court skips recent precedent, finds only anonymous communications are “advertising or promotion”

Arandell Corp. v. Walker, 2015 WL 7308649, No. 14-C-1279 (E.D.
Wisc. Nov. 19, 2015)
 
This case illustrates that lawyering matters a lot; courts
don’t always know the most recent circuit precedent.  Here, the only purported federal claim was false
advertising under the Lanham Act.  But
the court found the claim “insubstantial in the sense that ‘prior decisions
inescapably render the claim[ ] frivolous.’” The reason was that “the purported
false statements were made in person-to-person communications to specific
customers, rather than in promotional materials disseminated to anonymous
recipients.” And, in First Health Group Corp. v. BCE Emergis Corp., 269 F.3d
800, 803–04 (7th Cir. 2001), the Seventh Circuit “held” that only the latter
form of communication was “commercial advertising or promotion.” Then, Sanderson
v. Culligan International Co., 415 F.3d 620, 624 (7th Cir. 2005), “described as
frivolous an argument that a person-to-person communication is actionable under
§ 43(a)(1)(B).”
 
However, neither the plaintiff nor the court apparently considered
Neuros Co., Ltd. v. KTurbo, Inc., 698 F.3d 514 (7th Cir. 2012), in
which the Seventh Circuit fixed this outlier holding (if holding it was):
 
[First Health and Sanderson]
do not hold that “advertising or promotion” is always limited to published or
broadcast materials—an interpretation that would put us at odds with all seven
other federal courts of appeals to have considered the issue. … The cases from
the other circuits are not inconsistent with the holding in Sanderson that
three person-to-person communications at trade shows do not add up to
commercial advertising or promotion or the holding in ISI Int’l that letters
threatening suit for patent infringement are not commercial advertising or
promotion; and in First Health the Lanham Act was held applicable.
 
A classic advertising campaign is
not the only form of marketing embraced by the statutory term “commercial
advertising or promotion.” Podiatrist Ass’n required merely “some medium or
means through which the defendant disseminated information to a particular
class of consumers.” And the most recent case, LidoChem, explained that “the
required level of dissemination to the relevant purchasing public ‘will vary
according to the specifics of the industry.’ ”
 
If “advertising or promotion” just
meant “advertising,” then “promotion” would do no work in the statute. More
important (because of the frequency of redundant language in statutes), there
are industries in which promotion—a systematic communicative endeavor to
persuade possible customers to buy the seller’s product—takes a form other than
publishing or broadcasting.
 
KTurbo held that a
“road show” involving multiple presentations to individual customers was
sufficient “advertising or promotion” to trigger the Lanham Act.  Without further attention to the allegations
of the complaint, it’s hard to tell whether this is a KTurbo situation.  Since the
plaintiff only argued that “advertising or promotion” was a jury question, the
court didn’t have the chance to consider the issue—though I think failure to do
so probably justifies reconsideration, if the allegations are appropriate.

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