Wednesday, October 12, 2022

Clone wars: truthful statements about cloned horses don't constitute false association

La Dolfina S.A., LLC v. Meeker, 2022 WL 6507718, NO. 20-82231-CIV-CANNON/Reinhart (S.D. Fla. Aug. 19, 2022)

Judge Cannon has done some other stuff, too. “This case concerns major players in the world of professional polo, their efforts to produce and clone genetically superior horses, and the ownership disputes that have arisen from those efforts.” Plaintiffs raise allegedly awesome polo ponies. Defendants compete with La Dolfina; an individual plaintiff previously dealt with defendant Meeker for purposes of exploring the possibility of equine cloning, allowing a defendant to “select four mares from [plaintiff’s] stock for the purpose of extracting tissue samples for cloning” at a price of $250,000 per mare. The defendant was initially given “complete and exclusive licensing rights in and to [the selected mares] and all cloned foals.” Eventually, the parties parted ways. Then defendants entered into agreements with “entities associated with La Dolfina’s competitor, the Park Place Polo Team.” Litigation ensued, with lots of claims, including the Lanham Act claims on which I will focus, though breach of contract claims were prominent and survived a motion to dismiss.

The Lanham Act claims were styled as false association, “false association with celebrity status,”  false designation of origin, and false advertising.

The court found that plaintiffs failed to state a claim; the gravamen of the claim was “explicit and implicit representations” that defendants “were authorized to clone and sell the La Dolfina horses at issue.” Allegedly, these statements, plus the use of the horses’ names as given by La Dolfina, constituted false advertising and false association.

However, “truthful and undisputed acknowledgement that the horses at issue are genetically identical copies of La Dolfina horses” didn’t constitute an “actionable representation of association or endorsement.” Judge Cannon is not alone in using ipse dixit to get over the significant difficulties that endorsement theories pose for truthful statements of historical fact. The full reasoning, which courts usually avoid because it acknowledges the existence of trade-offs, is: There is important consumer value in being able to tell the truth (these products have some historical connection to X). But some consumers might take away the misleading implication of continued connection to X. Given the importance of the truth and the unimportance of the implication, that risk is justified and, indeed, forcing defendants to bear the costs of litigation is unjustified. The lack of plausibility here is actually the result of a cost-benefit analysis. And in many first sale cases, like the ongoing luxury resale cases, courts have not been willing to protect truthful statements of historical origin.

What about statements about the right to sell clones? That, the court said, “concerns the scope of their rights under the parties’ numerous and somewhat ambiguous agreements; it does not mislead as to the ‘origin, sponsorship, or approval’ or ‘nature, characteristics, qualities, or geographic origin’ of the identical clones themselves."

No comments: