former TM owner states valid damages claim against licensee of current TM owner that drove it out of business via infringement

Wagner Zip-Change, Inc. v. Tubelitedenco, No. 23 C 05077, 2026 WL 673148 (N.D. Ill. Mar. 10, 2026)

Wild facts! Wagner was until 2021 in the business of selling sign lettering products, including its trademarked Jewelite Trim (also known as “trim cap”), “a plastic molding that adds dimension to cut-out sign letters.” It obtained an exclusive license to use the mark in 1987. It contracted with a third party, Vidon, for manufacture, and sold its products to distributors, which then sold them to sign companies and other end users. Defendants were among the largest distributors.

Vidon allegedly began manufacturing a knock-off version of Jewelite Trim. Tubelite then allegedly entered into a distribution agreement with Vidon. Tubelite allegedly (1) made false and misleading statements that Vidon’s knock-off trim cap was “the original trim cap,” that Vidon was just a “different name” for Jewelite, and that the product was “the exact same”; (2) used the Jewelite mark in connection with the sale and promotion of the Vidon trim product; and (3) filled at least several hundred customer orders for “Jewelite,” “Wagner Jewelite,” and “Wagner” trim cap with the Vidon product. Tubelite’s conduct allegedly “contributed greatly” to driving Wagner out of business, resulting in at least $4.5 million in lost sales. Wagner ultimately gave up its rights in the Jewelite mark, which was then assigned to Vidon.

Wagner sued Tubelite for violations of the Lanham Act and state law claims for unfair competition and tortious interference with prospective economic advantage.

Under these circumstances, the court rejected Tubelite’s argument that, though its use of the mark was confusing, Wagner couldn’t sue because (1) it’s not the current user of the mark and (2) Vidon is the mark’s current owner.

Wagner was suing for damages, not an injunction. Violation of its past rights gave it a cause of action. Cases requiring use for trademark rights “simply stand for the proposition that a plaintiff claiming infringement must show that it had rights in the mark when the alleged infringement took place.” It was enough that “Wagner had enforceable rights in the mark when Tubelite used it to sell Vidon’s products.”

For statutory standing, a plaintiff must (1) “allege an injury to a commercial interest in reputation or sales” that (2) “flow[s] directly from” the defendant’s violation of the statute. “Wagner easily satisfies that test, alleging (1) a commercial injury (loss of millions in sales) that (2) directly resulted from Tubelite’s misleading use of the Jewelite mark.” Nothing in Lexmark required a plaintiff to show current rights in the mark or likelihood of a future injury. “Nor would that requirement make much sense. Consider the consequences: defendants who appropriate another party’s mark so successfully as to actually drive that party out of business—as Tubelite is alleged to have done here—would effectively be immune from suit under the Lanham Act. That would be an exceedingly odd result.” Indeed, Lexmark itself commented that “a competitor who is forced out of business by a defendant’s false advertising generally will be able to sue for its losses.”

Tubelite also unsuccessfully argued that Wagner’s false association claim fails because Vidon, as the Jewelite mark’s current owner of record, has an incontestable right to use the mark. Incontestability had nothing to do with the issue here. Vidon acquired the mark after the alleged misuse of the mark took place. [Maybe Vidon has such a right, but it didn’t have such a right.] “Second, Tubelite—not Vidon—is the defendant in this action, and it has presented no legal authority to suggest that it can assert Vidon’s rights in its own defense.” Anyway, there were lots of exceptions to incontestability.

Sometimes dumb arguments make for bad explanations that omit nuance, but sometimes they lead courts to articulate the reasons for the rules, and that’s nice.

delay still defeats Lanham Act presumption of irreparable harm

Skillz Platform Inc. v. Voodoo SAS, 2026 WL 717220, No. 24-CV-4991 (VSB) (JW) (S.D.N.Y. Feb. 12, 2026)

Skillz sought an injunction against defendants’ allegedly false representations about not using bots, and against defendants’ use of bots, in their gaming applications. Skillz has showed up before litigating against other gaming companies’ bot-related representations. Its games including those where players can compete to win cash prizes in head-to-head, skill-bracketed tournaments that ban bots. Defendants run similar games and advertise themselves as, e.g., “fair” and “skill-based” games that are played against “real players” with “no bots allowed.”

The magistrate recommended against an injunction solely on grounds of delay. The relevant date for measuring delay was not the filing of the initial complaint, but at the time Skillz learned of the alleged harm. Even after filing, it waited seven weeks to move for a preliminary injunction. Without more evidence about when it first learned of the bot use, this “undercuts the sense of urgency that ordinarily accompanies a motion for preliminary relief and suggests that there is, in fact, no irreparable injury.”

In addition, the claims of irreparable injury were too remote and speculative to justify emergency relief. Although the parties do compete, Skillz didn’t show a logical causal connection between the alleged false advertising and (1) its own sales position or (2) the overall cash gaming market.

Skillz showed that its sales and market share decreased since 2021, but not that the alleged false advertising played any role in that beyond unsupported speculation by a self-serving declaration. So too with harm to the overall market. “Courts in this circuit have frequently rejected such speculative arguments in deciding whether to issue a preliminary injunction.” [Now do trademark infringement!]

Without evidence of harm to Skillz’ own reputation, as opposed to allegations that distrust was harming the overall market, money damages could redress any injury.

damages requirement trips up another false advertising case with sophisticated customers

Agilent Technologies, Inc. v. Axion Biosystems, Inc., 2026 WL 734986, No. 23-198-CJB (D. Del. Mar. 12, 2026)

Agilent alleged patent infringement and false advertising by Axion in the advertising of its impedance-based cell assay products. E.g., “The simple and sensitive assays of the Maestro Z accurately measure tumor growth and immune cell killing of 3D cancer spheroid models.” Agilent contended that the Maestro Z platform doesn’t actually accurately measure the impedance of 3D spheroids, but only of cells in contact with electrodes on a 2D surface. 

The court granted Axion’s summary judgment motion. Even assuming a genuine dispute on literal falsity and on whether the statements were fact, not opinion, Axion still prevailed.

“For a false advertising claim seeking injunctive relief, if a plaintiff can prove the statement in question is unambiguous and literally false—then actual deception or a tendency to deceive is presumed and need not be proven.” However, “where a plaintiff seeks only money damages for a Lanham Act violation”—regardless of whether the plaintiff is asserting that the statements are literally false or simply misleading—then “plaintiff must present proof of actual deception.” Axion sought both an injunction and money damages; for the injunction, actual deception could be presumed.

But there was not enough evidence of actual deception for misleadingness or damages. A consumer survey or other customer testimony “is not absolutely required if other evidence of actual customer deception exists.” Agilent’s own corporate representative testified about the purported experience of a prospective customer, but this was double hearsay, not admissible at trial. [Agilent apparently didn’t respond that this was evidence of state of mind subject to an exception.] She “could not recall [any] specific case” of customers saying that they wanted the feature at issue. “This vague testimony amounts to a conclusory assertion backed by no actual facts on the key point in dispute.” Nor did the court’s reading of the record support the idea that “Axion’s own collaborators, … who Axion stated are ‘representative of an Axion customer,’ were deceived.” Given their extensive experience with the products, “whatever views they came to regarding Axion’s products and their capabilities were surely gleaned from their own extensive research efforts.”

Thus, claims requiring actual deception failed. The remaining claim (literal falsity/injunctive relief) failed for want of a showing of injury.  

Agilent’s damages theory wasn’t based on any lost sales or reputational damage, and instead focused solely on prospective corrective advertising costs. The Third Circuit “does not place upon the plaintiff a burden of proving detailed individualization of loss of sales” as “[s]uch proof goes to quantum of damages and not to the very right to recover.” And the parties compete directly. Still, there was no real evidence of harm: the testimony was “so vague, conclusory, and/or inadmissible that it cannot be good evidence of anything.” [Now do trademark infringement!]

drug makers face rocky road in making claims against sellers of compounded weight loss drugs

Three different cases reading Lexmark differently but mostly kicking out claims:

Eli Lilly & Co. v. Aios, Inc., 2026 WL 836624, No. 25-cv-03535-HSG (N.D. Cal. Mar. 26, 2026)

Eli Lilly sells Mounjaro and Zepbound, GLP-1 inhibitors containing tirzepatide. These are the only FDA-approved medicines containing tirzepatide in the United States, and the FDA has not approved any tirzepatide product in oral or compounded form.

Defendant operates telehealth platforms focusing on drugs for weight loss, including compounded tirzepatide. Eli Lilly alleged that its Fella telehealth platform engaged in the unlicensed practice of medicine: For example, the non-physician founder allegedly “frequently tells customers that he can help increase their dosage amounts of Fella’s knockoff drugs if they contact him or his non-physician customer success team directly.” Fella also allegedly changed patient prescriptions “en masse,” based on Fella’s business needs, rather than individualized patient needs. Many patients allegedly learned that their prescription now contained an additive “not through their doctor but rather when their prescription arrived from Fella Health.” Eli Lilly alleged that these weren’t “personalized prescriptions”—rather, Fella is offering “an untested, unapproved, one-size-fits-all drug” to patients without complying with the California Medical Practice Act’s requirement that prescriptions be made with “an appropriate prior examination and a medical indication.”

