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Lexmark Int'l, Inc. v. Static Control Components, Inc. - 572 U.S. 118, 134 S. Ct. 1377 (2014)

Rule:

Whether a plaintiff comes within the zone of interests is an issue that requires the court to determine, using traditional tools of statutory interpretation, whether a legislatively conferred cause of action encompasses a particular plaintiff’s claim. Prudential standing is a misnomer as applied to the zone-of-interests analysis, which asks whether this particular class of persons has a right to sue under a substantive statute.

Facts:

Lexmark was selling toner cartridges for a company’s laser printers. His toners were the only ones compatible with the company's laser printers. Nevertheless, there were remanufacturers that would acquire and refurbish used Lexmark cartridges to sell in competition with Lexmark's own new and refurbished ones. Lexmark's “Prebate” program gave customers a discount on new cartridges if they agree to return empty cartridges to the company. Each Prebate cartridge has a microchip that disabled the empty cartridge unless Lexmark replaces the chip. Respondent Static Control, a maker and seller of components for the remanufacture of Lexmark cartridges, developed a microchip that mimicked Lexmark's. Lexmark sued for copyright infringement. Static Control counterclaimed, alleging that Lexmark engaged in false or misleading advertising in violation of § 43(a) of the Lanham Act, 15 U.S.C.S. § 1125(a), and that its misrepresentations had caused Static Control lost sales and damage to its business reputation. The District Court held that Static Control lacked prudential standing to bring the Lanham Act claim, applying a multifactor balancing test the court attributed to Associated Gen. Contractors of Cal., Inc. v. Carpenters. In reversing, the Sixth Circuit relied on the Second Circuit's “reasonable interest” test.

Issue:

Did Static Control have prudential standing to bring the present Lanham Act claim?

Answer:

Yes.

Conclusion:

In deciding the case, the Supreme Court of the United States laid out the requirements in order for a plaintiff to have standing to bring a Lanham Act claim. According to the Court, to come within the zone of interests in a suit for false advertising, a plaintiff had to allege an injury to a commercial interest in reputation or sales. Furthermore, the Court noted that a plaintiff also had to show economic or reputational injury flowing directly from the deception wrought by the defendant’s advertising. To determine the relevant limits on who could sue, the Court directly applied the zone-of-interests test and the proximate-cause requirement. Under those tests, the Court held that the maker came within the class of plaintiffs whom Congress authorized to sue under § 1125(a). Its alleged injuries included lost sales and damage to its business reputation due to the toner manufacturer's statements that the maker's business was illegal. Moreover, it adequately alleged proximate causation by alleging that it designed, manufactured, and sold microchips that both were necessary for, and had no other use than, refurbishing the manufacturer's toner cartridges. The Court affirmed the judgment.

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