Suing a Competitor for False Advertising in Minnesota

What counts as false advertising under Minnesota and federal law?

False advertising is an ad that makes a statement of fact about a product or service that is untrue, deceptive, or misleading. Vague boasting and opinion fall outside the Lanham Act, so the first question is whether the ad says something that can be checked.

Minnesota’s statute, Minn. Stat. § 325F.67, reaches “an advertisement of any sort regarding merchandise, securities, service, or anything so offered to the public” that “contains any material assertion, representation, or statement of fact which is untrue, deceptive, or misleading.” The violation is a misdemeanor and a public nuisance “whether or not pecuniary or other specific damage to any person occurs as a direct result thereof.”

The federal statute, 15 U.S.C. § 1125(a)(1)(B), reaches statements made “in commercial advertising or promotion” about the advertiser’s own goods or “another person’s goods.” An ad that attacks your product can also support a claim for false statements about a competitor’s products.

The Eighth Circuit draws the line between fact and puffery. In American Italian Pasta Co. v. New World Pasta Co., 371 F.3d 387 (8th Cir. 2004), the court held that “‘America’s Favorite Pasta’ is not a specific, measurable claim and cannot be reasonably interpreted as an objective fact.” An actionable statement, the court said, must be a “specific and measurable claim, capable of being proved false or of being reasonably interpreted as a statement of objective fact.”

What is the Lanham Act, and what does Section 43(a) cover?

The Lanham Act is the federal trademark statute, and it also protects businesses from unfair competition. Section 43(a) of the Act is the part a business uses against a competitor’s false ad. In Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U.S. 663 (2014), the U.S. Supreme Court described it as “the Lanham Act, which governs trademarks.” The Act’s own statement of purpose, 15 U.S.C. § 1127, says its intent includes “to protect persons engaged in such commerce against unfair competition.”

Section 43(a), codified at 15 U.S.C. § 1125(a)(1), creates two claims against a person who uses “any false designation of origin, false or misleading description of fact, or false or misleading representation of fact”:

1. False designation of origin, under subsection (A). This claim reaches a statement that “is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person.”
2. False advertising, under subsection (B). This claim reaches a statement that, “in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities.”

A competitor that suggests your company sponsors or approves its product raises the first claim. A competitor whose ad misdescribes its product or yours raises the second, which is the subject of the rest of this page.

How does a competitor prove a Lanham Act false advertising claim?

A business suing under the Lanham Act in Minnesota must prove five elements: a false statement of fact in a commercial ad, actual or likely deception of a substantial part of the audience, materiality, interstate commerce, and injury to the business.

Minnesota sits in the Eighth Circuit under 28 U.S.C. § 41, so that court’s decisions govern federal cases here. In United Industries Corp. v. Clorox Co., 140 F.3d 1175 (8th Cir. 1998), it listed the elements:

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 a loss of goodwill associated with its products.”

The U.S. Supreme Court then set the test for who may sue. In Lexmark International, Inc. v. Static Control Components, Inc., 572 U.S. 118 (2014), the Court held that “a plaintiff must plead (and ultimately prove) an injury to a commercial interest in sales or business reputation proximately caused by the defendant’s misrepresentations.” The Court rejected a rule limited to direct competitors, and it excluded buyers: “Even a business misled by a supplier into purchasing an inferior product is, like consumers generally, not under the Act’s aegis.”

What makes an ad literally false rather than misleading?

A literally false ad states something untrue on its face, and a court may grant relief without proof of how buyers reacted. A misleading ad is true or ambiguous but leaves a false impression, and unless a trier of fact has determined that the advertiser acted willfully with intent to deceive or in bad faith, the Eighth Circuit requires proof that buyers actually took that impression.

In United Industries, the Eighth Circuit held: “If a plaintiff proves that a challenged claim is literally false, a court may grant relief without considering whether the buying public was actually misled; actual consumer confusion need not be proved.” The court reads the whole ad, words and images together, but added that “Commercial claims that are implicit, attenuated, or merely suggestive usually cannot fairly be characterized as literally false.”

For an ad that is not literally false, the burden is heavier. Unless “a trier of fact has determined that a competitor acted willfully with intent to deceive or in bad faith,” the plaintiff “bears the ultimate burden of proving actual deception by using reliable consumer or market research.”

Two more rules from the same case shape comparison ads:

1. A plain superiority claim. The plaintiff “must prove that the defendant’s claim of superiority is actually false, not simply unproven or unsubstantiated.”
2. A “tests prove” claim. When the ad says testing backs it, the plaintiff need only show “that the tests [relied upon] were not sufficiently reliable to permit one to conclude with reasonable certainty that they established the proposition for which they were cited.”

