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Avis Rent A Car System, Inc. v. Hertz Corp., 782 F.2d 381, 54 USLW 2456, 228 U.S.P.Q. 849

Facts

Avis Rent A Car System, Inc. filed a false advertising claim against The Hertz Corporation, alleging that Hertz's advertisement claiming it had more new cars than Avis was false. The advertisement, published in various media, suggested that Hertz had more new cars available for rental than Avis. The district court initially found Hertz's claim to be false, but upon appeal, the Court of Appeals determined that the claim was not false when considering the context of the advertisement, which referred to cars available for rental rather than total cars owned.

Issue

Whether Hertz's advertisement claiming it had more new cars than Avis was false under the Lanham Act.

Rule

Under the Lanham Act, a false advertising claim can be established if a statement is proven to be literally false or misleading in a way that deceives consumers. The context of the advertisement must be considered to determine whether the claim is misleading.

Any person who shall affix, apply, or annex, or use in connection with any goods or services, or any container or containers for goods, a false designation of origin, or any false description or representation, including words or other symbols tending falsely to describe or represent the same, and shall cause such goods or services to enter into commerce, and any person who shall with knowledge of the falsity of such designation of origin or description or representation cause or procure the same to be transported or used in commerce or deliver the same to any carrier to be transported or used, shall be liable to a civil action by any person doing business in the locality falsely indicated as that of origin or in the region in which said locality is situated, or by any person who believes that he is or is likely to be damaged by the use of any such false description or representation.

Analysis

The Court of Appeals analyzed the advertisement's wording and context, concluding that it referred to the number of cars available for rental rather than the total number of cars owned by the companies. The court found that the district court erred in interpreting the advertisement literally without considering the context in which it was presented. Evidence indicated that consumers understood the advertisement to pertain to rental cars, not total fleet size.

Conclusion

The Court of Appeals reversed the district court's ruling and remanded the case with instructions to dismiss Avis's complaint, concluding that Hertz's advertisement was not false.

The judgment is therefore reversed and the case remanded with instructions to dismiss the complaint.

Who won?

The Hertz Corporation prevailed in this case as the Court of Appeals found that the advertisement in question was not false when interpreted in context. The court emphasized that the advertisement was directed at consumers looking to rent cars, and the claim made by Hertz was true regarding the number of new cars available for rental at the time of the advertisement.

The Court of Appeals found that the claim was not false in context, which indicated that it referred to cars available for rental by the companies, not cars owned.

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