Federal Court Rules on "Commercial Advertising or Promotion" Definition under the Lanham Act

In this case, Defendant Casiano Communications, Inc. published the results of an audit ("Circulation Ad #1") declaring that Casiano's circulation for its publication, Caribbean Business, was "the largest circulation English-language newspaper in Puerto Rico." Casiano listed CB's circulation at 44,851 including all paid and non-paid circulation, in Circulation Ad #1. Circulation Ad # 1 also listed TSJS's circulation to be 36,674, including all paid and non-paid circulation.

Casiano also allegedly published two other ads (Ads #2 & #3) soliciting ad money from businesses for its special-interest supplement. These ads, allegedly run on May 28, 1998 and June 11, 1998 in CB, listed CB's audience at 228,700 readers. Also, a July 15, 1998 letter from Angel Luis Mercado and Miguel A. Vega of Radisson Normandie Hotel addressed to Geraldo Angulo of TSJS, cited the same figure (228,700 readers) as CB's audience (Ad #4).

Congress enacted the Lanham Act "to protect persons engaged in such commerce against unfair competition." 15 U.S.C. Section 1127. Section 43(a) of the Lanham Act provides in relevant part that:

"Any person who . . . uses in commerce any . . . false or misleading description of fact, or false or misleading representation of fact, which -

. . . (B) 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,

shall be liable in a civil action by any person who believes that he or she is likely to be damaged by such act." 15 U.S.C. Section 1125(a)(1)(B).

"This section provides protection against a 'myriad of deceptive commercial practices,' including false advertising or promotion." (Resource Developers v. Statue of Liberty-Ellis Island Found., 926 F.2d 134, 139 (2d Cir.1991).) Section 43(a) of the Lanham Act has been characterized as a remedial statute that should be broadly construed. (See Gordon & Breach Science Publ's v. American Inst. of Physics, 859 F. Supp. 1521, 1532 (S.D.N.Y.1994) [,aff'd by 166 F.3d 438 (2d Cir. 1999)]." Seven-Up Co. v. Coca-Cola Co., 86 F.3d 1379, 1382-83 (5th Cir. 1996).

To sustain an action under Section 43(a) of the Lanham Act, a plaintiff must allege:

(1) that the defendant has * * * and (5) that there is likelihood of injury to the plaintiff in terms of * * * .

The Lanham Act does not define either "advertising" or "promotion." Nor is the Act's legislative history addresses only the requirement that the advertising or promotion be "commercial" in nature. The Court pointed out that the "`commercial'" requirement was inserted to ensure that Section 43(a) does not infringe on free speech protected by the First Amendment."

The Court concluded that the advertisement in this case is clearly commercial in nature.

In order for representations to constitute "commercial advertising or promotion" under Section 43(a)(1)(B), they must be:

(1) commercial speech; * * * (4) must be disseminated sufficiently to the relevant purchasing public to constitute " advertising" or "promotion" within that industry.

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"Defendant's advertisements fall squarely within this definition," concluded the Court. Noted the Court:

"Finally, Section 43(a) covers a publisher of a controlled circulation magazine who falsely inflates the size of his audience and thereby causes reduced advertising revenues to a competing publisher, even though the misrepresentations did not refer in any way to plaintiff's magazine or otherwise expressly take aim at an identifiable competitor." [See Ames Publishing Co. v. Walker-Davis Publications, Inc., 372 F. Supp. 1 (E.D. Pa. 1974)].

"By alleging that * * * " the Court concluded.

* * *

A grant of summary judgment to Defendant for all ads at this point in time would be * * * , concluded the Court. The Court asked: "does the advertisement have a tendency to * * * ."

* * *


(The San Juan Star, Plaintiff v. Casiano Communications, Inc., Civ. No. 98-1372 (PG), United States District Court for the District of Puerto Rico, 2000 U.S. Dist. LEXIS 2107, January 7, 2000.)

See also:

Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557, 566, 100 S. Ct. 2343, 2351, 65 L. Ed. 2d 341 (1980).

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