The ad in that case was a television commercial claiming, based on lab tests, that Maxattrax roach bait kills roaches in 24 hours. The Eighth Circuit agreed with the district court that the commercial’s audio and print claims were “literally true,” and it ruled only on Clorox’s request for a preliminary injunction: “The order denying preliminary injunctive relief is affirmed.”

How does false advertising differ from fraud?

Common-law fraud requires proof of what the speaker knew and intended, and that the plaintiff itself relied on the lie. A Lanham Act false advertising claim requires neither, because its elements ask what the ad said and how its audience took it.

In Valspar Refinish, Inc. v. Gaylord’s, Inc., 764 N.W.2d 359 (Minn. 2009), the Minnesota Supreme Court listed the fraud elements. The plaintiff had to prove a false representation “made with knowledge of the falsity of the representation or made without knowing whether it was true or false,” made “with the intention to induce Gaylord’s to act” in reliance, “that the representation caused Gaylord’s to act in reliance thereon,” and “that Gaylord’s suffered pecuniary damages as a result of the reliance.”

The five United Industries elements listed above contain no element about the advertiser’s knowledge or intent. The deception element looks to whether the ad deceived “a substantial segment of its audience,” not to whether the competitor bringing suit believed it. Minnesota’s Deceptive Trade Practices Act says the same about intent for an injunction: under Minn. Stat. § 325D.45, subd. 1, “Proof of monetary damage, loss of profits, or intent to deceive is not required.”

The difference decides which claim fits you. A business misled into buying from the advertiser cannot use the Lanham Act, because Lexmark excluded buyers, so fraud, or a claim under § 8.31, subd. 3a, that meets the public-benefit rule described below, is the claim to weigh. A competitor that lost sales has the false advertising claims on this page, which do not depend on its own reliance.

How do Minnesota’s false advertising statutes work for a business plaintiff?

A business sues under Minnesota’s false advertising statute through the private attorney general statute, Minn. Stat. § 8.31, subd. 3a, which allows damages and attorney fees. The Minnesota Supreme Court adds a condition: the lawsuit must benefit the public.

Subdivision 1 lists the laws covered, including “section 325F.67 and other laws against false or fraudulent advertising” and “the Prevention of Consumer Fraud Act (sections 325F.68 to 325F.70).” Subdivision 3a provides that “any person injured by a violation of any of the laws referred to in subdivision 1 may bring a civil action and recover damages, together with costs and disbursements, including costs of investigation and reasonable attorney’s fees, and receive other equitable relief as determined by the court.”

Three Minnesota Supreme Court decisions frame that claim:

1. Public benefit. In Ly v. Nystrom, 615 N.W.2d 302 (Minn. 2000), the court ruled on the public-benefit question. It held that the statute “applies only to those claimants who demonstrate that their cause of action benefits the public.” Ly lost on that ground because he was defrauded in the one-on-one sale of a restaurant, where the misrepresentation “was made only to appellant.” In Curtis v. Altria Group, Inc., 813 N.W.2d 891 (Minn. 2012), the court declined to overrule Ly and reaffirmed the requirement.
2. No purchase required. In Group Health Plan, Inc. v. Philip Morris Inc., 621 N.W.2d 2 (Minn. 2001), answering questions from a federal court, the court held that “it is not necessary under subdivision 3a to plead that it is a purchaser of the defendant’s products.”
3. Causation required. The same decision held that a damages plaintiff “must establish a causal nexus between their alleged damages and the conduct of the defendants alleged to violate the statutes.”

Because the public-benefit question turns on who the lawsuit protects, I suggest the complaint show who else saw the ad and what an injunction would stop.

The same route covers the Minnesota Consumer Fraud Act, Minn. Stat. § 325F.69, subd. 1. That subdivision reaches any “misleading statement or deceptive practice, with the intent that others rely thereon in connection with the sale of any merchandise.” A 2023 addition, Minn. Stat. § 325F.70, subd. 3, provides that an action under it “benefits the public,” but that path belongs to a “consumer,” defined as “a natural person or family farmer.” A business plaintiff still proceeds under § 8.31, subd. 3a.

When does Minnesota’s Deceptive Trade Practices Act stop a false ad?

Minnesota’s Deceptive Trade Practices Act lets a business likely to be damaged by a competitor’s deceptive ad ask a court to stop it, without proving lost money or intent. The statute’s remedy is an injunction, not damages.