Eli Lilly also alleged deceptive conduct with claims such as “[o]ur science-backed methodology delivers results that outperform traditional weight loss methods”; “[o]ral tirzepatide is the same active ingredient as the compounded injectable (tirzepatide)”; and “[o]ur advanced oral Tirzepatide treatment, developed through cutting-edge research, offers a safe and effective solution tailored to support your weight loss journey and overall health.”

Eli Lilly alleged that Fella knew these statements were false. In a Reddit post, Fella’s Head of Customer Sales wrote that “oral [tirzepatide] can be fairly ineffective (though not totally ineffective), and some may experience more GI discomfort due to daily administration.” One of Fella’s customer success leads wrote that “[t]he oral version is less effective than the injectables, but it’s still better than not being on the medication at all.” Fella’s founder wrote on Reddit that “oral [tirzepatide] is slightly less effective than subcutaneous.”

But Fella’s website states that oral tirzepatide is “science-backed” and that Fella uses a “science-backed methodology,” while its Head of Customer Sales wrote that patients generally lose 15% of their body weight in one year on oral tirzepatide. Eli Lilly alleged that oral tirzepatide has never been studied in clinical trials and that Fella has no science at all supporting its oral product. The statistic cited by Fella on its female-targeted Delilah website, that patients using oral tirzepatide experience a weight loss average of “22.5%,” was derived from Eli Lilly’s clinical trial on injectable tirzepatide, not oral or compounded tirzepatide.

Eli Lilly sued for violations of the UCL, FAL, and Lanham Act, along with civil conspiracy.

Fella argued that Lilly lacked standing because they weren’t competitors and Eli Lilly couldn’t allege “something very close to a 1:1 relationship between [Eli Lilly’s] lost sales and the sales diverted to a defendant.” The court disagreed: Lexmark directed the court to use the zone of interests test and proximate cause, both of which Lilly properly alleged.

Lilly alleged that “Fella’s unfair, deceptive, misleading, and false practices, including its false and misleading statements, cause irreparable harm to Lilly’s brand and customer goodwill by promising results that consumers cannot obtain from Fella’s product,” and, because Fella relied on Lilly’s studies on its product, consumers would also think that Lilly’s product would be that bad. Plus, Lilly alleged injury to its commercial interest in sales. E.g., on Reddit, one of Fella’s customers said he “was on zepbound” until mid-November 2024, but “stopped” when the medicine became too expensive and eventually switched to Fella. Lilly also had standing under the UCL and FAL, but only as to false advertising, not to the UCL claim based on allegedly unlawful corporate practice of medicine. “Eli Lilly does not plausibly allege how Defendants’ claimed lack of authorization to practice in itself causes it any injury.”

Commercial advertising or promotion: It was plausible that the Reddit posts were made for the purpose of influencing customers to buy Fella’s products. Although this was a closer question than statements on Fella’s own website, the Reddit statements “tout Fella’s success with statistics, refer to Fella’s oral and injectable tirzepatide products, and adequately reflect an economic motivation, such that the allegations support a reasonable inference that ‘the economic benefit was the primary purpose for speaking.’”

However, Lilly struggled with its literal falsity arguments, since “lack of substantiation” is not itself a valid theory under state or federal law. For example, Lilly alleged that Fella’s statements regarding its patients typically losing 15-22.5% of their body weight were false because those statements are in reality based on the results of Eli Lilly’s clinical trials, which were performed on injectable and non-compounded tirzepatide. And it’s true that a plaintiff can show falsity by showing that even reliable tests do not establish the proposition asserted by the defendant. “But here, Eli Lilly has not alleged that Fella made any representation regarding the specific basis for its statements about the weight loss results typically achieved for its patients, and Eli Lilly does not allege any contrary facts (as opposed to the purported lack of supporting facts).” Lilly didn’t plausibly allege that Fella’s statements about the existence of rigorous “research” and “testing” were false just because oral tirzepatide has never been subject to the particular mechanism of a clinical trial or study. [Seems like a consumer survey should be relatively easy to do to find deceptiveness even if not literal falsity.]

The only allegedly false statements sufficiently pled were those made in connection with Fella’s promotion of “personalized treatment plans.” Whether defendants actually personalize customers’ treatment was capable of being proven true or false, not puffery.

Novo Nordisk A/S v. Amble Health, Inc., No. 4:25-CV-01048, 2026 WL 776100 (N.D. Ohio Mar. 19, 2026)

The parties allegedly are competitors in the sale of drug products containing semaglutide. Novo Nordisk sells the only FDA-approved medicines containing semaglutide in the United States, Amble is a telehealth company that sells drugs purportedly containing semaglutide, produced at compounding facilities. Novo Nordisk alleged that these compounded drug products are mass produced and create a higher risk to patients than Novo Nordisk’s medicines, because the FDA does not conduct pre-market reviews of compounded drugs for safety, quality, or effectiveness.

The complaint also alleged that Amble’s ads falsely claims that its drugs are personalized: “tailored to you,” and are “tailored to your personal goals,” with “personalization” of “active ingredients, dosage, and form of a medication to meet an individual’s personal needs.” The complaint alleged that, to the contrary, the compounded drugs were “ordered in bulk and sold to patients off the shelf.”

The court found that Novo Nordisk didn’t plausibly allege injury in fact. The complaint alleged sales diversion as well as reputational harm because compounded drugs might “undermine the reputation for quality and safety established on Novo Nordisk’s FDA-approved medicines.”

But defendants’ use of “personalized” didn’t plausibly threaten to harm Novo Nordisk’s reputation. “At base, [Plaintiff] appears to argue the mere fact a medication is compounded makes it an inferior version of an FDA-approved product with the same active pharmaceutical ingredients. But compounding is a federally recognized and regulated pharmaceutical practice ….” Novo Nordisk needed at least facts supporting an inference that Amble’s compounded medication fails to meet consumer expectations, which it didn’t. Nor did it plausibly allege that any of Amble’s customers were harmed by the compounded medication “such that they could draw unwarranted conclusions about the safety and efficacy” of Novo Nordisk’s drugs.  Although Novo Nordisk pled that “the FDA has received reports of adverse events, some requiring hospitalization related to overdoses from dosing errors associated with compounded ‘semaglutide’ products,” dosing errors don’t show that the term “personalized” in and of itself has led to any patient diversion. [The court is weirdly going back and forth between reputation and sales diversion.]

Even with Article III standing, Novo Nordisk didn’t properly allege statutory standing via the proximate cause element: The “personalized” message didn’t plausibly cause the harm. Compounded medications require prescriptions, and the physician’s prescribing decision, not the ads, was the proximate cause of the patient using the compounded medication instead of Novo Nordisk’s product.

Eli Lilly & Co. v. Willow Health Services, Inc., No.: 2:25–cv–03570–AB–MAR, 2026 WL 639976 (C.D. Cal. Feb. 3, 2026)

Eli Lilly alleged its medicines are backed by rigorous science and quality controls. It has FDA approval for two injectable tirzepatide-based medicines. At the time of the complaint, there was no FDA-approved oral tirzepatide. Willow operates a telehealth platform that markets and sells weight-loss treatments directly to consumers. Willow offers compounded tirzepatide products, including an injectable formulation and an oral formulation.

The FDA allegedly has expressed particular concern about compounded GLP-1 drugs, many of whose components are manufactured by facilities that are not subject to the same regulatory oversight as domestic manufacturers. It has warned about dosing errors, adverse events, and the use of unapproved salt forms in compounded tirzepatide products. 

Willow allegedly marketed its products as clinically validated and comparable to, or superior to, Lilly’s FDA-approved medicines: that its tirzepatide treatment has undergone “extensive testing,” is supported by “science,” and produces significant weight loss outcomes. Imagery of physicians and references to board-certified doctors allegedly reinforced the impression of medical endorsement.

Willow also allegedly claimed that its product is a “premium” blend that delivers “better results” than tirzepatide generally. Then it reiterates that its medication undergoes extensive testing. Lilly alleged that, in fact, Willow has no clinical studies supporting these claims, and no testing has been conducted on Willow’s compounded products to demonstrate safety or effectiveness. 

Willow allegedly marketed its drops as effective and, at times, superior to injections, but no clinical data supported the effectiveness of any oral tirzepatide product.

And Willow allegedly misrepresented that its medications were custom, “personalized,” and tailored to each patient’s unique needs, rather than standardized formulations delivered to all patients. Willow’s intake questionnaire “purports to assess whether Willow’s treatment is appropriate” but recommends its medication to all users regardless of the information provided.

After Lilly sued, Willow added a disclaimer to its website stating that its products are not FDA-approved and have not undergone clinical trials, but Lilly alleged that this bottom-of-page statement didn’t affect the overall message. Lilly also alleged that survey conducted by the National Consumers League found that many consumers incorrectly believe  thatcompounded GLP-1 drugs are FDA-approved and clinically tested. Willow’s advertising allegedly mirrored the types of statements the FDA has identified as false and misleading in warning letters sent to compounders and telehealth companies: “clinically proven,” “backed by extensive clinical research,” and “personalized.”

