“same quality as Made in USA” is not puffery, says magistrate

University Loft Co. v.
Blue Furniture Solutions, LLC, 2017 WL 876312, NO. A–15–CV–826 (W.D. Tex. Mar.
3, 2017) (report and recommendation of magistrate judge)
University sued Blue
alleging false advertising and trademark infringement
under the Lanham Act, unfair competition under Texas and Florida common law and
the Florida Deceptive and Unfair Trade Practices Act, and tortious interference
with prospective business relationships. Blue allegedly falsely claimed that
that: (1) it offers Chinese “high quality products made exactly as ‘Made in
USA’ products”; and (2) it “is able to achieve low prices and fast delivery on
such high quality products, because of the intimate relationship between the
manufacturer and Blue’s president Jeff Zeng, and Blue’s understanding of how
the local government in China operates.”  University alleged that the quality was not
equivalent to “Made in the USA” products, and that the lower prices were due to
evasion of customs duties, because Blue mislabeled its products as “steel” to
avoid additional anti-dumping duties that are required for “Wooden Bedroom
Furniture” imported from China. Finally, University alleged that Blue’s use of
the mark “LOFT” for one of its furniture lines infringes on University’s
registered and common law word and design trademarks.
The magistrate rejected Blue’s puffery argument.  As to the first statement, Blue argued that
the statement was non-actionable in the context of other claims in the
challenged article that Blue provided
either “high quality, high price,” or “low quality, low price” products. But
this explanation appeared pages before the allegedly misleading statement.  The relevant paragraph read:
The ability of my company to not ever have to
worry about these issues and properly provide exactly what we had indicated we
will, when we will, is amazing. Our process is very smooth and we continue to
make our clients happy with the quality of our product. The price is always
lower than the amount the client has to spend and they receive exactly what
they ask for. When working with my owner, understanding that China has many
amazing, high quality products made exactly as “Made in the USA” products is
important.
The only difference is that China offers these products for a
much lower price.
The judge found that
this statement “goes beyond mere puffery.”
Likewise, the statement that Blue’s low prices
were based on a special relationship with the Chinese government was factual,
and thus falsifiable.  Nor did the claim rely on an illegitimate
attempt to bring a private claim based on evasion of the Tariff Act; University
wouldn’t have to prove anything about dumping to prove  its claim, only that Blue’s manufacturer didn’t have a special relationship with
the Chinese government; the assertion that the prices were lower because of
tariff evasion could bolster the claim, but the claim itself wasn’t based on
tariff evasion.  This reasoning also
allowed the state law unfair competition claim to survive, and the magistrate
recommended not deciding the choice of law issues as to whether Florida or
Texas deceptive trade practice statutes applied.

Trademark infringement: Blue argued that University’s
registration explicitly excluded the furniture that Blue Furniture sells under
the allegedly infringing mark. University’s registration for LOFT explicitly
excluded loft beds and furniture used with loft beds. (Imagine that.) Blue
argued that all its furniture could be classified as furniture “used with” loft
beds, because “loft furniture could include any furniture found or used in an upper
room or floor.” The magistrate understandably termed this argument “nonsensical,”
given that any type of furniture could potentially be placed in a “loft.” Plus,
the scope of the registration didn’t go to protectability but rather to
infringement.

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