Thursday, March 29, 2007

Failure to Mark Country of Origin Would Violate Lanham Act

This posting was written by Bill Zale, editor of CCH Advertising Law Guide.

Failure to mark the country of origin on basketballs imported into the U.S. would violate Sec. 43(a) of the Lanham Act, the federal district court in Seattle has ruled. Nevertheless, the question of who was liable—the Japanese manufacturer (Molten), a French distributor (Fan Avenue), or the operator of an online store—was yet to be determined.

In addition, Molten's advertising claim that it developed "dual cushioned technology" could constitute false advertising in violation of the Lanham Act because a competing U.S. manufacturer (Baden) established a question of fact as to whether Molten's technology infringed Baden's patented design, the court held.

Importation Without Marking

The omission of a geographically descriptive term had been held actionable under the Lanham Act, the court noted. Baden alleged and presented evidence that Molten basketballs were imported into the United States through the online store of an international amateur basketball association (FIBA) without any country-of-origin marking. Molten did not contradict this allegation.

However, the parties had not yet addressed whether Molten could be held liable when it was not Molten, but either Fan Avenue or FIBA, who actually distributed the basketballs to U.S. consumers.

Molten asserted that it did not own the basketballs when they were sold to U.S. consumers through the FIBA online store. In any further briefing on this claim, the parties were directed to discuss whether Molten itself was liable for any Lanham Act violation relating to geographic misdescriptiveness if it was not the distributor or the U.S. importer of the allegedly unmarked balls.

Technology Development Ad Claim

Molten contended that it did not falsely advertise its basketball cushioning technology because the technology was an outgrowth of its own designs and Baden's patent was invalid because of prior art. These arguments both raised inherently factual issues that could not be decided on motions for dismissal or summary judgment, according to the court.

Molten's trade dress argument that alleged similarities were "structural and therefore functional" was misplaced because Baden was asserting false advertising, not a trade dress violation, the court added.

The decision is Baden Sports, Inc.v. Kabushiki Kaisha Molten dba Molten Corp., and Molten U.S.A., Inc, WD Wash., March 2, 2007 (2007-1 Trade Cases ¶75,642 and CCH Advertising Law Guide ¶62,467).

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