Lilly alleged that Willow’s marketing falsely equates its untested compounded products with FDA-approved medicines, diverting sales and harming Lilly’s reputation. It further alleged that adverse events associated with compounded tirzepatide products are often mistakenly attributed to Lilly’s medicines, further damaging its goodwill.

Statutory standing: “[T]he test forecloses suit only when a plaintiff’s interests are so marginally related to or inconsistent with the purposes implicit in the statute that it cannot reasonably be assumed that Congress authorized the plaintiff to sue.”

“If the plaintiff can demonstrate that the defendant is a direct competitor, there is a presumption of a commercial injury to plaintiff sufficient to establish standing.” Willow argued that wasn’t a direct competitor of Lilly evidenced by the fact that Lilly didn’t have direct evidence of lost sales and it actually had an increase in sales of Mounjaro and Zepbound. Lilly argued that the presumption of commercial injury conferred by direct competition couldn’t be rebutted. [Gotta say, that seems correct for the motion to dismiss stage.]

The court recognized “a split of authority in the Ninth Circuit on whether a presumption of commercial injury arising from direct competition is sufficient on its own to establish standing, or whether a plaintiff must also allege concrete facts demonstrating lost or diverted sales.”

Lilly alleged that Willow’s conduct “results in potential patients being lured away” and that “Willow[’s] ... materially false statements ... influence consumers’ ... decision to purchase Willow’s [drugs] instead of Lilly’s FDA-approved medicines.” Lilly also alleged that the products compete at “similar prices” causing consumers make purchasing decisions “based on factors other than pricing, including comparative safety and effectiveness.” These allegations, together with the presumption arising from direct competition, were sufficient to plead commercial injury.

What about proximate cause? A plaintiff “ordinarily must show economic or reputational injury flowing directly from the deception wrought by the defendant’s advertising; and that that occurs when deception of consumers causes them to withhold trade from the plaintiff.” Proximate causation may be adequately alleged when “there is likely to be something very close to a 1:1 relationship between” a plaintiff’s lost sales and the sales diverted to a defendant.

The court seems to read this Lexmark quote as a requirement rather than an example. But if I plausibly allege that my competitor & I would likely have split the sales garnered by a competing false advertiser, it’s got to be the case that I have standing. It’s not the 1:1 relationship that creates proximate causation but that, although the parties are at distinct parts of the value chain (as the parties were in Lexmark), a 1:1 sales relationship can justify finding proximate causation—a legal rather than factual conclusion—at a greater competitive distance than a more unbalanced/hard-to-prove loss ratio would have.

Reading Lexmark that restrictively, Lilly still failed to plead “a direct causal link between any advertisement by Willow and a patient choosing a compounded medication over Lilly’s product.” “Critically, regardless of advertising or patient intent, obtaining a prescription medication requires a physician to prescribe it. The physician’s prescribing decision, not Willow’s advertisements, is the proximate cause of the patient using the compounded medication instead of Lilly’s product.”

Lilly objected in vain that this ruling would categorically eliminate Lanham Act claims for prescription drugs. You still need “allegations showing a direct link between advertising and lost sales,” taking into account “the fact that prescriptions, a foreseeable and legally required step, determine whether a patient can actually obtain the product.” [Honestly, I’m not sure how hard this would be for Lilly to plead. The whole point of these services is that they contract with doctors to prescribe exactly what the services offer. A patient who contacts a doctor through one of these services is extremely likely to end up with their products. I don’t think Lilly should have to plead it, but it seems very plausible.]

CEO/sole owner is liable to bankruptcy estate for deliberate false advertising campaign that ended in bankruptcy

In re Vital Pharmaceuticals, Inc. (VPX Liquidating Trust v. Owoc), 2026 WL 822473, No. 22-17842-PDR, Adv. Pro. No. 24-01009-PDR (Bkrcy. S.D. Fla. Mar. 24, 2026)

This is an interesting case about false advertising and individual officer liability in bankruptcy. The court begins:

Corporate officers who breach their fiduciary duties do not become immune from accountability simply because they are also the only stockholders. Florida law imposes fiduciary obligations on directors and officers for the protection of the corporation itself—not for the benefit of any particular class of shareholders, and not subject to waiver by a sole owner who later finds it convenient to argue that no one was harmed but himself. When those obligations are breached and the corporation is driven into bankruptcy, the right to enforce them passes to the trustee or liquidating trust.

Owoc was VPX’s founder, sole shareholder, sole director, and CEO. A jury found that his and VPX’s false advertising of energy drinks was willful and deliberate, resulting in a judgment approaching $300 million.

At its peak, VPK generated over $1 billion in annual revenue, but its commercial success was based on claims about a proprietary ingredient that Owoc called “Super Creatine.” VPX falsely advertised that it offered significant physical and mental health benefits. VPX had “no corporate will separate from Mr. Owoc’s own.”

Because the jury was instructed that “VPX and/or Mr. Owoc acted willfully if they knew that their advertising was false or misleading or if they acted with indifference to whether their advertising was false or misleading,” its willfulness finding “necessarily encompassed a determination that Mr. Owoc either knew that the advertising was false or acted with indifference to whether it was.”

The judgment was one of the principal reasons for VPX’s bankruptcy filing; the resulting trust sought to hold Owoc liable for breach of fiduciary duty arising from the false advertising.

This claim requires: (1) the existence of a fiduciary duty; (2) a breach of that duty; and (3) damages proximately caused by the breach. Collateral estoppel applied to prevent Owoc from relitigating whether he willfully and deliberately engaged in false advertising of Super Creatine.

As VPX’s sole director and CEO, Owoc owed VPX fiduciary duties of care, loyalty, and good faith. A breach under Florida law requires at least gross negligence, which is “synonymous with engaging in an irrational decision making process.” The false advertising jury’s findings were preclusive: “A director who causes the corporation to engage in a years-long false advertising campaign that he knew was false, or acted with indifference to whether it was false, is the precise ‘knowing and deliberate indifference to the potential risk of harm to the Company’ that … breaches the fiduciary duty of care.” The damages were the judgment entered against VPX. Thus, there was liability (quantification of damages was for later).

The court rejected Owoc’s arguments, including that VPX was in pari delicto (equal fault) with him and thus barred from making the breach claim. The court disagreed: the doctrine “is not a tool for the powerful to insulate themselves from the consequences of their own misconduct.” It was designed for situations when two parties were independently at fault, voluntarily engaged in the same wrongdoing, and then fought about their relative entitlements arising from that shared wrongdoing. “In that situation, a court steps back and says: we will not sort this out.” It follows that, “when the parties were not independently at fault, when the plaintiff was not a voluntary wrongdoer, or when the very nature of the claim is that the defendant wronged the plaintiff rather than that both wronged each other,” the doctrine doesn’t apply. That was the case here.

While a bankruptcy trustee cannot sue third parties for their role in wrongdoing if the corporation itself was an equal participant (given that corporations can’t act without individual humans so the humans’ wrongdoing is attributed to the corporation), “an agent’s misconduct is not imputed to the principal if the agent was acting entirely in his own interest and adversely to the interest of the corporation.” “VPX’s liability in the Monster False Advertising Litigation was the legal consequence of Mr. Owoc’s own conduct being attributed to the entity he wholly controlled. The jury’s finding of willfulness against VPX reflects Mr. Owoc’s willfulness, not some independent institutional decision by VPX to deceive.”

Allowing Owoc to point to the fact that the law attributed his acts to VPX as a shield against accountability to VPX would be “to let fiduciaries immunize themselves through their own wrongful, disloyal acts—a “transparently silly result.” And if Owoc could do it here, so could every sole owner-operator, which would “systematically immunize the most powerful actors in closely held corporations from the most fundamental obligations corporate law imposes on them.”

Nor did the business judgment rule protect Owoc because of the breach of fiduciary duty. “This is not a case of a business judgment gone wrong — a risky but good-faith marketing strategy that backfired. It is a case of a director who caused his corporation to make claims he knew were false or misleading, or acted with indifference to whether they were false or misleading. The rule was not designed to shield such behavior.”

court dismisses vague false advertising counterclaims but allows challenge to Wonderful's pistachio trade dress

Wonderful Co. v. Nut Cravings Inc., No. 1:21-cv-03960 (MKV), 2026 WL 818073 (S.D.N.Y. Mar. 24, 2026)

Wonderful sued Nut Cravings for infringing its pistachio package trade dress. This opinion deals only with Nut Cravings’ counterclaims, which mostly survive except for false advertising.

Wonderful has a registration for its packaging: a design “consist[ing] of black three-dimensional product packaging having a rectangular shape with transparent semi-circular curved sides, the word ‘WONDERFUL’ in white with a design of a ‘heart’ in place of the letter ‘O’ appearing across the top of the packaging and the word ‘PISTACHIOS’ in green appearing vertically in the middle of the packaging” for “processed nuts.”

It also claimed unregistered trade dress in: (1) “a predominantly black package”; (2) “a bright green accent color”; (3) “use of sans serif font for the word ‘PISTACHIOS’ ”; (4) “use of capital letters for the word ‘PISTACHIOS’ ”; (5) “semi-circular curved ‘window’ cut outs showing pistachios”; and (6) “the WONDERFUL mark.”

