Unreported / Non-Citable
Background
ChowNow, Inc. operates a digital platform serving over 22,000 restaurant partners with tools to attract, engage, and retain customers, and owns the registered trademark CHOWNOW. ChowNow sued Owner.com, Inc. — a direct competitor in the restaurant-technology space — alleging that Owner.com’s comparative advertising contained false and misleading statements about ChowNow on Owner.com’s website, the RestaurantGPT website, and a YouTube channel.
ChowNow asserted seven claims: (1) false advertising and trademark infringement under Lanham Act § 1125(a); (2) trademark infringement under Lanham Act § 1114; (3) California UCL § 17200; (4) California FAL § 17500; (5) trade libel; (6) intentional interference with contractual relations; and (7) intentional interference with prospective economic advantage. ChowNow alleged at least hundreds of thousands of dollars in losses, sought punitive damages and attorney’s fees, and requested an accounting of Owner.com’s profits.
Owner.com moved to dismiss for lack of standing under Rule 12(b)(1) and for failure to state a claim under Rule 12(b)(6).
The Court’s Holding
Magistrate Judge Virginia K. DeMarchi denied the standing motion and granted in part and denied in part the failure-to-state-a-claim motion, with leave to amend.
On standing, the court held ChowNow alleged a concrete injury in fact under Lujan v. Defenders of Wildlife: lost sales and revenue, lost economic prospects, harm to its CHOWNOW trademark, and reputational damage. The injury was fairly traceable to Owner.com’s alleged false advertising and trademark conduct, and would be redressable through damages, injunctive relief, and disgorgement.
On the Lanham Act § 1125(a) false-advertising claim, the court found ChowNow plausibly alleged that Owner.com made false or misleading statements of fact in commercial advertising about ChowNow, that the statements were material to consumer decisions, and that they caused or were likely to cause competitive injury. Specific examples of allegedly false comparative-advertising statements on Owner.com’s websites and YouTube channel were sufficient at the pleading stage.
On Lanham Act § 1114 trademark infringement, the court found ChowNow plausibly alleged use of its registered mark in a way likely to cause confusion. The California UCL and FAL claims, which often track Lanham Act claims, also survived. The trade libel and tortious interference theories survived in part where ChowNow specifically tied the conduct to identifiable contractual relationships and prospective economic advantage; some theories were dismissed with leave to amend for lack of specificity.
Key Takeaways
- Competitor false-advertising claims under Lanham Act § 1125(a) generally satisfy Article III standing when the plaintiff alleges concrete competitive harm — lost sales, lost prospects, reputational damage, and trademark dilution.
- Comparative advertising in the restaurant-tech space, including statements made on competitor websites, third-party review sites, and YouTube channels, can support Lanham Act false-advertising claims when the statements are specific and verifiable.
- California UCL and FAL claims tracking Lanham Act false-advertising allegations generally survive together with the federal claim under Cleary v. News Corp.-style parallel analysis.
- Trade libel and tortious interference claims require plaintiffs to identify specific contractual or prospective economic relationships affected by the alleged conduct, not just generic claims of competitive harm.
- Restaurant-technology disputes between competing platforms (ChowNow, Owner.com, Toast, Square, etc.) are an emerging source of high-value commercial litigation in California’s tech corridors.
Why It Matters
The restaurant-technology space has become a battleground for competitive false-advertising and trademark litigation as platforms compete for the same restaurant customers. ChowNow serves more than 22,000 restaurants and competes directly with Owner.com and other platforms. False or misleading comparative advertising in this market can have substantial commercial impact, and Lanham Act suits are increasingly used to police those claims.
The opinion is a clean modern application of the Lanham Act false-advertising and trademark frameworks to comparative advertising on competitor websites and social media. For SaaS competitors generally, the case is a reminder that comparative advertising must be carefully fact-checked and that competitor names cannot be used in ways likely to cause consumer confusion. For plaintiffs, the case provides a template for pleading both standing and substantive Lanham Act claims at the dismissal stage.