AMERICAN BAR ASSOCIATION
Deng LikrtyP'ursaing Justice
PRIVATE ADVERTISING LITIGATION (PAL)
RECENT LITIGATION DEVELOPMENTS
JCases from June 4 to June 11, 20101
Prepared for the PAL Committee by Dan Blynn of Kelley Drye & Warren LLP; Ellie Boragine
of Weil Gotshal & Manges; Lauren Teitelbaum of Manatt Phelps & Phillips; Hesham Sharawy
of Keller and Heckman ; Dale Giali of Howrey LLP; and Alan Veronick of Arnold & Porter.
RECENT DECISIONS
Lanham Act
The U.S. District Court for the Eastern District of California grants motion for prevailing party's
attorneys' fees and litigation costs following summary judgment in defendants' favor on claims of
unauthorized use of plaintiff's name and likeness in violation of California law and the Lanham Act.
After a detailed analysis of the fee and cost request, including some downward adjustments, the
court awarded the vast majority of the amount sought under California Civil Code § 3344(a) and
Section 35(a) of the Lanham Act, 15 U.S.C. § 1117(a). (Yeager v. Bowlin, No. 08civ102, 2010 WL
2303273 (E.D. Cal. June 7, 2010)).
The U.S. Court of Appeals for the Ninth Circuit affirms a monetary fee-shifting sanction against
plaintiff's attorney for knowingly and recklessly pursuing a frivolous copyright infringement action
and litigating it for five years. Plaintiff filed suit against defendants, for unauthorized use of excerpts
of a song he had written, alleging violations of the Lanham. Act and California law. The Ninth
Circuit affirmed the $258,206 sanction, agreeing with the district court that had plaintiff s attorney
made even a cursory investigation, he would have known that plaintiff had no copyright interest in
the song he had composed for hire. (Lahiri v. Universal Music and Video ODW-CT Distrcb. Corp., - Fad --, No. 09-55111,2010 WL 2246401 (9th Cir. June 7, 2010)).
The U.S. District Court for the Northern District of Georgia denies defendants' motion to dismiss
plaintiffs claims for trademark infringement, unfair competition, and contributory trademark
infringement under the Lanham Act. The court found plaintiff s complaint sufficient where plaintiff
alleged that it was the owner of a variety of federally registered and unregistered trademarks used in
commerce on its prepaid phones, and defendants purchased in bulk such phones bearing plaintiff's
marks but resold them in an inferior form. (Tracfone Wireless, Inc. v. Zip Wireless Prods., Inc., No.
1:09-cv-2575-TCB, 2010 WL 2302184 (N.D. Ga. June 7, 2010)).
The U. S. District Court for the Central District of California denies defendant's motion for summary
judgment in action alleging trademark infringement and false designation of origin under the
Lanham Act, and unfair competition under California law. The plaintiff alleged that it had a
common law trademark for the phrase "OPTIMAL PETS" in conjunction with its brand of pet
vitamins, and that defendant improperly used the phrase "Optimal Pet" with its line of pet vitamins.
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The court held that summary judgment was not warranted because genuine issues of material fact
existed regarding consumer confusion and defendant' s good faith in adopting its brand name.
(Optimal Pets, Inc. v. Nutri-Vet, Inc., No. EDCV-08-1795, 2010 WL 2305843 (C.D. Cal. June 7,
2010)).
RECENT FILINGS
Lanham Act
Complaint alleging false advertising, unfair competition, and trademark infringement under the
Lanham Act, and violation of the Illinois Uniform Deceptive Trade Practices Act, filed against Case
Central, Inc., a provider of web-based litigation support services, in the U.S. District Court for the
Northern District of Illinois. Plaintiff, Nextpoint, Inc., alleges that Case Central falsely claimed to
have "the industry's first" software-as-a-service application, and released a service competing with
Nextpoint's "Discovery Cloud" under the confusingly similar mark, "eDiscovery Cloud."
(Nextpoint, Inc. v. Case Central, Inc., 1:10-cv-03515 (N.D. Ill. complaint filed June 8, 2010)).
Complaint alleging false advertising and trademark infringement under the Lanham Act and New
Jersey Consumer Fraud Act fled in the U.S. District Court for the District of New Jersey against
Invado Pharmaceuticals, LLC, among others. The plaintiff alleges that defendants have been falsely
advertising that their "NeutraSal" mouthwash is equivalent to plaintiff's "Caphosol" mouthwash;
that NeutraSal is approved by the FDA to "prevent oral mucositis"; and is "clinically proven to
exhibit a favorable side effect profile." (EUSA Pharma (LISA), Inc. v. Invado Pharms., LLC, et al.,
No. 3: 1 0-cv-02897 (D.N.J. complaint filed June 7, 2010)).
Complaint alleging false advertising, trademark infringement, and false designation of origin under
the Lanham Act, and common law trademark infringement filed against Quick Fix Jewelry, Inc. in
the U.S. District Court for the Northern District of Illinois. Plaintiff claims that Quick Fix operates a
competing jewelry and watch repair business under the name "Quick Fix Jewelry," which, allegedly,
is confusingly similar and infringes upon plaintiff's "Fast-Fix Jewelry Repairs" and "Fast-Fix
Jewelry and Watch Repairs" marks. (Jewelry Repair Enterprises, Inc. v. Quick Fix Jewelry, Inc., et
al., No. 1: 1 0-cv-03418 (N.D.111. complaint filed June 4, 2010)).
Complaint alleging false and deceptive advertising under the Lanham Act, and violation of New
York General Business Law §§ 349 & 350 filed by CARFAX, Inc. against Experian Information
Solutions, Inc. in the U.S. District Court for the Southern District of New York. Specifically,
CARFAX claims that Experian falsely advertised that its "Autocheck" vehicle history reports
provide twice the number of reported accidents than CARFAX Reports. (CARFAX, Inc. v. Experian
Information Solutions, Inc., No. 10 CIV 4458 (S.D.N.Y. complaint filed June 4, 2010)).
Class Actions
Putative nationwide class filed complaint against Apple Inc. and AT&T Mobility LLC in the U.S.
District Court for the Northern District of California. The complaint pleads under California
consumer protection laws and alleges that defendants falsely advertised that owners of the iPad 3G
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could buy an unlimited wireless data plan $29 . 99 per month, but then cancelled the unlimited data
plan. (Logan v. Apple Inc., AT&T Mobility LLC, No. 10cv2588 (N.D. Cal . complaint filed June 11,
2010)).
Putative nationwide class action filed against Paypal, Inc. in the U.S. District Court for the Northern
District of California, alleging that Paypal closes its users' accounts without reason to believe that
the users engaged in any prohibited activity, and unlawfully retains the users' funds regardless of
whether the hold is reasonably needed to prevent liability. The plaintiff claims that such action
violates California's Unfair Competition Law and asserts various common law causes of action.
(Zepeda, et al. v. Paypal, Inc, et al., No. 5:10-cv-02500 (N.D. Cal. complaint filed June 7, 2010)).
Putative nationwide class action filed against Procter & Gamble Co. in the U.S. District Court for the
Eastern District of New York, alleging that Procter & Gamble falsely advertised that its Pamper
brand of diapers were safe for premature babies when, in fact, the diapers often caused harm and
injury to the babies. The complaint claims that such conduct, among other things, violates the unfair
and deceptive acts and practices laws of all 50 states and the District of Columbia. (D'Andrea, et al,
v. Procter & Gamble Co., et al., No. 1:10-cv-2562 (E.D.N.Y. complaint filed June 4, 2010)).
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