Friday, December 12, 2014

plaintiff must identify elements of trade dress, specific false claims

Homeland Housewares, LLC v. Euro-Pro Operating LLC, 2014 WL 6892141, No. CV 14–03954 (C.D. Cal. Nov. 5, 2014)

Previously, the court granted a preliminary injunction on certain false advertising claims and refused to stop the plaintiff from publicizing that.  Now it granted in part and denied in part a motion to dismiss.  The parties compete in the home blender market. Homeland sells the Nutribullet, Nutribullet Sport, and Nutribullet Pro, and allegedly spent several hundred million dollars in ads, including infomercials.  Euro-Pro’s Nutri Ninja allegedly copied “the color scheme, fonts, phraseology, and overall look and feel of Plaintiff’s NUTRIBULLET packaging trade dress.”  Also, the packaging compares the Nutri Ninja to the Nutribullet in a chart.  Homeland also alleged that Euro-Pro planted “false reviews on the Internet, making false claims of defects in NUTRIBULLET blenders and touting the NUTRI NINJA as a superior alternative.”

Euro-Pro didn’t move to dismiss false advertising claims based on the chart, but did as to the allegedly fake reviews.  Homeland didn’t sufficiently allege that part of the claim.  It didn’t specify what “false claims of defects” Euro-Pro allegedly made:
Without something more, the allegation is ambiguous. Do the reviews, for example, label Plaintiff’s products “poorly made” or “too small” or “ugly,” which would be statements of opinion? Or do they make falsifiable factual claims about Plaintiffs’ blenders? Secondarily, even if Defendant made statement of fact, were they material? These questions matter, because merely alleging that Defendant said negative things about one’s product is not stating a claim for false advertising. Plaintiffs must clarify its allegations to state a cognizable false advertising claim based on false reviews.
In addition, saying that false reviews were somewhere on the internet wasn’t enough, “as the internet is vast and contains multitudes.”  Without more, Homeland failed to allege likely deception or injury.  “Some indication of the nature and scope of the communication is required to successfully allege false advertising.”

The trade dress infringement claim was dismissed for failure to sufficiently specify the elements of the claimed trade dress.  A photo plus a written description wasn’t enough where the written description claimed “the color scheme, fonts, phraseology, and overall look and feel” of Homeland’s product packaging.

Trade libel: this requires pleading special damages, which Homeland didn’t do. Instead it just claimed “lost sales, disruption of business relationships, loss of market share and of customer goodwill” to the tune of $3 million.  Homeland needed to allege its established sales for a substantial period, sales after the allegedly libelous publication, and facts showing that loss was the natural and probable result of the publication.

California FAL and UCL claims: tracked the results above.

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