Wednesday, March 23, 2022

clicking on competitor's ads isn't commercial advertising or promotion, LLC v. Top Shelf Golf, LLC, 2022 WL 834790, No. 2:20-cv-00674-APG-EJY (D. Nev. Mar. 21, 2022)

Weird edge case! Motogolf bought online ads on a pay-per-click contract “wherein ads would stop appearing to others if they were clicked a certain number of times in a given period.” Defendants allegedly “sought out Motogolf’s ads and repeatedly clicked on them, causing Motogolf’s ads to disappear sooner and increasing Motogolf’s advertising budget,” and allegedly interfered with its vendor relationships by accusing them of the same behavior. Motogolf sued for violations of the CFAA, the Nevada Computer Crimes Law (NCCL), the Lanham Act, the Nevada Deceptive Trade Protection Act (NDTPA), and Nevada’s Racketeer Influenced and Corrupt Organizations (RICO) law, and for intentional interference with contractual relations and intentional interference with prospective economic advantage.

Previously: The CFAA and NCCL claims were kicked out Motogolf had not plausibly alleged the defendants accessed Motogolf’s website without authorization. Intentional interference with contract went because Motogolf had not identified any specific vendor that the defendants allegedly interfered with. NDTPA and Lanham Act claims were dismissed because Motogolf didn’t plausibly allege the defendants’ click activity was likely to deceive or cause confusion. Nevada RICO failed because Motogolf had not plausibly alleged that the defendants’ conduct involved taking property.

Motogolf filed an amended complaint; the court allowed the CFAA amendment to allege disruption of its website.  But the Lanham Act claim still failed, even explicitly styled as § 1125(a)(1)(B), not § 1125(a)(1)(A).

“Motogolf alleges that by clicking on the ads, the defendants misrepresented that they were legitimate potential customers of Motogolf.” But clicking on an ad is not plausibly commercial advertising or promotion. “There is no allegation that the defendants’ click activity is communicated to any consumers, much less widely disseminated to the purchasing public.” [Wouldn’t the relevant “public” be Motogolf, in this theory? So the false clicks would be disseminated to them, though I agree that it doesn’t really fit the false advertising model. I think this likely fits into the category of commercial conduct--possibly not even speech from a First Amendment perspective, like contracts aren't--but not commercial advertising or promotion, though not really for the ordinary reasons given.] And even if it were commercial advertising, “there is no allegation that the false statement is about the defendants’ own products or Motogolf’s products.” A misrepresentation of oneself as a potential consumer isn’t about products. [Is it about “commercial activities,” the oft-forgotten phrase in §43(a)(1)(B)?] “And because they are misrepresenting themselves as consumers to Motogolf only, they are not making a material representation that is likely to influence other consumers’ purchasing decisions.” [Citing Lexmark; again, the gist seems right, but there does seem to be economic injury “flowing directly from the deception wrought” by defendant’s conduct.] 

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