Wednesday, August 30, 2006

Skydiving without standing

Skydive Arizona, Inc. v. Quattrochi, 2006 WL 2460595 (D. Ariz.)

Plaintiff’s trademark and false advertising claims are based on defendants’ websites, which allegedly misrepresent defendants as “Arizona Skydiving,” “Skydiving Arizona,” “Skydiving Arizona Center,” “Tuscon Skydiving Center,” and “Skydive Flagstaff,” when in fact defendants operate no such facilities. In addition, defendants allegedly falsely claim that the “Skydiving Arizona” facility is “the busiest skydive center serving Arizona” and runs “multiple turbine aircraft.” Defendants allegedly have similar websites for Phoenix, Tempe, Scottsdale, Mesa, Gilbert, Yuma and Flagstaff. Plaintiff claims that Defendants have sold “certificates” to Arizona residents with false claims that the certificates are redeemable at Plaintiff’s facility, and that defendants have made false and misleading statements concerning their relationship with Plaintiff.

After dismissing individual defendants for lack of personal jurisdiction, the court addressed certain allegations against the corporate defendants in the complaint.

Part of the complaint alleges that the defendants copied copyrighted photographs from the website of a well-known Arizona skydiving videographer and used those photos to misrepresent their services. The photos include a picture of a group of skydivers at plaintiff’s facility, but defendants used the picture on several of their websites, labeling it as a photo of defendants’ experienced staff. Plaintiff alleges that this occurred on websites for several states, and also alleges that defendants similarly copied photos, text, graphics, layout, and design from another, Canadian website, using the copied materials to advertise fictitious sites in 17 states. Moreover, defendants allegedly posted false testimonials from supposed customers on multiple sites. In addition, plaintiff alleges that, when a Tennessee skydiving facility owner died, defendants called the phone company and had the 1-800 number changed so that it would be forwarded to their telemarking center.

The court ruled that these allegations don’t cover conduct with direct bearing on the plaintiff. Plaintiff doesn’t operate outside Arizona, so the non-Arizona sites can’t harm it. (Unless the various sites combine to create the impression of a respectable nationwide business that’s a better bet than a local operator, though that might be hard to prove.) Because plaintiff couldn’t show that these false statements diverted business from it, it had no standing to challenge them under the Lanham Act. Plaintiff has no brief to defend the reputation of the skydiving industry generally, even if defendants’ practices make the whole industry seem shady. As a result, the court struck these specific allegations from the complaint.

A couple of comments: Dastar is one reason not to treat wholesale copying as false advertising, though of course if the defendant copies statements that aren’t true when applied to itself, it’s engaging in false advertising. It seems to me that these allegations may still bear on defendants’ intent to confuse (in the case of the 1-800 number) or to misrepresent. Intent can weigh against a defendant as part of the multifactor confusion test, and courts occasionally take it into account in false advertising cases. For similar reasons, if liability is established, the scope of defendants’ acts may bear on damages, though the Lanham Act doesn’t provide for punitive damages. Would state-law claims help here?

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