Seattle Trademark Lawyer

Another special motion to strike granted against a plaintiff claiming false advertising, deceptive practices, or commercial defamation. This is threatening to become a trend. (See STL’s posts here and here about similar outcomes in two other cases.)

No question about it — those who practice in the trademark or false advertising space need to pay attention to the recent expansion of Washington’s anti-SLAPP statute aimed at protecting against Strategic Lawsuits Against Public Participation, codified at RCW 4.25.525.

Last week, Western District Judge Ricardo Martinez granted the attorney rating company Avvo, Inc.’s special motion to strike false advertising and deceptive practice claims that Florida health lawyer Larry Joe Davis, Jr., brought after receiving a call from a prospective client who told him he was the “lowest rated employment lawyer” on Avvo, so she assumed he would be “desperate for employment.” Mr. Davis told the caller he was a health lawyer — not an employment lawyer — and declined to undertake the representation. After the call, Mr. Davis saw that Avvo’s Web site depicted his practice area as “100% employment/labor law.”

Mr. Davis sued Avvo in Florida state court; Avvo removed the case to the Middle District of Florida; and Avvo succeeded in getting it transferred to the Western District of Washington. After amending his complaint three times, Mr. Davis stated three causes of action under Florida law relating to the alleged misrepresentations, which the Western District construed as asserting similar claims under Washington law.

In response to Avvo’s special motion to strike that the anti-SLAPP statute authorizes, Mr. Davis specified that Avvo intentionally misrepresented his practice area to induce him to register on the Web site to correct the misrepresentation, and that Avvo induces lawyers to purchase a “Pro” membership in order to prevent competitor’s ads from appearing on their profile pages.

The court rejected his claims, finding they lacked “clear and convincing” evidence the statute required after Avvo established the claims were based on an action involving public participation or petition in an issue of public concern.

“Plaintiff has presented no evidence, let alone clear and convincing evidence, to demonstrate that there is any probability of prevailing on his [Washington Consumer Protection Act] claim,” the court found. “He points to no evidence in the record to support the conclusory allegations regarding Avvo’s advertisements. Indeed, he has provided no evidence at all; he has merely ‘verified’ the allegations set forth in his Third Amended Complaint. A complaint is not evidence. … Instead of presenting an affidavit, plaintiff asserts in his response that ‘[i]f one were to search on Avvo for a particular well-known lawyer, such as a well-known Board Certified Health Lawyer, when one is directed to that lawyer’s page, one would likely see an advertisement for a competing lawyer, as Plaintiff did in August 2010, which competing lawyer has paid Avvo to have that ad placed on the listed lawyer’s page.’ These speculations as to what ‘one would likely see,’ are not evidence. Nor has plaintiff alleged how this allegedly deceptive act of Avvo induced him to act or refrain from acting in some special manner, so as to establish causation for his loss.”

Based on that finding, the court granted Avvo’s motion, dismissed Mr. Davis’ claims, imposed the statutory $10,000 penalty, and stated it would award Avvo’s reasonable attorney’s fees.

GeekWire discussion of the decision here.

The case cite is Davis v. Avvo, Inc., No. 11-1571 (W.D. Wash. March 28, 2012) (Martinez, J.).

I’ve been busy!

That’s my excuse for not staying more on top of recent developments in the Experience Hendrix, L.L.C. v. Hendrixlicensing.com, Ltd., litigation involving use of Jimi Hendrix’s name and likeness in connection with the sale of art. The case has had some big implications along the way, including the Western District’s finding that portions of the Washington right of publicity statute are unconstitutional (STL post here).

Long story short, the case went to trial. After motions for summary judgment and settlement of defendants’ state law counterclaims, the only issues that remained were plaintiffs’ damages on their trademark infringement claim; defendants’ liability for violating Washington’s Consumer Protection Act; and the damages that flowed from any such violation.

On May 9, the jury found for plaintiffs. After a 3+ day trial, the jury deliberated for 1.5 hours and awarded plaintiffs $306,650 in lost profits and $60,000 in defendants’ profits on the infringement claim; and $750,000 in injury to reputation, $300,000 in injury to goodwill, and $306,650 in lost profits on the CPA claim.

