Antitrust Law Daily Wrap Up, ADVERTISING—E.D. Okla.: Reed Elsevier not liable for pop-up ads on law firm websites, (Mar 3, 2015)

By Cheryl Beise, J.D.

Two attorneys and their law firms failed to state Lanham Act, tortious interference, and civil conspiracy claims against legal publisher Reed Elsevier in connection with an Internet marketing scheme that allegedly used unlawful pop-up advertisements to divert business away from the law firms’ websites, the federal district court in Muskogee, Oklahoma, has ruled. There was no allegation that Reed Elsevier was responsible for the pop-up advertisements or had used the law firms’ marks in commerce (Allen v. IM Solutions, LLC, March 2, 2015, Payne, J.).

Tennessee attorney Anthony L. Allen and Oklahoma attorney James E. Blount, IV, and their respective law firms, Allen & Wiser, LLC and Blount Law Firm PLLC filed a class action law suit against legal publisher Reed Elsevier, Inc., Internet Brands, Inc., IM Solutions (“IMS”), and LeadingResponse, LLC (“RME”). The plaintiffs alleged that the defendants had engaged in a lead-generating process that improperly diverted potential customers away from the plaintiffs’ websites.

According to the plaintiffs, the scheme operated as follows: IMS generated leads for its client by utilizing “hidden browser plug-ins” placed on consumers’ computers by unnamed advertising “affiliates.” When one of these consumers visited the plaintiffs’ websites, the plug-ins caused a pop-up window to appear. If the consumer clicked on the pop-up window, a second pop-up window appeared with a questionnaire about the legal services sought by the consumer. Upon completing the questionnaire and clicking “Speak to lawyers,” the results were routed to Reed Elsevier. Reed Elsevier called the consumer and followed up with an email referring the consumer to IMS, which then matched the consumer with a law firm.

The complaint asserted claims for violations of Section 43(a) of the Lanham Act, tortious interference with prospective advantage under Oklahoma and Tennessee law, and civil conspiracy. It also accused IM Solutions of violating the Oklahoma Deceptive Trade Practices Act.

Before the court was Reed Elsevier’s motion to dismiss the claims against it.

Lanham Act claim. In order state a claim for violation of Section 43(a) of the Lanham Act, a plaintiff must either assert that a defendant is causing confusion through improper use of a mark, or that the defendant is causing confusion through a misrepresentation of the origin or nature of the services advertised.

The plaintiffs’ Lanham Act claim failed because there was no allegation that Reed Elsevier had used a service mark belonging to plaintiffs that could form the basis of their Lanham Act claim. Because the plaintiffs did not allege that Reed Elsevier used the plaintiffs’ marks, they failed to satisfy the threshold requirement of use in commerce. The pop-up advertisement at issue did not constitute “use” within the meaning of the Lanham Act, in the court’s view, because it appeared in a separate window and did not divert or misdirect consumers away from the plaintiffs’ websites.

Absent allegations regarding trademark use, the court did not need to reach the issue of likelihood of confusion. The court nevertheless observed that the plaintiffs failed to allege that Reed Elsevier made any misrepresentation to consumers that plausibly could cause a likelihood of confusion.

The plaintiffs asserted that Reed Elsevier falsely stated to consumers that it had matched them with a randomly selected law firm, when in fact, Reed Elsevier referred the prospect back to IMS. These statements, however, had no bearing on whether the customer was confused about the origin of the pop-up advertisement, the court noted. Because the Lanham Act was intended to address deceptive and misleading use of marks, there must be a causal connection between the challenged statement and the alleged consumer confusion which caused the harm, the court explained.

The plaintiffs failed to plead a Lanham Act claim against Reed Elsevier. Moreover, because the advertisements at issue did not constitute “use,” no amendment could cure the pleading.

Tortious interference. Oklahoma and Tennessee laws impose substantially similar requirements to state a claim for tortious interference with a prospective business relationship: (1) an existing business relationship or prospective relationship with an identifiable class of third persons; (2) defendant’s knowledge of that relationship; (3) the intent by defendant to cause a termination of the relationship; (4) the use of improper means; and (5) damages.

The court found that the plaintiffs failed to satisfy the pleading requirements for elements one and four. Contrary to the plaintiffs’ assertion, consumers’ visits to their websites created nothing more than “a mere hope” that the consumers would ultimately engage the plaintiffs’ legal services. The law is clear that such a hope or wish is not sufficient to allege a prospective business relationship.

Moreover, the plaintiffs failed to allege sufficient, non-conclusory facts, to establish that Reed Elsevier used improper means to interfere. The plaintiffs admitted that IMS was solely responsible for the pop-up, i.e. the alleged interference.

Civil conspiracy. To state a claim for civil conspiracy, a plaintiff must allege: (1) two or more persons; (2) an object to be accomplished; (3) a meeting of the minds on the object or course of action; (4) one or more unlawful overt acts; and (5) damages as the proximate result thereof.

The plaintiffs did not sufficiently allege that Reed Elsevier participated in a meeting of the minds to accomplish any unlawful act, according to the court. The complaint did not allege that Reed Elsevier had anything to do with, or even knew about, the pop-up advertisements, the unlawful act upon which the plaintiffs’ tortious interference and Lanham Act claims were based.

Reed Elsevier’s motion to dismiss was granted in its entirety.

The case is No. 14-CV-00213-JHP.

Attorneys: David A. Stampley (KamberLaw, LLC) for Anthony L. Allen, Allen & Wisner, LLC, and Blount Law Firm, PLLC. David G. Graves (The Barkley Law Firm) and Wendy E. Giberti (iGeneral Counsel, PC) for Internet Brands, Inc. Kristine R. Argentine (Seyfarth Shaw LLP) for Reed Elsevier, Inc.

Companies: Allen & Wisner, LLC; Blount Law Firm, PLLC; Internet Brands, Inc.; Reed Elsevier, Inc.; IM Solutions, Inc.; Leading Response, Inc.

Cases: Advertising OklahomaNews