Friday, February 01, 2013

Samples aren't statements under the Lanham Act

Buffalo News, Inc. v. Metro Group, Inc., 2013 WL 321578 (W.D.N.Y.)

Buffalo News sued Metro for false advertising in state and federal flavors.  The News is the largest daily newspaper in the Buffalo metro area.  It sells inserts—stand-alone ads, typically on high-gloss, colored paper—and alleged that “the greater the number of inserts and the higher the name recognition of the other advertisers in the insert package, the more valuable the placement in the insert becomes, and the more likely [it becomes that an] advertiser is willing to pay to be included in the insert package.” It alleged that Metro, which publishes weekly and biweekly local community inserts, misrepresented “the nature and extent” of the ads it could deliver via inserts.  The promotional material, which the court described as “essentially samples,” sent to potential advertisers, “contains more inserts, from more nationally recognized retailers, than Metro is typically able to produce.”  This, News alleged, created the impression that advertisers who haven’t agreed to participate are in fact going to show up in the inserts.  (Query whether such advertisers have a §43(a) claim.)  And that allegedly diverted business from News.

The court found that there was no Lanham Act claim because there was no “statement” or “representation of fact.” Though images or words can qualify, “the amended complaint fails to identify a single statement or image that asserts anything.”  Instead, the mere inclusion of more inserts than Metro “typically” can provide (for example, one sample package contained 23 inserts when its publications typically included no more than two or three) was supposedly implicitly misleading.  (I would have thought that advertisers would fear getting lost in the crowd!)  But the court wasn’t convinced.  “Indeed, it is clear from the amended complaint that the inserts are meant merely as samples, and there is no allegation that Defendants have claimed that the inserts imply anything more.”

The court analogized to Mylan Laboratories, Inc. v. Matkari, 7 F.3d 1130 (4th Cir.1993), where the 4th Circuit rejected the claim that the act of placing a drug on the market implies FDA approval.  “Like the plaintiff in Matkari, The News asks this Court to extrapolate a message from an act. But the mere presence of extra inserts in Defendants' sample packages cannot be considered a description or representation of fact under the Lanham Act.”

Comment: Why isn’t it plausible that consumers would expect the “samples” to be representative of what the defendant ordinarily offers?  That's my ordinary expectation of a sample.  Maybe market characteristics or other statements make clear that the “samples” are not actually representative but are best possible results because of the customization of the packages, but I don’t really understand why an ad showing/containing samples doesn’t send some message, even if the court wants to say it's not plausibly a deceptive one. 

With the Lanham Act claim dismissed, the court declined to exercise supplemental jurisdiction over the remaining claims.

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