Defendants moved for a judgment as a matter of law or for a new trial, arguing that much of the damages award was not supported by the evidence. They did not challenge the jury’s award of defendants’ profits or their liability under the CPA. Plaintiffs moved for treble damages under the CPA and for attorney’s fees.

On Sept. 21, Western District Judge Thomas Zilly pared back most of the jury’s award. He granted defendants’ motion for judgment as a matter of law and granted their motion for a new trial in the event an appeal results in the being case remanded. The court denied plaintiffs’ motion for treble damages and granted in part and denied in part their motion for attorney’s fees.

In the end, the court entered judgment against defendants imposing a permanent injunction and awarding $60,000 representing the undisputed amount of defendants’ profits attributable to their trademark infringement, plus $50,000, constituting reasonable attorney’s fees under the CPA, for a total award of $110,000.

Perhaps most interesting is the observation that businesses do not have “reputations”; they only have “goodwill,” so the award of damages for both reputation and goodwill elements was improper. The court also found the amount of the awards was based purely on speculation.

“[C]ontrary to plaintiffs’ position, Washington courts have consistently defined reputation as merely one component of a business’s goodwill. Similarly, Washington’s Department of Labor and Industries has explained by way of regulation that goodwill is ‘the value of a trade or business based on expected continued customer patronage due to its name, reputation, or any other factor.’.

“Thus, the Court’s unchallenged supplemental instruction to the jury that reputation and goodwill are synonymous comports with Washington law, as well as the observation by a district court in our circuit that business entities do not have reputations per se, but rather have goodwill. The jury’s verdict awarding vastly different amounts for injury to reputation and injury to goodwill cannot be reconciled with the Court’s instruction that, for a business, reputation and goodwill are the same thing.

“If these duplicative awards were supported by substantial evidence, the Court would face the difficult task of crafting an appropriate remedy, whether it be striking one award in favor of the other, offering plaintiffs the option of either accepting a remittitur or submitting to a new trial, or simply requiring a new trial. The Court need not, however, engage in such analysis because the damages at issue are based entirely on speculation. The jury was provided no evidence from which it could determine the diminution in value, if any, of plaintiffs’ goodwill as a result of defendants’ violation of the CPA. Plaintiffs proffered no estimate, by way of expert testimony or otherwise, of the value of their goodwill either before or after defendants’ wrongful conduct. Indeed, plaintiffs’ counsel conceded during discussions concerning the related jury instructions that ‘[t]here’s not a specific number in evidence.’”

The case cite is Experience Hendrix, L.L.C. v. Hendrixlicensing.com, Ltd., No. 09-285, 2011 WL 4402775 (W.D. Wash. Sept. 21, 2011) (Zilly, J.).

This weekend, The Seattle Times reported a big story at Qwest Field.

No, it wasn’t that the 7-9 Seattle Seahawks managed to upend the defending Super Bowl champs, the New Orleans Saints.

That was certainly a surprise, and around here is big news.

But it’s not the story some are talking about.

Some instead are talking about the story that revealed vendors at Seahawks stadium have been charging $1.25 more for a “large” beer than the “small” beer that actually is the same size.

“The Seattle Times did a test before the start of the game to check the size of the glasses and confirmed that they [both] were 20 ounces,” the paper reported.

For those who paid more than needed, it’s an outrage. But was it illegal?

Section 43(a)(1) of the Lanham Act prohibits a “false or misleading description of fact,” and a “false or misleading representation of fact” that is likely to cause confusion or mistake. It also prohibits sellers from misrepresenting “the nature, characteristics, [or] qualities” of their goods or services.

Washington’s Consumer Protection Act similarly outlaws false statements or misleading acts that deceive consumers.

Under either statute, a threshold question is whether anything in the sales was false or misleading.

Fans who paid for a small-sized beer and got the same quantity as a large got a bargain.

So is the beer cup half-empty or half full?

Half-empty, say those who paid more for the same size as the small.

Half-full, say the sellers, who argue those who purchased a small beer got a bonus — a large-sized drink for the price as a small. From the seller’s perspective, the fans who opted for the large size merely didn’t get the windfall the small purchasers received; they got exactly what they paid for.

But doesn’t “large” — with its higher price — imply a larger quantity than a “small”?

How many fans would have paid the higher price for a large if they had known they could get the same amount of product for less?

