image of competitor's system ok as part of generic intro to technology

Global Traffic Technologies, LLC v. Emtrac Systems, Inc., 2013 WL 2297054 (D. Minn.)

This is mostly a patent infringement case with a false advertising side issue.  The patent involves a “traffic preemption system,” which allows emergency vehicles (and sometimes other public vehicles) to override ordinary stoplight timing to assist them in moving faster.  The current generation of traffic preemption systems uses GPS, and plaintiff GTT has a patent on an aspect of this, which Emtrac allegedly infringed.  Emtrac counterclaimed for, among other things, violation of the Lanham Act for using images of Emtrac’s system to market GTT’s own system.  Emtrac also alleged that GTT threatened Emtrac’s customers, telling them that they were infringers and that GTT would sue them for false advertising if they published positive reviews of the Emtrac system.

Along with denying summary judgment on patent validity, the court found genuine issues of material fact about whether GTT failed to comply with the patent marking statute, because it only marked the package, not the product, despite having space on the exterior of the product to do so.  GTT argued that the packaging was the most effective method of giving notice because the components of the system are hidden from public view when in use.  Courts have divided on literal and practical approaches to the marking statute.  “Whether marking on the packaging served as the most effective notice to the public of this product, given its multiple and hidden components, is a fact issue for trial.”

GTT won summary judgment on the state and federal false advertising claims, however.  As for the use of images of defendant’s system, this came in a seven-minute instructional video describing traffic preemption systems generically, then using animation to show exactly how the GTT system worked.  In the live portion of the video, the buses pictured apparently didn’t use the GTT system, but if they were simply representing buses in general, then there was no literal falsity.  The narrator never mentioned the particular buses (Minneapolis Metro Transit) and never claimed that GTT’s system was in use on them.  “Instead, the images serve as stock images of buses and traffic where a TPS system may be useful.”  In the absence of literal falsity and of evidence of consumer deception, the claim couldn’t survive summary judgment.

Defendants also claimed that an email newsletter was misleading for stating that “For more than 35 years [GTT], the innovator of Opticom priority control solutions, has provided reliable traffic management....”  But GTT didn’t exist 35 years ago.  Instead, a 3M business unit was divested in 2007 as part of an asset purchase agreement and became FTT.  The court concluded that, “[l]egally, if GTT is a continuation of 3M's Intelligent Transportation Systems unit, and if GTT retains the experience of 3M, then the ad is not literally false because GTT's experience incorporates 3M's.”  With no evidence of deception, again summary judgment was appropriate.  GTT also prevailed against tortious interference counterclaims, which are very hard to win when a patent hasn’t been invalidated.