Tuesday, January 31, 2006

Attracts deer but also false advertising claims

Wildlife Research Center, Inc. v. Robinson Outdoors, Inc., -- F.Supp.2d --, 2005 WL 3676530 (D. Minn.)

This case resulted in a judgment of $4.8 million, plus prejudgment interest, based on the defendant’s false advertising, business defamation, and product disparagement for hunting products – a human scent elimination spray and a doe-urine-based attractant. Monetary awards in Lanham Act cases are reasonably rare, but in this case the jury apparently felt that years of false advertising had taken their toll on the plaintiff, and awarded both damages for lost business and the defendant’s profits. Although the awards on the Lanham Act and state-law claims were duplicative, prejudgment interest was available on the state-law claims and was awarded accordingly.

Lanham Act recovery may include both actual damages and the defendant’s profits, though the total recovery is subject to principles of equity and must constitute compensation, not a penalty. In this case, the duration of the false claims, the damage to the plaintiff, and the defendant’s knowledge that its claims were false justified the award. In addition, though the defendant argued that recovery of profits is only allowed for willful violations of the Lanham Act, the court ruled that the 1999 amendment to §1117(a) abrogated earlier case law imposing a willfulness requirement: The law used to allow recovery for “a violation under section 1125(a) of this title,” but now it reads “a violation under section [1125(a)] of this title, or a willful violation under section [1125(c) (dilution of famous marks)].” The contrast makes clear that willfulness is not required for an award of profits in a false advertising case.

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