Friday, March 24, 2017

Dastar/preemption bars claims based on allegedly false claims of credit for innovation

OptoLum, Inc. v. Cree, Inc., No. CV-16-03828, 2017 WL 1057924 (D. Ariz. Mar. 21, 2017)

The parties compete in the market for LED lights. OptoLum claims to be the inventor of technology used inside LED bulbs allowing them to have the look and feel of traditional incandescent bulbs.  It alleged false advertising under the Lanham Act, an unjust enrichment claim, and two patent infringement claims (which I will not discuss).

The court found that these claims were puffery:

• The “Cree Filament Tower™ Technology” is “the genius idea inside” the Cree LED bulb;
• Cree “found a way to put the LEDs in the center of the bulb like a traditional light bulb” and “we’re making an LED but we are actually inventing all the technology in between”;
• “[O]ne of the technical breakthroughs that enabled Cree to break the $10 threshold is our new Cree Filament Tower™ Technology. The Filament Tower™ is the Cree innovation that lets our LED bulb replicate the look and feel of filament based traditional lights”;
• “[Cree] engineers came up with a very elegant solution to the design issues inherent in LED bulbs. In a compact form, the Filament Tower produced the light dispersion we wanted without problematic heat building”;
• “[I]nventing the LED technology that delivers like an incandescent was hard work, but designing a bulb in a form-factor that consumers trust at a price they can afford was even harder. Designed with Cree LED Filament Tower Technology, the Cree LED bulb represents a breakthrough in LED bulb design and performance”; and
• “[Cree] invented the lighting-class LED.”

The court found these all nonactionable puffery as a matter of law.   The claim that Cree’s Filament Tower Technology was a “genius idea” was “the epitome of puffing.” Likewise, the other statements about “breakthroughs” were “not specific, not concrete, not measurable, and therefore puffery.” A “very elegant solution” was “sufficiently imprecise to constitute puffery,” as were the “look and feel,” “long useful life,” and “energy efficiency and low cost” claims.

OptoLum argued that Cree falsely claimed that it was the source of ingenuity, innovation, and technological breakthroughs attributable to OptoLum.  The court replied: Dastar.  A contrary holding would create a conflict with the Patent Act.

Similar reasoning doomed the unjust enrichment claim.  OptoLum alleged that there was significant value in being perceived by consumers as an innovator, inventor, and creator of groundbreaking technology. But patent law preempts an unjust enrichment claim based on such grounds.  Given that the plaintiff’s right to relief would depend on resolving inventorship, a substantial question of patent law, patent law preemped “any state law that purports to define rights based on inventorship.”  While a contract implied in fact could support an equitable unjust enrichment claim if no formal contract existed between the parties, those weren’t the allegations here.

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