court allows TM and false advertising claims against "toxic backlink" SEO disparagement campaign (SEM, for minimization?)

Montway LLC v. Nexus AT LLC, 2026 WL 1552185, No. 25 C 13100, No. 26 C 1056 (N.D. Ill. Jun. 2, 2026)

Although the UCL unfair competition claims got kicked out, federal trademark and false advertising claims survive in this dispute between automotive transportation brokers. They provide  “automotive transportation services to a broad range of clients including individual car owners, auto dealerships, financial institutions (for vehicle repossession), rental car companies, original equipment manufacturers, and others.” Plaintiffs Montway and SGT have registered various trademarks related to their services, including “MONTWAY AUTO TRANSPORT” and “SGT AUTO TRANSPORT.”

Plaintiffs alleged that their SEO spending meant that, e.g., “Montway.com” is one of the first websites that Google returns when a user searches for “Montway,” “Montway Auto Transport,” “best car shipping company,” or “how to ship a car to another state.” Allegedly, SEO considers “trustworthiness.” Google allegedly measures website “trustworthiness” by measuring the quality of “backlinks,” which occur when links for a given website appear on other websites.

Nexus allegedly launched a toxic-backlink campaign to damage the companies by adding links to “Montway.com,” “sgtautotransport.com,” and other Montway and SGT subdomains on untrustworthy websites. Another toxic-backlinking technique to degrade SEO allegedly involves using misleading “anchor text” (the clickable text that appears on screen when text is hyperlinked) such as keywords related to online gambling and “adult content.”

Some of the toxic backlinks Nexus created allegedly used “sgtautotransport.com” as anchor text on websites like pokerstarcasinolives.com, or anchor text such as “online casino,” “hiding illegal funds,” “CBD products online,” “illegal border crossing,” “illegal drug distribution,” “corrupt influence,” “drug paraphernalia” and “heroin is a drug” leading to Montway or SGT’s websites. This creates the false impression that plaintiffs are connected to and/or affiliated with such products or services.

Montway sued for Lanham Act false advertising, trademark infringement, and tarnishment, as well as violation of Illinois consumer protection law and California’s UCL.  

False advertising: The allegedly false statements were in the “anchor text,” and they were plausibly literally false, e.g., anchor text stating “sgtautotransport.com” but connecting to a website like “pokerstarcasinolives.com,” or “online casino,” “hiding illegal funds,” “CBD products online,” and other similar statements connecting to SGT’s website. If anchor text states that “a link will lead to a website offering certain goods or services—car transport services or a variety of unsavory goods and services—but that the link actually takes the consumer to a different destination,” that’s false.

Plus, the allegations were that the anchor text created the impression that their services were affiliated with the spam websites as well as the unsavory products and services promoted on those websites, misleading consumers about the quality and type of services that Montway and SGT offer.

Was this commercial advertising or promotion? The Seventh Circuit doesn’t use Gordon & Breach, but instead applies the Lanham Act only to “traditional commercial advertising or promotion methods.” [Like… backlinks? I guess, because:] “Based on plaintiffs’ allegations, Nexus’s alleged toxic backlink campaign involves an innovation in communications media that is covered by the Lanham Act. Montway and SGT allege that they have made significant investments in online advertising, search engine optimization, and affiliate marketing to ensure they continue to reach prospective customers,” with which defendants interfered. [But that indicates that plaintiffs are involved in commercial advertising, not that defendants are. This is one of the early mistakes courts made about domain names.] The court agreed that “Nexus’s alleged toxic backlinking campaigns are comparable to negative advertising. … The alleged toxic backlinks serve the same goals as negative advertisements: to denigrate a competitor.” [That might work under Gordon & Breach, but I can’t see why that makes them comparable to traditional advertising and promotion methods.]

Plaintiffs also sufficiently alleged materiality or injury because the toxic backlinks and included anchor text allegedly “created the impression that their services are affiliated with untrustworthy websites and/or unsavory goods and services. According to Montway and SGT, this ultimately led to fewer consumers reaching their websites.”

[I really wonder what Google would say about all of this.]

Trademark infringement: Fact-intensive so no motion to dismiss for you despite defendant’s argument about the high degree of care used by consumers of the relevant services. The court doesn’t require the confusion to be about the source of defendants’ goods or services, but confusion about whether plaintiffs’ “services are affiliated with untrustworthy, spam-filled websites and/or the service advertised therein, rather than with the trustworthy services normally associated with the SGT Mark.” That doesn’t actually seem like trademark confusion to me, even if it’s disparaging false advertising.

The theory of harm here is purely algorithmic. In fact, the theory works without any allegations that any consumers ever hover over any of these links in order to see the allegedly disparaging connections. This is perhaps what a rump unfair competition common-law cause of action is for, but it’s not what trademark law is for and the Supreme Court has been pretty clear that the Lanham Act doesn’t cover all forms of unfair competition.

Tarnishment: Appallingly, the court finds fame sufficiently alleged because of allegations that Montway’s mark “has been in continuous use since at least July 2007” and, based on that use, the mark “has acquired consumer recognition, positive reputation, and extensive goodwill with consumers,” SGT’s mark has been in use since 2014 and, based on that use, SGT’s mark “has acquired consumer recognition, positive reputation, and extensive goodwill with consumers,” and they’ve spent hundreds of thousands of dollars each year to reach prospective consumers. No citation to the standard set forth in the statute or any case law. If a human being ever looked at the links—a big if—the negative associations qualify for the ordinary meaning of tarnishment, I suppose.

Illinois consumer protection: Fine, given what’s gone before.

California UCL: Montway and SGT argued that they suffered an injury in California because Google is headquartered in California. That’s not where they suffered injury, though. They didn’t allege “any specific instance where a potential customer in California was impacted by Nexus’s actions.”