Federal Trade Comm. v. Trudeau, No. 03 C 3904, 2007 WL 4109607 (N.D. Ill. Nov. 16, 2007) (Gettleman, J.).
Judge Gettleman held defendant Kevin Trudeau (“Trudeau”) in contempt for violating the Court’s Stipulated Permanent Injunction (the “Injunction”). In 2003, plaintiff Federal Trade Commission (“FTC”) filed suit against Trudeau* alleging, among other things, false advertising pursuant to the FTC Act, 15 U.S.C. Section 52(a). The advertisements at issue included various informercials in which Trudeau allegedly claimed that the coral calcium in his supplement Coral Calcium Supreme could treat cancer, multiple sclerosis and heart disease, among other medical conditions. In settlement of the FTC’s suit, the parties agreed to and the Court entered the Injunction. The Injunction generally prohibited Trudeau from producing infomercials, with the exception that he could make infomercials promoting books, so long as the infomercials did not misrepresent the books. The FTC argued that a series of three infomercials promoting Trudeau’s new book The Weigh Loss Cure “They” Don’t Want You to Know About (the “Book”) violated the Injunction because Trudeau made claims in the infomericals that the weight loss program described in the book was “easy,” “simple” and prevented weight gain forever once complete.
The weight loss plan had four phases, the last of which was to be followed for the remainder of a person’s life. Each phase had various requirements (or strong recommendations) including colonics, various organ cleansings, avoiding use of over the counter or prescription drugs, daily walks and eating only 100% organic foods. Phase two also required daily injections of human chorionic gonadotrophin (“HCG”). HCG is available only by prescription in the US, but the FDA specifically stated that it should not be used for treating obesity. Trudeau argued that the claims were mere puffery and opinion which, therefore, did not violate the Injunction. But the Court held that Trudeau’s claims that the Book detailed an “easy” diet were false. Furthermore, Trudeau’s claims that once the diet was complete you could eat anything you wanted were false because the fourth phase of the diet lasted for the remainder of the dieter’s life. The Court, therefore, held Trudeau in contempt and set a hearing to determine an appropriate remedy.
This opinion is also an excellent example of engaging judicial writing. It has one of the most engaging introductions I have read with appeal beyond just the legal community:
Kevin Trudeau is one heck of a salesman. He is also a prolific author, self-described consumer advocate and “exposer of corporate and government corruption.” He is also an ex-felon and, as discussed below, a contemnor of this court’s orders. His favorite marketing tool is the “infomercial,” a lengthy television advertisement that takes the form of a mock interview. Through this medium Mr. Trudeau has sold various products that he claimed could: cure numerous diseases, such as multiple sclerosis, cancer, substance abuse addictions, and arthritis (among many others); reverse hair loss; improve memory; and (apropos to the matter before the court) cause dramatic and permanent weight loss.
(Footnotes omitted). This is the sort of introduction that engages a reader and opens the law to those without legal degrees.
* Click here for a copy of the complaint.

Continue Reading Trudeau Held in Contempt for Claiming Diet was “Simple”

