Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—N.D. Cal.: Competitor’s engagement of business partner as counsel in adverse lawsuit not unlawful or unfair, (Feb 27, 2014)
Law Firms Mentioned:Kenyon & Kenyon LLP | Latham & Watkins
Organizations Mentioned:Kenyon & Kenyon, LLP | Latham & Watkins LLP | Latham & Watkins, LLP | Watershed Asset Management, L.L.C. | Watershed Asset Management, LLC | Watershed Capital, LLC
By Jody Coultas, J.D.
Watershed Capital, LLC could not state a California Unfair Competition Law (UCL) claim against Watershed Asset Management, L.L.C. (WAM) for engaging Watershed Capital’s business partner as counsel in trademark claims filed against Watershed Capital, the federal district court in San Francisco has held (Watershed Asset Management, L.L.C. v. Watershed Capital, LLC, February 25, 2014, Alsup, W.).
Latham & Watkins LLP, counsel for WAM, hosted and sponsored a cleantech event for Watershed Capital. Watershed Capital listed Latham as the top law firm for cleantech. In promoting the event, the parties referred potential clients to each other, each partner using the other’s logo on its website.
WAM, represented by Latham, filed trademark infringement claims against Watershed Capital. Latham ordered Watershed Capital to remove its mark from its website.
Watershed Capital asserted unfair competition counterclaims under the UCL based on WAM engaging Latham as counsel. Watershed Capital also alleged that WAM used its “superior economic capacity” to lure Latham away, harming Watershed Capital’s business prospects and leaving it without its business partner and advisor.
The court held that Watershed Capital failed to plead sufficient factual allegations to support its UCL counterclaim. The UCL prohibits unlawful, unfair, or fraudulent business practices. Watershed Capital’s UCL arguments were made for the first time in the opposition rather than the answer. Nothing in the answer raised an inference that WAM engaged in unlawful, unfair, or fraudulent conduct. The allegations were also conclusory and lacked factual support.
WAM was also granted dismissal of Watershed Capital’s tortious interference with contractual relations, tortious interference with prospective economic advantage, and cancellation of federal trademark registration counterclaims.
The case is No. C 13-03852 WHA.
Attorneys: James K. Lynch (Latham & Watkins) for Watershed Asset Management, LLC. Megan Rae Whyman Olesek (Kenyon & Kenyon LLP) for Watershed Capital, LLC.
Companies: Watershed Asset Management, L.L.C.; Watershed Capital, LLC; Latham & Watkins LLP
Cases: StateUnfairTradePractices CaliforniaNews