Nut Cravings uses a black and green color scheme for its pistachios, has the phrase “roasted salted pistachios” written in all capital letters, a sans-serif typeface, and a rectangular simulated-window on the front of its package. It alleged that each of the elements that overlap with Wonderful’s is generic and functional for packaging of processed nuts.

Nut Cravings plausibly alleged that the trade dress (registered and unregistered) was functional, thus stating a claim for invalidity of the registered mark. Although a combination of functional elements can in theory be nonfunctional, “the fact that a trade dress is composed exclusively of commonly used or functional elements might suggest that that dress should be regarded as unprotectable or ‘generic,’ to avoid tying up a product or marketing idea” (also citing Laurel Road Bank v. CommonBond, Inc., 18-cv-7797 (ER), 2019 WL 1034188, at *6 (S.D.N.Y. Mar. 5, 20219) (noting that “where each element is functional and the elements work in tandem to create an advertisement that is readable and eye-catching, [plaintiff] is not likely to meet its burden that the Trade Dress is nonfunctional”)).  

The counterclaim plausibly alleged that only the Wonderful mark was nonfunctional. The presumption of nonfunctionality afforded by registration is rebuttable. Nut Cravings alleged that black and green provide a non-reputation related benefit of an aesthetically pleasing appearance, with black separately indicating high quality and green separately indicating the product is related to “nature, health and/or pistachios.” It cited pleading numerous reports and publications explaining the benefits of the use of these colors for food packaging. It further alleged that numerous other processed nut products use green and black for their packaging and provided 36 specific examples.  “[A] color on packaging may be functional in a given industry.”

Nut Cravings also alleged that the other elements—capital letters, sans-serif font, and transparent windows on the package—are functional and provide non-reputation related benefits for food packaging. All-caps is allegedly commonly used to denote simplicity and/or premium quality; sans-serif font is allegedly commonly used to assist readability; transparent windows are allegedly commonly used to “entic[e] customers, enhance[e] product visibility, and/or display[ ] the freshness of items inside.” These are all non-reputation-related benefits that courts have found to be functional in similar contexts. E.g., Laurel Road Bank found the use of sans serif font in advertising campaign to be functional as it “enhanced legibility and readability” and that the use of “large text catches a viewer’s attention” and is also functional, and Kind LLC v. Clif Bar & Co., 2014 WL 2619817, (S.D.N.Y. June 12, 2014), held that the use of a transparent window on food packaging for food bars serves a functional purpose “of revealing the bar within.” In reversing the dismissal of Wonderful’s claims in this case and finding nonfunctionality plausible, the Second Circuit even noted that “the transparent windows in the packaging [ ] arguably serve the functional purpose of allowing a consumer to view the pistachios being sold.”  

So too with genericity, although the allegations were thinner. That’s what discovery is for.

False advertising: Nut Cravings alleged that Wonderful misrepresented that the packages contain more edible pistachios than actually included. It pointed to nineteen online consumer reviews complaining of a significant number of empty shells in Wonderful pistachio products. Nut Cravings alleged that consumers expect that packages of in-shell processed nuts will include substantially only editable nuts within shells, and that “almost all of the advertised weight” is edible, and that the deception here caused consumers to pick Wonderful over Nut Cravings.

But conclusory allegations that false advertisements caused a claimant to lose sales are insufficient. None of the cited customer reviews mentions Nut Cravings or says that the customer otherwise would have purchased from them absent the allegedly false statements.  Nut Cravings didn’t even allege that every bag misrepresents its net weight due to a significant number of empty shells. The court wasn’t willing to give every pistachio producer a claim against Wonderful without more allegations.

Meta's AI assistance to advertisers defeats Section 230, court says

Bouck v. Meta Platforms, Inc., No. 25-cv-05194-RS (N.D. Cal. Mar. 24, 2026) 

Does offering AI enhancements to deceptive ads constitute participating in what makes them illegal for purposes of avoiding section 230? This case answers "yes, relatively easily" and it should be raising flags in a lot of boardrooms.

Plaintiffs here are victims of a pump-and-dump scheme involving shares of a Chinese penny stock. The scammers initially targeted them on Facebook and Instagram through advertisements for investment groups promising handsome returns. For example, in one ad, Kevin O’Leary— “a businessman well-known for his role on Shark Tank”—appears to advertise a private group in which stock tips are shared. In another, Savita Subramanian—Bank of America’s head of U.S. equity and quantitative strategy— “looks to be promoting” spots in a “free trading training” group that boasts “95% accuracy” and 30-40% daily returns. 

Plaintiffs sued Meta for aiding and abetting fraud; negligence; breach of contract; violation of the California Unruh Civil Rights Act, Cal Civ Code § 51; and unjust enrichment, along with promissory estoppel and breach of the covenant of good faith and fair dealing as alternatives to their breach of contract claim. The court allowed the claims for aiding and abetting fraud, negligence, and unjust enrichment to proceed.

Section 230: An “information content provider” is “any person or entity that is responsible, in whole or in part, for the creation or development of information provided through . . . any other interactive computer service.” If Meta was sufficiently involved in the “creation or development” of the fraudulent ads, the court reasons, then those ads were not just “provided by” the scammers—they were also provided by Meta. Under 9th Circuit precedent, a website helps to develop unlawful content “if it contributes materially to the alleged illegality of the conduct.”

Plaintiffs’ allegations of material contribution depended on three tools Meta offers to advertisers. (1) Flexible Format: “Meta automatically optimizes the ad and shows it in the format that Meta predicts may perform best” by “selecting the specific images and other content that will be included, the layout, the platform (Facebook or Instagram), and how the ad will be displayed to a particular user (e.g., in the user’s feed, as a story, etc.).” (2) Dynamic Creative: This tool “takes multiple media, such as images and videos, and multiple ad components, such as images, videos, text, audio, and calls-to-action, and then mixes and matches them in new ways to improve . . . ad performance.” This “allows the advertiser to automatically create personalized creative variations for each person who views the ad, with results that are scalable.” (3) Advantage+ Creative: Meta uses generative AI to apply “creative enhancements” to optimize advertisements, including AI-generated text and images. “The alterations may include modifications to images (such as applying different text overlays or modifying the image background), generating variations of the ad’s text to target different audiences, and inserting ‘Call to Action’ buttons, such as a link to purchase a product or join a WhatsApp group.”

The complaint alleged that scammers used these tools at least to create different variations of ads featuring Ms. Subramanian. That was enough to plead the existence of a dispute over whether Meta “contribute[d] materially to the alleged illegality of the advertisements.” “Plaintiffs have averred that Meta participated in the construction of the ads by literally generating, using artificial intelligence, the images and text in the advertisements. That degree of participation is not protected by section 230.” In other words, “optimizing the appearance of an ad to drive engagement” was enough of a contribution to the ads’ illegality to preclude section 230 immunity. Pleading the ability to create “AI- generated text and images” “is more than enough to aver ‘that the tools affect ad content in a manner that could at least potentially contribute to their illegality.’”

Meta argued that its tools were “neutral” and that offending content was exclusively provided by the scammers. But 230 allows services to “structure the information provided by users,” not “to create the information itself.” Plaintiffs alleged that “Meta created the offending information by generating some of the false statements that tricked them into the investment scheme.”

If a scammer tells Advantage+ Creative “that he is interested in an ad promising astronomical weekly investment returns, Advantage+ Creative will spin up a slew of ads that include the provided language and other language, images, and videos it decides will be effective in promoting the user’s chosen message.” Indeed, a journalist from Reuters asked for an ad asking users if they were “interested in making 10% weekly returns.” Advantage+ Creative “generated a slew of ads saying just that and new ads with language like ‘Tired of living paycheck to paycheck? Break the cycle and start earning steady weekly income with our proven system.’ The reporter did not come up with that (patently fraudulent) language; it was all Meta.” It was at least plausible that some of the illegal content (i.e., the fraudulent statements in the ads) was created by Meta, not by the scammers.

Aiding and abetting fraud: “California has adopted the common law rule that [l]iability may ... be imposed on one who aids and abets the commission of an intentional tort if the person ... knows the other’s conduct constitutes a breach of a duty and gives substantial assistance or encouragement to the other to so act.” Meta argued that it neither had knowledge of the scammers’ conduct nor substantially assisted in the execution of their scheme. Plaintiffs alleged that Meta has been repeatedly subject to lawsuits stemming from similar schemes; that Meta itself acknowledged the proliferation of fraud using public figures and celebrities’ images; and that Meta had an “ad review system” in place to screen ads for “violation of [Meta’s] policies.”

Meta responded that knowledge that fraud is occurring generally on its platforms could not have given “actual knowledge of the specific primary wrong” at issue in this case. “In a vacuum, that argument has merit. Under California law, knowledge that something illegal is occurring on a defendant’s platform does not establish that the defendant knew of the particular illegal conduct that injured the plaintiff.” But the court accepted allegations “that when Meta saw the ads in its ad review process, Meta acquired actual knowledge of their fraudulence.”

