General Steel and defendant Armstrong (founded by Chumley)
compete in the prefabricated steel building market. General Steel sued for trademark infringement
and false advertising under state and federal law, seeking disgorgement of
profits, statutory damages, and compensation for corrective advertising.
The court started with the Colorado deceptive trade
practices claim under the Colorado Consumer Protection Act, which requires
injury to a legally protected interest.
The court held that General Steel failed to identify any actual injury;
disgorgement is a theory of recovery, but there was no evidence of actual
injury.
General Steel also claimed that Armstrong’s use of “General
Steel Buildings” in ads infringed General Steel’s registered mark. But General Steel neither sought injunctive
relief nor identified actual damages. To
recover an award for corrective advertising, General Steel still needed to
establish actual injury.
Despite all that, a plaintiff in a case of a counterfeit
mark can seek statutory damages, but General Steel didn’t invoke that provision
of the Lanham Act. The court was willing
to let General Steel try its hand at that argument before finally resolving
summary judgment on the trademark claim.
General Steel’s separate false advertising claim targeted
Armstrong’s claims “that [it is] a manufacturer, that [it] posess[es]
environmentally controlled painting facilities, and that [its] facilities use
laser-precision engineering.” Again, no
evidence of actual damages, but this time General Steel sought injunctive
relief, which is available upon a showing of literal falsity even with no
evidence of actual damages.
Armstrong admitted to the statements and asserted a “vague
and unsupported denial” of falsity.
Though it argued that materiality ought to be separately required in a
literal falsity case, it failed to explain why statements about whether and how
Armstrong makes its products would be immaterial. Not only was Armstrong’s summary judgment motion
denied, it was ordered to show cause why General Steel wouldn’t be entitled to
summary judgment.
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