Grasshopper Motorcycles, Ltd. v. Rivera, No. 14–cv–320, 2015
WL 853564 (W.D. Wis. Feb. 26, 2015) (magistrate judge)
Grasshopper sells a moon-shaped backrest designed to be
attached behind the driver’s seat of a motorcycle. “Its 2013 sales were
approximately $333,000, with the majority of these sales occurring on eBay.” It
claimed trademark rights in the design of its motorcycle backrest and the
goodwill associated with the Grasshopper name and products. Grasshopper leased part of its commercial
space to Rivera for unrelated business, but then learned that Rivera, doing
business as Better Built Backrests, was making a motorcycle seat backrest that
looked a lot like Grasshopper’s backrest, using online marketing that looked
similar to Grasshopper’s. Some customers allegedly mistakenly purchased a
backrest from Rivera, thinking it was a Grasshopper backrest. Grasshopper sued
and moved for summary judgment.
Rivera built his first backrest around January 2014, and had
never before constructed motorcycle backrests and had not been trained in sewing
or upholstery. For the purposes of the motion, the court accepted that the
photos, layout and wording that Rivera used in his on-line advertising were
very similar to Grasshopper’s. Rivera described his seats as “professionally
sewn.” “In April 2014, he included a photo on his eBay advertisement that
showed a black vinyl backrest that was labeled ‘My competitors Finished
product,’ and which had large staples closing off the upholstery work. Next to
this photo was a second photo of a nearly-identical backrest labeled ‘Better
Built Finished Product,’ which was a more finished looking product without
visible staples.” At his deposition, Rivera admitted that the former photo was
actually a backrest he built himself, allegedly to resemble the look of
backrests made by his competitors, including Grasshopper, which in his view are
inferior to his own because of the visible stapling. Around July 2014, eBay
removed his advertisement from his eBay webpage because it violated eBay’s
policy against including “gratuitous information that doesn’t describe the item
being sold,” which Rivera understood to mean the photo and language stating
that his “product is much less expensive than the high-dollar OEM1 products.”
Rivera removed the “competitor’s product” photo and the OEM language and
re-listed his backrests on eBay.
Grasshopper argued that undisputed evidence showed false
advertising under state and federal law with the photo of the stapled backrest
and the “professionally sewn” claim. But
its complaint didn’t allege false advertising, only copying and misappropriation
of Grasshopper’s backrest design.
Rivera, representing himself, had not waived his right to object to this
broadening of the complaint. At this point, the court would deny leave to amend
on timeliness grounds, regardless of the merits, but the court addressed the
claims on the merits for the sake of completeness.
Even assuming literal falsity [RT: which does actually seem
to be the case], Grasshopper was seeking damages, and it therefore needed to
show actual harm. It failed to do so. There was some evidence of customer
confusion: “affidavits from customers and employees who report that it is
difficult on eBay to distinguish Rivera’s backrest from Grasshopper’s because
of the similarity of the written advertisements and photos and because both
backrests are listed for approximately the same price.” There was also
anecdotal evidence of customers who purchased a Better Built backrest by
mistake, intending to purchase a Grasshopper backrest. But that’s confusion
about the wrong thing. Grasshopper
needed to show that it lost sales because of Rivera’s false statements, not by
the appearance of Rivera’s product or his marketing:
Indeed, if what Grasshopper is
claiming is true—that Rivera’s online advertising looked so much like
Grasshopper’s that customers were misled into thinking it was
Grasshopper’s—then how could Rivera’s false statements have hurt Grasshopper?
Obviously, a customer believing he was viewing Grasshopper’s posting for its
backrests would not think the shoddy backrest shown on the “competitors
Finished product” photo was Grasshopper’s, and would be happy to know that
Grasshopper’s backrests were “professionally sewn.”
This also doomed summary judgment on the state deceptive
practices law claim, which requires pecuniary harm, and anyway doesn’t offer a
cause of action to competitors for representations made to third parties. Nor
did Grasshopper show that Wisconsin state common law unfair competition covered
false advertising. “Rivera’s alleged
copying of Grasshopper’s marketing style could, in theory, amount to
misappropriation of a property right. However, Grasshopper has not adduced
evidence sufficient to establish that its marketing materials have value
independent from the backrests themselves, which are not the subject of the
summary judgment motion.” None of the summary judgment evidence showed that
Grasshopper had a “distinct” marketing style that customers associated with
Grasshopper. And whether Rivera copied the language of Grasshopper’s ads was a
question of fact for a jury.
No comments:
Post a Comment