Monday, June 23, 2008

Authorship, authenticity, advertising and ownership

Societe Civile Succession Richard Guino v. Beseder Inc., 2008 WL 2463770 (D. Ariz.)

The Societe moved for reconsideration of the court’s earlier ruling awarding defendant Jean Emmanuel Renoir $45,000 in lost profits for its false advertising counterclaim. See earlier discussion here: basically, the Societe advertised some Renoir-Guino works as originals. The court sustained the jury’s verdict that they were inauthentic and/or unauthorized, and that this was false advertising.

The court considered the motion under Rule 59(e), as a motion to alter or amend the judgment. Such motions are rarely granted—only when something has unexpectedly changed or gone so badly wrong that a manifest and critical error needs correcting. The Societe argued that a dispositive element of a false advertising claim was missing—it didn’t own any of the falsely advertised sculptures at issue in the case.

The court believed that, whether or not the Societe owned the sculptures, false statements about them could ground a false advertising claim. But the Societe argued that “commercial advertising” under the Lanham Act requires that a statement must be made “for the purpose of influencing consumers to buy defendant’s goods or services.” Coastal Abstract Service, Inc. v. First Am. Title Ins. Co., 173 F.3d 725, 734-35 (9th Cir. 1999) (emphasis added). However, the district court held, this language was merely adopted from a Fifth Circuit case, not discussed, and there was no reason to think the 9th Circuit meant to restrict false advertising claims “solely to instances where false statements are made to influence consumers to buy the accused’s own products.” In fact, other 9th Circuit cases make clear that a false advertising claim may be based either on statements about one’s own products or about another’s products; it is sufficient if the statement is made for the purpose of influencing consumers not to buy a competitor’s products. Thus, there was no manifest error of law or fact, even if the Societe didn’t own the sculptures.

This seems like fancy footwork on everyone’s part. The court’s ruling is certainly reasonable given the procedural context, but it bucks the trend on standing, which is how these competition issues are usually resolved these days (rather than by the weird test for what counts as “commercial advertising”). For the same reasons, the Societe’s argument seems like a different way of making the same argument that it wasn’t in competition with the defendants that it already lost before.

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