Unhappy purchasers of the “large” size also point out the cups look different. The “large” 20 ounce cup is tall but narrow; the “small” is short and wide. While this could be an honest mistake — and for all I know this situation is chargeable to an independent contractor rather than the stadium or team — it doesn’t smell right.

This supposedly has been going on all year. What’s truly amazing is no one noticed until the playoffs started. 

In CertainTeed Corp. v. Seattle Roof Brokers, shingle manufacturer CertainTeed brought suit against James Garcia, a “roof broker,” claiming he had engaged in unfair competition and violated the Washington Consumer Protection/Unfair Business Practices Act. As discussed here, on June 28, Western District Judge Richard Jones found for CertainTeed on summary judgment and imposed a permanent injunction against Mr. Garcia.

Following the order, CertainTeed moved to dismiss its remaining claims without prejudice, including its claim for damages. At the pretrial conference, the court suggested that CertainTeed dismiss its claims with prejudice, but CertainTeed declined.

On July 23, the court granted CertainTeed’s request, finding that Mr. Garcia would not suffer any legal prejudice — the sole basis on which a court can deny a motion for voluntary dismissal.

The court’s reasoning:

“The court finds no legal prejudice that would arise from CertainTeed’s voluntary dismissal of its remaining claims. Mr. Garcia would lose no legal right as a result of the dismissal, and there is no indication that the discovery from CertainTeed necessary to mount his defense would be more difficult to obtain later. Indeed, as discovery has closed in this action, Mr. Garcia has already had a complete opportunity to seek discovery in support of his defense.

“In an equitable sense, Mr. Garcia’s claim to prejudice is stronger. As Mr. Garcia made clear at the pretrial conference, this litigation has been a considerable strain on him for two years, and he would strongly prefer to put an end to it. CertainTeed, meanwhile, has shown little interest in moving beyond this dispute. Although the court cannot accurately forecast whether CertainTeed will attempt to resurrect the claims it now wishes to relinquish, CertainTeed refused at the pretrial conference to agree to a dismissal with prejudice. This suggests that it wishes to retain at least the threat of relitigation of these claims, a threat on which it might well make good.

“On the other hand, even a dismissal with prejudice would not immunize Mr. Garcia from the threat of future litigation. As the court has already discussed, the permanent injunction will remain in place. CertainTeed can pursue relief in this court if it feels that Mr. Garcia’s future conduct violates the injunction. Moreover, nothing prevents CertainTeed from filing another lawsuit if Mr. Garcia’s future conduct violates the law without violating the permanent injunction.”

The case cite is CertainTeed Corp. v. Seattle Roof Brokers, No. 09-563 (W.D. Wash. July 23, 2010) (Jones, J.).

In CertainTeed Corp. v. Seattle Roof Brokers, a manufacturer of asphalt shingles filed suit against James Garcia, a “roof broker” who allegedly made false statements about CertainTeed’s roofing products.

On June 28, Western District Judge Richard Jones granted summary judgment for CertainTeed on its false advertising and Consumer Protection/Unfair Business Practices Act claims, and imposed a permanent injunction.

In doing so, the court found Mr. Garcia’s falsehoods included statements that CertainTeed’s product “will not be able to pass a resale inspection after 15 to 20 years”; that “one roofing contractor reports submitting over 600 warranty claims to CertainTeed within the last four years”; and CertainTeed’s product “have a history of premature failure.”

Gotta love a court that gives its parties options.

In its permanent injunction, the court stated: “As to Mr. Garcia’s website (whether at www.seattleroofbrokers.com or any other domain he controls), he has two options. He may, at the top of every page on his website, include a prominent hyperlink (of a font size at least as large as any other font used on the page) to an electronic version of this order. The text of the hyperlink shall include the following statement: ‘Please click here for court order finding that this website contains false statements.’ His website must continue to include these hyperlinks until he removes every false statement that violates this order, at which time he can notify the court that the false statements have been removed. If the court finds that the false statements have been removed, it will permit him to remove the hyperlinks. Alternatively, Mr. Garcia may take his website ‘offline,’ remove the false statements, submit the new website content to the court for approval, and await court approval before placing his website online.”

The case cite is CertainTeed Corp. v. Seattle Roof Brokers, No. 09-563 (W.D. Wash. June 28, 2010) (Jones, J.).