of ß 43(a). The Third Circuit concluded, however, that Congress really intended something different.

Conte Brothers Automotive Inc. vs. Quaker State ó Slick 50, Inc., involved Slick 50Æ, an engine lubricant marketed as a motor oil substitute. Plaintiffs, retail sellers of regular motor oil, sued Quaker State, alleging that it falsely advertised that Slick 50 would reduce the friction of moving parts, decrease engine wear, and improve engine performance.

Quaker State convinced the district court to dismiss the complaint, and the Third Circuit Court of Appeals affirmed. The Court refined its previously stated "reasonable interest" standing test, and adopted the test for antitrust standing for ß 43(a) claims. Under this test, a court should consider, among other factors: the nature of the alleged injury; the directness of the asserted injury; the proximity of remoteness of the party to the alleged injurious conduct; and the degree to which damages are speculative.

The...