Radiancy, Inc. v. Viatek Consumer Products Group, Inc., 2014 WL 1318374, No. 13–cv–3767 (S.D.N.Y. Apr. 1, 2014)
And now for a different result on the pleading standards for affirmative defenses! Among the many arguments in this case, Viatek raised unclean hands as an affirmative defense. Here, Radiancy alleged that Viatek used Radiancy’s trademark in its website metadata, directed Google search results to Viatek’s product, and falsely advertised that its hair removal devices caused hair growth to stop. Viatek alleged that Radiancy was also using Viatek’s trademark in Radiancy’s website metadata; trying to influence Google searches; and advertising that its hair removal devices could stop hair growth. But pleading “unclean hands” without more isn’t enough. Radiancy would be prejudiced by not striking a bare unclean hands defense because additional discovery would be required.
Here, the court found that Viatek wasn’t sufficiently clear about the false advertising aspects of the defense. However, the trademark-related claims were sufficiently clear that the defense survived with respect to them.
As for Viatek’s unfair competition counterclaim, at the pleading stage, “there must at least be allegations of the goods allegedly misappropriated or marketed to the public, how such goods competed with those of the counterclaim-plaintiff, the basis upon which the consuming public would be confused, and the damages sustained.” Viatek couldn’t base its claim on allegations of bad faith litigation, because that doesn’t give rise to an unfair competition claim under NY law.
What about the metatag/keyword buys claims? Somewhat puzzlingly, the court relied on 1–800 Contacts v. When U.Com, Inc., 414 F.3d 400 (2d Cir. 2005), rather than Rescuecom v. Google. Since internal use of a mark as a keyword isn’t use of a mark in a trademark sense, and since Radiancy didn’t place the mark on any goods, displays, etc. or use the mark in any way that indicated source or origin, Viatek didn’t state a claim for unfair competition under the Lanham Act. It is odd that Google is “using” the mark in the Second Circuit but, according to this case, Google’s advertisers aren’t—and yet I can’t find any great sadness in me for this result, since neither metatags nor keyword buys in themselves indicate anything about likely confusion.