To prevail on a Lanham Act false advertising claim, a plaintiff must show that the defendant's advertising was: (1) false or misleading, (2) actually or likely deceptive, (3) material in its effect on buying decisions, (4) connected with interstate commerce, and (5) actually or likely injurious to the plaintiff. Fernandez v. Jones, 653 F. Supp. 2d 22, 32 (D.D.C. 2009) (quotation and citation omitted); Riggs Inv. Mgmt. Corp. v. Columbia Partners, LLC, 966 F. Supp. 1250, 1267 (D.D.C. 1997) (citing ALPO Petfoods, Inc. v. Ralston Purina Co., 913 F.2d 958, 964 (D.C. Cir. 1990)). In order to survive a motion for summary judgment, a plaintiff (or counterclaimant) must prove or at least raise a genuine issue of dispute as to each of these elements.
Indeed, "[w]illfulness or bad faith requires some element of targeted wrongdoing and intentionally deceptive conduct before the defendant's profits are recoverable." Riggs Inv. Mgmt. Corp. v. Columbia Partners, LLC , 966 F.Supp. 1250, 1270 (D.D.C. 1997) [hereinafter Riggs I ] (internal quotation marks and citation omitted); see alsoALPO Petfoods, Inc. , 913 F.2d at 966 ("[I]n the trademark infringement context, 'willfulness' and 'bad faith' require a connection between a defendant's awareness of its competitors and its actions at those competitors' expense."). If a plaintiff establishes that the defendant acted willfully or in bad faith, the court must assess the profits that the defendant earned through the unlawful use of his mark.
Uncredited references to another entity's history and achievements may constitute "false or misleading" representations as to give rise to liability under section 43(a). See, e.g., ITEX Corp. v. Glob. Links Corp., 90 F. Supp. 3d 1158, 1171 (D. Nev. 2015) (trade exchange's claim to forty-year history of unaffiliated company violates section 43(a)); Riggs Inv. Mgmt. Corp. v. Columbia Partners, L.L.C., 966 F. Supp. 1250, 1267 (D.D.C. 1997) (investment company violated section 43(a) when it represented itself as responsible for another firm's investment record). Use of substantially similar website logos and backgrounds may also give rise to liability under section 43(a).
Multiple recent cases in this jurisdiction have applied the common law principles and limitations of agency law into the field of corporate employment. See, e.g., PM Services, 2006 WL 20382; Furash, 130 F. Supp. 2d 48; Riggs Inv. Mgmt. Corp. v. Columbia Partners, 966 F. Supp. 1250 (D.D.C. 1997); and Mercer, 920 F. Supp. 219. Under this application, it has been established that employees — especially managers, corporate officers, and directors — "owe 'an undivided and unselfish loyalty to the corporation' such that 'there shall be no conflict between duty and self interest.'"
A. Breach of Fiduciary Duty (McClave) Two cases, Mercer Management Consulting v. Wilde, 920 F. Supp. 219 (D.D.C. 1996) and Riggs Investment Management Corp. v. Columbia Partners, 966 F. Supp. 1250 (D.D.C. 1997), apply applicable common law principles concerning fiduciary duty. "Corporate officers and directors owe `an undivided and unselfish loyalty to the corporation' such that `there shall be no conflict between duty and selfinterest.'" Mercer, 920 F. Supp. at 233 (quoting Guth v. Loft, 5 A.2d 503, 510 (Del. 1939)).
An employee's privilege to prepare to engage in a competing enterprise, however, is not absolute. SeeRiggs Inv. Mgmt. Corp. v. Columbia Partners, L.L.C. , 966 F. Supp. 1250, 1265 (D.D.C. 1997) ("[T]he privilege to compete is limited."). Rather, "[i]n preparing to compete, an employee may not commit wrongful acts, ‘such as misuse of confidential information, solicitation of the firm's customers, or solicitation leading to a mass resignation of the firm's employees.’ "
The question remains whether the development of the Proposed Business Plan is evidence that Mr. Miller committed "fraudulent, unfair, or wrongful acts, such as the misuse of confidential information ...." Riggs Inv. Mgmt. Corp. v. Columbia Partners, L.L.C. , 966 F. Supp. 1250, 1266 (D.D.C. 1997) (citing Sci. Accessories , 425 A.2d at 965 ). In Riggs , an agent agreed to " ‘treat in strict confidence’ bank business, including the affairs of its customers, which he would learn in the course of his employment."
It appears, however, that defendants have found a way around that prohibition by taking credit for the California State Grange's history and achievements without referencing it by name. The Lanham Act prohibits uncredited references to another entity's history and achievements. See, e.g., ITEX Corp. v. Glob. Links Corp., 90 F. Supp. 3d 1158, 1171 (D. Nev. 2015) (trade exchange's claim to forty-year history of unaffiliated company constitutes false advertising); Riggs Inv. Mgmt. Corp. v. Columbia Partners, L.L.C., 966 F. Supp. 1250, 1267 (D.D.C. 1997) (investment company formed by former chairman of investment firm made false advertisements when it represented itself as being responsible for investment firm's investment record without giving proper attribution). But defendants have found a loophole around that too: because the California Guild remains incorporated under the same corporate papers that the California State Grange formerly existed under, (see Pls.' Mem. at 3 (referencing "the 1946 corporation previously named the 'California State Grange,' now named the 'California Guild,' Entity No. C0210454"), defendants are technically correct when they refer to the California Guild as an organization that has existed for "decades" and around which "cities and townships have grown up."
That principle is clearly applicable here. Plaintiff also relies on Riggs Investment Mgmt. Co. v. Columbia Partners, LLC, 966 F. Supp. 1250, 1267 (D.C. Cir. 1997), which is not binding on this Court and also distinguishable. There, after a bench trial, the court found the defendant's advertising false or misleading, actually or likely deceptive, and material.
This is the law of the District of Columbia. United States Travel Agency, Inc. v. World-Wide Travel Service Corp., 235 A.2d 788, 789 (D.C. 1967) ("An agent after termination of his employment, in the absence of an agreement to the contrary, may compete with his former principal . . ."). Accord Group Assoc. Plans, Inc. v. Colquhoun, 466 F.2d 469, 474 (D.C. Cir. 1972) (acknowledging "common law doctrine that permits an employee to compete with his former employer absent an express contractual provision to the contrary.") See Mercer Mgmt. Consulting Inc. v. Wilde, 920 F.Supp. 219, 233 (D.D.C. 1996) (even while employed, an employee may make arrangements to compete with his principal provided no unfair acts are committed or injury done his principal); Riggs Inv. Mgmt. Corp. v. Columbia Partners, LLC, 966 F.Supp. 1250, 1265 (D.D.C. 1997) (same). Draim's posttermination activities therefore cannot serve as the basis for any claim of breach of an agent's fiduciary duty to his principal because Draim went to work for a competitor and in fact competed against Dr. Castiel.