Friday, August 16, 2019

fake online review by competitor wasn't advertising/promotion, 10th Circuit says

Wilson v. AdvisorLaw LLC, --- Fed.Appx. ----, 2019 WL 3819604, No. 18-1441 (10th Cir. Aug. 15, 2019)

Wilson, a lawyer, had a relationship with AdvisorLaw that ended badly in November 2016. Later that day, a “Patrick Erickson,” allegedly from New York, posted a negative review of Wilson on the website accusing Wilson of serious and deliberate professional malfeasance. When Wilson discovered the review, he sued the defendants. The district court dismissed the Lanham Act claim and then dismissed the state law claims for civil conspiracy, defamation, and deceptive trade practices under the Colorado Consumer Protection Act without prejudice.

The court of appeals affirmed the finding that Wilson failed to show “commercial advertising or promotion” because of a failure to meet prong four [reminder, post-Lexmark, now prong three!]: the advertising/promotion “must be disseminated sufficiently to the relevant purchasing public to constitute ‘advertising’ or ‘promotion’ within that industry.” Though Ripoff Report receives up to 250,000 visitors a day, that wasn’t enough to show that a sufficient number of relevant clients received the message.

The court of appeals held that there wasn’t evidence that the review here “was disseminated to the relevant purchasing public—prospective clients in need of the type of specialized legal services that plaintiffs provide or others in that industry who might have influence over prospective clients.” It wasn’t enough to argue that it was disseminated to the public at large or to cite general evidence that customers look for online reviews. “While we don’t condone the posting of a false review on the Ripoff Report website, we agree with the Second Circuit that ‘[a]lthough the Lanham Act encompasses more than the traditional advertising campaign, the language of the Act cannot be stretched so broadly as to encompass all commercial speech.’”

Comment: While I understand why the court ruled this way, there’s a significant conceptual move that goes unannounced here, and I’m inclined to think it’s a mistaken one.  The early commercial advertising/promotion cases were about isolated statements by individual salespeople to specific individuals that by their nature were unlikely to travel beyond the few individual recipients.  By contrast, a national mailing would be easily understood as commercial advertising even though there was no evidence that a single person read the mailing on its way from the door to the trash.  Likewise, no evidence of how many people saw a TV commercial is ever required to find that it’s advertising/promotion, even though they may all have ignored it.  That is, the structural features of the communication—the intent and attempt to penetrate the market in an organized and widespread fashion—usually suffice to put it within (or outside of) the Lanham Act, and the way the standard test is worded is consistent with that understanding.  By requiring evidence of reception for online postings—and only online postings, even on review sites designed to reach consumers interested in a target’s commercial offerings—the court is raising the standard for what constitutes commercial advertising or promotion, but only with respect to online communications.  There are other cases finding fake reviews by competitors, and websites set up purporting to be independent and designed to be found in a search for the plaintiff’s name, to be actionable under the Lanham Act; I think that’s probably the better result.

1 comment:

Peter S. Sloane said...

The Tenth Circuit agreed with the Second Circuit’s statement in Fashion Boutique of Short Hills, Inc. v. Fendi USA, Inc., 314 F.3d 48, 57 (2d Cir. 2002), that although the Lanham Act encompasses more than the traditional advertising campaign, the language of the Act cannot be stretched so broadly as to encompass all commercial speech. However, the Second Circuit also recognized in Fashion Boutique that the ordinary understanding of both “advertising” and “promotion” connotes activity designed to disseminate information to the public. Defendants would not have bothered to post the fake review unless they intended it to be disseminated to, and read by, relevant consumers. Indeed, the website at states “[y]our Ripoff Report will be discovered by millions of consumers! Search engines will automatically discover most reports . . . .” Under these circumstances, plaintiffs asserted a prima facie case which should have survived summary judgment.