Thursday, June 05, 2014

meaningless numbers aren't advertising

MGM Resorts Intern. v. Pacific Pillows, LLC, 2014 WL 2434628, No. 2:13–CV–1404 (D. Nev. May 28, 2014)
Pacific Pillows lets consumers buy bedding products that are used in various hotels including several hotels owned by MGM. Its website allows people to “shop by hotel,” and (at least some) pillows are named after hotels that MGM owns.  MGM also sells pillows and bedding using MGM’s marks for its hotels.  MGM sued Pacific Pillows for trademark infringement, counterfeiting, false advertising, and unfair competition.  Pacific Pillows counterclaimed, to no avail.
The Sherman and Clayton Act claims were dismissed because there is no antitrust law left.  MGM’s allegedly false advertising on its pillow tags was also not actionable under the Lanham Act.  Pacific Pillows lacked a  “concrete and particularized” injury, because all it alleged was that MGM’s advertising created “significant confusion in the marketplace” and harmed Pacific Pillows, which was too vague and speculative.  Even with standing, the claim failed. The allegedly false advertising was an incorrect registry number on pillow tags, but a registry number isn’t a commercial advertisement.  “The incorrect registry number is simply a series of letters and numbers that means nothing to consumers. The number does not give typical consumers any information about the pillow, and it certainly does not influence customers to buy the pillow.”  Even if other parts of the tags (the logo) were advertising, that didn’t make the registry number a commercial ad.  Also, Pacific Pillows failed to plead that the registry number was likely to influence purchase decisions or cause injury to Pacific Pillows.
Separately, Pacific Pillows alleged that MGM falsely advertised a pillow named “Aria,” because “Aria” wasn’t the exclusive pillow used at the Aria hotel, and that a pillow similar to the “Aria” pillow is only used in a small number of rooms. Pacific Pillow also lacked standing to bring this claim.  Further, it didn’t allege a false statement of fact: it didn’t allege that MGM advertised that a customer who purchased “Aria” would get the same pillow that is found in every room at the Aria hotel. Since both sides agreed that a similar pillow is found in some rooms in the Aria hotel, there was no falsity.
Common-law unfair competition failed too, as did wrongful interference with contractual relations/prospective economic advantage.  Though MGM allegedly contacted Pacific Pillows suppliers, and thus did intentionally interfere with contractual relationships, Pacific Pillows didn’t successfully plead that this interference was improper.  MGM notified the suppliers that they were supplying a company that was allegedly infringing MGM’s marks.  Protection of its trademarks was legitimate.

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