United States: The Lanham Act In The Entertainment Industry – 2017 Highlights

Last year saw two major Lanham Act cases in the entertainment industry: Incarcerated Entm't, LLC v. Warner Bros. Pictures, 261 F. Supp. 3d 1220 (M.D. Fla. 2017) and Twentieth Century Fox Television v. Empire Distribution, Inc., 875 F.3d 1192 (9th Cir. 2017). Both of these cases involved alleged violations of the Lanham Act: Incarcerated Entertainment dealing with a false advertising claim and Twentieth Century Fox Television dealing with a trademark infringement claim. Both also dealt with the First Amendment implications of Lanham Act liability in the industry. We summarize and review each case in turn.

Incarcerated Entertainment

According to the complaint in Incarcerated Entertainment, in 2011, Efraim Diveroli agreed to allow Guy Lawson, a well- known journalist and author, to publish an article about his true story of having engaged in, and been imprisoned for, illegal arms trafficking. Lawson later expanded the article into a book and optioned the movie rights for the article to Warner Brothers (hereinafter "Warner"). In 2014, Diveroli decided to market the movie rights to his own memoir through his company, Incarcerated Entertainment. He pitched the story to Warner, but Warner declined and instead hired Lawson as producer and David Packouz (a former associate of Diveroli's) as a consultant, with the intention of cinematizing Lawson's book.1 Warner made the movie, titled War Dogs, and released it in 2016.

Incarcerated Entertainment sued Warner in the Middle District of Florida, alleging false advertising in violation of the Lanham Act and unfair competition in violation of Florida state law. The complaint challenged a number of promotional statements in trailers, social media, and interviews that implied War Dogs was Diveroli's "true story." Warner moved to dismiss the complaint for failure to state a claim,2 claiming that the First Amendment protected the statements at issue and, more generally, that the complaint failed to allege sufficient facts to support a plausible claim for relief.3

The court denied the motion, with limited exceptions. The case turned on two questions: (1) whether the statements were "commercial speech" and (2) whether the statements constituted false advertising.

Commercial Speech

Warner argued that the statements at issue were not "commercial speech." If this were true, then (i) the First Amendment would likely protect the statements,4 and (ii) the Lanham Act would not reach them.5 Applying Supreme Court precedent, the court disagreed with Warner and ruled that the challenged statements could plausibly be commercial because (1) the complaint alleged that the statements were used for promotional purposes, (2) the statements referred to a specific product, and (3) Warner had an economic motivation for making the statements.6

Warner argued that the statements deserve blanket protection because they relate to a movie, which is a protected expressive work. However, the court held that, even though movies themselves are protected expressive works, they are also products sold in the commercial marketplace and, therefore, advertisements for movies do not deserve the same First Amendment protection as the movies themselves.7

Warner also argued that the statements should not be treated as commercial speech because they were intertwined with non-commercial speech, including political and artistic commentary. But the court held that, in these circumstances (which the court saw as analogous to challenging the title of an artistic work), the outcome depends on balancing the public interest in avoiding consumer confusion against the public interest in free expression—a balancing test not suitable for resolution on a motion to dismiss. Because Warner did not contend that the statements were themselves artistic works, and the complaint plausibly alleged that they were separate promotions for the movie, the court denied the motion on this ground.8 This is likely to be a major point of contention as the litigation progresses.

False Advertising

In the Eleventh Circuit, to succeed on a claim for false advertising, the plaintiff must show that "(1) the advertisements of the opposing party were false or misleading; (2) the advertisements deceived, or had the capacity to deceive, consumers; (3) the deception had a material effect on purchasing decisions; (4) the misrepresented product or service affects interstate commerce; and (5) the movant has been—or is likely to be—injured as a result of the false advertising."9

The first question for the court was whether the challenged statements were plausibly alleged to be either false or, although true, misleading, when viewed in context. Each challenged advertisement must be evaluated separately.10

The court declined to dismiss the complaint as to most of the challenged statements. The most notable statements to survive the motion to dismiss were the phrase "based on a true story" in the trailers and various interviews with cast members, the director, Lawson, and Packouz that implied War Dogs is a true story. These statements survived because the court found that the question of whether the statements read in full context falsely or misleadingly portrayed the movie as a true story was too in depth for a motion to dismiss. Warner also argued that some statements by Lawson and Packouz were mere opinion, but the court ruled that this issue also needed to be decided at trial, as a reasonable person could infer that there was a factual basis for their opinions.11

Warner also challenged the elements of deception and materiality. The court disagreed with Warner, finding that factual evidence of consumer deception was not required at the pleading stage. As to materiality, Incarcerated Entertainment's assertion that consumers are drawn to true stories was enough to support an inference that the movie's truthfulness was an "inherent quality or characteristic" of the product, which is sufficient at the pleading stage.

Last, Warner challenged the causation element. The Court held that Incarcerated Entertainment's allegation that it lost sales because consumers are more likely to buy a heavily marketed movie ticket than a book was enough to support an inference of damages and causation.

This decision may cause a stir in the filmmaking industry. Movies that are "based on" true stories but partially fictionalized are common, and the Incarcerated Entertainment decision makes such movies potentially subject to Lanham Act liability and, with it, the potential for disgorgement of profits, enhanced damages, and attorney fees. Look for similar suits to be filed in the future.


1 Incarcerated Entm't., 261 F. Supp. at 1225–26.

2 See Fed. R. Civ. P. 12(b)(6).

3 See Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 561–62 (2007).

4 See Central Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n of N.Y., 447 U.S. 557, 562–63 (1980) ("The Constitution therefore accords a lesser protection to commercial speech than to other constitutionally guaranteed expression.").

5 See 15 U.S.C. § 1125(a)(1)(B) (limiting scope of false advertising to "commercial advertising or promotion"); Edward Lewis Tobinick, MD v. Novella, 848 F.3d 935, 950 (11th Cir. 2017) (holding that "commercial speech" is an element of "commercial advertising or promotion").

6 Incarcerated Entm't, 261 F. Supp. 3d at 1227–28 (citing Bolger v. Youngs Drug Prods. Corp., 463 U.S. 60, 66–67 (1983)).

7 Id. at 1228–29 (citing, inter alia, Rogers v. Grimaldi, 875 F.2d 994, 997 (2d Cir. 1989) and Charles v. City of Los Angeles, 697 F.3d 1146, 1152 (9th Cir. 2012)).

8 Id. at 1229 (citing Rogers, 875 F.2d at 999).

9 Id. at 1230 (quoting Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256, 1260 (11th Cir. 2004)). 10 Id. at 1229–30.

11 Id. at 1230–32.

To view the article please click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions