Friday, February 12, 2010

U.S. Not Immune from Suit for False Advertising

This posting was written by William Zale, Editor of CCH Advertising Law Guide.

The United States was not immune from a software company's claim that the Department of Justice violated the Lanham Act by falsely representing that the company's TrustedAgent product would be included in DOJ’s information security solution for Federal Information Security Management Act compliance, the federal district court in the District of Columbia has ruled.

The Lanham Act was amended in 1999 to provide that the United States is not immune from suit for violations.

Commercial Advertising and Promotion

The software company (Trusted Integration, Inc.) stated a Lanham Act claim by asserting injury to its interstate business from the Department of Justice's allegedly false and deceptive advertisement of a product that it was selling to the company's potential customers, the court determined.

A Lanham Act claim may be based on a likelihood of damage from commercial advertising or promotion that misrepresents the nature, characteristics, qualities, or geographic origin of another person's goods, services, or commercial activities.

Trusted Integration alleged that government agencies sought to purchase their Federal Information Security Management Act compliance solution from the DOJ. DOJ’s advertisements to its potential customers allegedly portrayed TrustedAgent as “a key component,” even though DOJ had no intention of actually including it in the final product and had formally announced that it was selling its own alternative.

The company further alleged that the DOJ “repeatedly referenced” TrustedAgent in its demonstration to potential customers, and that this gave customers the “false sense” that TrustedAgent would be included in the final product.

The January 20 decision in Trusted Integration, Inc. v. United States of America, Civil Action No. 09-898 (ESH), appaers at CCH Advertising Law Guide ¶63,737.

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