TrafficSchool.com, Inc. v. Edriver, Inc.

In a claim under the Lanham Act, “when the plaintiff competes directly with defendant, a misrepresentation will give rise to a presumed commercial injury that is sufficient to establish standing.”

TrafficSchool.com sued Edriver and other defendants, who owned and operated DMV.org, for false advertising and unfair competition under the Lanham Act 15 U.S.C. § 1125(a). The lower court issued an injunction requiring DMV.org to have a disclaimer splash screen stating that it was not a government site. The lower court did not award damages or fees to Trafficschool.com. Both parties appealed. Edriver challenged TrafficSchool.com’s standing. The Ninth Circuit noted that the parties advertised the same products to the same groups of consumers. The Ninth Circuit held that “when plaintiff competes directly with defendant, a misrepresentation will give rise to a presumed commercial injury that is sufficient to establish standing.” TrafficSchool.com challenged the lower courts denial of damages and fees. The Ninth Circuit held that “plaintiffs didn’t produce any proof of past injury or causation, so the district court had no way to determine with any degree of certainty what award would be compensatory.” With regard to fees, the Ninth Circuit noted that the lower court considered only the type of relief granted, not the conduct of Edriver. The Ninth Circuit held that the lower court applied the wrong legal standard by failing to consider the willfulness of Edriver in misleading consumers. AFFIRMED in part and REVERSED in part.