Consumer Surveys Take Center Stage in Ad Fraud Battles

Consumer surveys are fast becoming a pivotal tool in deceptive‑advertising litigation, used to assess how real audiences interpret marketing claims—and even to influence preliminary injunctions.

 

Key Case: Guardant vs. Natera

A recent landmark came in November when a California jury awarded $292.5 million to Guardant Health under the Lanham Act, finding rival Natera Inc. had misled oncologists about Guardant’s tissue-free colorectal cancer test.

 

Before trial, lawyers engaged Applied Marketing Science (AMS) to conduct a litigation survey. The results showed doctors believed Natera’s advertising falsely implied its test was superior.

 

What Is the Lanham Act?

The Lanham Act, officially known as the Trademark Act of 1946, is a foundational U.S. federal law that governs trademarks, service marks, and unfair competition, including false advertising. 

 

Under Section 43(a) of the Act, companies can bring civil actions against competitors who make misleading representations about their products or services.

 

In false advertising cases, a plaintiff must prove that:

• The defendant made a false or misleading statement of fact;

• That statement actually deceived or tended to deceive a substantial segment of consumers;

• The deception is material, i.e., likely to influence purchasing decisions;

• The product is in interstate commerce, and

• The plaintiff has been or is expected to be injured as a result.

 

The Guardant v. Natera case is a textbook example where the Lanham Act was successfully invoked based on survey-backed evidence of deception.

 

Read More: Basic steps for registering a trademark in UAE

 

Litigation Surveys vs. Market Research

While market research surveys aim to test what consumers like and whether an ad improves brand recognition or influences sales, litigation surveys serve a very different purpose.

 

Here’s how:

 

Litigation Surveys aim to determine the following:

 

• Whether the ad misled the consumer;

• Whether the allegedly deceptive claim directly influenced their belief or purchasing decision.

 

Why Litigation Surveys Matter Legally

These surveys are potent tools in court for several reasons:

 

• For plaintiffs, a well-conducted survey can help secure a preliminary injunction—a court order stopping the misleading ad before the case goes to trial.

• In class action lawsuits, they help prove whether a large group of consumers was similarly misled by the same advertising message. This is crucial to determining whether the case qualifies for class certification.

• Beyond proving deception, surveys can also influence how much damages or compensation the court may award.

 

Best Practices for In-House Counsel

Legal experts advise corporate counsel to act quickly if they intend to use surveys in litigation due to strict court-imposed deadlines.

 

Additionally, if the opposing party submits survey evidence, companies can commission rebuttal surveys. These are used to challenge the reliability or validity of the original study—especially if it's biased or poorly designed.

 

To be admissible in court, surveys must:

 

• Target the correct audience;

• Be objective and non-leading in design;

• Use a methodology that others can replicate.

 

Legal Insight

Sunil Ambalavelil, Chairman of Kaden Boriss and a seasoned Intellectual Property (IP) and technology lawyer in Dubai, shares:

 

“The Lanham Act plays a critical role in maintaining integrity in the marketplace by holding businesses accountable for misleading claims. It empowers companies to defend their brand reputation through objective tools like litigation surveys, which help courts see advertising from the consumer’s point of view.  Especially in cross-border or tech-driven markets, its framework ensures a balance between fair competition and consumer protection.”

 

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