Opinion ID: 2981417
Heading Depth: 2
Heading Rank: 4

Heading: static control’s lanham act counterclaim

Text: Static Control contends that Lexmark violated the Lanham Act by engaging in false advertising. Static Control alleges that Lexmark “falsely informed customers that SCC’s products infringe Lexmark’s purported intellectual property,” and “misled . . . customers of SCC’s products that license agreements prohibit remanufacturing Lexmark toner cartridges, when no license agreements actually exist,” causing Static Control’s customers to believe that Static Control is engaging in illegal conduct and thereby damaging Static Control’s business and reputation.9 02R. 172 (2d Am. Answer & 9 The Lanham Act provides: Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which (A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or (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 or is likely Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 25 Countercl. at ¶¶ 2, 84-90). The district court dismissed Static Control’s counterclaim for lack of Lanham Act standing because Static Control lacked antitrust standing, holding that “[m]ultiple courts have held that the factors” for antitrust standing are the same as for Lanham Act standing. R. 392 (D. Ct. Order 9/28/06 at 13) (citing Fifth and Third Circuit cases). Static Control maintains that the test “[i]n this Circuit” is “not the same as the . . . test for antitrust standing.” First Appellant Br. at 53 (citing Frisch’s Rests., Inc. v. Elby’s Big Boy of Steubenville, Inc., 670 F.2d 642, 649-50 (6th Cir.), cert. denied, 459 U.S. 916 (1982)). Frisch’s Restaurants held that a Lanham Act claimant need not demonstrate actual losses as a result of the defendant’s misleading use of the claimant’s trademarks in its advertisements, only a “‘likelihood of injury and causation.’” Id. at 650 (quoting Johnson & Johnson v. Carter-Wallace, Inc., 631 F.2d 186, 190 (2d Cir. 1980)). Since Frisch’s Restaurants, the Second Circuit has further described its approach, called the “reasonable interest” approach, as finding that the claimant has standing if the claimant can demonstrate “(1) a reasonable interest to be protected against the alleged false advertising and (2) a reasonable basis for believing that the interest is likely to be damaged by the alleged false advertising.” Famous Horse, Inc. v. 5th Ave. Photo Inc., 624 F.3d 106, 113 (2d Cir. 2010). We have not addressed Lanham Act standing since Frisch’s Restaurants. Lexmark urges us to follow one of the narrower approaches adopted by our sister circuits. The Seventh, Ninth, and Tenth use a categorical test, permitting Lanham Act suits only by an actual competitor making an unfair-competition claim. L.S. Heath & Son, Inc. v. AT & T Info. Sys., Inc., 9 F.3d 561, 575 (7th Cir. 1993); Waits v. Frito-Lay, Inc., 978 F.2d 1093, 1108-09 (9th Cir. 1992), cert. denied, 506 U.S. 1080 (1993); Stanfield v. Osborne Indus., Inc., 52 F.3d 867, 873 (10th Cir.), cert. denied, 516 U.S. 920 (1995). These circuits, however, have distinguished the standing inquiry between claims of false association under 15 U.S.C. § 1125(a)(1)(A) and false advertising under to be damaged by such act. 15 U.S.C. § 1125(a)(1). Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 26 § 1125(a)(1)(B) and do not require direct competition for claims of false association. See e.g., Waits, 978 F.2d at 1108-09. Static Control’s claim is for false advertising and would fail under this stricter standard, because Static Control and Lexmark are not actual competitors. The Third, Fifth, Eighth, and Eleventh Circuits all reference antitrust standing or the AGC factors in deciding Lanham Act standing. Conte Bros. Auto., Inc. v. Quaker State-Slick 50, Inc., 165 F.3d 221, 233-34 (3d Cir. 1998) (Alito, J., authoring); Procter & Gamble Co. v Amway Corp., 242 F.3d 539, 562-63 (5th Cir.), cert. denied, 534 U.S. 945 (2001); Gilbert/Robinson, Inc. v. Carrie Beverage-Missouri, Inc., 989 F.2d 985, 990-91 (8th Cir.), cert. denied, 510 U.S. 928 (1993); Phoenix of Broward, Inc. v. McDonald’s Corp., 489 F.3d 1156, 1162-64 (11th Cir. 2007), cert. denied, 552 U.S. 1275 (2008). The Third Circuit nominally uses a “reasonable interest” approach, but applies it by looking to the five AGC factors. Conte Bros., 165 F.3d at 233-34. The Third Circuit has also rejected any distinction in standing between the two types of Lanham Act claims. Id. at 232. The Second Circuit’s more recent cases reject the Third Circuit’s conflation of the reasonable-interest test with the AGC factors as “unnecessarily complicat[ing] the inquiry,” Famous Horse, 624 F.3d at 115 n.3, setting its approach apart. Therefore, Lexmark’s statement that the reasonable interest test and the AGC test are not “conceptually different,” Second Appellee Br. at 60, is not correct. Although the claimant in Frisch’s Restaurants brought a claim under 15 U.S.C. § 1125(a)(1)(A) for false association of trademark, not under § 1125(a)(1)(B) for false advertising, we agree with the Third Circuit’s reasoned analysis rejecting a distinction between these two types of claims for purposes of standing. Conte Bros., 165 F.3d at 232-33. Because we have already addressed the appropriate level of standing for claims brought under 15 U.S.C. § 1125(a), even if we were to prefer the approach taken by our sister circuits, we cannot overturn a prior published decision of this court absent inconsistent Supreme Court precedent or an en banc reversal.10 Geiger v. Tower Auto., 10 Even if we were to adopt the AGC factors, Static Control’s claim would not necessarily fail. Although we have determined that Static Control failed to satisfy the AGC factors regarding its antitrust allegations, this does not necessarily mean Lanham Act standing would be lacking. Not all of Lexmark’s Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 27 579 F.3d 614, 622 (6th Cir. 2009). Static Control has therefore sufficiently alleged a Lanham Act claim. Static Control alleged a cognizable interest in its business reputation and sales to remanufacturers and sufficiently alleged that these interests were harmed by Lexmark’s statements to the remanufacturers that Static Control was engaging in illegal conduct. This is sufficient to state a claim under the Lanham Act. We therefore REVERSE the district court’s dismissal of this claim and REMAND with instructions to reinstate the Lanham Act claim.