seller can’t sue customer for false advertising under Lanham Act because customer can’t sue seller either

Buckeye Int’l, Inc. v. Schmidt Custom Floors, Inc., 2018 WL
1960115, No. 18-cv-111-jdp (W.D. Wis. Apr. 26, 2018)
Buckeye sells floor finishing products, including Gym Bond, which
is supposed to help a clear topcoat adhere to a previously finished gymnasium
floor. Schmidt used Gym Bond on the floors of several sports facilities, but
the floors had problems with peeling. Schmidt turned to social media and email
to voice its complaints. Buckeye contends that the peeling was caused by
Schmidt’s faulty preparation of the floor surface, and sued for false
advertising and related claims. The court denied a preliminary injunction.
“A customer’s complaints about a supplier’s products and
services, even if posted on social media, are not statements made in commercial
advertising or promotion.” In addition, there was a genuine dispute about the
cause of the floor problems, making speech and counterspeech the appropriate
resolution for now.
Schmidt complained about Gym Bond and Buckeye on social
media and directly to Schmidt customers and trade associations, including
statements that Buckeye admitted that Gym Bond is defective and that Buckeye is
broke. The parties sharply disputed the truth or falsity of the statements.
Schmidt took down social media postings on Facebook, YouTube, LinkedIn, and
Google Review. (Schmidt was apparently very mad.)
The court explained that “commercial advertising or
promotion”
is broader than classic
advertising, and it is not limited to traditionally published or broadcast
materials. There is no requirement that the challenged communication be
distributed broadly to the general public, but there must be some public
dissemination. Individualized person-to-person communication, whether conducted
in-person or by means of correspondence, is not within the scope of the
statute.
Thus, Schmidt’s emails or personal discussions with its
customers, the trade association, or anyone else weren’t subject to the Lanham
Act.  [This seems to skip a step.  Were the emails individualized or personalized,
or was there a mass mailing trying to reach the relevant market?  Email ads are still ads.]
The social media posts were disseminated to some portion of
the public.  Still, “not every social
media posting would constitute commercial advertising or promotion”: what’s
needed is “a systematic communicative endeavor to persuade possible customers
to buy the seller’s product.” That’s where Buckeye’s claim faltered. Under Gordon & Breach test, Schmidt’s anti-Buckeye
social media postings wouldn’t be commercial advertising or promotion because
Schmidt and Buckeye are not competitors. [Though this rigid application of Gordon & Breach neglects the
subsequent effects of Lexmark, which
I believe removed the “competitor” prong from Gordon & Breach—and several subsequent cases have so
held.] 
This public complaining wasn’t “a prototypical negative
advertisement that disparages a competitor’s goods to promote one’s own. …Schmidt
is explaining that the trouble with its floor refinishing is not its fault. And
Schmidt is warning Buckeye’s customers about an alleged deficiency in one of
Buckeye’s products. There is no endeavor to persuade any potential customer to
choose Schmidt’s services.”  [Though
explaining that the trouble wasn’t its fault does seem to be designed to boost
Schmidt’s attractiveness to potential customers, as well as to criticize
Buckeye.]  Ultimately, Schmidt’s social
media postings weren’t “a systematic communicative endeavor to persuade
possible customers to buy the seller’s product.” “[T]he communications at issue
in this case are, at heart, those of a customer who is unhappy with a
supplier’s product,” and Lexmark indicates
that this isn’t generally within the Lanham Act’s purview. 
Lexmark said that
in the context of not letting the customer sue the seller for false advertising
of its own products’ characteristics;
Lexmark
itself is a disparagement case, and I read the case as allowing far
greater scope for disparagement claims. 
However, the court here thought that sauce for the goose was sauce for
the gander: if the customer can’t sue for false advertising, then the converse
should also be true. Thus, “[t]he public interest is better served by Buckeye
offering its counter-explanation rather than by shutting down Schmidt’s side of
the story.” Of course, causes of actions with heavier burdens of proof on
intent remain.

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