whether a product was discontinued doesn't relate to its “nature, characteristics, qualities, or geographic origin"

Memjet Technology Limited v. Vanguard Graphics International, LLC, 2025 WL 976915,  No. 3:23-cv-1810-JES-AHG (S.D. Cal. Apr. 1, 2025)

The parties sell digital inkjet products for use in commercial industries. Plaintiffs alleged that defendants disseminated a communication to approximately twenty businesses in the digital inkjet printing industry stating that “Duraflex print head will no longer be produced by Memjet effective immediately” and that they were “disappointed in Memjet’s decision ...” and will “provide even better options ...” moving forward. This allegedly libeled Memjet by telling its customers that Memjet was discontinuing Duraflex printheads immediately without warning to its customers and suggested that the Duraflex printheads were “substandard, obsolete, and becoming irrelevant within the print industry.” Plaintiffs also alleged that the communication “violated” Memjet’s trademarks by displaying the Duraflex name and logo. Plaintiffs sued for Lanham Act false advertising, trade libel, intentional/negligent interference with prospective economic relations, and California UCL violations.

Defendants successfully sought dismissal of the dismiss the trade libel claim, the UCL claim, and the Lanham Act false advertising claim.California trade libel requires: (1) a false or misleading statement; (2) which specifically refers to the plaintiff’s product or business; and (3) clearly derogates that product or business. Statements about Duraflex being discontinued weren’t clearly derogatory, despite allegations that they prompted “countless” phone calls, emails and in-person inquiries and that one of plaintiffs’ larger OEM providers “indicated that it would significantly reduce its DuraFlex printhead forecast as a result of the Communication.” But ‘[t]he defamatory character of the language must be apparent from the words themselves.’ ”  “[A] statement that the Duraflex printheads are being discontinued effective immediately, even if true, would not necessarily or clearly carry an implication that something was wrong with the product or business. For example, unexpected discontinuation of a product could result from a supply chain issue with a part or from a personal issue with the business owner that has nothing to do with how the business is run or the product’s quality.”

UCL: Only allows injunctive relief/restitution. Plaintiffs’ claim for money spent on corrective advertising wasn’t restitution but damages, and they didn’t seek injunctive relief, so the claim had to go.

Lanham Act: This one I’m dubious about, but the court held that a statement that a product was being discontinued didn’t relate to its “nature, characteristics, qualities, or geographic origin.”

Sybersound Records, Inc. v. UAV Corp., 517 F.3d 1137 (9th Cir. 2008), says that phrase relates to “characteristics of the good itself” and not to false statements regarding their copyright license status. Characteristics of a karaoke recording, for example, include “the original song and artist of the karaoke recording, and the quality of its audio and visual effects.” Whether a product was discontinued was not a characteristic of the good itself. (What about plaintiffs’ services or “commercial activities”? The court dismissed the complaint without leave to amend, because this was their second try.)