International Foundation of Employee Ben. Plans, Inc. v.
Cottrell, No. WDQ–14–1269, 2015 WL 127839 (D. Md. Jan. 7, 2015)
IFEBP sued Cottrel, d/b/a HR Vantage, for false advertising,
trademark infringement, and related claims. IFEBP is a nonprofit that trains and certifies
professionals in employee benefits and compensation, with registrations for CEBS
and Certified Employee Benefits Specialist (certification marks allowing
certified individuals to use those designations). Cottrell provides disability
retirement counseling to federal employees, and uses those designations on her
website and LinkedIn profile, but doesn’t have certification from IFEBP.
IFEBP alleged harm in the form of “lost sales of [IFEBP’s] educational
and examination fees,” as well as harm to its reputation because Cottrell “is
providing substandard services,” and “customers receiving such sub-standard
services from Cottrell will presume ... that [IFEBP has] certified [Cottrell’s]
sub-standard services.”
Cottrell argued that IFEBP didn’t show harm causation from
her alleged use of its marks and that its claims failed because they weren’t
competitors. The court found that her competition-based argument applied to
both the §43(a) false designation and the §43(a) false advertising claims. The
court then reasoned that Lexmark
applied to both prongs of §43(a). The
Supreme Court relied on the Lanham Act’s purpose, which applies to all its
provisions; “there is no reason to think the Supreme Court would apply
different standing requirements to a false designation claim.” Indeed, the
Court then observed that “[m]ost of the enumerated purposes are relevant to
false-association cases.” Thus, direct
competition wasn’t required for either claim.
IFEBP plausibly alleged a likelihood of confusion. And
confusion wasn’t a necessary element of its false advertising claim; when a
representation “is literally false, a violation may be established without
evidence of consumer deception.” The allegations sufficiently delineated
literal falsity. Plus, IFEBP alleged
economic and reputational injury: Cottrell displayed its certification without
paying “educational and examination fees,” and customers would believe that
IFEBP “certified [Cottrell’s] sub-standard services.” (That first injury doesn’t really seem like Lexmark injury. It occurs to IFEBP as
vendor of services, the flip side of injury suffered as a customer, which isn’t
within the Lanham Act’s definition of harm according to the Supreme Court.)
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