No crying in basketball: losing defendant can't get "do over"

Baden Sports, Inc. v. Kabushiki Kaisha Molten, 2008 WL 238593 (W.D. Wash.): Previous coverage here.

Molten lost a big false advertising judgment to Baden based on false advertising of its “innovative” basketballs that, it appears, were not innovative and in fact infringed Baden’s patent. In this ruling, the court denied Molten’s Rule 50(b) motion to void the judgment under Dastar. The court reaffirmed its conclusion that “innovative” was not a claim of origin or inventorship, but a claim about the nature, characteristics or qualities of the basketballs themselves.

Some witness testimony suggested that the innovation claim was false because Baden actually created the design, but other testimony indicated the witnesses believed that the product was not “new.” The jury instruction explained, “Baden Sports claims Molten Corp. and Molten USA advertised their ‘dual cushion’ basketballs as a Molten innovation and they were not.” (Comment: this sure sounds like it’s an inventorship-based claim. “Innovation” is one thing; “Molten innovation” connotes origin of the idea, and could be false if the basketballs were in fact innovative, but not developed by Molten. At best, these jury instructions are confusing under Dastar.) The court found that, as presented to the jury, the false advertising claim didn’t founder on Dastar.

In addition, Molten argued that the jury instructions should have included an instruction on puffery. Not only did Molten fail to preserve this objection, it was wrong, because puffery is a question of law, not a fact question.

The court further rejected Molten’s argument that the jury verdict was contrary to the clear weight of the evidence. Baden’s CEO testifed that Molten’s ads that its dual-cushion technology was a Molten innovation would “absolutely” deceive a substantial number of consumers, and Molten offered no contradictory testimony. Baden also had evidence of materiality, in the form of testimony from the CEO and from a professor of marketing. The CEO and a senior sales manager also testified that Molten false advertising damaged Baden’s goodwill. No specific or quantifiable examples of harm or consumer confusion were necessary. The only evidence presented by the parties supported the jury’s verdict.

Finally, Molten argued that the $8 million damages award was grossly excessive and against the clear weight of the evidence. The jury instructions specified that if Baden proved intentional false advertising, Baden was entitled to Molten’s profits from the false advertising, with the burden on Molten to prove what portion of its profits were attributable to other factors. Baden’s witness testified that Molten’s profits could be measured by the amount Molten paid for its sponsorship agreements with FIBA and USA Basketball (basketball organizations). Under those agreements, FIBA advertised and promoted Molten’s “innovative” technology. The witness also testified that Molten’s formerly flat sales took off after Molten changed its balls’ exterior design and FIBA began promoting the balls. Molten paid over $21.5 million for these agreements, the net present value of which was $8 million – the amount of the jury award. Molten had arguments against the $8 million figure, but it had its chance with the jury.

Basically, Molten had a very bad trial, with much of its evidence excluded for pretrial shenanigans and its legal arguments unfocused. With new counsel, Molten wanted a “do over,” but the court was unwilling to grant it.