Thursday, February 16, 2017

claims about others' patent infringement can be factual, commercial speech subject to Lanham Act

Global Tech Led, LLC v. HiLumz International Corp., 2017 WL 588669, No. 15–cv–553 (M.D. Fla. Feb. 14, 2017)

The parties, former business partners, now compete in the retrofit LED lighting industry. Global Tech sued defendants for patent infringement. HiLumz counterclaimed for false advertising/trade libel under federal and state law based on statements such as one that Global Tech “received a permanent injunction, rendering account and damages based on its newly-granted patent against HiLumz USA for infringement of its US patent” and accusing defendants of “stealing” and “copying” Global Tech’s product ideas.  Someone from Global Tech warned HiLumz distributors attending the 2015 World Energy Engineering Congress to “be careful what products you sell” and said that “HiLumz will be out of business soon.” Global Tech also allegedly told “customers, sales representatives, competitors, and others” that HiLumz infringed Global Tech’s patents, that “HiLumz USA is no longer allowed to sell LED retrofit kits,” and that “Global Tech was preparing to file suit against HiLumz, and would also file suit against anyone who does business with HiLumz.”

Global Tech argued that its alleged statements were mostly not made in commercial advertising or promotion.  First, it argued that the challenged ads weren’t commercial speech because they referenced only Global Tech’s patents, not any products, but referring to a particular good or service isn’t required under Bolger.  Plus, even if a product reference were required, it was present in most of the challenged statements—for example, Global Tech’s press release  specifically mentioned Global Tech’s “LED lighting products” with hyperlinks for the word “products.” Warning distributors to take care when determining which products to sell, in light of HiLumz’s impending demise, and statements that defendants couldn’t sell HiLumz retrofit products, also referenced products. And defendants sufficiently alleged economic motivation.

However, one challenged statement—posted on a personal LinkedIn profile page, incorrectly asserting that a relevant parent patent  “issued on June 8, 2009” instead of having been filed then—wasn’t commercial speech.  The speaker “sought merely to showcase his contribution to the world of patentable technology.”

The court also mostly found the statements adequately disseminated to the relevant purchasing public, at least as a matter of pleading. Disseminating the press release online made it available to the world; disseminating claims to distributors attending the World Energy Engineering and to “customers, sales representatives, competitors, and others” also were plausibly pled as adequate dissemination of those statements “to the relevant purchasing public.”  However, allegations that “when internet users searched on the internet for ‘global tech LED hilumz’ ” at least as late as on October 6, 2015, a Google search result appeared containing a URL wrongly stating that Global Tech had already received a permanent injunction against HiLumz.  “[T]he Court cannot gratuitously infer that any netizen beside Defendants ever actually googled ‘global tech LED hilumz’ during the relevant time period.”

Global Tech then argued any statements regarding HiLumz’s impending demise, patent infringement, and inability to sell retrofit kits were “non-actionable opinion.”  The court agreed that the statement warning HiLumz distributors that HiLumz was “going out of business” was non-verifiable “prediction or opinion about the future of [Hilumz], and consequently, is not actionable as a false or misleading statement of fact under the Lanham Act.”

However, claims that defendants infringed Global Tech’s patents and therefore defendants weren’t allowed to sell them  “fairly implies a factual basis” and was thus properly treated as a statement of fact, despite being “framed as an opinion.” The outcome of the patent infringement claim will reveal the truth, making the statements empirically verifiable.  Plus, the counterclaim alleged that Global Tech had been making these statements as early as fall of 2012, years before Global Tech actually obtained the patent in suit. “Given that ‘[a] patent application cannot be infringed,’ the falsity of these statements may be readily ascertainable.”

State-law unfair competition claims survived to the same extent. Florida Deceptive and Unfair Trade Practices Act claims also survived; the court rejected the argument that only consumers have standing under the current version of the law.

No comments:

Post a Comment