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Tempur-Pedic Trademark Complaint Still Alive in Lanham Act Case

8 Jan, 2013 By: John Waller, Blank Rome LLP, Jeffrey Richter

As regular readers of the DRMA Voice are by now likely aware, it is easier to assert a claim under the Lanham Act than it is to summarily dispose of one. Although the precise facts are not available at this stage of the litigation, based solely upon its review of the allegations of the complaint (Tempur-Pedic Intl. Inc. v. Angel Beds LLC), a U.S. District Court for the Southern District of Texas recently denied the defendants’ motion to dismiss the plaintiffs’ claim for unfair competition finding that it states a plausible claim under the Lanham Act.

The plaintiffs allege that the defendants engaged in conduct involving plaintiffs’ Tempur-Pedic trademarks that created customer confusion in order to drive customers to the defendants’ websites, where the defendants sell products using confusingly similar product names to the plaintiffs’ Tempur-Pedic marks. Tempur-Pedic also alleges that the defendants registered the confusingly similar domain name and placed misleading and confusing advertisements on that website that redirect consumers to defendants’ website.

The plaintiffs further allege that the defendants used Tempur-Pedic trademarks on their website in violation of the plaintiffs’ trademark rights under the Lanham Act. Tempur-Pedic also alleges that Angel Beds adopted confusing similar product names to confuse consumers regarding the relationship between the defendants and the plaintiffs and their Tempur-Pedic products. The plaintiffs further allege that the defendants’ advertising used the Tempur-Pedic marks to drive Internet traffic to the defendants’ website by manipulating search engines. According to the allegations of the complaint, the defendants’ trade practices likely caused customer confusion that resulted in injury to the plaintiffs’ goodwill, business reputation and intellectual property, including its Tempur-Pedic marks.

The court first concluded that the appropriate standard for reviewing Lanham Act claims in the Fifth Circuit is the liberal pleading standard of Rule 8 of the Federal Rules of Civil Procedure, rather than the heightened pleading standards under Rule 9. The court then concluded that under a plain reading of Section 43(a) of the Lanham Act, the Act is intended to prohibit all false and misleading advertising regardless of the perpetrator’s intent in promulgating such advertisements. Based solely upon the allegations of the complaint, the court held that the plaintiffs had stated a plausible claim of unfair competition under the Lanham Act and denied the defendants’ motion to dismiss that claim.

While the defendants may ultimately establish that their conduct does not violate the Lanham Act, the court’s ruling permits plaintiffs to proceed with the litigation, including conducting discovery. Under the circumstances, marketers should exercise caution when using a competitor’s marks on their websites. Making legitimate comparisons between competing products remains fair use even when the competing products’ are identified using their trademarks, but such comparisons should clearly state that the marketer’s product is not affiliated with its competitor’s product and manipulative Web links should be avoided.

Jeffrey Richter and John Waller are partners at Los Angeles-based Finestone & Richter. They can be reached at (310) 575-0800, or at [email protected] and [email protected].

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