Antitrust Law Daily Wrap Up, ADVERTISING—C.D. Cal.: False ad claim against holder of trademarked name for heavy machinery dismissed, (Jan 23, 2015)

By Edward L. Puzzo, J.D.

A heavy machinery manufacturer could not sustain a false advertising counterclaim against a heavy machinery distributor using its trade name, because the distributor had a registered federal trademark for use of the name, the federal district court in Los Angeles has ruled (Mighty Enterprises, Inc. v. She Hong Industrial Co. Ltd., January 22, 2015, Wright, O.).

Mighty Enterprises, a distributor of heavy machinery, filed a number of claims against She Hong Industrial, a manufacturer of heavy machinery, based upon She Hong’s alleged breach of an oral agreement granting Mighty the exclusive right to distribute and service She Hong’s “Hartford” machinery in the United States. In response, She Hong made a counterclaim against Mighty alleging false advertising under the Lanham Act. Mighty moved to dismiss the counterclaim.

False advertising. She Hong began selling its “Hartford” machinery in the U.S. in 1982. In April 2014, Mighty applied for and was granted a trademark for the use of the “Hartford” name in association with heavy machinery. She Hong claimed that Mighty’s use of the “Hartford” name it had used for many years was false advertising.

She Hong’s claim was untenable, the court stated, because it presently did not own the rights to the Hartford trademark. A registered federal trademark was prima facie evidence of the validity of the trademark, and She Hong had admitted that Mighty owned the registered trademark. There could be no claim for false advertising against a company that advertised with a registered trademark it owned, the court stated. She Hong therefore had no basis for a Lanham Act claim, the court ruled, dismissing the counterclaim.

The case is Civil Action No. 2:14-cv-06516-ODW(RZx).

Attorneys: Chris M. Amantea (Squire Sanders LLP) for Mighty Enterprises, Inc. Anthony J. Dain (Procopio Cory Hargreaves and Savitch LLP) for She Hong Industrial Company Ltd.

Companies: Mighty Enterprises, Inc.; She Hong Industrial Company Ltd.

Cases: Advertising CaliforniaNews