SKEDCO, an Oregon corporation, sued its competitor ARC (dba
Medsled), a Missouri corporation, alleging false advertising in violation of
federal and Oregon law based on ARC’s comparative claims about the parties’ emergency
medical rescue equipment in brochures, films, presentations, and online.
The court first found personal jurisdiction in Oregon. SKEDCO had the burden of establishing
personal jurisdiction by making a prima facie showing of facts that support the
exercise of jurisdiction over defendant. Here, specific jurisdiction was
adequately shown; the elements are (1) purposeful direction, (2) a claim
arising out of the defendant’s forum-related activities, and (3) that the
exercise of jurisdiction was reasonable; when the first two parts are shown,
the burden shifts to the defendant to show unreasonableness. For purposeful direction, the tort-based effects
test applied: “the defendant allegedly must have (1) committed an intentional
act, (2) expressly aimed at the forum state, (3) causing harm that the
defendant knows is likely to be suffered in the forum state.”
The first part of the effects test was clearly satisfied,
since ARC intended to publish ads that targeted SKEDCO and made
comparisons. This conduct was expressly
aimed at Oregon because, under the 9th Circuit’s test, there’s
express aiming “when the defendant is alleged to have engaged in wrongful conduct
targeted at a plaintiff whom the defendant knows to be a resident of the forum
state.” Here, ARC targeted SKEDCO with its comparisons.
ARC argued that it operated an essentially passive website,
which wasn’t enough to confer jurisdiction.
But SKEDCO’s claims weren’t just based on ARC’s website, but also in
brochures and YouTube videos (why YouTube isn’t “passive” for these purposes is
not clear to me). A passive website in
conjunction with “something more” directly targeting the forum is sufficient,
and “something more” includes “individually target[ing] a plaintiff known to be
a forum resident.” And the final element of the effects test was satisfied,
because any harm suffered by SKEDCO would necessarily be felt in Oregon
regardless of where it lost business.
The claims also arose out of/resulted from ARC’s
forum-related activities: its allegedly false ads targeting an Oregon
corporation. ARC didn’t show that the
exercise of jurisdiction would be unreasonable, despite its minimal contacts in
Oregon.
The court also declined to dismiss the Lanham Act claims as
laches-barred based on the pleadings; laches is usually fact-intensive. The date of the comparative YouTube video was,
ARC submitted, March 16, 2011. ARC
argued that SKEDCO therefore slept on its rights for over two years. Assuming this to be true, the earliest date
that laches could attach would be March 16, 2013, and SKEDCO sued on April
24. It should have the opportunity to
explain why the five-week delay was reasonable, and ARC also didn’t show
prejudice, though it was free to renew its defense after discovery.
Finally, the court held, based on state appellate court
cases, that common law unfair competition in Oregon covered only misappropriation
of intellectual property, not false advertising.
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