court parses Lanham Act standing on statement by statement basis

FieldTurf USA Inc. v. TenCate Thiolon Middle East, 2013 WL 1963918 (N.D. Ga.)

While this was mainly a breach of contract action, the court had occasion to resolve various Lanham Act false advertising/trademark and business tort issues.  TenCate (actually a bunch of related entities) entered into three contracts to supply FieldTurf with polyethylene fiber used to make artificial grass turf for athletic fields. Initially, FieldTurf entered into a supply agreement in which TenCate’s predecessor would provide monofilament fiber called Evolution exclusively to FieldTurf.  FieldTurf allegedly began receiving complaints about fields installed using Evolution fiber.  Its testing allegedly demonstrated that Evolution yarn was degrading prematurely.  It subsequently released Revolution, a competing fiber product.  FieldTurf sued TenCate for breach of contract, breach of warranty, and fraud. TenCate counterclaimed for false advertising, trademark infringement, slander, etc.

On FieldTurf’s statement that Revolution was the “industry’s strongest fiber,” TenCate argued that this meant tensile strength, and provided evidence that Revolution didn’t have the strongest tensile strength.  But a TenCate employee admitted in deposition that fiber strength can be measured in many ways; this was not literally false, and TenCate didn’t have evidence of consumer reception.  As for the statement that Revolution had “strongest ultraviolet inhibitor technology in the industry,” TenCate showed that other UV stabilizers were equal, but that wasn’t enough to show literal falsity, “only that the advertisement was phrased in a manner which may have misled consumers about the strength of Revolution's ultraviolet inhibitor technology.”

Revolution also claimed to have the “most natural looking fiber,” but this was puffery.  TenCate’s expert testified that there were ways to make turf fiber more natural looking, but also admitted that whether one type was more natural looking than another was unprovable.

And Revolution claimed to have the “strongest tuft bind” in the industry, but the court found that TenCate didn’t have standing to contest this claim.  According to FieldTurf, “tuft bind” related to “how hard it is to pull a tuft of fiber out of its backing” and has nothing to do with the fiber itself. Thus, there was no prudential standing.  Although TenCate’s commercial interests may have been harmed if end users purchased turf through FieldTurf rather than a TenCate-supplied turf producer, that didn’t counsel heavily in favor of standing because (NB: this is not a because, but a conclusion about materiality) the ads at issue made a lot of claims for Revolution, and there was no reason to think that the brief “tuft bind” claim persuaded a purchaser more than any other claim.  The directness of the injury counseled against prudential standing because the parties didn’t generally compete to sell the same products to the same end users. TenCate was a commercial entity competing in the general market for artificial turf and was therefore connected to the effects of the false advertising, which counseled slightly in favor of standing, but determining FieldTurf’s profits and TenCate’s losses from the “tuft bind” claims would involve too much speculation given the other important components of the product.  And the possibility of duplicative claims weighed against standing because, if TenCate could sue, so could every other competitor in the market for artificial turf and its components.

TenCate argued that FieldTurf’s ads were deceptive comparative advertising, justifying a presumption of causation and harm for actual damages.  But the “tuft bind”-related claims weren’t comparative advertising.  The ad pamphlet said that a third party fiber manufacturer’s “quality began to suffer” and repeated Revolution's motto: “This is no evolution. This is revolution.” (How is that not comparative with Evolution, the third party product?)  The ads “only” said that Revolution had the “strongest tuft bind in the industry” but didn’t “compare the tuft bind with the tuft bind of any competitors, including TenCate.”  (How is “strongest” not comparative? Ugh.)  Thus there could be no presumption of causation or harm.

FieldTurf also sought summary judgment on TenCate’s trademark infringement/unfair competition counterclaims, on the grounds that TenCate couldn’t show confusion.  The Evolution 3GS mark was incontestable, giving it “presumptive[]” strength (ugh again—no, incontestability means irrebuttable nondescriptiveness: as a matter of law, if it’s not generic, it functions as a mark, but that doesn’t make it a strong mark, so that’s wrong in two distinct ways).  But FieldTurf overcame the presumption of strength by showing that, when it introduced Revolution, Evolution had been sold exclusively to FieldTurf in the US, and “with trivial exceptions,” it hadn’t been advertised or promoted. Therefore it was (commercially) weak.  (Wonder why that pamphlet reads that way—an inside jab?)

The marks differed only by a single letter, but the buyers were sophisticated purchasers of technical products who were unlikely to be deceived.  The motto “It’s not evolution, it’s Revolution” made clear that FieldTurf was trying to distinguish the products, not to deceive, especially since it was saying that Evolution was defective; deception made no sense in context.  Plus, the parties dealt with consumers at different stages of the buying process: FieldTurf sold turf to athletic facilities, while TenCate sold fiber to other manufacturers of artificial turf—FieldTurf’s competitors.  And there was de minimis evidence of actual confusion. 

FieldTurf also won summary judgment on the slander claim because TenCate provided only hearsay to prove that it had occurred.  TenCate argued that a form letter FieldTurf sent was libelous, but the court agreed that the statements were privileged: made in good faith to a properly limited set of persons to protect the speaker’s interest in a matter in which it was concerned. Though FieldTurf’s letter was (relatively) widely disseminated in the “design community,” the letter was limited in scope.  It simply repeated the allegations of FieldTurf’s lawsuit that TenCate changed the fiber and didn’t live up to its promises.  FieldTurf’s protection of its reputation was privileged.

The tortious interference counterclaim also failed because the statements were privileged, and TenCate also failed to show financial injury.  Though three potential customers declined to adopt Evolution for various reasons, including that it had “a lot of baggage,” the statements didn’t show that the customers were affected by any FieldTurf statement, whether about the lawsuit or about a TenCate product.  Specific claims of lost sales, on inspection, were traced to reasons other than FieldTurf’s statements about TenCate, showing again how hard a tortious interference claim is to win in most instances.