Friday, February 13, 2015

Allegations of trademark "theft" falsifiable; other epithets puffery

Candyland, Inc. v. Cornfields, Inc., No. 14-3119 (D. Minn. Feb. 5, 2015)
Candyland, which sells popcorn, candy, and chocolate, sued Cornfields and Snyder’s Lance for trademark infringement and unfair competition based on their use of the mark Chicago Mix.  Candyland uses the registered mark CHICAGO MIX for a mixture of traditional, caramel, and cheddar popcorn.  Defendants also sell popcorn called Chicago Mix. Defendants counterclaimed for violations of the state deceptive trade practices law, false advertising under the Lanham Act, and defamation.  Candyland was partially successful in its motion to dismiss the counterclaims.
Defendants challenged Candyland’s website statement, Chicago mix Trademark Information, that they were “‘corporate sharks’ and ‘shameful companies’ out to ‘steal the trademark and use it at their discretion, punishing the entire nation with over-priced, bad tasting, unappetizing, tainted mixtures of popcorn.’”  Candyland also called Cornfields’ product an “infringing” “knock off,” and wrote, “Snyders of Hanover aka Jay's Potato Chips aka Okedoke aka Gross! I mean lets [sic] be honest, is it even popcorn?”  In an article on another website, Candyland accused Cornfields of producing “inferior products” that “degrade the brand,” and accused Cornfields and others of “stealing the name” in a book.  A Candyland email to bloggers said “We are doing whatever we can to protect the origin, history and integrity of the Chicago Mix® trademark—We are just protecting something that is being stolen from us, as would anyone else!”  Defendants alleged that these statements were defamatory and constituted false advertising in violation of state and federal law.
The court first asked whether the statements were falsifiable, considering 1) the precision and specificity of the disputed statement; 2) verifiability; 3) literary and social context; and 4) public context.  Most of Candyland’s statements could not be proven false because they were neither precise nor verifiable. There was no objective standard for judging what’s a “corporate shark” or a “shameful company.”  Calling the defendants’ popcorn “over-priced,” “bad tasting,” “unappetizing,” “gross,” “inferior,”  or “degrad[ing] the brand” were statements of judgment, not empirically verifiable facts.
The epithet “tainted” also couldn’t be proven false.  Though it could mean spoiled or rotten, in context, the term “emphasize[d] Candyland’s disrespect for the general quality of Cornfields’ and Snyder’s-Lance’s popcorn.”  It followed derogatory terms such as “bad tasting,” “unappetizing,” and “punishing the nation,” and preceded the “hyperbolic” “is it even popcorn?” Thus, the term indicated dislike, not an accusation of unfitness for human consumption.  Similarly, the “knock off” accusation was opinion.
Only one type of statement could be proven false: Candyland’s claims that the defendants were “stealing” its trademark. (Not “infringing”?) Courts have disagreed whether statements about the legality of a party’s action are opinions or can be proven false; context is key.  A statement is provably false if “a speaker is aware that statements are either untrue or unsupported conclusions not based on the prevailing law” but it is opinion if “the speaker is only opining on unsettled areas of the law.”  Here, the statements allegedly implied an illegal activity.  Whether they were provable or mere interpretation depended on context, and on the result of the trademark litigation.  The statements weren’t necessarily falsifiable; they might also be true. But at the motion to dismiss stage the allegations sufficed for defamation.  A similar result obtained for the state and federal false advertising claims.

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