Antitrust Law Daily Wrap Up, ADVERTISING—Ohio App.: Exercise equipment reseller’s Lanham Act claim properly tossed, (Aug 17, 2015)

By Greg Hammond, J.D.

A company engaged in the business of reselling goods failed to allege an adequate Lanham Act false advertising claim against an exercise equipment manufacturer. In affirming the lower court’s order granting summary judgment against the Lanham Act claim, the Ohio Court of Appeals determined that alleged misrepresentations made about another company’s products, rather than the declarant’s products, do not violate the Lanham Act (Jascar Enterprises, LLC v. Body by Jake Enterprises, LLC, August 17, 2015, Hensal, J.).

Jascar Enterprises, LLC is in the business of reselling goods purchased from a wholesale distributor, which obtains the items from several retailers, including Sears. Body by Jake Enterprises, LLC designs and manufactures exercise equipment, which it sells through authorized retailers like Sears and Kmart. Former Body by Jake vice-president Darcy Dominguez filed an infringement notice with eBay, noting a good faith belief that Jascar had unlawfully copied Body by Jake’s copyrighted text and images when listing “brand new” Tower 200 Full-Body Exercise Gym models on eBay. She also purportedly wrote to eBay that consumers are buying “counterfeit” products at a cheaper price. eBay eventually sanctioned Jascar by removing the company from its platinum power seller program for one year. Jascar filed suit against Body by Jake, alleging false advertising, deceptive trade practices, and other claims. The lower court granted summary judgment in favor of Body by Jake and Jascar appealed.

False advertising. The appellate court affirmed summary judgment in favor of Body by Jake on the false advertising claim, but based on different reasoning. Specifically, it noted that the Lanham Act prohibits a person from making a false or misleading description of fact about “his or her” own goods. However, Jascar did not allege that Dominguez made false representations about Body by Jake’s own products. Rather, Dominguez’s statements concerned Jascar’s products, which is not a violation of the Lanham Act.

Deceptive trade practices. The lower court erred, however, in granting summary judgment on the deceptive trade practices claim. Because the lower court limited its analysis to statements Dominguez made in the infringement notice to eBay, but did not address the “counterfeit” allegations that she later made, the lower court erred when it determined that, as a matter of law, the statements were protected opinion and not in violation of the Ohio Deceptive Trade Act.

The case number is 14AP0006.

Attorneys: Eric S. Crusius (Miles & Stockbridge PC) for Jascar Enterprises, LLC. Richard M. Garner (Collins Roche Utley & Garner LLC) for Body by Jake Enterprises, LLC.

Companies: Jascar Enterprises, LLC; Body by Jake Enterprises, LLC

Cases: Advertising StateUnfairTradePractices OhioNews