You own stores that sell clothes. A vendor persuades you to buy name-brand jeans from it. You learn that the vendor fooled you. The denims in fact came from a counterfeiter. And so you cancel the contract.
Then you find out that the vendor has gone around telling people that it counts you as a "satisfied customer". You don't like that. But what can you do?
The Second Circuit held yesterday that you can sue the vendor's pants off. Sections 32 and 43(a) of the Lanham Act create claims, respectively, for the vendor's using your trademark to mislead people about your happiness with the trousers and for its giving folks the false impression that you endorse its wares. Section 43(a) also supported the store owner's claim for unfair competition due to the vendor's sales, in competition with the store owner, of counterfeit britches. Famous Horse, Inc. v. 5th Avenue Photo, Inc., 08-4523-cv (2d Cir. Oct. 21, 2010).
The court sent the case back to the district court, which had dismissed the case, for another try. The district court's mistake turned largely on its belief that the Lanham Act required the defendant to have caused "confusion" about the "origin" of goods, as where a seller puts a "Gucci" label on a fake Gucci handbag. The Second Circuit clarified that the confusion element can relate to lots of things, including confusion about whether you endorsed a seller.