The parties compete in the squirrel trap market. Murchinson, an inventor who makes his own
Black Fox product, allegedly disparaged SB’s Squirrelinator trap. He began emailing SB’s customers and
distributors negative commentary about the Squirrelinator, asserting it was
inferior to the Black Fox and infrined Murchinson’s patent and sending videos
purporting to show the Squirrelinator malfunctioning. He also posted similarly disparaging comments
on websites including Amazon and eBay.
The court found that SB failed to state a Lanham Act claim
because Murchinson wasn’t engaging in commercial speech. Ignoring the context (though the definition
of commercial speech is supposed to be context-sensitive), the court found that
disparaging a competitor did more than propose a commercial transaction, and
commercial speech’s core is speech that does “no more than propose a commercial
transaction.” Nissan Motor Co. v. Nissan Computer Corp., 378 F.3d 1002 (9th
Cir. 2004). Speech that does more than
propose a transaction is noncommercial, so criticizing SB’s products made Murchinson’s
speech noncommercial.
Comment: Wow. Nissan,
of course, is a case about noncompetitors; when a noncompetitor says nasty
things about a producer, yes, that’s likely to be noncommercial speech. But the point of saying nasty things about a
competitor is to make purchases from it less likely and therefore purchases
from you more likely. Under this “the
semantic content isn’t solely an invitation to purchase” logic, Pepsi’s ads
showing people enjoying Pepsi or even advertising no-purchase-necessary
contests aren’t “commercial speech”—after all, they do more than ask people to
buy a product—and are entitled to full First Amendment protection. That isn’t the law, as the many, many cases
about commercial disparagement under the Lanham Act—amended in 1988 precisely
to confirm that saying nasty things about the competition was actionable—reflect.
However, since amendment wouldn’t necessarily be futile, the claim
was dismissed without prejudice, as was a similar UCL claim for failure to
allege lost money or property. (Hunh? What
is missing from these pleadings? If
Murchinson said so much that his speech was noncommercial, how could that be
pled around? I think the court at some
level understands that Murchinson’s statements are, in fact, likely to be commercial.
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