What about the moderator’s dilemma?  “To be sure, in many cases a defendant could not be charged with actual knowledge of fraud simply because the fraud passed through a routine review process. For that reason, many cases arising in the financial fraud context have required a plaintiff bringing an aiding and abetting claim to show that the defendant had some extra knowledge about the primary fraudster in order to create an inference that the defendant knew of the fraud and passed it through the review process anyways.” But here, “no extra knowledge is required. That is because the advertisements are facially ridiculous.” [This seems like it will create a bit of a problem on the back end of proving classic fraud—where is the reasonable reliance?]

Thus, an ad showing “Savita Subramanian, one of Wall Street’s most respected market observers, purporting to offer stock tips in a WhatsApp group,” not through her employer Bank of America but promoting something called “AI Investment.” “She” touted daily potential returns that were roughly three to four times the average annual return of U.S. equity markets, all for free. “Even a cursory look would warrant suspicion that the ad is fraudulent….  If Plaintiffs succeed in convincing a jury that this ad (and others that are equally preposterous) passed Meta’s ad review process, the jury would be entitled to infer that Meta had actual knowledge of the fraud at the time the ads went out to its users.”

Meta made the obvious point that its ad review is not human review, and that automated systems don’t have the intuitive knowledge that allows this conclusion from a “cursory look.” The court found that response “confounding.” “It was Meta’s decision to use technological review tools to screen ads, and it does not now get to claim it had no idea what was going on because it tasked some software program with doing the first pass.” But … Meta did have no idea what was going on, in the sense of having specific knowledge. This really is a decision to allow general knowledge to count for liability; it penalizes Meta for having automated review instead of no review. Given that human review at Meta scale is … let’s say unlikely … then allowing this generalized knowledge to count is another blow against large online services generally.

The court also found that it was plausible that Meta acquired knowledge that it was aiding and abetting a fraud “well before the ad passed through a review system.” “At the moment a scammer asked Advantage+ Creative to generate an ad using a celebrity, a secret chat room, and the promise of unfathomable riches, there is at least a fact question on whether Meta acquired knowledge that it was aiding and abetting a fraud.” After all, “even routine operations may constitute substantial participation if done with knowledge.”

Breach of contract: Meta didn’t impose a binding contractual obligation on itself to do anything, only a duty on its users not to pollute Meta’s platforms with scam investment ads. For similar reasons, alternative claims for promissory estoppel and for breach of the covenant of good faith and fair dealing failed.

But negligence survived for the reasons above.

California’s Unruh Act provides that all individuals, regardless of race or national origin, shall be “entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever.” Plaintiffs alleged that Meta’s advertising tools targeted ads featuring celebrities and investors that shared their race or national origin to make it more likely that they’d engage with the ad and succumb to the scam. “In general, a person suffers discrimination under the [Unruh] Act when the person presents himself or herself to a business with an intent to use its services but encounters an exclusionary policy or practice that prevents him or her from using those services.” Targeting is not exclusion, so there was no violation.

Unjust enrichment also survived.

CA6 interprets literal falsity narrowly but says materiality implements the standing requirement, yay

Victory Global, LLC v. Fresh Bourbon, LLC, --- F.4th ----, 2026 WL 836221, No. 25-5173 (6^th Cir. Mar. 26, 2026)

Lower court decision discussed here.

Victory Global, d/b/a Brough Brothers claims to have become the “first” African American-owned company to distill bourbon when it opened its physical distillery in 2020. But Fresh Bourbon counters that it was the “first” because its owners physically distilled their brand at another company’s distillery two years earlier. Brough Brothers sued for Lanham Act false advertising, but failed to identify any unambiguously false statements or evidence of deception. The court of appeals affirmed the grant of summary judgment to Fresh Bourbon.

Brough Brothers sold their its batch of bourbon under the Brough Brothers label in 2020. The bottles truthfully disclosed that they were distilled in Indiana. On New Year’s Eve in 2020, they distilled their first bourbon in Kentucky.

Fresh Bourbon distilled using another distillery’s space starting in 2018; eventually, Fresh Bourbon’s employees knew what they were doing and got “free reign” [sigh] of the Hartfield distillery. It first sold its bourbon made at Hartfield in 2020, using Hartfield’s federal license to sell to distributors. The label stated: “Distilled and Bottled by Buchanan Griggs Inc. Paris, Kentucky For Fresh Bourbon Distilling Company[.]” Fresh Bourbon owned the recipe for this bourbon, and Hartfield agreed not to make it for others. Eventually, Fresh Bourbon opened its own distillery and distilled its first batch either in late 2022 or in early 2023.

“Given that Brough Brothers and Fresh Bourbon developed side by side, various sources have made different claims about who came first.”

“If a defendant makes a literally false statement, the defendant can identify no possible framing in which one could consider the statement true.” [This is an overstatement—we can always imagine secret definitions that make a statement true.]  By contrast, a misleading statement “requires a reader to engage in some mental processing to determine its truth or falsity.” [Also wrong: the whole point of falsity/misleadingness is that the reader does not know the truth by way of the statement. A misleading statement requires some inference that leads the reader to a false conclusion; the mental processing is the process of determining what the statement is saying.] “If, for example, an ambiguous statement is true under one interpretation but false under another, the statement qualifies as potentially misleading (not literally false). The same rule covers a technically true statement that lacks important details.”

The court noted that other circuits have split over whether the false/misleading line matters to materiality. Now here’s a line I like a lot: Materiality “implements the statutory causation requirement because a business is not ‘likely to be damaged’ from a claim that will not affect a consumer’s decision on which product to buy.” The court declined to weigh in on the split here (correctly recognizing that the Fifth Circuit had mistakenly cited it as already having resolved the issue; indeed, the Fifth Circuit cited its misunderstanding of other courts’ holdings as the reason it adopted a separate-evidence-for-materiality requirement; the split emerged from a game of Telephone).

Anyway, Brough Brothers bet it all on literal falsity. But none of the categories of challenged statements met the “high” bar for literal falsity.

First: The first to African Americans to “distill,” “produce,” or “develop” Kentucky bourbon since the Civil War. For example, Fresh Bourbon’s profile on X called the company’s bourbon the “first ... developed grain to glass by African Americans in the state of Kentucky.”

Brough Brothers’ expert conceded that it was “impossible to verify” whether other African American distilleries existed before these two companies because of the history of ignoring Black history. “At least with respect to other bourbon makers, then, Fresh Bourbon’s statements are not ‘verifiable’ as false on this record.” So the alleged falsity was the message that Fresh Bourbon made bourbon at its Lexington distillery before Brough Brothers made bourbon at its Louisville distillery, when the truth was that Brough Brothers obtained its distilling licenses and made its first batch of bourbon at its own distillery in December 2020 before Fresh Bourbon completed the same tasks years later. “If, then, the challenged statements unambiguously suggested that Fresh Bourbon opened its physical location before Brough Brothers, they would likely be literally false.” 

But there was another “reasonable” reading [applying the correct standard rather than the “any reading” standard]: “that Fresh Bourbon’s agents made its Kentucky bourbon first—no matter the physical distillery at which it did so.” And that was true. Fresh Bourbon’s founders participated in the distilling process at the Hartfield distillery starting in 2018. During this time, Brough Brothers sourced their bourbon from Indiana and did not help this producer in the distilling process. Under these circumstances, there was ambiguity.

Brough Brothers argued that a party does not “distill,” “produce,” or “develop” bourbon unless the party obtains licenses to open a distillery.

But this technical claim has no place in the “literally false” calculus—which requires a “bald-faced” lie. Fresh Bourbon’s use of these verbs does not meet that high standard. In ordinary language, one would naturally say that a party distilled or produced bourbon when the party put the raw materials into a still and took the other steps necessary to create the alcoholic beverage at the end.… These verbs also would remain accurate even if the party lacked a license.

The legality claim thus “conflicts with the ordinary understanding of the words.” And the facts showed that Fresh Bourbon’s team did more than buy bourbon on Hartfield’s license; they physically participated in the distilling.

Second: “[C]onsidered to be the first black-owned distillery in Kentucky.” This phrase came from the Kentucky Senate’s resolution praising Fresh Bourbon in February 2020, to which Fresh Bourbon’s website links. Brough Brothers argued that it opened its Louisville distillery before Fresh Bourbon opened its Lexington one, making this literally false.

But there was no evidence that Fresh Bourbon itself ever claimed to have opened the first African American-owned distillery in Kentucky. That the Kentucky Senate “considered” it to be the first, even if misleading, wasn’t literally false. Also, “distillery” could mean different things in different contexts. Although both dictionaries and Kentucky law define the term as meaning a place where distilled spirits are made, “consumers do not necessarily flip open a dictionary or check statutes when evaluating products.” And Fresh Bourbon introduced evidence that companies often call themselves a “distillery” even when they are “having a spirit bottled for” them by others. Brough Brothers itself registered the name “Brough Brothers Distillery” in 2018—years before it opened its physical location. The resolution itself suggested that this was how the Kentucky Senate used the term, because it stated elsewhere that Fresh Bourbon had “announced that they plan to build” a physical distillery in Lexington. “[I]t would have made little sense for the resolution to refer to Fresh Bourbon’s (unconstructed) venue as the first.” Under the understanding of “distillery” that means a company that sells bourbon, Fresh Bourbon sold Kentucky-made bourbon while Brough Brothers still sold Indiana-made bourbon, so that was true.

