Tuesday, February 18, 2014

Lanham Act 43(a) and Rule 9(b)

SKEDKO, Inc. v. ARC Products, LLC, 2014 WL 585379, No. 3:13–cv–00696 (D. Ore. Feb. 13, 2014)

Short opinion finding that Rule 9(b) applies to Lanham Act false advertising claims (here, counterclaims), because they sound in fraud.  Fraud might not be an essential element of the statutory violation, but if the claimant chooses to allege fraudulent conduct, then the claim sounds in fraud.  “By asserting that plaintiff unfairly obtained business by intentionally misleading customers about the characteristics of its product, defendant made allegations that reach beyond a mere unintentional misrepresentation. Instead, defendant asserted that plaintiff’s misrepresentations were made knowingly, satisfying the scienter element of fraud.” Thus, Rule 9(b) applied, and the counterclaims were dismissed because they failed to state when the alleged misrepresentations were made; where the misrepresentations were made; or who relied on them.  (Note: that last, actual reliance, is not required for literal falsity under §43(a), or for infringement for that matter.)

Comment: trademark plaintiffs almost universally allege intentional infringement.  How often do we see Rule 9(b) dismissals for this reason?  Trademark is literally special pleading!


Anonymous said...

What do you mean "Trademark is literally special pleading!"?

RT said...

Because courts let plaintiffs plead trademark claims with less specificity than they'd require for any other kind of false advertising claim; they don't treat trademark infringement claims as fraud claims for purposes of Rule 9(b).

Anonymous said...

Thanks for responding! Would be nice if plaintiffs had to think a little harder about pleading exceptional case (since Rule 9(b) would apply if they did). I feel like Rule 8 is usually applied even to 1125(a)(1)(B) false advertising claims, but maybe more courts are applying Rule 9(b) than I'm aware of.