I have long been a proponent of novel Lanham Act false advertising claims. And we are entering a new frontier that involves AI-generated fabrications. Over the past two years, AI fabricated content has become ubiquitous. And if an AI fabrication is being deployed against a person or a company in a way that negatively impacts their market position, they have liable Lanham Act false advertising claims.
Before we get to that point, a bit of history. This is how my use of Lanham Act claims has evolved over the years.
The Non-Compete Smear Campaign & the Lanham Act Countermove
About 10 years ago, I invented the non-compete abuse scenario Lanham Act claim. Allow me to explain: Joe Executive leaves Company X. Company X is so terrified of competition from Joe Executive that they launch a smear campaign. They send JE a cease & desist letter that accuses him of breaching his non-compete agreement and stealing trade secrets. But they do not stop there. They send copies of the cease & desist letter to various third parties in the market. Clients. Investors. Partners. And then they work the phones. They warn everyone: Don’t do business with JE. He’s in deep shit. He’s facing massive litigation. He’s about to be enjoined. And, my favorite: In case you didn’t know, he’s under investigation by the authorities — yeah, it might turn criminal.
I know. I sound like I’m Michael Weston and this is Burn Notice.
If you are going to run a non-compete smear campaign in Miami, it’s a good idea to make sure Pollard is not on the other side.
Now, sometimes, we were able to shut those situations down without any litigation. I would just go to the other side and tell them how fucked they are. Defamation. False advertising. The list goes on and on. And they would make the reasonable decision and tap out.
But law and litigation is crawling with tough-guy Tuesday keyboard warriors. And Florida especially is crawling with lawyers who would not be considered passably intelligent in NYC, DC, Chicago, San Fran, Los Angeles, Houston — But in Florida, they are running the show. That’s not blowing smoke. I started by career at the powerhouse Boies, Schiller & Flexner. In my first year, a partner at BSF who was admitted in both FL and NY told me point blank: The standard of legal practice and the general level of practitioner intelligence in Florida is abysmal. Nearly 20 years later, I have found that to be true.
So we had plenty of these situations we could resolve without litigation. And we had plenty of them where we file false advertising claims.
We had the Joe Executive scenario.
One time, our clients got sued in Florida state court. Big Florida law firm representing the plaintiff. We stepped in to defend the state court non-compete and trade secret case. Then we launched our own attack: A Lanham Act false advertising case in federal court. It was Sunday morning and I was sitting in my industrial, concrete bunker loft in Downtown Fort Lauderdale. We had a temporary injunction hearing set for the next morning somewhere out in the hinterlands of central Florida. I was about to pack my suitcase and head to the airport. See, we had just filed our Lanham Act case a day or two prior and the other side was reeling. The other side’s lawyer set up worked like this: Hot-shot mid-40’s junior partner who loved to talk shit. He was a rainmaker and a business-getter. He was a Florida “face”. You know the type. Good hair. Plays a lot of golf. Loves to drink and hang out. Has a boat. He was not the brains of the operation. 65-year-old senior partner who was much smarter. Well, after we dropped the Lanham Act lawsuit on them, the senior partner knew they were fucked. The senior partner was like the dad on the other side. And I mean that in a good way. He was mature. He was wise. He was the voice of reason. Let’s call him Bob Sr. Well, Bob Sr. had floated possible settlement as soon as we filed the Lanham Act case. But the young hotshot – let’s call him Ken – did not perceive the magnitude of their client’s peril. We had circulated a draft settlement agreement.
So, it’s Sunday morning. And I email Bob Sr. And I say: If you make me get on a plane, I am not going to be happy. You have 30 minutes to call off tomorrow’ hearing. Or I am coming up there. And you know I am not afraid of these non-compete injunction hearings. Then we are filing our own injunction in federal court to stop all your false advertising. You’ve got way more to lose than we do.
And they tapped.
That’s just one of many stories. We ran several interesting Lanham Act cases in this general direction. One time, we represented an 80-something-year-old grandmother against a bogus non-compete (hello Gladys!). Her old company had posted a flyer outside of their office saying that she retired. But she had not retired! She had left the company and was continuing her career. I ran that as a Lanham Act claim. For free. They moved to dismiss. And the Chief Judge of the United States District Court for the Southern District of Florida denied their motion in an order that was a slam dunk for us. We ran defamation claims in that one, too.
And they tapped.
Fake Reviews & False Advertising
I expanded to fake reviews and resolved some disputes in that arena but never got to file an actual lawsuit. But this is fertile territory for Lanham Act claims. It works both ways. I’ll explain:
Scenario 1. Company A is using fake, positive reviews. Company A pays typically pays a 3rd party to post dozens of fake, glowing reviews for their product or service. This helps improve Company A’s reputation and helps them win more business. They do this on Google and any other review page imaginable. This is widespread and I’m not sure why more companies are not suing competitors that do this. This is 100% actionable for injunctive review and possibly for damages (damages are harder and depend on the exact nature of the market).
