Nippon and POSCO are engaging in a global IP battle. This is one aspect. Nippon alleged that POSCO has “engaged in a
multi-year program of corporate espionage, including theft and bribery,”
directed toward Nippon's specialized steel technology, and that POSCO incorporated
Nippon's technology into its own manufacturing process. The court here dealt with a motion to dismiss
the Lanham Act false advertising claims.
Nippon alleged that POSCO’s statements about its technology
were false or misleading because POSCO claimed that its own innovation gave its
products uniquely superior characteristics and qualities, such as “excellent
performance and high energy efficiency,” “superior electric and magnetic
property,” and “consistent quality improvement,” such that “customers prefer
products made by POSCO.” Since the
technology was Nippon’s, Nippon alleged, these statements can’t be true. (I’m surprised that POSCO didn’t move to kick
most or all of these out as puffery as a matter of law.)
The court found that Nippon stated a claim. “[U]se of such statements in advertising must
necessarily be a comparison of POSCO's … product to those of competitors,
including Nippon.” This was a false
advertising claim, not a passing off claim.
Dastar and Baden Sports, Inc.
v. Molten USA, Inc., 556 F.3d 1300 (Fed. Cir. 2009), didn’t bar the
claims. First, Dastar involved a full record, not a motion to dismiss, and Baden involved post-trial motions. (Hunh?
What record development would make a difference here?) Second, Dastar
was a § 43(a)(1)(A), case, not a § 43(a)(1)(B) case. Nippon alleged more than
copying; it alleged that POSCO falsely promoted its products as the customer
choice based on false statements of uniquely superior characteristics and
qualities. This went beyond Baden, where Baden just challenged Molten’s
claims to be an innovator and didn’t target Molten’s representations about
physical or functional attributes of its products. Here, Nippon did allege statements relating
to the “physical or functional attributes” of its products.
Because the federal claim survived, coordinate state law
claims under the New Jersey Fair Trade Act and common law unfair competition did
so as well.
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