Wednesday, June 17, 2015

False patent marking not actionable under Lanham Act

Leisure Concepts, Inc. v. California Home Spas, Inc., 2015 WL 3658190, No. 14–CV–388 (E.D. Wash. June 12, 2015)
Leisure and CHS compete in spa products, including spa cover lifters.  Leisure’s CoverMate I is protected by a patent, which it claimed was infringed by CHS’s Cover EX.  CHS marketed the Cover EX with a sign reading: “All Aluminum Design NO PLASTIC Compare to the Cover Mate I.” Ads for the Cover EX also refer to a CHS patent, but Leisure claimed that the CHS patent “claims a spa cover lifter utilizing support members comprising telescoping gas struts, which are not an aspect of the [Cover EX.]” CHS sells the Cover EX at a lower price than Leisure sells the CoverMate I, allegedly harming Leisure’s sales.  Moreover, Leisure asserted that the written and visual instructions provided with the Cover EX were substantially similar to Leisure’s copyrighted manual for the CoverMate I and that the instructions even contained verbatim text and diagrams from the protected manual.
The court denied CHS’s motion to dismiss the patent infringement and false patent marking claims.  In addition, the court found that Leisure stated a plausible copyright infringement claim.  “Although some of Leisure’s manual consists of mere lists of product parts and directions that may not be subject to copyright, the manual also contains narrative instructions that may be protected. This is especially true where some of the language from Leisure’s manual is copied almost verbatim in CHS’s manual. While some similarity between manuals for spa cover lifters is expected, ‘such obvious copying ... is not to be encouraged.’”
Comment: wow.  What an anticompetitive claim.  These are the pages that the court used as comparators: 
Leisure Concepts instructions
CHS instruction (page 2 of 6)
I see one identical instruction, but I can’t imagine (1) that’s enough to constitute substantial similarity, or (2) that’s even protectable; how many ways are there to say that in an easily comprehensible way?
The court did dismiss the Lanham Act claim based on allegedly false claims by CHS that the Cover EX was protected by the CHS patent instead of embodying the Leisure patent.  Leisure argued that “because spa dealers are more likely than general consumers to be wary of potential patent infringement lawsuits,” CHS placed its patent number on the advertising for the CoverEX to convince customers that their product would not be subject to patent infringement lawsuits.  But under Sybersound Records, Inc. v. UAV Corp., 517 F.3d 1137 (9th Cir. 2008), an alleged misrepresentation of patent status isn’t covered by the Lanham Act.  To avoid overlap between the Lanham and Patent acts, “nature, characteristics, and qualities” should be construed to mean characteristics of a good itself, not its patent status.  Leisure made no allegations about the physical good; its patent-advertising arguments were more properly considered under patent law.  Leisure didn’t allege that CHS made false representations about the exclusivity of its product, which would be actionable (a conclusion somewhat in tension with the idea that the Lanham Act only covers misrepresentations about the physical good). “Leisure has not alleged that CHS told customers that it held exclusive patent rights to this class of spa cover lifters or that CHS represented that the CoverMate I infringed on CHS’s patent.” Thus, this claim was dismissed with prejudice.

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