The Mellor Law Firm, APLC

California Real Estate, Construction, Bankruptcy, Foreclosure and Business Litigation Lawyers

    • Facebook
    • LinkedIn
    • RSS
    • Twitter
    • YouTube

Call: (951) 221-4744

  • Our Firm
  • Attorney Profile
  • Practice Areas
    • Real Estate Law
    • Construction Law Attorney
    • Experienced Foreclosure Attorney Serving Riverside Homeowners
    • Business Law
    • Chapter 7 Bankruptcy
    • Chapter 13 Bankruptcy
    • Contract Disputes
    • Insurance
    • Loan Modifications
    • Personal Injury & Wrongful Death
    • Mechanic’s Lien
  • Case Handling
  • Clients
  • Blog
  • Contact

Unfair Competition Action Decided By U.S. Supreme Court.

June 6, 2014 by Leave a Comment

Unfair Competition Plaintiff sells the only style of toner cartridges that work with the company’s laser printers, but ‘remanufacturers’ acquire and refurbish used plaintiff’s cartridges to sell in competition. Thus, plaintiff gives its customers a discount on new cartridges if they agree to return empty cartridges to plaintiff. Each cartridge has a microchip that disables the empty cartridge unless plaintiff replaces the chip. Defendant developed a microchip that mimicked plaintiff’s. So, in the good old American spirit, the parties sued each other. Plaintiff sued defendant for copyright infringement, and defendant sued plaintiff under the Lanham Act for false advertising which resulted in defendant losing sales and damage to its business reputation.

The purpose of the Lanham Act [15 U.S.C. § 1125(a)(1)(A)&(B)] includes “protect[ing] persons engaged in [commerce within the control of Congress] against unfair competition.” At common law, unfair competition was understood to be concerned with injuries to business reputation and present and future sales, so under the Act, “a plaintiff must allege an injury to a commercial interest in reputation or sales.”

The federal district court held that defendant lacked standing to bring a claim under the Act, and the circuit court of appeals reversed. The U.S. Supreme Court held that defendant adequately pleaded the elements of a Lanham Act cause of action for false advertising, stating: “The District Court emphasized that [plaintiff] and [defendant] are not direct competitors. But when a party claims reputational injury from disparagement, competition is not required for proximate cause; and that is true even if the [] aim was to harm its immediate competitors, and [a party] merely suffered collateral damage. Consider two rival carmakers who purchase airbags for their cars from different third-party manufacturers. If the first carmaker, hoping to divert sales from the second, falsely proclaims that the airbags used by the second carmaker are defective, both the second carmaker and its airbag supplier may suffer reputational injury, and their sales may decline as a result. In those circumstances, there is no reason to regard either party’s injury as derivative of the other’s; each is directly and independently harmed by the attack on its merchandise.” (Lexmark Intern., Inc. v. Static Control Components, Inc. (U.S. Sup. Ct.; March 25, 2014)134 S.Ct. 1377, [188 L.Ed.2d 392].)

Filed Under: Advertising/Billboard Law News, Copyright Law News, Legal News, U.S. Supreme Court, Unfair Competition Law §17200 News

Leave a Reply Cancel reply

You must be logged in to post a comment.

Call Us: 951-222-2100

Consultations available in-office or over
the phone. Speak to one of our leading attorneys in California today.

Recent News

How to Protect Yourself in a Business Partnership

December 31, 2025 By Mark Mellor

Starting a new venture with a partner is an exciting experience. You have a shared vision, complementary skills, and the drive to build something great together. However, enthusiasm alone isn't enough to sustain a company. A business partnership requires trust, communication, … Read More...

Managing Change Orders Without Derailing Your Construction Project

December 26, 2025 By Mark Mellor

Few construction projects finish exactly as the initial blueprints dictated. Whether it’s a sudden discovery of unstable soil, or a client deciding they want terrazzo floors instead of tile, adjustments are an inevitable part of the building process. These adjustments are handled … Read More...

Top Legal Mistakes to Avoid When Starting an LLC in California

December 2, 2025 By Mark Mellor

Starting an LLC in California is an exciting step for any entrepreneur. You've got your business idea, you're ready to make it official, and you can already picture the success ahead. But here's the reality: many new LLC owners make preventable legal mistakes that can derail … Read More...

Follow Mellor Law Firm

    • Facebook
    • LinkedIn
    • RSS
    • Twitter
    • YouTube

Our Areas of Practice

  • Comprehensive Real Estate Legal Services
  • Construction Law Attorney
  • Mechanic’s Lien – Stop Notice
  • Experienced Foreclosure Attorney Serving Riverside Homeowners
  • Business Law
  • Contract Disputes
  • Chapter 7 Bankruptcy
  • Chapter 13 Bankruptcy
  • Insurance
  • Lien Stripping Bankruptcy
  • Loan Modifications
  • Personal Injury & Wrongful Death
  • Property Ownership

Navigate

  • Home
  • Our Firm
  • Mark Mellor
  • Practice Areas
  • Case Handling
  • Clients
  • Resources
  • Contact
  • Blog
  • Privacy Policy

Practice Areas

  • Comprehensive Real Estate Legal Services
  • Construction Law Attorney
  • Mechanic’s Lien – Stop Notice
  • Experienced Foreclosure Attorney Serving Riverside Homeowners
  • Business Law
  • Contract Disputes
  • Chapter 7 Bankruptcy
  • Chapter 13 Bankruptcy
  • Insurance
  • Lien Stripping Bankruptcy
  • Loan Modifications
  • Personal Injury & Wrongful Death
  • Property Ownership

Recent Posts

  • How to Protect Yourself in a Business Partnership
  • Managing Change Orders Without Derailing Your Construction Project
  • Top Legal Mistakes to Avoid When Starting an LLC in California
  • How Long Do You Have to File a Construction Defect Claim?

Follow Us

    • Facebook
    • LinkedIn
    • RSS
    • Twitter
    • YouTube

Contact our offices

The Mellor Law Firm, APLC
6800 Indiana Avenue, Suite 220
Riverside, CA 92506
Phone: (951) 221-4744
Fax: (951) 222-2122
10.0Mark Albert Mellor

The Mellor Law Firm, APLC © 2026. All Rights Reserved.