USAA moved to dismiss Mitek’s false advertising counterclaimand strike its claims of bad faith; the magistrate judge recommended denyingthese motions. USAA provides variousfinancial services, and alleged that in 2005 it invented a method for consumersto remotely deposit financial documents. It filed patent applications for thisinvention, and chose Mitek as the software vendor for software to read thenumbers on checks. USAA allegedlydisclosed the invention to Mitek subject to a confidentiality agreement. In 2008, allegedly unbeknownst to USAA, Mitekfiled a provisional patent application, reciting a claim to a similarinvention. In 2012, Mitek began tellingUSAA that it was infringing on Mitek’s patents. USAA sued for a declaratory judgment of nonfringement/invalidity/etc.
Mitek alleged that USAA violated the Lanham Act by accusingMitek of conducting its commercial activities in an unethical manner. USAA’s press release, “USAA files SuitAgainst Mitek Systems, Inc.,” states:
USAA has filed suit against MitekSystems, Inc. for misappropriation of USAA's proprietary information, breach ofcontract, and fraud, among other claims.
USAA spokesman Paul Berry says,"USAA invented remote deposit capture technology to meet the needs of ourhighly mobile military membership, enabling them to deposit checks with ascanner or smartphone wherever they may be stationed. USAA has investedsubstantial time and money in the development and implementation of aninvention which has revolutionized the banking industry."
"Mitek misappropriated USAA'sproprietary and confidential information while working under contract for USAA,and then took numerous steps to claim it as its own,” says Berry. “USAA filedthis lawsuit to protect USAA members and our Association."
The magistrate judge concluded that this was commercialadvertising or promotion. It was widelydisseminated and promoted USAA by claiming that USAA developed an inventionthat has “revolutionized the banking industry,” and that USAA is looking outfor its members and filed the suit to “protect” them. Such statements “go well beyond describing theallegations in a lawsuit and arguably involve an attempt to influence customersto buy USAA's goods and services.” USAAargued that it was simply identifying its allegations, but the press releasedidn’t specify its allegations or say that USAA was giving its “beliefs,opinions or views." Instead, the press release presented its contents as factual statements "and, bysuggesting that it was protecting its customers in filing suit, USAA intimatesthat Mitek's products and/or services are somehow unsafe or untrustworthy.” (At a minimum, this conclusion seems in tension with the law surrounding Lanham Act claims based on statements made aboutpending patent lawsuits, though that’s not a “commercial advertising orpromotion” problem.)
USAA then argued that it wasn’t in competition with Mitek. The magistrate judge found sufficientcompetition: “both companies have apparently sought to develop and implement aproduct to designed to enable mobile banking.” USAA targets individual customers while Mitek targets banks as potentialusers/licensees, but that “hardly [made] a difference; the parties clearly areboth vying for use of the same technology with the intent of selling thisproduct and/or service to itscustomers” (emphasis added).
USAA also argued that it wasn’t trying to influencecustomers with the press release. (Whosecustomers? This might bear on the “competition”question, though I also think that the fact that one company has integratedproduction and one supplies just one component of the overall experience isrelevant and might be enough to justify a finding of competition under somecircumstances.) Mitek, though, arguedthat USAA’s claims jeopardized its well-earned reputation (with whom? Mitek’scustomers or USAA’s customers?). Themagistrate judge concluded that the press release could be understood “toinfluence customers to continue or commence business with USAA.”
The magistrate judge also concluded that the statements allegingmisappropriation of confidential information concerned thenature/characteristics/qualities of Mitek’s services or commercial activities.
USAA then argued that it accurately described itsallegations. But the press releasesuggested that Mitek’s actions were unethical and that customers needed “protection.” “These statements go well beyond merelydescribing the allegations in the complaint and arguably convey a falseimpression of Mitek's goods and/or services, providing USAA with an unfair advantagein the marketplace.” (The marketplacefor what?)
View the Original article
No comments:
Post a Comment