Another internal website search engine case survives motion to dismiss

Stiles v. Wal-Mart Stores, Inc., 2015 WL 5173060, No.
2:14–CV–2234 (E.D. Cal. Sept. 2, 2015) (magistrate judge)
 
Stiles allegedly patented the “Stiles Razor,” the only
personal styling razor with a 1/8” blade and ergonomic handle allowing for safe
and precise shaving (a design patent, with a utility patent pending, as well as
some foreign patents). Wal–Mart allegedly made and sold an infringing
competitive razor, the “Salon Perfect.”  The design patent infringement survived, showing
once again the value of a design patent, even against Wal-Mart.
 
Trade dress: Stiles alleged a distinctive trade dress, but
the description—“a razor with a tube shaped body with the razor blade on top, a
grip in the center of the handle, packaging with each product individually
viewable encased in clear plastic, and similar colorations and decorations of
the product, including the Stiles’ signature pink-colored razor”—described the
generic shape of a razor, except for the packaging/color. As for packaging/color,
the claim was insufficient because Stiles didn’t allege any facts showing that
her design had acquired secondary meaning in the market place. Nor was the conclusory
statement that the trade dress was not functional sufficient given her
description of functional features.  The
magistrate recommended allowing her an opportunity to amend the complaint.
 
False association: Stiles alleged that Wal-Mart misleadingly
advertised its Salon Perfect Micro Razor on the Walmart.com website because,
when someone searches for “Stiles Razor,” the “Salon Perfect Micro Razor”
showed up in the search results and the Stiles Razor was listed, but only as
“out of stock.” She alleged that “out of stock” was misleading “because it
leads a consumer to believe that Walmart will replenish the supply of the
Stiles Razor, when in fact it terminated Stiles’ contract in bad faith and then
illegally copie[d] her patented product.” 
But “out of stock” was not literally false because, without a supply
from Stiles, the Stiles Razor wasn’t in stock. 
Stiles didn’t allege actual deception, so the complaint was
insufficient.
 
Wal-Mart argued that a search for “Stiles Razor” didn’t
produce the “Salon Perfect” result but rather the question “Did you mean
‘Scales Razor?’”  But this was a factual
issue not resolvable on the pleadings (Wal-Mart withdrew its request for judicial
notice of a printout of a search result), and thus Stiles stated a claim for
false association.  Eric Goldman will not
like this result; the magistrate doesn’t discuss Multi Time Machine, but clearly the issue would deserve more
analysis in a more heavily litigated case.
 
The antitrust claims failed for want of allegations that
Wal-Mart had market power to force Stiles to sell below average variable cost.
 
To the extent that the state law claims were based on patent
infringement, they were preempted, but other state law unfair competition
claims might survive; a further amended complaint could allow the court to take
another look.
 

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