Tuesday, April 30, 2019

competitor has standing to challenge use of certification mark

Savvy Rest, Inc. v. Sleeping Organic, LLC, 2019 WL 1607585, No. 18CV00030 W.D. Va. Apr. 15, 2019)

The parties compete in the market for mattresses and other bedding products. Savvy Rest alleged that Sleeping Organic violated the Lanham Act by falsely advertising that Sleeping Organic’s mattresses are free of chemicals and certified to meet the requirements of the Global Organic Textile Standard (GOTS). Sleeping Organic challenged standing and argued that “Savvy Rest does not own the GOTS trademark nor have any organizational interest that would provide standing for Savvy Rest to assert a claim for false advertising from alleged misuse of the GOTS trademark or of misstatements regarding the organic makeup of Sleeping Organic’s products.”

The court disagreed. There are a couple of pre-Lexmark cases suggesting the contrary, but Savvy Rest satisfied Lexmark’s standing test. It alleged that Sleeping Organic “can sell its falsely advertised mattresses for much lower prices” because it “does not incur expenses which are required to manufacture and sell ... genuine GOTS Certified Mattresses,” causing Savvy Rest to lose sales and to get a reputation for being overpriced. Lost sales and damage to business reputation “are injuries to precisely the sorts of commercial interests the Act protects.”

Finally, citing Belmora, “the plain language of § 43(a) does not require that a plaintiff possess ... a trademark in U.S. commerce as an element of the cause of action,” which is true but not super responsive to the argument that the person who does own the trademark would be the proper plaintiff in a 43(a)(1)(B) case. I don’t think this is the wrong result, but query whether the certifier should be impleaded/how if at all its rights may be affected by this litigation/what happens if the certifier is cool with defendant's use.

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