Opinion ID: 763256
Heading Depth: 3
Heading Rank: 3

Heading: Commercial Advertising or Promotion

Text: 33 The Lanham Act proscribes misrepresentation of another's goods or services in commercial advertising or promotion. 15 U.S.C. § 1125(a)(1)(B). Neither the Act's legislative history nor the Act itself defines advertising or promotion. See Seven-Up Co. v. Coca-Cola Co., 86 F.3d 1379, 1383 (5th Cir.1996). The court in Gordon & Breach Science Publishers v. American Inst. of Physics, 859 F.Supp. 1521 (S.D.N.Y.1994), after reviewing the relevant case law, set forth four criteria for determining whether representations constitute commercial advertising or promotion. Id. at 1535-36. The court explained that: 34 In order for representations to constitute commercial advertising or promotion under Section 43(a)(1)(B), they must be: (1) commercial speech; (2) by a defendant who is in commercial competition with plaintiff; (3) for the purpose of influencing consumers to buy defendant's goods or services. While the representations need not be made in a classic advertising campaign, but may consist instead of more informal types of promotion, the representations (4) must be disseminated sufficiently to the relevant purchasing public to constitute advertising or promotion within that industry. 35 Id. In Seven-Up, the Fifth Circuit adopted these criteria as accurate and sound, 86 F.3d at 1384, and we, too, adopt them. The disputed component in our case is (4): was the representation that Coastal was not paying its bills on time sufficiently disseminated to the relevant purchasing public to constitute ... 'promotion' within that industry. (Emphasis added). 36 Coastal argued that, because the evidence showed that there were only two or possibly three institutions involved in the kind of nationwide refinancing operation conducted by Shearson, a representation to Shearson was a dissemination to a sufficient segment of the relevant purchasing public. The district court ruled that, if Coastal's view of the market were correct, then a representation could constitute a promotion even if made only to Shearson. In this ruling, we conclude that the district court was correct. 37 Where the potential purchasers in the market are relatively limited in number, even a single promotional presentation to an individual purchaser may be enough to trigger the protections of the Act. 38 Seven-Up, 86 F.3d at 1386. Here the district court, without objection, submitted to the jury the factual question of the nature of the market, by the following instruction: 39 To establish the existence of a commercial promotion for purposes of its Lanham Act claims, plaintiff has the burden of establishing that the relevant purchasing public to which plaintiff was marketing its services consisted only of customers operating nationwide programs for the refinance of residential mortgages. If you find that the relevant purchasing public to which plaintiff was marketing its services included any institutional lender or other purchaser of escrow services, you must find against plaintiff on its Lanham Act claims. 40 So instructed, the jury found that the defendants' statements were made in a commercial promotion. The jury's finding was supported by substantial evidence. We therefore reject the contention of First American and Hollenbeck that there was no promotion as a matter of law.