sitting by designation, Judge Bibas says there's no de minimis exception to Lanham Act false advertising

Montway LLC v. Navi Transport Services LLC, --- F.Supp.3d ----, 2025 WL 3151403, No. 25-cv-00381-SB (D. Del. Nov. 11, 2025)

Judge Bibas either likes sitting by designation or is willing to take one for the team; here’s another of his IP district court decisions. This case involves alleged trade secret theft (departing employees) in the cross-country car-shipping business, which has only a “handful” of competitors. The trade secret claims survive in key part, as do the false advertising claims, on which I will focus.

Defendant Navi’s website generally resembled plaintiff Montway’s own, including a Terms of Use page that “chose to apply Illinois law” even though Navi was headquartered in Delaware. “The website also contained a handful of peculiar, similarly worded reviews, including multiple reviews by people with the same name. And the website claimed that Navi had shipped more than 20,000 vehicles, even though the entity had only been in business for a few months and had a negligible online footprint. … [A]t least one positive internet review of Navi … had been posted by an ex-Montway employee who had never used Navi’s services.”

The court did dismiss Delaware state trade secret claims, without prejudice so that Montway could, if it was able to, add more facts that could support applying Delaware law to Navi’s conduct (much of the misconduct allegedly took place in Bulgaria).

The court noted that, while some courts have imposed a “slightly heightened” pleading standard for Lanham Act false advertising claims, neither the Supreme Court nor the Third Circuit had done so, and it agreed with Delaware district courts that had been skeptical of inventing such a standard. Nonetheless, because the parties didn’t dispute the issue, it analyzed the claim under that intermediate standard.

For proximate cause (why would the false advertising take sales away from Montway, instead of the handful of other competitors?), the trade secret theft—which meant that “Navi targeted Montway customers by sending unsolicited, cheaper quotes to individuals who have asked Montway for quotes”—sufficed. The allegedly false statements on Navi’s website would plausibly lead a consumer to do business with Navi instead of Montway.

As for falsity, the complaint provided screenshots of specific reviews: “three near-identical reviews posted by individuals with three different names within the period of several weeks in 2024, more near-identical reviews posted by individuals with the same three names months later, and repostings of those exact reviews a few months after that. The suspicious timing and wording of those reviews makes their falsity plausible.” And a screenshot of a glowing review posted by an alleged ex-Montway employee “who had never used Navi’s services” also made the ‘fake reviews using names of real people’ allegations plausible. So too with the allegation that Navi falsely claims to have “shipped ‘over 20,000 vehicles,’ ” where falsity was plausible given allegations that fewer than 125 people visit Navi’s website each month and that Navi has only been in business since May 2024. “To be sure, if it turns out after discovery that Navi’s customer reviews were legitimate, or that it has in fact shipped more than 20,000 cars, Montway’s false-advertising claim will run into problems. But trying to litigate that issue now puts the cart before the horse.”

Navi argued, cheekily, that 125 visitors/month was not enough to cause more than de minimis harm. “The Lanham Act does not have a de minimis exception.” Anyway, given the allegations of customer swiping, “[i]f even some of those visitors decide, after reading the statements on Navi’s website, to do business with Navi instead of Montway, that obviously harms Montway more than a little.”

Meanwhile, a wholly owned subsidiary of Montway that served as its sales/servicing arm had standing to sue for misappropriation, but not for false advertising.  The complaint failed to allege any harm from the false advertising to the subsidiary.