Brough Brothers argued that Fresh Bourbon drafted the resolution and was thus responsible for it, but the Senate didn’t use the language that they drafted, which didn’t include the challenged statement. Thus the court didn’t resolve the question of whether a state Senate resolution could be attributed to a private party for Lanham Act purposes.

Likewise with other claims; the Senate resolution also said that Fresh Bourbon “produces bourbon in the state of Kentucky with an African American Master Distiller, the first in Kentucky since slavery[.]” Brough Brothers argued that this statement was literally false because the putative master distiller lacked the qualifications: “20+ years of experience operating a distillery,” according to its expert. The putative master distiller “worked full time at a bank and merely had an interest in bourbon as a hobby before he took the job with Fresh Bourbon.” But the record showed that whether a producer qualifies as a “master distiller” was opinion not fact; as one witness said, the term is “more of a symbol” that some distillers coined in their marketing to become “rock stars with the bourbon people.” He testified that there is “no set experience level” or “no set anything” for that matter; the claim that a master distiller must have 20 years’ experience would disqualify Brough Brothers’ own master distiller. Brough Brothers’ expert conceded that it “[b]asically” boils down to “a matter of opinion,” which is fatal to a Lanham Act claim.

The court also declined to hold that these statements added up to falsity by necessary implication. Unfortunately casting doubt on whether the circuit actually recognized the doctrine, it understandably refused to “combine statements from different sources into one ‘overall marketing scheme.’” Context is vital, but “we have never treated every advertisement that a business has ever made as the relevant ‘context.’” Even considered together, however, the challenged statements were still ambiguous.

Cal. anti-SLAPP law protects trailer for show that allegedly promised more fight than it delivered

Camper v. Paramount Global, 2026 WL 836249, No. B339150 (Cal. Ct. App. Mar. 26, 2026)

Camper “viewed a trailer for the reality television show College Hill: Celebrity Edition, which referenced, but did not show, a physical altercation between two cast members.” Camper alleged that he was misled by the trailer and other promotional materials to believe the show would include the full altercation and therefore paid for a subscription to the online streaming service BET Plus. When the show did not include any additional footage of the altercation, he sued for false advertising and related claims.

The trial court granted Paramount’s anti-SLAPP motion to strike.

Camper alleged that the trailer showed an argument between two of the show’s stars about racial identity, then showed one getting up to confront the other, then cut to other cast members yelling. Based on the trailer, “media interviews regarding the season, and a circulated screenshot of a physical fight released by” respondents, Camper allegedly bought a subscription to BET Plus so he could watch College Hill. At the moment of the fight, the show displayed the following message, “Out of respect for all parties involved, we have chosen not to show this fight.”

Paramount denied releasing the screenshot presented by Camper, or “any other screenshot depicting a physical altercation” between the cast members, “as part of an official marketing campaign or for any other purpose.” It also argued that it did not exercise any control over the interview given by a cast during which she discussed the fight, since by the time the interview was recorded, she had been expelled from college and had left the cast of College Hill.

The trial court concluded that the television program and associated promotional activities constituted protected speech in connection with an issue of public interest, as the episode involved “discussions of issues regarding race and racial identity, and the physical fight that is at the center of [Camper’s] claim arose out of a dispute on that topic.” Camper’s claims under the UCL, FAL, and CLRA failed because he could not establish that “it is probable that a significant portion of the general consuming public or targeted consumers could be misled by the trailer.” The court found that the physical altercation “was depicted in the episode, with a level of graphic detail that was greater than that in the trailer,” including that it showed an “opening swing” by one cast member, followed by “an extended segment of violent and disturbing audio that leaves no doubt that a physical fight is occurring,” as well as “audio of other classmates’ reactions during and after the event.” The trial court found that the scene “is much more dramatic than what is shown in the trailer, and nothing that is in the trailer is left out of the scene.” The court further noted that “there is nothing in the trailer that indicates how the fight would actually be depicted in the episode.”  

The court of appeals agreed. Camper argued that the trial court should have applied an exception for commercial speech, but the anti-SLAPP law carves out an exception from the commercial speech exception when an action is “based upon the creation, dissemination, exhibition, advertisement, or other similar promotion of any dramatic, literary, musical, political, or artistic work, including, but not limited to, a motion picture or television program.”

Camper had no evidence that a significant portion of reasonable consumers viewing the College Hill trailer could be misled to believe that the show would include additional footage of the physical fight. Declarations from Camper and one other viewer regarding their expectations were insufficient, especially since all of the footage in the trailer related to the fight was shown during the episode, as well as audio recordings capturing the fight and onlookers’ reactions to it. (Nor did he show causation given that he subscribed before the cast member interview.)

abortion clinic can proceed with false advertising claims against for-profit ad agency and (in part) the anti-abortion "center" it touted

Four Women Health Servs., LLC v. Abundant Hope Pregnancy Resource Center, Inc., No. 1:24-cv-12283-JEK, 2026 WL 836424 (D. Mass. Mar. 26, 2026)

Four Women is a licensed healthcare clinic that provides reproductive healthcare, including abortion care, to its patients. Abundant Hope is a “nonprofit crisis pregnancy center” that opposes abortion operating in a neighboring building. Four Women sued for state and federal false advertising; the court dismissed the Massachusetts Chapter 93A claim against Abundant Hope but denied dismissal as to the Lanham Act claim. Four Women also stated a plausible Chapter 93A claim against CLM, “a for-profit entity paid by Abundant Hope to make allegedly misleading advertisements about the services provided at the Attleboro Women’s Health Center.” The other defendants weren’t reachable under Chapter 93A because “Abundant Hope is a nonprofit that did not charge for its services, which advanced its pro-life mission, and its officers furthered that charitable mission.”

In 2018, Abundant Hope relocated next door to Four Women and put the name “Attleboro Women’s Health Center,” or “AWHC” for short, on its office. AWHC purports to furnish patients with free medical services, including ultrasounds and pregnancy consultation, testing, and diagnoses, but “is not a separate corporate entity from Abundant Hope, nor is it a licensed medical provider.”

Abundant Hope hired CLM, a for-profit marketing agency in Missouri, to manage that website and place advertisements on Google promoting AWHC to women seeking abortion care. Abundant Hope approved the language drafted by CLM. CLM also provides Abundant Hope with the contact information of potential clients and describes the services that they are seeking based on forms that those “leads” completed on AWHC’s website or elsewhere.

The alleged falsities: On its website and in Google advertisements, AWHC is advertised as a “Women’s Health Center” that has performed hundreds of “medical” tests and appointments and that can furnish “medical services,” including pregnancy testing and ultrasounds. But AWHC does not employ an on-site licensed doctor or Advanced Practice Registered Nurse, and state law requires such licensed medical professionals to diagnose the viability and location of a fetus.

AWHC also allegedly encourages women to access its services by falsely representing on its website that an ultrasound and a determination regarding viability are necessary to obtain an abortion.

AWHC’s website misrepresents that AWHC provides abortion care by listing “abortion” first in the “Options” page and, on the “Abortion” page, urging women who are “thinking about abortion” to “MAKE AN APPOINTMENT.” The website also includes a client testimonial describing AWHC as a “[g]reat place for women considering abortion.” While other pages on AWHC’s website include a small disclaimer at the bottom that AWHC does not perform abortions, these pages and its other advertising contain no such disclosure. Google advertising further implies that AWHC performs abortions because AWHC appears among the first Google search results for “abortion near me attleboro ma,” with an advertisement for scheduling an appointment and links to “Abortion Cost,” “Abortion Pill Info,” “Abortion Clinic Info,” and “Abortion Info.”

Four Women alleged diversion: Between January 2023 and August 2024, 591 patients called both AWHC and Four Women. Many women “unknowingly provided their contact information to Abundant Hope through AWHC’s website or CLM’s Google advertising,” and AWHC allegedly schedules appointments with callers without informing them that it does not furnish abortion care and, once on-site, offers them pamphlets falsely stating that abortion is “dangerous” in order to deter them from going to Four Women.

Chapter 93A prohibits “an unfair or deceptive act or practice” between those “engage[d] in the conduct of any trade or commerce.” Abundant Hope and its officers weren’t engaged in “trade or commerce,” which the law defines, in relevant part, to “include the advertising, the offering for sale, rent or lease, the sale, rent, lease or distribution of any services.” This language “indicates an intent that the services be distributed in exchange for some consideration or that there must be other strong indications that the services are distributed in a business context.”

Using a for-profit marketing agency didn’t change that calculus; “[i]n most circumstances, a charitable institution will not be engaged in trade or commerce when it undertakes activities in furtherance of its core mission.”

However, defendant CLM was a for-profit entity that has been paid “substantial sums” by Abundant Hope to advertise AWHC’s services. “CLM is therefore operating in a business context by receiving payment for its advertising services, and its activities fall squarely within the definition of ‘trade or commerce’ under Chapter 93A.” It wasn’t immunized just because its profit-making activities could be said to further the core mission of a nonprofit organization.

