Everybody has a ghost: no false advertising/infringement where p's goods are legitimate components of d's product

Montana Camo, Inc. v. Cabela's, Inc., 2011 WL 744771 (D. Mont.)

Interesting but odd licensor-licensee litigation here, where there was some confusion about the legal claims. At the dispute’s core, Montana Camo objected to Cabela’s use of Montana Camo’s marks for its clothes (Prairie Ghost and River Ghost for fabric, and use of “Montana Camo” as a trigger for sponsored links) and on Cabela’s use of its own neck labels on garments made from Prairie Ghost and River Ghost fabric.

The reverse passing off claims based on Cabela’s use of its own neck labels and advertising the garments as Cabela’s or Cabela’s Montana Camo Ghost series failed. Cabela was the producer of the finished garments. It put its own labels on garments it made, as the law allows. The parties agreed that Cabela’s would buy raw fabric from Montana Camo and use the fabric to make clothes:

Although Montana Camo claimed Cabela's was supposed to put Montana Camo neck labels on these garments, this was not part of the agreement because the parties never discussed neck labels. Consistent with it being the manufacturer of the garments, Cabela's put its own neck labels on them and advertised them as “Cabela's Montana Camo Ghost Series.” Consistent with its use of Montana Camo fabric, Cabela's put Montana Camo hangtags on the garments. As opposed to a neck label, which is sewn on the back of the collar on the inside of the garment and typically depicts the logo of the garment manufacturer, a hangtag is usually applied to the sleeve or zipper of a garment and depicts a particular proprietary technology utilized in the garment, such as "Gore-Tex," "Scent-Lok," or "Montana Camo Ghost Series."

There was no authority to support Montana Camo’s claim that there could be a likelihood of confusion as to origin, sponsorship, or approval where a company puts its own label on products it made. Likewise, since it made the goods, Cabela’s ads depicting the garments as Cabela’s or as Cabela’s Montana Camo Ghost Series were not misrepresentations. (Important conclusions, given claims by, among others, candy manufacturers to control whether ice cream makers can use a trademark to identify the candy in the ice cream.) “Although in hindsight Montana Camo may not be happy with the licensing agreement that it entered into, Cabela's actions were not inconsistent with the licensing agreement. Montana Camo made its bed with this licensing agreement and now it has to lay in it.”

In addition, false advertising claims based on Cabela’s purchase of sponsored links for “Montana Camo” failed. Montana Camo couldn’t prove a false statement of fact—buying a sponsored link isn’t a statement of fact, and Montana Camo products were indeed sold on Cabela’s website, so there was nothing false there. Any §43(a)(1)(A) claim based on sponsored links was also “meritless.” There was no evidence of any likelihood of confusion, mistake or deception as to the origin of the goods.