Monday, November 18, 2019

general allegations of harm to Legalforce from TM scammer sufficed for Lexmark standing

Legalforce RAPC Worldwide P.C. v. Glotrade, No. 19-CV-01538-LHK, 2019 WL 6036618 (N.D. Cal. Nov. 14, 2019)

Legalforce “offers services including trademark preparation and prosecution, patent preparation and prosecution, copyright registration and counseling, international trademark and patent filings, and corporate formation and stock and equity structuring.” Mailer companies allegedly “use publicly available trademark filer information to send targeted ‘solicitations’ to...trademark applicants.” The “ ‘solicitations’ are constructed to [deceptively] make the trademark applicant believe that an official U.S. government agency or the [United States Patent & Trademark Office (“USPTO”) ] itself is sending a letter to them, raising fear among the unsuspecting public that they must pay large amounts of money or forfeit trademark rights.” These “Mailer Defendants” provide no real services and “result in no value to trademark owners.”

Defendant is allegedly one such “Mailer Defendant,” listing a Washington, D.C. address for its business, but actually located in Hungary. It allegedly sends out unsolicited offers and directs recipients to pay a $980 registration fee to have the recipients’ trademark (worthlessly) listed in its publication. The unsolicited offer is “deliberately constructed to deceive recipients into thinking the unsolicited offer is a bill so the recipient will send a check as a payment for something they think is already owed to protect a trademark.” Legalforce allegedly “has received over 40 unsolicited offers from [Defendant] in the past year, directed to both RACP’s clients and to individuals employed by RAPC.” It alleged that “significant business” was deceptively diverted, and that its business reputation was harmed because it “received inquiries from its clients confused about the unsolicited actions by the Mailer Defendants and worried that [Plaintiff’s] services to the clients were somehow deficient.” Legalforce alleged that it spent “valuable time and expenses to investigate the facts to appropriately advise its clients.”

Legalforce sued for violation of the Lanham Act, California’s UCL and FAL, and intentional interference with prospective economic advantage. Although the court found no personal jurisdiction over the defendant, it did find Article III standing/Lexmark standing. The defendant conflated the two.

Under Lexmark, “allegations of lost sales and damage reputation” are sufficient to “give [a plaintiff] standing under Article III to press [a] false-advertising claim.” Legalforce’s allegations, while “admittedly general,” sufficiently alleged damage to its business reputation caused by the alleged false advertising.

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