Friday, May 17, 2019

blog posts on company's site are "commercial advertising or promotion" under Lanham Act

Luminati Networks Ltd. v. BIScience Inc., 2019 WL 2084426, No. 18-CV-00483-JRG (E.D. Tex. May 13, 2019)

Mostly a jurisdictional challenge; the court found it had specific personal jurisdiction over Luminati’s claims for patent infringement and false advertising and supplemental jurisdiction over the remainder of Luminati’s claims, though it declined to exercise supplemental jurisdiction over Luminati’s claim for tortious interference with employment agreements, “as determination of that claim is best left to the judicial authority of the State of Israel.” There was personal jurisdiction because BIScience has sold its allegedly patent-infringing proxy service to at least 52 customers in Texas, and its service allowed customers all over the world to utilize residential proxy devices in ten Texas cities, which BIScience advertised (at least in terms of allowing them to use US addresses).

Luminati sufficiently alleged the falsity of blog posts on BIScience’s website stating: “Some proxy providers look great and fancy until you try to integrate them. Some—such as Luminati—are very difficult to integrate, as they require you to install complex proxy managers and to ultimately modify your entire solution.” Luminati sufficiently alleged falsity by alleging that its residential proxy service didn’t require installation of Luminati’s proxy manager.

BIScience argued that a blog post on its own site wasn’t “commercial advertising or promotion.” Yes, they were.  The blog posts were commercial speech by a company in commercial competition with Luminati, made for the purpose of influencing customers to use BIScience’s GeoSurf service. Shortly after the statements at issue, the blog posts continue: “In short, stay away from these proxies. Instead, go for easy-integration proxies that support whatever your needs may be. GeoSurf, for instance, takes less than 5 minutes to integrate....” Moreover, “while company blog posts may not be traditional ads, they are a quintessential type of informal promotion.” BIScience allegedly purchased search engine ads for terms like “luminati” so that potential customers would be directed to its website.  “Thus, Luminati has alleged that these blog posts are disseminated sufficiently to the relevant purchasing public.” [Note an emerging divergence on this: some courts would want evidence that lots of people landed on the blog posts, which I think is probably an issue of damages rather than “commercial advertising or promotion”; it’s still an ad even if everyone successfully avoids reading it.]

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