But what Tuesday's
decision makes clear is that a company does not have to be a
direct competitor to sue another company. And that, said several ad
lawyers, could raise the legal risk for marketers. "Ultimately it
will lead to more lawsuits because historically there has been this
question of whether use of the Lanham Act was limited to direct
competitors," said Linda Goldstein, a partner with Manatt, Phelps
& Phillips "This really opens up the field to a wider spectrum
Also, by simply weighing in on the Lanham Act, the
Supreme Court has raised the profile of the law, which by itself
could spark more company vs. company lawsuits. "Sometimes people
think of it as a nuclear option that you want to use sparingly,"
said Randy Miller, an ad lawyer at Venable LLP. But the new
attention given by the court "make clear that not only is it
available … but it's actually broader than people
involved a company called Lexmark International that makes printer
cartridges. The company is at odds with a company called Static
Control, which makes microchips that allow for other companies to
remake used Lexmark cartridges so that they can be used again.
Lexmark prefers that consumers return cartridges for a "prebate"
that can be used for discounts on new cartridges.
Lanham Act, Static Control alleged that Lexmark " 'purposefully
misleads end-users' to believe that they are legally bound by
the prebate terms and are thus required to return the
prebate-labeled cartridge to Lexmark after a single use," according
to court documents. A district court ruled that Static lacked
standing to sue, but an appellate court reversed that