Antitrust Law Daily Wrap Up, ADVERTISING—D. Md.: Employee benefits nonprofit states Lanham Act false ad claims, (Jan 8, 2015)

By Greg Hammond, J.D.

The owner of a disability retirement counseling business was unable to evade allegations that she engaged in false advertising, in violation of the Lanham Act. The federal district court in Baltimore denied her motion to dismiss, finding that the plaintiff was not required to demonstrate deception with regard to the false advertising claim (International Foundation of Employee Benefit Plans, Inc.v. Cottrell, January 7, 2015, Quarles, W.).

Background. International Foundation of Employee Benefit Plans, Inc. (IFEBP) is a nonprofit organization that specializes in employee benefits, compensation, and financial literacy education and information. The company trains and certifies professionals in employee benefits and compensation, and allows individuals certified by IFEBP to use its registered “CEBS” and “Certified Employee Benefits Specialist” designations. Defendant Wendy J. Cottrell is the owner and operator of HR Vantage, a business that provides disability retirement counseling to federal employees. Although she was allegedly never certified by IFEBP, she displayed both of the nonprofit’s designations on her website and LinkedIn profile page. IFEBP filed suit against Cottrell, alleging false advertising, trademark infringement, false designation, and unfair competition under the Lanham Act. Cottrell moved to dismiss the claims for failure to state a claim.

False advertising. In support of her motion to dismiss, Cottrell argued that IFEBP failed to demonstrate that her use of IFEBP’s trademarks will deceive or confuse customers into thinking that it certified Cottrell’s services. However, the court determined that confusion is not a necessary element of IFEBP’s false advertising claim, because the nonprofit sufficiently alleged falsity—that Cottrell displayed the two designations, indicating IFEBP certification, when Cottrell was not certified.

Trademark infringement, false designation. Cottrell also argued that IFEBP failed to establish confusion with regard to her false designation and trademark infringement claims. The court disagreed, finding that IFEBP plausibly alleged a likelihood of confusion. Specifically, IFEBP alleged that Cottrell’s unauthorized use of its trademarks will deceive or confuse customers into thinking that it certified Cottrell’s “sub-standard services,” or otherwise sponsored or approved her services. The motion to dismiss was therefore denied.

The case number is WDQ-14-1269.

Attorneys: Michael J. Lichtenstein (Shulman Rogers Gandal Pordy and Ecker PA) for International Foundation of Employee Benefit Plans, Inc. Wendy J. Cottrell, pro se.

Companies: International Foundation of Employee Benefit Plans, Inc.

Cases: Advertising MarylandNews