Genometrica is developing a medical device, a DNA
analyzer/sequencer. It was formed by one
of the two individual defendants, Gorfinkel, and Gorbovitski was its sole
director and executive officer for a time, but after they sold their stakes,
they allegedly created a new company, Advanced BioMedical Machines, in order to
compete directly with Genometrica to develop ABMM’s own sequencer. This sequencer is allegedly substantially similar
or identical to Genometrica’s, and ABMM allegedly “states in its marketing
materials that its device employs and exploits inventions, technology patents,
know-how, trade secrets and related intellectual property and other information
that belongs to Genometrica.” In
addition, its website allegedly offers to sell ABMM’s sequencer, a “version” of
Genometrica’s device, without authorization.
Without discussing Dastar,
the court refused to dismiss the false designation of origin/false advertising
claims, even though the allegations were that ABMM was “holding out and
representing to the public in interstate commerce that it is the owner of all
rights, title and interest to the website and the intellectual property
contained therein, including the Medical Device” and that this was false
because the image of the sequencer on the website clearly showed the
Genometrica’s former corporate name and was taken from a brochure prepared by
Gorbovitski as Genometrica’s officer.
The picture might well ground a reverse passing off claim,
but the broader “misrepresentation of IP ownership” allegations seem clearly Dastar-barred. Still, the court accepted the general
allegations that defendants’ conduct created a likelihood of confusion etc. as
to “the affiliation, connection, and association between Defendants' ABMM
Sequencer and Genometrica's Medical Device.”
That is, the complaint set out all the elements of false designation of
origin (oddly, the court repeatedly referred to the device as a “work,” which
suggests that it should have encountered Dastar)—but
see below.
In addition, Genometrica stated a claim for false
advertising because defendants allegedly made a false or misleading
representation about the sequencer (which appears to be simply that it was
defendants’) and otherwise alleged the elements.
Defendants apparently didn’t argue Dastar directly, even though it would’ve given them some purchase
on the false advertising claims as well, given the case law. Instead, they argued that Genometrica didn’t
properly plead that it owned a trademark.
If the §43(a) claim was for infringement of an unregistered mark,
Geometrica would need to allege the existence of a protectable mark. But a false advertising §43(a)(1)(B) claim
doesn’t require that, so that claim survived.
What about
§43(a)(1)(A)? The court determined that
false designation of origin requires a protectable mark. Genometrica didn’t allege that it had a protectable mark for
its former corporate name or for any other mark in connection with the
sequencer. Thus, allegations of false
association and trading on Genometrica’s goodwill was insufficient to state a
claim. Alleging reverse passing off, in
the absence of a mark, wasn’t sufficient to satisfy the statute.
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