Scenario 2. The reverse: Company A pays a 3rd party to leave negative reviews for Company B. Again, this is 100% actionable. This sort of situation gives you a very strong basis for injunctive relief. But, again, damages are a bit different. That said, I think damages are much more viable in Scenario 2. The issue here is causation and proving losses. In Scenario 1 (above), if Company A is getting the business through fake reviews, then many competitors are harmed unless the market is only a 2 or 3 player market. Especially if it’s 2 player. In a 2-player market, even Scenario 1 is highly viable. But if there are several or more players in the market? Scenario 1 is a tough sell on damages (though still strong on injunctive relief). But in Scenario 2? The linkage and causation are much stronger. A customer was on Company B’s website or profile or listing and was considering buying from Company B. But then they read the negative reviews and purchased elsewhere. See what I mean: That’s much closer.
Issues with damages are why you also run these as defamation where possible. You use the Lanham Act as your hook for federal court, injunctive relief, and attorneys’ fees. You use defamation as your damages hammer. Defamation has a much more favorable and less restrictive damages framework.
This is still fertile territory that is barely being tapped. But with recent advances in AI, we have moved into an entirely new frontier. I will explain.
AI and False Advertising
This morning, I read about the wildest AI ordeal. A prominent scientist went on LinkedIn to advise everyone that a recent medical paper that contained his name was not, in fact, authored by him. The paper was AI-generated. It was being used by a company to help tout their products. It was a total fabrication. And while other people were thinking “Wow, that’s wild,” I was thinking, “Lanham Act.”
Consider this: AI has already led to a proliferation of fake everything. Fake images. Fake videos. Fake audio. Apparently, fake scientific papers. I am not a Justice Scalia fanboy. But what he did in Lexmark was brilliant and forward-thinking. Anyone who has a commercial interest in their name, image, brand, reputation, or ideas has Lanham Act standing when those interests are compromised by a rival or a 3rd party using AI. Just imagine some real-world scenarios that either already exist, or, are quickly on their way:
- Fake scientific white paper. Falsely affixes the names of prominent doctors or scientists who were not involved and did not endorse the product or confirm the findings.
- Fake clinical trials. Blown out with fake data, graphs, charts, analysis, fake doctors, fake scientists or – even worse – real ones who did not consent to their names being used.
- AI Platform that gives rigged results. Company X roles out its own AI platform. Company X takes money from large corporate concerns to rig the results and recommend or suggest their products and services (including providing false information about the quality of those products or services).
- AI-generated 3rd party audits. Totally fake, but held out as 3rd party verification, testing, auditing.
- AI-generated fake simulation results of simulations that never occurred. Huge application in biotech, finance, engineering, energy, etc. “We ran 87 different comprehensive simulations. Here is the data and the outcomes.” But it’s all rigged.
- AI-generated user activity data. Think SaaS. Company sells software or tech services. They have a compelling deck that shows dashboards with user activity, engagement metrics, system outputs, subscriber growth, etc.
- Fake video testimonials, video endorsements, entire fake podcasts, fake “live” demonstrations. Self explanatory. None of it is real. All AI-generated. Like this: Watch a live video of our product in action. Here’s how it works. You watch. You are blown away. But it is not real. Can you imagine how someone like Elizabeth Holmes would have dominated in the era of AI?
- Fake UI screen recording / demo.
- Fake television interviews or fake news appearances.
- Fake competitor scandals or crises with fake audio or video, fake victims telling their story, fake experts weighing in to condemn the rival company. C-level executives who have a large, public-facing presence are particularly vulnerable here b/c there is so much data to use in creating the deepfake.
These situations create a clear basis to pursue Lanham Act false advertising claims and possibly a variety of other claims in the realm of defamation and unfair competition. The key is to package the claims correctly. Nearly all of these scenarios would give rise to a strong claim for injunctive relief. But the case for damages under the Lanham Act might be more difficult. That is why you run a variety of claims in the scenarios. You secure federal court jurisdiction, pursue injunctive relief, and obtain attorneys’ fees through the Lanham Act claim. You get damages through the best tort available.
The Market Value of Corrective Advertising
One further note: Do not discount the value of corrective advertising. In some instances, depending on the identity and market position of the competitor who engaged in the false advertising, corrective advertising may be more valuable than damages. Consider this: A prominent industry rival launched a fake, AI-backed campaign against you. They created a false scandal involving your CEO, complete with fake “smoking gun” audio. Or they fabricated hundreds of fake, negative reviews about your company. And you caught them. You pursue the Lanham Act case and you prevail. The court orders corrective advertising. The rival is required to maintain a disclaimer on its website. Yes, of course you will have to fight for what you want in the disclaimer. But imagine if a large rival has to publicly admit that it lied about you? That is brilliant for your business. That’s not the same as damages, but it is a real marketplace value.
Jonathan Pollard is a lawyer, writer, and founder of the law firm Pollard PLLC. For more than 15 years, Pollard has litigated high-stakes non-compete, trade secret, employment, and unfair competition cases. Pollard and his firm repeatedly have been recognized by Super Lawyers and Chambers & Partners. His legal work has appeared in or on The New York Times, Bloomberg, PBS News Hour, The Guardian, Law 360, Above the Law, NPR, Inc. Magazine, and more. The Firm has offices in Fort Lauderdale, Florida and St. Louis, Missouri and litigates cases nationwide. The Firm’s headquarters can be reached at 954-332-2380.