Under Minn. Stat. § 325D.44, subd. 1, a person engages in a deceptive trade practice when, “in the course of business, vocation, or occupation,” the person does any of several things, including:

• “(5) represents that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have”
• “(7) represents that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another”
• “(8) disparages the goods, services, or business of another by false or misleading representation of fact”
• “(9) advertises goods or services with intent not to sell them as advertised”
• “(11) makes false or misleading statements of fact concerning the reasons for, existence of, or amounts of price reductions”

Subdivision 2 provides that “a complainant need not prove competition between the parties or actual confusion or misunderstanding.” Under Minn. Stat. § 325D.45, subd. 1, “A person likely to be damaged by a deceptive trade practice of another may be granted an injunction against it under the principles of equity and on terms that the court considers reasonable. Proof of monetary damage, loss of profits, or intent to deceive is not required.”

In Alsides v. Brown Institute, Ltd., 592 N.W.2d 468 (Minn. App. 1999), the Court of Appeals held that “the sole statutory remedy for deceptive trade practices is injunctive relief.” Attorney fees run both ways under subdivision 2. The court may award them against a plaintiff that sued “knowing it to be groundless.” It may also award them against a defendant that “willfully engaged in the trade practice knowing it to be deceptive.” Subdivision 3 makes this relief “in addition to remedies otherwise available against the same conduct under the common law or other statutes of this state.”

What can a business recover for a competitor’s false advertising?

Under the Lanham Act, a business can recover the competitor’s profits, its own damages, and court costs, and can ask for an injunction. Attorney fees come only in exceptional cases. Minnesota law adds damages and attorney fees under § 8.31, subd. 3a, when the suit benefits the public.

• Profits and damages. Under 15 U.S.C. § 1117(a), the plaintiff may recover, “subject to the principles of equity,” “(1) defendant’s profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action.” The remedy applies to “a violation under section 1125(a) or (d) of this title.” The statute divides the proof of profits: “In assessing profits the plaintiff shall be required to prove defendant’s sales only; defendant must prove all elements of cost or deduction claimed.” The court may raise damages to “not exceeding three times such amount,” as “compensation and not a penalty.”
• Proof of damages. In United Industries, the Eighth Circuit required proof of “both actual damages and a causal link between defendant’s violation and those damages.” In Lexmark, the Supreme Court noted that a plaintiff unable to quantify its losses “may still be entitled to injunctive relief under § 1116(a) (assuming it can prove a likelihood of future injury) or disgorgement of the defendant’s ill-gotten profits under § 1117(a).”
• An injunction. Under 15 U.S.C. § 1116(a), courts may issue injunctions “according to the principles of equity and upon such terms as the court may deem reasonable,” including “to prevent a violation under subsection (a), (c), or (d) of section 1125 of this title.” A plaintiff “shall be entitled to a rebuttable presumption of irreparable harm” once it shows a violation for a permanent injunction, or a likelihood of success for a preliminary injunction or temporary restraining order.
• Attorney fees. “The court in exceptional cases may award reasonable attorney fees to the prevailing party,” which includes a defendant that wins.
• Minnesota damages. Section 8.31, subd. 3a, allows damages, costs of investigation, and reasonable attorney’s fees, subject to the public-benefit rule above. Separately, Minn. Stat. § 325D.13 provides that no person shall “knowingly misrepresent, directly or indirectly, the true quality, ingredients or origin” of merchandise, and Minn. Stat. § 325D.15 lets “Any person damaged” sue for an injunction “and for the amount of the actual damages, if any.”

What defenses does an advertiser have to a false advertising claim?

An advertiser accused of false advertising defends by attacking the elements: the statement was puffery, it was true, it did not matter to buyers, the plaintiff has no right to sue, or the claim came too late. Minnesota’s statutes add defenses of their own. If you are the one sending the demand letter, expect each of these in the answer.

The Lanham Act defenses, from the cases above:

1. Puffery or opinion. A vague boast fails the American Italian Pasta standard because it cannot be proved false or read as a statement of objective fact.
2. Truth. An advertiser can win without proving its claim true, because the plaintiff must prove a superiority claim “actually false,” and in United Industries the challenged audio and print claims were “literally true.”
3. No deception or immateriality. For a claim that is not literally false, the plaintiff needs “reliable consumer or market research” showing actual deception, unless the willfulness exception applies. The deception must also be “likely to influence the purchasing decision.” An advertiser can attack the plaintiff’s survey or show that buyers did not care about the statement.
4. No right to sue. A buyer, or a plaintiff whose losses trace to something other than the ad, fails the Lexmark standing test described above.
5. Delay. The advertiser can argue laches, covered in the next section.

