A recent case in the Western District of Virginia sheds some interesting light on the use of claims of Trademark Infringement, False Association and False Endorsement, False Designation of Origin, and False Advertising under the Lanham Act (aka the Trademark Statute) to protect a company’s business from Unfair Competition in popular social media forums.
The plaintiff, AvePoint, Inc. is in the software business and provides services to many federal, state and local government agencies. It owns a Federal Trademark Registration for the mark “AvePoint.” The defendant Power Tools, Inc. dba Axceler is one of AvePoint’s primary competitors.
Axceler created an account on LinkedIn for a fictitious AvePoint representative named Jim Chung, using AvePoint’s registered trademark. It identified Chung as a “Software Engineer at AvePoint” located in “Xinjiang, China.” The fake LinkeIn profile encouraged viewers to contact Chung for “business deals,” “new ventures,” and “consulting offers.”
AvePoint filed suit in Federal District Court claiming that by fielding customer inquiries through the imposter account, Axceler used the account to divert business to Axceler and otherwise cause competitive harm to AvePoint. Axceler further enhanced the deception by posting several tweets about Chung on Twitter in order to flesh out the persona and make it believable and to reinforce the false narrative Axceler wanted customers to believe about AvePoint.
AvePoint’s complaint claims that Axceler improperly used the AvePoint trademark to confuse customers into falsely believing, among other things, that AvePoint is a Chinese company rather than an American one and that AvePoint’s products have been found to be inferior than Axceler’s.
Axceler filed a motion to dismiss the claims saying that regardless of whether any of these allegations are true, there cannot be Trademark Infringement or False Association or False Designation of Origin or False Advertising under the Lanham Act because this set of facts does not jive with the wording of the Trademark Statute. The court said otherwise.
So could this be Infringement of a Registered Trademark under §32 of the Lanham Act? Yes, it could be. Crucial to the use of this statute is that the illicit use is made “in commerce.” Here, the creation and use of the LinkedIn account was enough to implicate the Trademark Statute in that it belonged to the competitor and was “utilized for competitive, commercial purposes, specifically to profit from AvePoint’s goodwill and to divert business to Axceler.”
Could this also be a legitimate claim for False Association or False Endorsement under §43(a)(1)(A) of the Lanham Act? Yes, it could be. Here, Axceler stands accused of promoting services through the account in a manner likely to cause confusion as to whether such services were offered in connection with, or on behalf of, AvePoint and deceiving actual AvePoint customers into believing that Jim Chung was a duly appointed AvePoint representative.
Could this also be a legitimate claim for False Designation of Origin under §43(a)(1)(A) of the Lanham Act? Yes, it could be. In this case, Chung had nothing to do with AvePoint but he was held out to be from AvePoint and, in fact, he did not even exist. How more confusing could it get?
And how about False Advertising? Well; yes it could be. Were the posts on LinkedIn and Twitter commercial advertisements? Yes. They could be considered such. The messages misrepresented the geographic origin of AvePoint’s goods or services (important especially to doing business with U.S. government agencies) and impugned their quality. Though the comments did not specifically mention AvePoint by name, there were sufficient facts to establish these statements were directed to AvePoint.
The new frontier of social media is an exciting and also daunting landscape for many. It may be in some way comforting to know that established law will not be left behind but will follow and support legitimate business endeavors as the future becomes the present.