CareerFairs.com v. United Business Media LLC, 838 F. Supp. 2d
1316 (S.D. Fla. 2011)
CareerFairs alleged that it met with defendant O’Brien
seeking investment capital to launch a virtual college career fair featuring an
interactive online interview format. O’Brien
said he wasn’t interested in investing in CareerFairs.com’s idea, but then his
company launched its own virtual college career fair website. CareerFair alleged that Unicruit.com’s Nov.
2010 interactive career fair for students attending 16 universities and
colleges in the Big East was identical to its business idea. The court declined to dismiss the claims
related to breach of an alleged confidentiality agreement/trade secret
misappropriation. It dismissed the
conversion claim, since the only converted property was the intangible idea and
the parties’ relationship was governed by a contract.
The court also dismissed the Lanham Act claim because
CareerFairs hasn’t been able to enter the market, allegedly because of
defendants’ behaviors. Thus, CareerFairs
lacked standing under the Phoenix of
Broward test. “Each of the Phoenix Factors hinges on the directness
of the competition between the parties.”
Defendants argued that only active competitors have standing. CareerFairs argued, futilely, that the court
should use the Ninth Circuit’s standing test instead, since the Eleventh
Circuit has rejected this test (and anyway, the court held, the Ninth Circuit
requires actual or direct competition, so unlaunched competitors still wouldn’t
have standing in that circuit). “[D]irect
competition is essential to a finding of standing to bring a false advertising
claim under the Lanham Act in the Eleventh Circuit.” Comment: The formal promise of Conte Bros./Phoenix of Broward was that
direct competition wouldn’t be necessary for standing, so that it was possible
to characterize the test as more expansive
than the 9th Circuit version.
From “not necessary,” though, the practical result became “not
sufficient.” It is interesting to see a
court read this standing test as requiring the opposite of what its stated goal
was.
Anyway, though Phoenix
of Broward doesn’t expressly require the plaintiff to have a product in the
market, it’s an indicator of direct competition.
The state-law claims survived for misappropriation, though
not for false advertising because lack of standing to bring a false advertising
claim under the Lanham Act somehow translated into lack of standing to bring a
false advertising claim under the FDUTPA, even though the court also found that
the plaintiff “comes within the protection” of the latter law, but apparently
only for purposes of asserting a misappropriation claim where the defendant
deceptively caused harm to the plaintiff.
I didn’t really get it.
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