The Minnesota defenses:

1. No public benefit. A damages claim under § 8.31, subd. 3a, fails without a showing that the lawsuit “benefits the public,” the Ly v. Nystrom rule.
2. No causal nexus. Group Health requires a “causal nexus” between the plaintiff’s damages and the ad.
3. No damages under the Deceptive Trade Practices Act. Under Alsides, the act’s only statutory remedy is an injunction, and § 325D.45, subd. 2, lets the court award fees against a plaintiff that sued “knowing it to be groundless.”
4. The publisher’s limit. Under Minn. Stat. § 325F.69, subd. 3, the Consumer Fraud Act reaches the owner, publisher, or employees of a newspaper, station, or “other advertising media” “only if the owner, publisher, agent, or employee has either knowledge of the false, misleading or deceptive character of the advertisement or a financial interest in the sale or distribution of the advertised merchandise.”

How long do you have to file a false advertising claim?

The Lanham Act sets no filing deadline of its own, so an advertiser’s timing defense is laches: unreasonable delay that hurt the defendant. Minnesota’s statutory claims carry a fixed period under Minn. Stat. § 541.05 that a federal court has held starts with the violation, not when you discover it.

In Petrella, the Supreme Court noted that “the Lanham Act, which governs trademarks, contains no statute of limitations.” The same opinion defines laches as “unreasonable, prejudicial delay in commencing suit.” A business that waits while a competitor’s ad keeps running gives the competitor that argument, so I suggest acting promptly once the record described below is in hand.

For Minnesota claims, § 541.05, subd. 1, provides that “the following actions shall be commenced within six years,” including actions “(2) upon a liability created by statute, other than those arising upon a penalty or forfeiture or where a shorter period is provided by section 541.07.” Common-law fraud is listed separately in clause (6), “in which case the cause of action shall not be deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud.” Check the current text of § 541.05 before relying on that period.

In Klehr v. A.O. Smith Corp., 875 F. Supp. 1342 (D. Minn. 1995), the federal district court applied clause (2) to claims under § 325F.67, the Consumer Fraud Act, § 325D.13, and the Deceptive Trade Practices Act. The court held that “Minnesota Statute section 541.05 subd. 1(2) imposes a six year statute of limitations for claims based on liability created by statute. This provision does not include a discovery allowance as does the statute of limitations applicable to fraud claims.” The period “commenced on the date of sale, 1974, when each of the alleged statutory violations occurred,” so those claims were time-barred. The Eighth Circuit affirmed in Klehr v. A.O. Smith Corp., 87 F.3d 231 (8th Cir. 1996). A federal district court’s reading of Minnesota law persuades a Minnesota state court but does not bind it.

Because the clock runs from each violation, I suggest dating every version of the ad you save, so each one can be matched to the period that applies to it.

Does the Lanham Act reach a foreign competitor’s advertising?

For a trademark claim, the Lanham Act reaches only use in the United States, and the Supreme Court has not decided how that rule applies to false advertising. In Abitron Austria GmbH v. Hetronic International, Inc., 600 U.S. 412 (2023), a trademark case, the Court held that “§ 1114(1)(a) and § 1125(a)(1) are not extraterritorial and that the infringing ‘use in commerce’ of a trademark provides the dividing line between foreign and domestic applications of these provisions.” The Court also held that the Act’s definition of commerce in § 1127, “all commerce which may lawfully be regulated by Congress,” was not enough to show that Congress meant these provisions to apply abroad.

Section 1125(a)(1) also contains the false advertising clause, but Abitron applied its holding to the use of a trademark and did not decide a false advertising claim. For a business facing an overseas competitor, I suggest collecting proof of what the competitor did in the United States, such as ads shown to buyers here, sales here, and its distributors here, because conduct in the United States is the test Abitron applied.

How should you build the record before acting on a competitor’s ad?

Before you act, save the ad exactly as it ran, sort its literal claims from its implied ones, and collect proof that the ad cost you sales or reputation. The claims on this page turn on those three facts.

One business owner who contacted me had watched a former affiliate rewrite a favorable review into one that steered readers toward a rival brand paying the reviewer a larger commission. My first advice was to save a dated screenshot and an archived copy of the page, find any record of the earlier version, and weigh a direct request to remove it against a formal letter.

