TRADEMARKS - False advertising vs. Infringement

First, the district court abused its discretion when it did not separately consider the false advertisement claim. The district court included that claim in its trademark infringement analysis because it found false advertisement to be “derivative of Wells Fargo's trademark infringement claim.” However, the two claims are distinct and require the application of separate tests. To succeed on a false advertisement claim under Lanham Act § 43(a), a plaintiff must prove:

(1) a false statement of fact by the defendant in a commercial advertisement about its own or another's product; (2) the statement actually deceived or has the tendency to deceive a substantial segment of its audience; (3) the deception is material, in that it is likely to influence the purchasing decision; (4) the defendant caused its false statement to enter interstate commerce; and (5) the plaintiff has been or is likely to be injured as a result of the false statement, either by direct diversion of sales from itself to defendant or by lessening of the goodwill associated with its products.

Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1139 (9th Cir.1997) (citations omitted). The false advertisement test requires a plaintiff to show all five elements. Id. By contrast, a claim for trademark infringement requires only two elements: (1) ownership of a trademark, and (2) that the plaintiff show a likelihood of confusion through the balancing of eight factors. Rearden LLC v. Rearden Commerce, Inc., 683 F.3d 1190, 1202 (9th Cir.2012). These tests are distinct, and the district court abused its discretion when it did not separately consider the false advertisement claim.

Wells Fargo & Co. v. ABD Ins. & Fin. Servs., Inc., 13-15625, 2014 WL 806385 (9th Cir. Mar. 3, 2014)