Insurance Coverage for False Advertising Claims

Section 43(a) of the Lanham Act, a federal trademark statute, establishes a cause of action for false advertising and provides that any person who “uses in commerce any ' false or misleading description of fact, or false or misleading representation of fact, which 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 to any person who believes that he or she is or is likely to be damaged by such act. See 15 U.S.C. ' 1125(a). A plaintiff who prevails on a Lanham Act false advertising claim can obtain relief that may deal a mortal blow to the defendant's product or product lines ' the court can issue an injunction barring the challenged advertisements, it can order corrective advertising or even a product recall if the false advertising is on the product's packaging and labeling. Additional remedies under the Lanham Act include damages, attorneys' fees, and any equitable remedy that the court determines would fairly compensate the plaintiff. Not only can the verdict in a false advertising suit have devastating consequences in terms of injunctions and monetary damages, the litigation process itself is so costly that it can be equally onerous.