Law Firms Mentioned:Baker & McKenzie LLP | Polsinelli LLP
Organizations Mentioned:ChowNow, Inc. | Owner.com
By Patricia K. Ruiz, J.D.
The complaint alleged Owner.com engaged in a pattern of unfair, false, and misleading business practices to divert customers away from ChowNow.
The U.S. District Court for the Northern District of California denied in part Owner.com’s motion to dismiss ChowNow’s seven-count complaint arising from allegedly false and deceptive comparative advertising, finding ChowNow plausibly alleged Article III standing, having established a chain of inferences sufficient to show injury-in-fact. The court further found that ChowNow adequately alleged Lanham Act statutory standing for its false advertising claim because the parties were direct competitors, the alleged deception related to commercial reputation and sales, and the complaint specifically alleged diversion of accounts. The court also found that ChowNow sufficiently pled Unfair Competition Law (UCL) and False Advertising Law (FAL) standing by alleging economic injury in the form of lost sales and customers caused by Owner.com’s challenged statements (ChowNow, Inc. v. Owner.com, Inc., No. 5:25-cv-07315-VKD (N.D. Cal. Jan. 16, 2026)).
Allegations. ChowNow, a digital platform serving over 22,000 restaurants, alleged that Owner.com, a direct competitor in the restaurant digital-platform market, had engaged in a pattern of unfair, false, and misleading business practices designed to divert customers away from ChowNow. According to the complaint, Owner.com had published inaccurate comparative advertising across multiple channels—including its website, the RestaurantGPT website, and its YouTube channel—that misrepresented ChowNow’s product features, services, and third-party ratings. ChowNow claimed that Owner.com had falsely portrayed outdated Capterra and G2 scores as current, had published misleading performance claims and customer testimonials, and had disseminated video content inaccurately stating that ChowNow lacked important capabilities such as menu-promotion tools, loyalty systems, and website-building functionality. ChowNow further alleged that these actions had deceived existing and prospective restaurant clients, harmed the goodwill of its CHOWNOW trademark, and caused lost sales, lost business opportunities, and reputational injury amounting to hundreds of thousands of dollars.
The complaint asserted seven causes of action: (1) false advertising and unfair competition under the Lanham Act; (2) trademark infringement under the Lanham Act; (3) violation of California’s UCL; (4) violation of California’s FAL; (5) trade libel; (6) intentional interference with contractual relations; and (7) intentional interference with prospective economic advantage.
Motion to dismiss. Owner.com moved to dismiss the complaint on two primary grounds: lack of Article III standing under Rule 12(b)(1) and failure to state a claim under Rule 12(b)(6). On standing, Owner.com argued that ChowNow had not alleged any concrete injury traceable to its conduct because ChowNow did not identify a single customer it lost as a result of the challenged statements, did not provide lost-sales data, and relied only on vague assertions of reputational harm. On the merits, Owner.com contended that ChowNow’s false advertising allegations did not satisfy Rule 9(b)’s heightened pleading standard because the complaint failed to show that the statements were false when made, were material, or were encountered by consumers. Owner.com further argued that the trademark infringement claims failed as a matter of law because its use of the CHOWNOW mark in comparative advertising constituted nominative fair use and could not plausibly cause consumer confusion. In addition, Owner.com asserted that ChowNow’s UCL, FAL, trade-libel, and interference claims lacked essential elements, such as reliance, causation, identification of specific customers, or knowledge of contractual relationships, and therefore were legally insufficient and should be dismissed.
Article III standing. The court first rejected Owner.com’s Rule 12(b)(1) argument, holding that ChowNow plausibly alleged Article III standing. ChowNow’s allegations established a chain of inferences sufficient to show injury in fact: the parties were direct competitors; Owner.com’s allegedly false comparative statements concerned matters material to restaurant-owner purchasing decisions; and ChowNow alleged harm in the form of lost customers, revenue, and goodwill. Under Ninth Circuit precedent, a false advertising plaintiff need not identify a specific lost customer at the pleading stage, and the court found ChowNow’s allegations adequate to satisfy Article III’s traceability and redressability requirements.
Lanham Act, UCL, FAL standing. The court next assessed statutory standing under the Lanham Act, the UCL, and the FAL. It held that ChowNow adequately alleged Lanham Act statutory standing for its false advertising claim because the parties were direct competitors, the alleged deception related to commercial reputation and sales, and the complaint specifically alleged diversion of accounts—including Metro Pizza—from ChowNow to Owner.com. The court likewise held that ChowNow sufficiently pled UCL and FAL standing by alleging economic injury in the form of lost sales and customers caused by Owner.com’s challenged statements, adopting the minority approach under which competitor plaintiffs need not plead their own reliance.
Heightened pleading standard. Turning to the Rule 12(b)(6) analysis, the court evaluated the challenged categories of statements under Rule 9(b)’s heightened pleading standard. The court found that ChowNow adequately pled false advertising claims with respect to misrepresentations about Capterra and G2 scores, where ChowNow detailed who made the statements, what they were, where they appeared, when they were made, and how they were false—specifically alleging that Owner.com continued to advertise score comparisons as “current as of 2025” despite later changes. ChowNow also plausibly alleged falsity and materiality regarding the “Metro Pizza” testimonial, where the statements explicitly compared Owner.com to ChowNow and ChowNow alleged specific inaccuracies. However, the court dismissed ChowNow’s false advertising claims concerning testimonials by other restaurants, YouTube videos, Owner.com’s comparison-page performance claims, and statements on the RestaurantGPT website. In each instance, the court held that ChowNow failed either to identify any actual falsity or adequately plead materiality or customer exposure.
Trademark infringement. The court dismissed ChowNow’s trademark infringement claims in their entirety. Although ChowNow alleged that Owner.com used the “CHOWNOW” mark in comparative advertising, such nominative use is permissible absent a likelihood of consumer confusion, sponsorship, or source misidentification. Because the complaint did not plausibly allege that Owner.com’s uses of ChowNow’s mark created any risk of consumer confusion—and instead simply reflected comparative advertising—the claim failed as a matter of law.
California UCL. On ChowNow’s California UCL claims, the court held that ChowNow adequately pleaded an “unlawful” UCL theory to the extent it successfully pled false advertising under the Lanham Act and FAL. However, the court found that it did not meet the “unfair” UCL prong, reasoning that ChowNow alleged only injuries to itself—not to the competitive market—and thus failed to satisfy Cel-Tech’s requirement that competitor-based UCL claims show market-level harm.
State-law tort claims. The court dismissed ChowNow’s remaining state-law tort claims for trade libel, intentional interference with contractual relations, and intentional interference with prospective economic advantage. The court found ChowNow failed to identify particular customers or transactions lost or any facts showing that specific statements materially induced customers not to deal with it. On the interference claims, the court found that ChowNow did not allege facts showing the existence of specific contracts or prospective relations, Owner.com’s knowledge of those relationships, or wrongful conduct beyond competition itself.
Leave to amend. Despite identifying substantial deficiencies in several claims, the court granted leave to amend across all claims—including those the court believed were likely incurable, such as trademark infringement—consistent with Rule 15’s liberal amendment policy.
The Case is No. 5:25-cv-07315-VKD.
Judge: DeMarchi, V.
Attorneys: Joshua Louis Rayes (Polsinelli LLP) for ChowNow, Inc. Dale Richard Bish (Baker & McKenzie LLP) for Owner.com.
Companies: ChowNow, Inc.; Owner.com
Cases: Advertising StateUnfairTradePractices CaliforniaNews