Montway LLC v. Nexus AT LLC, 2026 WL 1552185, No. 25 C
13100, No. 26 C 1056 (N.D. Ill. Jun. 2, 2026)

Although the UCL unfair competition claims got kicked out,
federal trademark and false advertising claims survive in this dispute between
automotive transportation brokers. They provide  “automotive transportation services to a broad
range of clients including individual car owners, auto dealerships, financial
institutions (for vehicle repossession), rental car companies, original
equipment manufacturers, and others.” Plaintiffs Montway and SGT have
registered various trademarks related to their services, including “MONTWAY
AUTO TRANSPORT” and “SGT AUTO TRANSPORT.”

Plaintiffs alleged that their SEO spending meant that, e.g.,
“Montway.com” is one of the first websites that Google returns when a user
searches for “Montway,” “Montway Auto Transport,” “best car shipping company,”
or “how to ship a car to another state.” Allegedly, SEO considers “trustworthiness.”
Google allegedly measures website “trustworthiness” by measuring the quality of
“backlinks,” which occur when links for a given website appear on other
websites.

Nexus allegedly launched a toxic-backlink campaign to damage
the companies by adding links to “Montway.com,” “sgtautotransport.com,” and
other Montway and SGT subdomains on untrustworthy websites. Another
toxic-backlinking technique to degrade SEO allegedly involves using misleading
“anchor text” (the clickable text that appears on screen when text is
hyperlinked) such as keywords related to online gambling and “adult content.”

Some of the toxic backlinks Nexus created allegedly used
“sgtautotransport.com” as anchor text on websites like pokerstarcasinolives.com,
or anchor text such as “online casino,” “hiding illegal funds,” “CBD products
online,” “illegal border crossing,” “illegal drug distribution,” “corrupt
influence,” “drug paraphernalia” and “heroin is a drug” leading to Montway or
SGT’s websites. This creates the false impression that plaintiffs are connected
to and/or affiliated with such products or services.

Montway sued for Lanham Act false advertising, trademark
infringement, and tarnishment, as well as violation of Illinois consumer
protection law and California’s UCL.  

False advertising: The allegedly false statements were in
the “anchor text,” and they were plausibly literally false, e.g., anchor text
stating “sgtautotransport.com” but connecting to a website like
“pokerstarcasinolives.com,” or “online casino,” “hiding illegal funds,” “CBD
products online,” and other similar statements connecting to SGT’s website. If
anchor text states that “a link will lead to a website offering certain goods
or services—car transport services or a variety of unsavory goods and
services—but that the link actually takes the consumer to a different
destination,” that’s false.

Plus, the allegations were that the anchor text created the
impression that their services were affiliated with the spam websites as well
as the unsavory products and services promoted on those websites, misleading consumers
about the quality and type of services that Montway and SGT offer.

Was this commercial advertising or promotion? The Seventh
Circuit doesn’t use Gordon & Breach, but instead applies the Lanham
Act only to “traditional commercial advertising or promotion methods.” [Like…
backlinks? I guess, because:] “Based on plaintiffs’ allegations, Nexus’s
alleged toxic backlink campaign involves an innovation in communications media
that is covered by the Lanham Act. Montway and SGT allege that they have made
significant investments in online advertising, search engine optimization, and
affiliate marketing to ensure they continue to reach prospective customers,”
with which defendants interfered. [But that indicates that plaintiffs
are involved in commercial advertising, not that defendants are. This is one of
the early mistakes courts made about domain names.] The court agreed that “Nexus’s
alleged toxic backlinking campaigns are comparable to negative advertising. … The
alleged toxic backlinks serve the same goals as negative advertisements: to
denigrate a competitor.” [That might work under Gordon & Breach, but
I can’t see why that makes them comparable to traditional advertising and promotion
methods.]

Plaintiffs also sufficiently alleged materiality or injury
because the toxic backlinks and included anchor text allegedly “created the
impression that their services are affiliated with untrustworthy websites
and/or unsavory goods and services. According to Montway and SGT, this
ultimately led to fewer consumers reaching their websites.”

[I really wonder what Google would say about all of this.]

Trademark infringement: Fact-intensive so no motion to
dismiss for you despite defendant’s argument about the high degree of care used
by consumers of the relevant services. The court doesn’t require the confusion
to be about the source of defendants’ goods or services, but confusion about
whether plaintiffs’ “services are affiliated with untrustworthy, spam-filled
websites and/or the service advertised therein, rather than with the
trustworthy services normally associated with the SGT Mark.” That doesn’t
actually seem like trademark confusion to me, even if it’s disparaging false
advertising.

The theory of harm here is purely algorithmic. In fact, the
theory works without any allegations that any consumers ever hover over any of
these links in order to see the allegedly disparaging connections. This is perhaps
what a rump unfair competition common-law cause of action is for, but it’s not what
trademark law is for and the Supreme Court has been pretty clear that the
Lanham Act doesn’t cover all forms of unfair competition.

Tarnishment: Appallingly, the court finds fame sufficiently
alleged because of allegations that Montway’s mark “has been in continuous use
since at least July 2007” and, based on that use, the mark “has acquired
consumer recognition, positive reputation, and extensive goodwill with
consumers,” SGT’s mark has been in use since 2014 and, based on that use, SGT’s
mark “has acquired consumer recognition, positive reputation, and extensive
goodwill with consumers,” and they’ve spent hundreds of thousands of dollars
each year to reach prospective consumers. No citation to the standard set forth
in the statute or any case law. If a human being ever looked at the links—a big
if—the negative associations qualify for the ordinary meaning of tarnishment, I
suppose.

Illinois consumer protection: Fine, given what’s gone
before.

California UCL: Montway and SGT argued that they suffered an
injury in California because Google is headquartered in California. That’s not
where they suffered injury, though. They didn’t allege “any specific
instance where a potential customer in California was impacted by Nexus’s
actions.”

from Blogger https://tushnet.blogspot.com/2026/06/court-allows-tm-and-false-advertising.html