Wednesday, October 21, 2009

Letters to Competitor’s Customers Not “Advertising” Within Lanham Act

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

A Guardian Life Insurance agency did not engage in “commercial advertising or promotion” within the meaning of the Lanham Act's false advertising prohibition by sending letters to MetLife customers using an agency name and logo formerly used by MetLife, the federal district court in Chicago has ruled.

The Guardian agency was set up by the former managing director of a MetLife agency, who had been replaced. The new agency had hired 21 former MetLife agents, some of whom had retained MetLife client files.

One of the new agency’s letters to Metlife customers announced a move to a larger location, and a second letter enclosed forms to “help make this transition . . . seamless to you.”

Direct Communications

The allegedly deceitful announcements were direct communications, not advertising, in the court’s view. “Advertising is a form of promotion to anonymous recipients, as distinguished from face-to-face communication,” the Seventh Circuit explained in First Health Group Corp. v. BCE Emergis Corp. (CCH Advertising Law Guide ¶60,408).

The agency's letters were not sent to anonymous recipients, the court noted. They were directed to individuals on client lists. The second letter enclosed a highly individualized transfer of assets form containing not just the customer's name but his or her social security number and MetLife account number.

Although the announcements might give rise to claims under state law, they were not actionable under the Lanham Act, either as advertising or trademarks (in light of the MetLife's abandonment of the agency name and logo), the court concluded.

The September 16 opinion in Metropolitan Life Insurance Co. v. O’M & Associates LLC, will be reported at CCH Advertising Law Guide ¶63,616.

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