former customer lacks Lanham Act standing against platform

Gaby’s Bags, LLC v. Mercari, Inc., No. C 20-00734 WHA, 2020 WL 5944431 (N.D. Cal. Oct. 7, 2020)

Mercari promoted its web platform, Mercari.com, for commerce in miscellaneous goods as a venue where “anyone can sell.” Gaby’s opened a Mercari account in reliance on these claims and began selling handbags on Mercari’s platform. It generated nearly $400,000 over a two-year period until Mercari terminated its account for violating its terms of service, which barred “business accounts.”

Gaby’s sued, relevantly for violation of the Lanham Act claim. Although the terms of service were not “so clear cut as to allow judgment on the pleadings,” the court denied a motion to dismiss, but here granted summary judgment on standing grounds.

Gaby’s failed to show that it fell within the zone of interests for Lanham Act false advertising and also failed to show proximate cause. It sustained its complained-of harm as a consumer, not as a competitor. The statement that “anyone can sell” “related to the type of platform Mercari provided, not any other products (e.g., handbags) available on Mercari.”

Separately, Gaby’s failed to show how Mercari’s statement that “anyone can sell” deceived consumers to withhold trade from Gaby’s.