general allegations of harm to Legalforce from TM scammer sufficed for Lexmark standing

Legalforce RAPC Worldwide P.C.
v. Glotrade, No. 19-CV-01538-LHK, 2019 WL 6036618 (N.D. Cal. Nov. 14, 2019)
Legalforce “offers services
including trademark preparation and prosecution, patent preparation and
prosecution, copyright registration and counseling, international trademark and
patent filings, and corporate formation and stock and equity structuring.” Mailer
companies allegedly “use publicly available trademark filer information to send
targeted ‘solicitations’ to…trademark applicants.” The “ ‘solicitations’ are
constructed to [deceptively] make the trademark applicant believe that an
official U.S. government agency or the [United States Patent & Trademark
Office (“USPTO”) ] itself is sending a letter to them, raising fear among the
unsuspecting public that they must pay large amounts of money or forfeit
trademark rights.” These “Mailer Defendants” provide no real services and
“result in no value to trademark owners.”
Defendant is allegedly one
such “Mailer Defendant,” listing a Washington, D.C. address for its business,
but actually located in Hungary. It allegedly sends out unsolicited offers and
directs recipients to pay a $980 registration fee to have the recipients’
trademark (worthlessly) listed in its publication. The unsolicited offer is
“deliberately constructed to deceive recipients into thinking the unsolicited
offer is a bill so the recipient will send a check as a payment for something
they think is already owed to protect a trademark.” Legalforce allegedly “has
received over 40 unsolicited offers from [Defendant] in the past year, directed
to both RACP’s clients and to individuals employed by RAPC.” It alleged that “significant
business” was deceptively diverted, and that its business reputation was harmed
because it “received inquiries from its clients confused about the unsolicited
actions by the Mailer Defendants and worried that [Plaintiff’s] services to the
clients were somehow deficient.” Legalforce alleged that it spent “valuable
time and expenses to investigate the facts to appropriately advise its
clients.”
Legalforce sued for violation
of the Lanham Act, California’s UCL and FAL, and intentional interference with
prospective economic advantage. Although the court found no personal
jurisdiction over the defendant, it did find Article III standing/Lexmark
standing. The defendant conflated the two.
Under Lexmark,
“allegations of lost sales and damage to…business reputation” are sufficient
to “give [a plaintiff] standing under Article III to press [a]
false-advertising claim.” Legalforce’s allegations, while “admittedly general,”
sufficiently alleged damage to its business reputation caused by the alleged false
advertising.

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