Picture it (yes, that’s a Golden Girls reference), you have a company selling computer A. Your competitor sells computer B. Now your computer As have Intel processors and computer Bs have AMD. You want to gain more customers so you create an advertisement stating that AMD processors are slow, unstable and overheat easily so customers should not buy computer Bs from your competitor. AMD hears about this and wants to sue you for what they believe to be “deceptive advertising”. Should AMD be able to sue you? After all you were trying to get over on your competitor not AMD who is simply a supplier.
Well in the past, the answer to that depended on where you were in the country. The courts in each region had different rules and requirements. Well, in its decision in a case named Lexmark v. Static Control, the U.S. Supreme court changed everything. The new rule is that, in order to sue, AMD would have to allege:
“an injury to a commercial interest in reputation or sales…flowing directly from the deception wrought by the defendant’s advertising; and that that occurs when deception of consumers causes them to withhold trade from the plaintiff.”
Seeing that this is a Supreme Court decision, this is now the law throughout the entire country. Regional differences no longer apply. Eric Goldman discusses the implications for businesses from now on.
