TrustID, a caller ID service, brought an action in the district court of Delaware against its competitor, Next Caller Inc., alleging trade secret misappropriation, tortious interference and false advertising. The premise of plaintiff's false advertising claim was that defendant copied plaintiff's own assertions about Plaintiff's products and advertised that those same benefits could be achieved via use of Defendant's product.
Plaintiff alleged that, unlike plaintiff itself, who invested considerable time and money to test, measure, and validate the performance of its own anti-spoofing and caller-authentication technologies in order to make certain savings claims, defendant simply copied the claims without testing its own products. Defendant filed a motion to dismiss, arguing that the plaintiff did not plead sufficient facts to demonstrate how any of the alleged advertising conduct amounts to making "false" statements regarding Defendant's own products.
While the Court, perhaps surprisingly, found that the issue of whether defendant engaged in false advertising was a "close" one, it determined that "[i]t seems likely that a party who makes claims about its own product's attributes—without ever taking any steps to confirm whether those claims are true, and instead simply parroting assertions that its competitor made about the competitor's own products—is making false statements about its product." (Slip Opinion, 2018 WL 6242493)(Nov. 26, 2018)
It seems so obvious, but apparently not obvious enough to prevent federal court litigation: if you're making claims about your own products, make sure you have substantiation...about your own products!
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