Antitrust Law Daily Wrap Up, ADVERTISING—M.D. Fla.: LED lighting manufacturer failed to show injury in false advertising, unfair trade practices counterclaims, (Jun 1, 2016)

By Linda O’Brien, J.D., LL.M.

In a patent infringement action by an LED lighting manufacturer against a competitor, the competitor failed to adequately allege injury to pursue Lanham Act false advertising and state unfair trade practices counterclaims against the complaining manufacturer, the federal district court in Fort Myers, Florida has ruled (Global Tech Led, LLC v. HiLumz International Corp., May 31, 2016, Steele, J.).

Global Tech LED is a LED lighting manufacturing company that specializes in LED retrofit kits and new fixtures for commercial and industrial lighting applications. In September 2015, Global Tech filed suit against competitor HiLumz International, seeking injunctive relief and money damages. The complaint alleged that HiLumz manufactured, distributed, and sold LED products that infringed, literally and under the doctrine of equivalents, claims under its U.S. Patent No. 9,091,424 (“the '424 patent”).

In November 2015, HiLumz filed counterclaims for false advertising under the Lanham Act and deceptive and unfair trade practices under the Florida Deceptive and Unfair Trade Practices Act (FDUTPA). Global Tech moved to dismiss the counterclaims.

False advertising. The court determined that HiLumz failed to sufficiently allege an injury under the Lanham Act. To state a false advertising claim under the Lanham Act, a plaintiff must plead an injury to a commercial interest in sales or business reputation proximately caused by the defendant’s misrepresentation, the court explained. In this case, HiLumz alleged only that Global Tech’s patent infringement suit was a sham that was filed for the purpose of “scaring away HiLumz customers” and “stealing the business for itself.” There were no allegations of commercial or reputational injury, a causal link between the misrepresentations and an injury, or an injury to HiLumz. An anticompetitive purpose or consumer deception did not establish an injury, the court noted.

Unfair trade practices. To properly plead a claim under the FDUTPA, HiLumz must prove actual damages, which do not include future lost profits. Since HiLumz failed to adequately allege injury, its counterclaims under the FDUTPA failed as well, the court concluded.

The case is No. 2:15-cv-00553-JES-CM.

Attorneys: Alexander D. Brown (The Concept Law Group, PA) for Global Tech Led, LLC. J. Scott Anderson (Culhane, Meadows, Haughian & Walsh, PLLC) and Matthew S. Nelles (Broad and Cassel) for HiLumz International Corp., HiLumz, LLC and HiLumz USA, LLC.

Companies: Global Tech Led, LLC; HiLumz International Corp.; HiLumz, LLC; HiLumz USA, LLC

Cases: Advertising StateUnfairTradePractices FloridaNews