A court could find that the immediate cause of the retailers’ loss of sales to other retailers was attributable to some other factor—for example, that the other retailers stocked a brand of motor oil that plaintiffs did not. Similarly, in L.S. Heath & Son, Inc. v. AT&T Information Systems, Inc., 9 F. 3d 561, 575 (7th Cir. 1993), Heath (a chocolate manufacturer) voluntarily participated in an AT&T ad touting its use of AT&T computers, but then alleged the advertising was false when the computer system experienced problems. The 7th Circuit rejected the claim because the companies were not direct competitors, but probably would have reached the same conclusion under the Lexmark analysis because Heath did not show how its appearance in the AT&T ad would affect its chocolate sales or its reputation among consumers as a chocolate manufacturer.Second, the Supreme Court has firmly put to rest any lingering notion that there can be consumer class actions under Section 43a.
AT & T Info. Sys., Inc., 9 F.3d 561 (7th Cir. 1993).3See, e.g., Famous Horse Inc. v. 5th Ave. Photo Inc., 624 F.3d 106 (2d Cir. 2010). The “reasonable interest” test requires a plaintiff to demonstrate “(1) a reasonable interest to be protected against the alleged false advertising and (2) a reasonable basis for believing that the interest is likely to be damaged by the alleged false advertising.”
The Seventh, Ninth and Tenth circuits established a “director competitor” test, whereby the parties needed to be direct competitors for there to be Lanham Act standing. See, e.g., L.S. Heath & Sons, Inc. v. AT&T Information Systems, Inc., 9 F.3d 561, 575 (7th Cir. 1993). The Third, Fifth, Eighth and Eleventh circuits, meanwhile, had used a series of five factors borrowed from the Court’s antitrust standing test enunciated in Associated Gen. Contractors of Cal, Inc. v. Carpenters, 459 U.S. 519 (1983).