Lanham Act Section 43(a)(1)(B), 15 U.S.C. § 1125(a)(1)(b), for false advertising makes liable any person who “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.” In Sybersound Records, Inc. v. UAV Corp., 517 F.3d 1137 (9th Cir. 2008), the Ninth Circuit held that phrase relates to “characteristics of the good itself” and not to false statements regarding their copyright license status. Sybersound involved a Section 43(a)(1)(B) claim based on false statements regarding the copyright license status of a music record, and the court found that it could not because such information was not inherent about the good. Id. (characteristics of the good itself would include things like “the original song and artist of the karaoke recording, and the quality of its audio and visual effects”); see also San Diego Cnty. Credit Union v. Citizens Equity First Credit Union, 360 F. Supp. 3d 1039, 1053 (S.D. Cal. 2019) (“Under either theory of literal falsity or misleading/confusing consumers, the plaintiff must also demonstrate that the false or misleading representation involved an inherent or material quality of the product.”); Maximum Availability Ltd. v. Vision Sols., Inc., No. CV 10-1488-GW(RZX), 2011 WL 13176820, at *6 (C.D. Cal. Dec. 12, 2011) (information regarding number of customers who switched from Plaintiff to Defendant does not concern “nature, characteristics, qualities, or geographic origin”).

More recently, in Memjet Technology Limited v. Vanguard Graphics International, LLC, 2025 WL 976915,  No. 3:23-cv-1810-JES-AHG (S.D. Cal. Apr. 1, 2025), a Section 43(a)(1)(B) claim was asserted in connection with a communication disseminated to approximately twenty businesses in the digital inkjet printing industry stating that “Duraflex print head will no longer be produced by Memjet effective immediately” and that they were “disappointed in Memjet's decision ...” and will “provide even better options ...” moving forward. This allegedly libeled Memjet by telling its customers that Memjet was discontinuing Duraflex printheads immediately without warning to its customers, and “violated” Memjet's trademarks by displaying the Duraflex name and logo. 

The court held that a statement about whether a product is discontinued or not does not qualify as a “characteristic of the good itself” or an “inherent or material quality of the product,” citing Sybersound, 517 F.3d at 1144 and San Diego Cnty. Credit Union, 360 F. Supp. 3d at 1053. 

Professor Tushnet was "dubious" about the court's Lanham Act analysis because, in addition to the goods themselves, the statements also could concern plaintiff's services or commercial activities under the statute. 

The plaintiff also assert a California trade libel claim, which requires: (1) a false or misleading statement; (2) which specifically refers to the plaintiff's product or business; and (3) clearly derogates that product or business. See Hartford Cas. Ins. Co. v. Swift Distrib., Inc., 59 Cal. 4th 277, 291-295 (2014). Derogation can be established directly or through reasonable implication. Id. at 294. The court went on to explain that, “[d]isparagement by reasonable implication require[d] more than a statement that may conceivably or plausibly be construed as derogatory to a specific product or business. A reasonable implication in this context means a clear or necessary inference.” Id. at 295. District courts have dismissed claims where the statement at issue did not meet this “heightened standard.” Diaz v. Heredia, No. 5:20-CV02332-JWH-KK, 2024 WL 4381364, at *6 (C.D. Cal. Jan. 4, 2024); Nestle USA, Inc. v. Crest Foods, Inc., 2019 WL 2619635, at *10 (C.D. Cal. Mar. 8, 2019) (dismissing a trade libel claim after finding that alleged communications “presented subtle, implied comments that were not clearly disparaging”); Rumble, Inc. v. Daily Mail & Gen. Tr. PLC, 459 F. Supp. 3d 1294, 1300–01 (C.D. Cal. 2020) (statement that Plaintiff's company was the “only” one that Defendant did not work with did not carry a clear or necessary implication something must be wrong with Plaintiff's company). In Rumble, the court evaluated whether a statement that the plaintiff company was the “only” one that the defendant did not work with to carry a clear or necessary derogatory implication. 459 F. Supp. 3d at 1300. The court found that the statement did not because “there are a number of reasons why companies might not work together that are unrelated to the allegedly defamed company's quality of service. For example, the companies' higher-ups may not get along, or one company may have an exclusive arrangement with a competitor of the other.” Id. at 1301. Thus, the Rumble court concluded that, therefore, the statement “does not carry a clear and necessary implication that something must be wrong with Rumble.” Id. 

Similarly here, a statement that the Duraflex printheads are being discontinued effective immediately, even if true, would not necessarily or clearly carry an implication that something was wrong with the product or business. For example, unexpected discontinuation of a product could result from a supply chain issue with a part or from a personal issue with the business owner that has nothing to do with how the business is run or the product's quality. Therefore, the Court finds that the statements in the communication do not meet the heightened “clear or necessary” standard [to infer that the statements were derogatory]. 

Thus, the court dismissed the trade libel claim and the Lanham Act false advertising claim, as well as a California unfair compeition law ("UCL") claim.