Friday, July 01, 2022

maintaining ex-employees' voicemail/email doesn't violate Lanham Act or right of publicity

At least there's something that doesn't?

3M Co. v. Continental Diamond Tool Corp., 2022 WL 2355481, No. 1:21-CV-274-HAB (N.D. Ind. Jun. 30, 2022)

“This case began as a routine suit for breach of a noncompete provision in an employment contract. But to raise the price of poker, Defendants have counterclaimed alleging a litany of offenses, many related to Plaintiffs’ egregious act of failing to shut down the email and voicemail accounts of former employees [who are now individual defendants].” As to be expected from this intro, the court dismissed the counterclaims, mostly without leave to amend.

The individual defendants are former 3M employees who went to work for Continental. 3M maintained their email and voicemail accounts even after they left.

Lanham Act false advertising: Failing to delete email and voicemail accounts is not “commercial advertising or promotion.” Omissions and inactions of this sort do not constitute either ordinary advertising or “a systematic communicative endeavor to persuade possible customers to buy the seller’s product.” Even if a customer called an individual defendant’s former phone number and got a message suggesting that person was still employed by 3M, that wasn’t 3M’s advertising or promotion: “any misleading information is then conveyed as a matter of computer programming.”

Lanham Act false endorsement: Even if the individual counterclaimants’ names had protectable commercial value, the present maintenance of a past link is not false endorsement. The court cited Mktg. Prods. Mgmt., LLC v. Inc., 333 F. Supp. 2d 418 (D. Md. 2004), in which the defendant continued to run an infomercial after its agreement with the individual plaintiff, Lundin, featured in the infomercial expired. The plaintiff alleged that the “present broadcast of a past endorsement [was] allegedly ‘likely to confuse customers’ as to [his] continued endorsement of the [bicycle],” but the court dismissed the claim: “Manifestly, this case bears no resemblance to those leading cases in which courts upheld false endorsement claims. In those cases, the facts generally involved depictions of or statements attributed to well-known individuals who in fact were in no way associated with the defendant’s product.”

If the plaintiff didn’t negotiate a limitation on the use of his likeness, the court wouldn’t impose it by federal law; it would be “extraordinary” to “regulat[e] the truthful use by a defendant of the plaintiff’s donated image” without any contractual provisions specifying that “his likeness would only be used as long as he was employed and compensated.” The court analogized to first sale.

Here too, the email and voicemail accounts were created when there was a real employment relationship and “[a]ny attribution or endorsement . . . was true when made.” The parties had a written employment agreement, and the court wasn’t going to imply additional provisions in it.

Pennsylvania right of publicity: Pennsylvania protects the name or likeness of any natural person that has commercial value and is used for any commercial or advertising purpose without written consent. The law defines “commercial or advertising purpose” as including “the public use or holding out of a natural person’s name or likeness: (i) on or in connection with the offering for sale or sale of a product, merchandise, goods, services or business; (ii) for the purpose of advertising or promoting products, merchandise, goods or service of a business; or (iii) for the purpose of fundraising.” “The Court finds no cases in which liability under the Pennsylvania statute has been based on mere maintaining email and voicemail accounts.” Receiving a benefit from the use of a name isn’t sufficient. “[T]here must be some public-facing commercial use of the likeness. That is, the likeness must be distributed to members of the public in a way calculated to bring in money. There are no allegations of such use here.”

Florida right of publicity: This one says “No person shall publish, print, display or otherwise publicly use for purposes of trade or for any commercial or advertising purpose the name, portrait, photograph, or other likeness of any natural person written or oral consent.” Relevant case law holds that the statute is violated only when the name or likeness is used to “directly promote a product or service.”

John Daly Enters., LLC v. Hippo Golf Co., Inc., 646 F. Supp. 2d 1347 (S.D. Fla. 2009), held a golf club manufacturer liable based on a photo of a former spokesman on its website with the following caption:

The twice major winner and golfing superstar, John Daly, will continue to be synonomous [sic] with Hippo. Renowned as the longest hitter in the professional game, Daly truly had the power of Hippo behind his game, working closely with the Hippo design teams over the years to produce some of the most technologically advanced woods to hit the golf market.

It was “incredibl[e]” to claim that this case was on all fours with John Daly, to which the facts bore “no meaningful similarity.” There was no allegation that the counterclaimant’s name or likeness appeared on 3M’s website, were “front and center as part of a marketing campaign to sell Plaintiffs’ products,” or that 3M stated that he “will continue to be synonymous” with 3M. Live but dormant voicemail and email accounts do not “directly promote a product or service.”

Minnesota unfair competition: Under Minnesota law, “[u]nfair competition is not a tort with specific elements; it describes a general category of torts which courts recognize for the protection of commercial interests.” This includes product disparagement, tortious interference with contractual interests and improper use of trade secrets. “For a claim to survive dismissal, it must identify the tort that is the basis for the unfair competition claim.” Counterclaimants didn’t, so the claim was dismissed.

However, two counterclaimants did successfully plead tortious interference with business relationships; 3M’s justifications for asserting noncompete rights could be tested later.


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