Monday, October 24, 2016

Press release constituted commercial advertising or promotion

Engineered Arresting Sys. Corp. v. Runway Safe LLC, No. 1:15-CV-546, 2016 WL 6087906 (W.D. Tex. Sept. 19, 2016)

Engineered materials arrestor systems (EMAS) are installed at the end of airport runways in order to safely stop an aircraft that fails to stop before the end of the runway by absorbing the energy of the aircraft. For over 15 years, plaintiff ESCO was the only supplier of EMAS for US airports, but Runway Safe entered the market in 2014.  ESCO sued for direct and indirect patent infringement; Runway Safe brought various counterclaims, including a false advertising counterclaim based on ESCO’s press release announcing this lawsuit.  (Including: “As a new and untested entrant into the marketplace, Runway Safe apparently hopes to capitalize on the goodwill and reputation of [ESCO] by misappropriating [ESCO’s] valuable intellectual property ….”) 

The court declined to dismiss that counterclaim, adding to the small but reasonably consistent jurisprudence on press releases: at least when the target market is small enough that press releases are a good way to communicate with consumers, they can constitute advertising or promotion. The press release, which also says that “[c]ustomers desiring the aircraft arresting system that provides proven safety records with successful arrestments should ensure that they are purchasing the EMASMAX® manufactured only by [ESCO],” directly targets EMAS customers and encourages them to buy from ESCO.  It was published on ESCO’s website where any potential purchaser of an EMAS would be able to view it.  Thus, Runway Safe properly pled commercial advertising or promotion.

Likewise, Runway Safe properly alleged that statements such as that Runway Safe has copied features of ESCO’s EMAS and that Runway Safe is an “untested entrant into the marketplace,” were false and misleading.

Runway Safe also alleged that this conduct was likely to cause “confusion, mistake, or deception as to the origin, sponsorship or approval of the nature of the services offered by Runway Safe.”  Hello, Dastar.  Here, the court reasoned that §43(a)(1)(A) required statements about the speaker’s own goods, not statements about someone else’s goods, which are covered by §43(a)(1)(B).

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