Friday, October 26, 2007

Letter Writing Campaign Could Constitute Advertising for Lanham Act Claim

This posting was written by William Zale, Editor of CCH Advertising Law Guide.

The “commercial advertising or promotion” element of a Lanham Act false advertising claim could be satisfied by an alleged letter writing and telephone campaign by a computer lock manufacturer and former employees of its competitor aimed at discrediting the competitor and its affiliates, the federal district court in Norfolk, Virginia has ruled.

The customers were told that the competitor and its affiliates were distributing a product that infringed a patent owned by the manufacturer and that, to avoid legal trouble, the customers should begin purchasing their locks from a marketing firm formed by the competitor’s former employees.

The competitor’s pleading did not estimate the number of customers contacted. Nevertheless, it could not be said to a legal certainty that the letter writing and telephone campaign did not constitute commercial advertising or promotion, according to the court.

The competitor allegedly engaged in wholesale lock distribution to computer giants such as Dell, Gateway, and Hewlett Packard. These customers allegedly were contacted during the course of the conspiracy to steal the business of the competitor and its affiliates. Potential misrepresentations to these companies alone might establish commercial advertising, the court said.

Since discovery was critical in determining market composition and the breadth of the alleged scheme, the court denied the defendants’ motions to dismiss.

The September 28 decision in Miz Engineering, LTD v. Avganim appears at CCH Advertising Law Guide ¶62,715.

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