legal memo to existing customers wasn’t “commercial advertising or promotion”

IHS
Global Ltd. v. Trade Data Monitor, LLC, 2021 WL 2134909, No. 2:18-cv-01025-DCN
(D.S.C. May 21, 2021)

A
trade secret/similar case in which IHS owns a database called Global Trade
Atlas, which it acquired from the people who founded defendants, and you can
basically guess what happened next.

The
false advertising counterclaim arose from a legal memo that IHS sent to
customers who had been contacted by two people on behalf of defendant TDM:

We
understand that you have been contacted by Trade Data Monitor offering an
equivalent service to the Global Trade Atlas. As you may be aware TDM is a
business owned by an individual who sold the GTI business (including the GTA)
to IHS, and TDM also employs a number of former colleagues of IHS [ ]. I’d like
to make you aware that for a number of reasons we have commenced proceedings
against TDM to protect our proprietary and other rights. Notwithstanding any
proceedings we bring against TDM, we remain committed to support you and all of
our GTA customers and to the long-term development of the Global Trade Atlas.

This
wasn’t “commercial advertising or promotion” because, first, it was sent to
only 9 customers, less than 1% of customers, and communicating with “such a
minuscule subset of the relevant market can hardly comprise a ‘sufficient[ ]
disseminat[ion] to the relevant purchasing public.’” Second, the memo was not
“part of an organized campaign to penetrate the relevant market.” It was “a
responsive communication to existing customers” rather than “an active
advertisement intended to penetrate a market.”

Nor
did the memo breach the nondisparagement clause in the parties’ contract. It
didn’t “unjustly discredit” the principal or “detract” from his reputation; it
didn’t even say that defendants violated the law or breached a contract.

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