Innovation or Infringement: The Fine Line Between Marketing Strategy and Unfair Practices

by Rushing McCarl LLP Nov. 18, 2021

Earlier this year, Digital Media Solutions (DMS) landed in hot water over emails that allegedly contained spam. The media giant is under scrutiny once again, this time for misleading ads. 

In the recently filed lawsuit Insurance King Agency, Inc. v. Digital Media Solutions, LLC et al, Illinois-based Insurance King Agency, Inc. alleges that DMS has committed trademark infringement, unfair competition, and false designation of origin under the Lanham Act, 15 U.S.C.§§ 1114, 1125(a), statutory unfair competition under California Business and Professions Code §§ 17200 and 17500, and common law unfair competition under California law.

The plaintiff claims that DMS placed bids through Google Adwords in a Pay Per Click (PPC) campaign that referred to King Agency and used common designs associated with the insurance company in order to mislead customers. The plaintiff contends that it has lost revenue because users are clicking on DMS ads while believing that they are reaching out to King Agency.

For companies looking to invest in their marketing efforts, it can be tempting to use competitors’ imagery to lure users to one’s site. However, advertisers who mislead consumers can face serious legal consequences. This is particularly true in California, which has some of the country’s most robust consumer protection and false advertising laws.

The case is Insurance King Agency, Inc. v. Digital Media Solutions, LLC et al, No. 3:2021cv01539 (Cal. Super. August 31, 2021).