CLM also argued that, since Abundant Hope couldn’t be held liable under Chapter 93A, it couldn’t be held liable for what was essentially aiding and abetting. “But under Massachusetts law, one entity’s participation in another’s tortious conduct can lead to liability under Chapter 93A, even if the other entity is not subject to Chapter 93A liability.”

And its conduct in advertising/running the website was plausibly misleading, even if everything it produced was literally true. It was also plausible that the deception injured Four Women by diverting patients. Four Women alleged multiple specific instances in which women sought abortion care at Four Women but, as a result of confusion, ended up at AWHC.

Lanham Act: Why a different result for Abundant Hope on “commercial advertising or promotion”? The complaint adequately alleged that the defendants had an economic motive and thus engaged in commercial speech. Even though Abundant Hope is a nonprofit organization that provides free services at AWHC, “as a for-profit business, CLM has a clear economic incentive and is paid to promote AWHC’s services.” Nor was AWHC’s provision of free services and its status as a nonprofit organization dispositive. A nonprofit organization’s promotional advertising of services can directly relate to its “ability to fundraise and, in turn, to buy more advertisements.”

Abundant Hope’s paid promotion of its services included $38,846, or nearly 17% of its total functional expenses, in 2022 alone. And Abundant Hope “promotes its diversion of patients from Four Women and AWHC’s provision of free services in its fundraising.” Because Abundant Hope “has a direct economic stake in the provision of its ... service[s]” and advertises those services “in the hopes of realizing an economic gain” through fundraising “rather than merely informing the public or pursuing its ideological views, it may reasonably be viewed as economically motivated.”  

Four Women also adequately alleged that the defendants’ representations were made with the intent of influencing potential customers to purchase the services offered at AWHC; “purchase” here doesn’t require an exchange of money. [Probably more to the point, the word “purchase” in the Gordon & Breach test isn’t part of the statute, and we should be reasoning about what “commercial advertising or promotion” means rather than what a word from Gordon & Breach means.] And [although Lexmark should have abrogated this element], the complaint plausibly alleged commercial competition in the market for reproductive health care.

Materiality: Defendants admitted that AWHC is not “a licensed medical provider” or “facility” and “has never been licensed by the Massachusetts Department of Public Health to provide medical care,” but  they identify AWHC as Abundant Hope’s “medical” arm that furnishes “medical” services; promote AWHC as providing “medical appointments and medical tests” on its website; and advertise elsewhere, including on Abundant Hope’s website, that AWHC provides “medical” services to women, including pregnancy testing and ultrasounds. “These statements give the mistaken impression that AWHC is a medical provider that lawfully performs the identified medical procedures.” Likewise, misleadingly suggesting that an ultrasound and a determination regarding viability are necessary preconditions to obtaining an abortion, and misleadingly suggesting that AWHC provides abortion care, were plausibly material for the same reasons they were plausibly misleading. The complaint also provided examples of actually deceived consumers, giving rise to an inference of materiality.

First Amendment: Four Women’s claims do not target any speech the defendants wish to make, or have made, about their pro-life viewpoint or any of their views about the propriety of abortion. Rather, the claims are narrowly addressed to AWHC’s advertisements and website content that, as alleged, contain false or misleading information and divert women seeking abortion care from Four Women. Where, as here, a plaintiff plausibly alleges that the defendant engaged in commercial speech through false or misleading advertisements, the First Amendment does not provide refuge from claims under the Lanham Act or Chapter 93A.

Cases like NIFLA weren’t apposite, because Four Women wasn’t a government actor and it was challenging only false or misleading advertising, not seeking to compel speech. [Yeah, good luck with that on appeal.]

challenge to whether certification agency did its job can't be used to disprove an establishment claim

McKeon Rolling Steel Door Co. v. U.S. Smoke & Fire Corp., 2026 WL 865699, 1:23-cv-8720 (ALC) (S.D.N.Y. Mar. 30, 2026)

McKeon sued defendants for false advertising under NY and federal law. I’m ignoring the trade secret counterclaim.

McKeon and USS&F compete in the market for commercial and special purpose safety assemblies, focusing here on fire shutters that close openings in buildings and block the passage of flames and gas in the event of a fire. Fire shutters are installed in public buildings, including hospitals, schools, and airports; they descend from ceilings if there is a fire. Building codes throughout the United States require that fire shutters be tested and certified by UL 10B Standard for Safety.

Defendant Guardian tests products, sometimes with third-party help; once it deems a product certified, it posts that to its website. Once the products at issue were deemed “certified” by Guardian, defendant USS&F posted the certification information on its publicly accessible website.

They argued that the statements were literally true because USSF’s products were tested by a third party, a certified testing agency; the tests were witnessed by Guardian, and Guardian issued certifications that the products were UL 10B certified.

McKeon argued that, even though the products stated they were UL 10B certified, they were not properly certified. McKeon had obtained what defendants deem “confidential test reports” and interpreted the results to determine whether the products should have been certified to UL 10B standard. McKeon argued that it was bringing an establishment claim, by which it sought to prove that “the Test Reports do not support the proposition for which they were cited; namely, that the subject Products meet the UL 10B certification requirements.”

The court found summary judgment appropriate, because this wasn’t a case where the claim was “tests prove X,” but rather “this product is accredited by a third party.” And that was true. The court found that cases allowing challenges to the reliability of claim-supportive testing were about protecting consumers against unfounded superiority claims. Here, there was no superiority claim, so there could be no establishment claim. [This distinction seems wrong to me, even if summary judgment is correct on these facts. Certainly statements that “tests prove” a monadic claim (e.g., treats headaches) or an equivalence claim (as good as) should also be able to be falsified.]

Instead, the court looked to Board.-Tech Elec. Co. v. Eaton Corp., 737 F. App’x 556 (2d Cir. 2018), which rejected a challenge to whether a competitor’s light switches should have actually been certified by the UL. “Without any indication that UL decertified the defendant’s product—or (perhaps) that the defendant’s product had materially changed since certification—there would be no plausible allegation of a false statement.” Here, McKeon conceded that it didn’t have a certifier re-test the products at issue, or provide evidence from a testing agency that the products didn’t meet the standard, or provide evidence that there was in fact no accreditation. Thus, the statements were literally true.

court enjoins lawyer from using exaggerated/distorted animation of misfiring gun in advertising

Sig Sauer, Inc. v. Jeffrey S. Bagnell, Esq., LLC, No. 3:22-cv-00885 (VAB), 2026 WL 867181 (D. Conn. Mar. 20, 2026)

Bagnell, a lawyer, commissioned a graphics company to create an animation purporting to show how a P320 pistol could misfire absent a trigger pull, known as an “uncommanded discharge.” He later posted that animation to YouTube and published it on his firm’s website; he represents plaintiffs who claim that they have been injured by uncommanded discharges from P320s.

The court granted a permanent injunction against Bagnell’s advertising use, though cautioning that the issue here was not “whether the P320 pistol can misfire or undergo uncommanded discharges, or whether that issue should properly be the subject of litigation elsewhere, or public commentary anywhere.”

Commercial advertising or promotion: Lawyer advertising is commercial speech, and the animation was made for the purpose of influencing potential clients. It was available online. Even if it also was attempting to raise awareness about a public safety concern, “[a]dvertisers should not be permitted to immunize false or misleading product information from government regulation simply by including references to public issues.”

Falsity:

The P320 is a striker-fired pistol, meaning that a pull of the trigger initiates a sequence of internal components to move, culminating in the releasing of a compressed spring, which drives a pin forward to impact the cartridge, causing the gun to fire. The Animation, which is approximately five minutes long, claims to show how vibrations or sudden movements could cause the P320 to fire absent a trigger pull.

The animation opens with a written message that the P320 contains a “mechanism of failure,” “suggesting that the following sequence is that mechanism.” It then depicts a CT scan of a P320 before moving into fully animated renderings of the internal components of the firearm combined with text guidance that it is possible for the P320 to have a “defective discharge” with “no trigger pull.”

The court found that Sig Sauer demonstrated that it would not be possible for the P320 to have the “mechanism of failure” specifically depicted in the video, and identified five literally false statements within the video about specific components of the pistol.

First, the video falsely depicts malformed versions of two P320 components, the sear and the striker foot, as having “inset surfaces,” which could lead to an unsafe “rollover condition.” Sig Sauer’s expert witness demonstrated that both components are flat with straight edges, making “rollover” impossible.

The animation showed a lumpy striker foot based on a photo that the lawyer knew depicted grease buildup. [Though knowledge isn’t required.]

Second, the video falsely depicts the slide’s ability to move up away from the frame, allowing the striker foot to walk up off the sear and fire without a trigger pull. This wasn’t physically possible: two steel parts—the slide and frame rail—merged into each other in an obscured part of the video. Yellow lines show the location of the slide channel, and a red box shows the location of the rail: An accurate depiction would have the red box sitting inside the two yellow lines.

Third, there were key differences between the striker’s so-called safety notch depicted in the video and the actual P320 striker safety notch, which is angled and undercut:

Although this portrayal allowed them to claim that the safety lock could slip over the safety notch to result in an uncommanded discharge, “the physical geometry of the components prevents this from occurring.” The safety notch as depicted in the video is 50% shorter than the actual component, adding credibility to the otherwise inaccurate claim that the lock could slide past the notch.