The record I suggest building, in this order:

1. The ad itself. Every version should be saved with its date (web pages, packaging, video, and sales sheets), because an ad can change once a dispute starts. In United Industries, the Eighth Circuit said materials distributed to retailers “may properly be the basis of a claim.” The district court still denied relief on them because Clorox “had never alleged that such materials were violative of the Lanham Act,” and the Eighth Circuit found “no abuse of discretion in the district court’s denial of leave to amend.”
2. The literal words and any cited test. I suggest writing down the exact claim and any test it relies on, because a literally false claim and a “tests prove” claim carry lighter burdens than an implied one.
3. Proof of how buyers read it. For a misleading claim, plan early for the consumer or market research the Eighth Circuit requires unless the willfulness exception applies.
4. Proof of harm. Sales figures, lost accounts, and customer statements tie the ad to your losses, the link Lexmark calls proximate cause and Group Health calls a “causal nexus.”
5. Your own advertising. I suggest reviewing your own claims against the same standards, because a lawsuit invites the same scrutiny. In American Italian Pasta, the advertiser sued first for a declaration that its slogan was lawful after receiving a cease and desist letter, and the competitor’s claims became counterclaims.

What are the options short of a lawsuit?

This page covers two options short of suing: a demand letter to the competitor, and a complaint to the Minnesota Attorney General or the county attorney. Each has a cost to weigh.

A demand letter tells the competitor which statement is false and why. It also tells the competitor a lawsuit may follow, and in American Italian Pasta the advertiser answered a letter by filing its own suit first. The ways a cease and desist letter can backfire are worth weighing before one goes out. I suggest a letter that quotes the exact claim and attaches the proof that it is false, because the competitor, and later a court, can then see exactly what you say is untrue.

A complaint to the state uses the enforcement duty in Minn. Stat. § 325F.67. The statute imposes on the attorney general the duty of “strict observance and enforcement of this law and prosecution for any violation thereof.” The county attorney where the violation occurred has a separate duty, “upon complaint being made, to prosecute any person violating any of the provisions of this section.” Under Minn. Stat. § 8.31, subd. 3, the attorney general may seek an injunction and a civil penalty “not in excess of $25,000,” and “All sums recovered by the attorney general under this section shall be deposited in the general fund.” Subdivision 3a adds: “In any action brought by the attorney general pursuant to this section, the court may award any of the remedies allowable under this subdivision.”

A state case can also affect your own claim. In Curtis, the Minnesota Supreme Court held that the attorney general’s 1998 tobacco settlement released consumers’ later private claims under § 8.31, subd. 3a, over the same misrepresentations. The court read the release, which covered the state’s claims brought “representatively” and “derivatively,” to reach those private claims. Under § 8.31, subd. 3b, a permanent injunction, judgment, or order in the attorney general’s case “shall be prima facie evidence in an action brought under subdivision 3a that the defendant used or employed an act or practice in violation of the laws referred to in subdivision 1,” except for “consent judgments or decrees where the court makes no finding of illegality.”

How can a business keep its own advertising lawful?

Substantiate every claim a buyer could check before the ad runs, keep the proof, and qualify any claim you cannot prove. The same rules that let you sue a competitor apply to your ads, and the defenses above work best for an advertiser that prepared them in advance.

The practices I suggest, each tied to a rule on this page:

1. Test before you claim. A “tests prove” claim can be attacked by showing the tests “were not sufficiently reliable,” so run sound tests before the ad cites them.
2. Keep the test records. Dated test results, methods, and data let you show the claim was true when the ad ran, which answers both a demand letter and the truth defense.
3. Qualify superiority claims. A claim like “faster than Brand X” is measurable and must be true; a vague boast like “the best” is puffery. Either name the measure and keep the proof, or keep the claim general.
4. Review comparison ads with care. Under § 325D.44, subd. 1(8), a person who “disparages the goods, services, or business of another by false or misleading representation of fact” engages in a deceptive trade practice.
5. Check price claims. Clause (11) of the same subdivision covers “false or misleading statements of fact concerning the reasons for, existence of, or amounts of price reductions.”
6. Set a review step and correct fast. I suggest training the people who write your ads, having someone check each new claim before it publishes, and correcting a mistaken claim as soon as you find it.

Next Steps When a Competitor’s Ad Is False

A Minnesota business harmed by a competitor’s false ad has a federal claim for profits, damages, and an injunction under the Lanham Act, and Minnesota claims under § 325F.67, the Consumer Fraud Act, and the Deceptive Trade Practices Act. Each turns on whether the ad states a checkable fact, whether that fact is literally false or only misleading, and whether you can tie your lost sales to it. The Minnesota damages route also requires a lawsuit that benefits the public.

If you would like me to analyze a competitor’s ad and tell you which of these claims your record supports, email [email protected] with a brief description and the competitor’s name so I can start an intake and conflict check. I suggest waiting to send your sales figures and other confidential information until that check is done. More on related claims is on the business fraud and unfair competition page.