Antitrust Law Daily Wrap Up, FALSE ADVERTISING—NDOkla: Intent Not Required for Oklahoma Deceptive Trade Practices Act, Lanham Act False Ad Claims, (Feb 5, 2013)

By Tobias J. Gillett, J.D., LLM.

A manufacturer of a product for repairing piping systems was entitled to summary judgment on its Oklahoma Deceptive Trade Practices Act (ODTPA) and Lanham Act false advertising claims against a competitor and former distributor, which admitted to making false references to the manufacturer’s product as belonging to it, because neither the ODTPA nor the Lanham Act required proof of intent, the federal district court in Tulsa has ruled (CTI Services, L.L.C. v. Energy Maintenance Services Group I, L.L.C., February 4, 2013, Frizzell, G.).

CTI Services, L.L.C., doing business as Citadel Technologies, manufactures a composite wrap product for repairing leaking or corroded piping systems called Diamond Wrap. Energy Maintenance Services Group I, L.L.C. (EMS)’s predecessor, Energy Facility Services, Inc. (EFSI), distributed CTI’s wrap product.

CTI alleged that EFSI removed references to Citadel from marketing materials for Diamond Wrap, reverse engineered Diamond Wrap to produce its own product called I-Wrap, and then converted Diamond Wrap users to I-Wrap.

CTI asserted a variety of claims against EMS, including claims for false advertising under both the ODTPA and the Lanham Act. CTI based these claims on allegedly literally false statements in two EFSI brochures and on EFSI’s website where EFSI referred to Diamond Wrap as “EFS’s Diamond Wrap” rather than “Citadel’s Diamond Wrap.”

Although EMS conceded that it had committed these violations, it argued that the court should not grant summary judgment to CTI on its claims because it did not make the statements maliciously or with intent.

The court disagreed. The court explained that the ODTPA prohibits “[k]knowingly mak[ing] a false representation as to the source, sponsorship, approval, or certification of goods or services; and [k]knowingly mak[ing] a false representation as to affiliation, connection, association with, or certification by another,” and provides that “[p]roof of actual monetary damages, loss of profits or intent shall not be required.” The Lanham Act similarly prohibits a person from “misrepresent[ing] the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities.” The court noted that the Lanham Act’s false advertising provision “does not require proof of intent to establish liability for a false representation claim.”

As neither the ODTPA nor the Lanham Act required proof of intent, and as EMS had conceded that it had violated both acts, the court concluded that CTI was entitled to summary judgment, and granted CTI’s motion.

The case is No. 9-CV-144-GKF-TLW.

Attorneys: Kris Ted Ledford (Kernan & Ledford) for CTI Services, L.L.C. Chris L Rhodes, III (Rhodes Hieronymus Jones Tucker & Gable) for Energy Maintenance Services Group I, L.L.C.

Companies: CTI Services, L.L.C.; Energy Maintenance Services Group I, L.L.C.

Cases: Advertising OklahomaNews