Saturday, September 26, 2009

Press release on lawsuit not false advertising

Paradigm Alliance, Inc. v. Celeritas Technologies, LLC, 2009 WL 3045464 (D. Kan.)

Paradigm sued Celeritas over an allegedly failed joint venture with subsequent fallout, including trade secret claims. Celeritas counterclaimed for false advertising based on a press release Paradigm posted to its website, repeating the allegedly false claims of the lawsuit (claiming ownership in the technology developed by the parties and any related patents), thus planting doubt about Celeritas in consumers’ minds. The court found that there were no material false or misleading representations of fact because the press release stated that Paradigm had sued and listed the “allegations” in the suit. The press release, the court concluded, concerned only the lawsuit, and not the parties’ products (but see the Lanham Act coverage of false and misleading statements about “commercial activities”). Celeritas argued that because the allegations were false, the press release was false advertising, but Paradigm did file the lawsuit and did make the allegations as set forth in the release. That wasn’t a misrepresentation.

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