Wednesday, May 22, 2013

allegations of patent infringement protected by Noerr-Pennington doctrine

Sliding Door Co. v. KLS Doors, LLC, 2013 WL 2090298 (C.D. Cal.)

Sliding Door sued defendants alleging patent infringement; defendants counterclaimed for, among other things, false advertising and unfair competition.  Sliding Door made allegedly false claims that defendants were infringing Sliding Door’s patent and threatened to hold any purchaser of an infringing product accountable.  The relevant email included a link for the recipient to view Sliding Door’s catalog along with pictures of sample products.

For the Lanham Act claim, the court adopted the standard four-factor definition of “commercial advertising or promotion,” focusing on the question of whether the statements were commercial speech. Under the circumstances, the email could be seen as commercial speech.  It was sent by Sliding Door’s sales manager in its commercial division, included a link to Sliding Door’s catalog, and had images of Sliding Door’s product.  Thus, it could be seen as commercial speech made for the purpose of influencing consumers to buy Sliding Door’s goods and services.  The fact that it also included “cease and desist” language wasn’t dispositive, given these other contextual factors.

However, this was still protected communication under the Noerr-Pennington doctrine, precluding liability for petitioning the government for redress.  Conduct incidental to a lawsuit is also protected by Noerr-Pennington, and defendants failed to explain why this wouldn’t also apply to Lanham Act claims. The email here was related to the petition activity of filing suit, even if it was also carried out to further the petitioning party’s commercial interests.  The sham exception didn’t apply because Sliding Door’s claim “contain[ed] sufficient issues of fact” to show (for whatever values of “show” you want to apply on a motion to dismiss)  that its action wasn’t objectively baseless.

Similarly, the state law unfair competition claim was barred by California’s litigation privilege.  Defendants argued that statements made for advertising purposes weren’t protected.  The privilege applies to statements that have a connection or logical relation to the litigation process; it doesn’t apply if the statements only serve interests that happen to parallel or complement a party’s litigation interest.  Here, the email informed customers of the pending litigation and warned them of potential liability for buying infringing products.  This had a logical relation to the lawsuit.  Even though it was also advertising, it still fell within the scope of the privilege.

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