Fourth, the safety lock appeared less stable in the video than it is in reality: the video showed a bulbous, rounded appearance fitting loosely against the striker, while the real striker safety lock has flat edges and is tightly fitted against the striker.

The video falsely represents the dimensions of the striker foot and striker housing by depicting “[e]xcessive space” between the two components.

These false claims “distort the firearm’s components and safety features to support a claim that sudden impact or vibration leads to unintentional discharge.”

Materiality: A firearm’s safety to its bearer is plainly an “inherent quality or characteristic” and “likely to influence purchasers,” as YouTube comments like “Should I stop carrying my P320?” and “This is definitely plausible and very well described ... BTW I own a Sig M18 with a safety” showed.

Defendants didn’t rebut the resulting presumption of irreparable harm, even if Sig Sauer couldn’t show lost sales. The video was viewed as many as 37,000 times on YouTube over the seven-month period before it was taken down, and at least 80,000 times on another website. For injunctive relief, that was enough. First Amendment concerns were minimal because this was a post-trial order dealing with commercial speech, not a prior restraint.

Preventing use of the video for advertising purposes “does nothing to prevent the Defendants from continuing to practice law, represent plaintiffs against Sig Sauer, publicly express opinions about Sig Sauer or its products, or using even this version of the Animation in the context of other litigation.” The court took no position on whether the animation would be admissible in a tort case and suggested that its decision was narrow and its injunction should not “be construed to affect the ability of the Defendants to use any image, take any position, or make any argument to a court in any other litigation.”

Court enjoins T-Mobile's "Save over $1000" campaign for comparing apples to oranges

 Cellco Partnership v. T-Mobile USA Inc., 2026 WL 867129, No. 26-cv-0972 (LAK) (S.D.N.Y. Mar. 30, 2026)

Verizon sued T-Mobile for false advertising and the court granted a preliminary injunction, finding that T-Mobile’s claims that switchers could “Save Over $1,000” were likely false. As the court explains:

The cellular service industry is dominated by three large providers that fiercely compete to wrest customers from each other and to attract new ones. Price (or perceived price) is among the most important subjects of competition. Much provider advertising seeks to induce competitors’ customers to “switch” to the advertising provider. It often does so by claiming that the advertiser’s service is the cheapest.

The court agreed that the new campaign compared apples to oranges.

Verizon’s pricing strategy allows customers to customize their plans by adding optional “perks,” bundled together and offered at a discount compared to what the selected services (e.g., HBO and Netflix) would cost individually.

T-Mobile, by contrast, includes some benefits, such as a smaller, select set of streaming services, for no or little additional cost. It also includes T-Satellite, a network of low-orbit satellites that provide cellular service in parts of the United States that otherwise are unserved by terrestrial cellular networks. (T-Satellite is available to customers of other service providers, but few Verizon customers buy it.)

Previously, Verizon challenged T-Mobile’s “Save Up to 20%” campaign before the NAD, which recommended that “T-Mobile discontinue the challenged claims” because (a) “consumers are not likely to expect the value of ancillary benefits to be included in a savings comparison,” and (b) the terms that would enable a customer to save 20 percent were “not clear and conspicuous and further contradict[ ] the message of the broad comparative savings claim.” The NARB on review upheld that recommendation in part because “many reasonable consumers will conclude that the promoted savings is based on the cost of the wireless plans without any adjustments for additional benefits.” On January 22, 2026, the NARB found that T-Mobile still had “not made a bona fide attempt to” comply with aspects of its decision.

Instead, the “Save Over $1,000” campaign features claims that customers can save over $1,000 per year by switching from Verizon’s Unlimited Ultimate Plan or AT&T’s Unlimited Premium Plan to T-Mobile. This campaign tells customers that they can “[s]ave on streaming, satellite, and more benefits the other big guys leave out.” The fine print reads:

Savings vs. comparable plans at AT&T and Verizon plus the costs of optional benefits; plan features and taxes and fees vary .... With 3+ lines of Better Value Plan, 3+ new lines & 2 eligible ports or 3+ lines & 5+ years on T-Mobile postpaid plan required. Qualifying credit [required].

T-Mobile’s online calculator shows the a bunch of purported monthly cost comparisons between T-Mobile’s Better Value Plan and Verizon’s Unlimited Ultimate Plan, where services are listed as “included” through T-Mobile but extra through Verizon. Adding up the cost comparisons, T-Mobile’s calculator purports to show that its Better Value Plan costs customers $143 per month, whereas Verizon’s supposedly comparable Unlimited Ultimate Plan costs customers $260 per month, or a difference of $1,404 per year.

Verizon also has claimed in ads that its service is cheaper than those of its competitors. Until at least the T-Mobile campaign’s launch, Verizon offered its own interactive calculator that customers to toggle adding to their plan certain features, such as streaming bundles, that Verizon offers and then purported to show what a T-Mobile or AT&T customer purportedly would have to pay to obtain those same benefits.

Verizon’s core objections were two: “First, the campaign compares the promotional rate T-Mobile charges to new customers to Verizon’s nonpromotional rate, ignoring Verizon’s promotional rate of $175 per month. Second, it attributes to Verizon the costs of ancillary benefits that T-Mobile includes in its plan without charging T-Mobile the costs of ancillary benefits Verizon includes in its plan.”

T-Mobile counterclaimed that Verizon was falsely advertising its own “Better Deal,” but didn’t move for a preliminary injunction.  

For likely success on the merits, only falsity and materiality were contested. First, the court found that the “Save Over $1,000” campaign “necessarily implies” that customers can save over $1,000 per year on a comparable plan by switching from Verizon’s Unlimited Ultimate Plan to T-Mobile’s Better Value Plan. “That message is false. Instead of putting comparable plans side-by-side, T-Mobile engages in an apples-to-oranges comparison at every step of the way.” First, the undisclosed comparison of Verizon’s nonpromotional rate ($195 per month) with T-Mobile’s own promotional rate ($140 per month). It attempts to define away that problem by arguing that “$140 for three lines is the standard rate for T-Mobile’s Better Value [P]lan” was “akin to comparing an apple to an orange.”

T-Mobile argued that the comparison was reasonable because it “targets existing Verizon customers,” who supposedly would not be “eligible for Verizon’s promotional price.” “But nowhere in the campaign does T-Mobile indicate that it is speaking to only the subset of Verizon customers who are paying Verizon’s nonpromotional rate.” Verizon’s promotional rate lasts for three years, and using the term “switch” didn’t convey any limit on the claim.

Then, T-Mobile compared the price for each of three streaming services that it includes at little to no additional cost in its Better Value Plan to the full cost of each of Verizon’s bundles that include the relevant streaming service. “Yet, T-Mobile neither credits Verizon for the value of the additional services included in Verizon’s bundles nor charges T-Mobile for those services, which are not available through the Better Value Plan.” It also charged Verizon for the “sticker price” of T-Satellite too, even though T-Mobile controls how much to charge Verizon customers for T-Satellite and even though most Verizon customers do not purchase T-Satellite.

It was not enough that T-Mobile disclosed its inputs and methodology, because the plans were different, but T-Mobile portrayed them as “equivalents in all ways other than in price.” This is literally false by necessary implication because it portrays “non-comparable products ... as otherwise equivalent (except for the superior or inferior aspect being illustrated in the advertisement).” “Accounting for Verizon’s promotional rate and the ancillary streaming benefits it offers in its bundles that T-Mobile does not and removing from Verizon’s side of the figurative ledger the cost of T-Satellite, the supposed savings fall to a mere $228.84 per year.”  

Finally, the campaign’s price guarantee of five years applied to only “the cost of voice, data, and texting on T-Mobile’s cellular network,” or “the price of the rate plan,” not the ancillary streaming benefits or T-Satellite. This was a “crucial fact” but disclosed “at best indirectly, in fine print, and only on some advertisements.” That didn’t change “the unmistakable message of the campaign that a customer can save over $1,000 per year by switching to T-Mobile.” That was literally false.

Materiality: “Claiming a price difference between two purportedly comparable products is material. Indeed, T-Mobile’s claim of immateriality is nonsense for the obvious reason that it is inconsistent with its decision to launch the campaign and with its repeated arguments that enjoining the campaign would harm its ability to communicate the value of its services and compete in the cellular service market.”

Verizon was thus entitled to a presumption of irreparable harm that was not rebutted by delay. The ongoing dispute over a different ad campaign didn’t affect the fact that Verizon “promptly” filed suit after the “Save Over $1,000” campaign launched.

Nor did Verizon’s allegedly bad conduct in substantially similar advertising affect the balance of equities. Even assuming that Verizon’s “Better Deal” campaign was false, Verizon took down its competitive grid before suing. Its position “must be judged by the facts existing as they were when this suit was begun, not by the facts existing in an earlier time .... Conduct which came to an end prior to the events which are in issue cannot constitute an unclean hands defense.” Even if that were not the case, it still would be “better to remedy one wrong than to leave two wrongs at large,” “particularly where the harm damages not just the parties but also the public.” The counterclaim was the right place to address Verizon’s bad behavior.