Steiner Indus., Inc. v. Auburn Mfg., Inc., No. 07 C 668, 2007 WL 1834176 (N.D. Ill. Jun. 22, 2007) (Darrah, J.).
Judge Darrah denied declaratory judgment defendant Auburn Manufacturing’s (“Auburn”) motion to dismiss. Auburn argued that plaintiff’s (collectively “DJ Plaintiffs”) suit improperly anticipated Auburn’s complaint which alleged Lanham Act claims of false designation and false advertising, as well as related state law claims. Auburn filed its complaint in the District of Maine within a week of DJ Plaintiffs’ filing. Auburn alleged that DJ Plaintiffs’ use of “FM Approved” and “Made in the USA” in their catalogs and website advertising in connection with their welding blankets constituted false designation and false advertising. DJ Plaintiffs were aware of the allegations before they filed suit because, as part of an ongoing negotiation with plaintiffs, Auburn had provided plaintiffs a copy of its complaint. The Court acknowledged its discretion to dismiss the case in favor of Auburn’s later filed complaint, but did not dismiss the case. The two cases mirrored each other, so either could resolve the parties’ dispute. And because both cases were filed in federal courts, there was no concern that the DJ case would cause friction between federal and state courts. The deciding issue was whether the Maine Court could offer a full remedy. DJ Plaintiffs had a motion to transfer or dismiss pending before the Maine Court. In that motion, DJ Plaintiffs argued that the Maine Court lacked personal jurisdiction over two of the three DJ Plaintiffs – Steiner Industries, Inc. and Lab Safety Supply, Inc. DJ Plaintiffs, therefore, asked the Maine Court to transfer the case to the Northern District of Illinois or to dismiss the case. The Court held that if the Maine Court transferred the case to the Northern District or dismissed Steiner and Lab Safety for lack of jurisdiction, those factors would weigh in favor of maintaining the DJ action. If, however, the Maine Court denied DJ Plaintiffs’ motion and held that it had jurisdiction over all DJ Plaintiffs, then the Main Court could more effectively decide the dispute than the Northern District. The Court, therefore, denied the motion to dismiss with leave to refile if the Maine Court finds it has jurisdiction over all DJ Plaintiffs and does not transfer the case to the Northern District.

Continue Reading Pending Motion to Transfer Preserves DJ Complaint

The Wall Street Journal print edition had an interesting article about a new trend in defending lawsuits that focused on an IP dispute — A Growing Dispute: Fertilizer Start-Up Uses Web as Defense (subscription required). The article discusses TerraCycle Inc.’s use of a website (www.suedbyscotts.com) to bolster its defense of a lawsuit Scotts Miracle-Gro Co. filed against TerraCycle alleging trade dress infringement and false advertising.* According to the article, TerraCycle has not raised much money from its online solicitation for defense fund donations. But during the first four weeks of its online defense, TerraCycle’s sales jumped 122%, as opposed to 31% during the same period last year. TerraCycle also saw a corresponding spike in visits to its primary website. The WSJ Law Blog picked up on the story and developed it further, identifying several other defendants that have used websites as an aspect of their defense strategies, including Vonage’s site (www.freetocompete.com) developed in connection with its prominent patent dispute.
It appears that defending cases on the internet is a growing trend. I doubt it will benefit defendants within the confines of the courtroom or the legal proceedings generally. Perhaps bringing details of the suit into the public eye will help identify additional prior art or apply pressure from interest groups like consumers or shareholders to get plaintiffs to change tactics. But it seems to me that the biggest benefit of these sites may commercial, they make news and drive additional traffic to the defendant’s primary site.
* You can read more about the Scotts Miracle-Gro v. TerraCycle dispute at the Seattle Trademark Lawyer.

Continue Reading Taking IP Defense to the Court of Public Opinion

Gencor Pacific, Inc. v. Nature’s Thyme, LLC, No. 07 C 167, 2007 WL 1225362 (N.D. Ill. Apr. 24, 2007) (Kocoras, J.).

Judge Kocoras granted defendants’ Fed. R. Civ. P. 12(b)(2)&(3) motion to dismiss for lack of personal jurisdiction and venue and dismissed the case.  Plaintiff brought this Lanham Act false advertising and copyright infringement

Gail Green Licensing & Design Ltd. v. Accord, Inc., No. 05 C 5303, 2006 WL 2873202 (N.D. Ill. Oct. 5, 2006) (St. Eve, J.).

Judge St. Eve dismissed plaintiffs’s Lanham Act false advertising claim, but refused to dismiss plaintiffs’s breach of contract claim, among others.  Both claims are based upon defendants’s receipt of plaintiffs’s copyrighted designs for pet clothing and accessories pursuant to a Non-Disclosure and Confidentiality Agreement (the "NDA") and defendants’s subsequent alleged sale of  goods based upon plaintiffs’s copyrighted designs.


Continue Reading The Lanham Act is Going to the Dogs