Monday, June 15, 2009

Former Sales Director Can Pursue Claims for Misuse of His Name

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

Joseph Krause—the former sales director of the Philadelphia Soul arena football team—can pursue claims for Lanham Act false designation of origin and state law misappropriation of name against the team and its part owner, rock musician Jon Bongiovi (a.k.a., Jon Bon Jovi), the federal district court in Philadelphia has ruled.

Krause alleged that the team’s record-breaking ticket sales were due to his favorable reputation in the sports and entertainment industry. Following the team’s 2008 national championship season, Krause was given a one-week notice of termination when the Arena Football League suspended its 2009 season.

E-Mail to Fans

After Krause’s termination, the team allegedly sent an e-mail to fans from Krause’s Philadelphia Soul e-mail address. The team allegedly sought to trade on Krause’s good name and reputation with the fan base and cause confusion as to Krause’s association with the unpopular decision to cancel the 2009 season and the resulting controversy over season ticket refunds.

Standing to Sue

The court held that Krause had standing to sue for a false designation of origin in violation of the Lanham Act. Although his damages were speculative, this was outweighed by factors supporting standing: the nature of the alleged injury (loss of reputation and goodwill among the public and Philadelphia fans), the directness of the injury from the false designation of the e-mail, Krause’s status as the most clearly identifiable party to bring an enforcement action, and the lack of risk of duplicative damages.

Use of Name, Likelihood of Confusion

Krause succeeded in alleging that his name was protectable mark that had secondary meaning in the sports and entertainment business. Krause relied on Lewis v. Marriott Int’l, Inc. (ED Pa. 2007), CCH Advertising Law Guide ¶62,815, in which the court held that a hotel chain’s use of a chef’s name to promote wedding packages at a Philadelphia hotel could constitute Lanham Act false advertising.

Although Krause did not allege that his name was specifically used in advertisements to promote the Philadelphia soul, he was did not have to make allegations regarding advertising in order to establish false designation of origin, according to the court.

The e-mail at issue contained the line “From: Joe Krause [].” Krause alleged that the Philadelphia Soul sought to cause confusion among fans as to Krause’s association with the season’s cancellation and that the e-mail actually deceived, or tended to deceive, members of the public. These allegations satisfied the likelihood of confusion element of a false designation of origin claim, the court determined.

Misappropriation of Name

Krause also asserted a state law claim for the tort of invasion of privacy by misappropriation of name, a common law cause of action recognized by the Pennsylvania Supreme Court. Krause adequately pled that the team and Bongiovi sought to appropriate the value of his name by benefiting from his goodwill and reputation with the team’s fans. No pleading of secondary meaning was required to sustain the misappropriation of name claim, the court noted.

The June 4 opinion in AFL Football LLC v. Krause will be reported at Advertising Law Guide ¶63,434.

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