In another ruling in this caseabout electronic check scanning, the magistrate judge recommended grantingMitek’s partial motion to dismiss without leave to amend. USAA alleged that it invented a method forconsumers to remotely deposit financial documents, e.g., checks, using adigital camera or similar device. USAAalleged that its software provider, Mitek, filed for a patent on elements of remotescanning technology and started claiming that USAA was infringing; USAA suedfor a declaratory judgment etc. USAAalleged a claim for false advertising, false designation of origin, and reversepalming off based on Mitek’s statements that Mitek “played a key role in thedevelopment of remote deposit capture”; that “USAA's RDC technology is ‘poweredby Mitek Systems' “; that “mobile RDC software is proprietary to Mitek”; andthat “USAA's mobile RDC service incorporates Mitek proprietarytechnology.” While USAA apparentlyacknowledged that Dastar barred a§43(a)(1)(A) claim, it contended that §43(a)(1)(B) was still available to it,insofar as the Supreme Court said so. The question was whether allegations thatMitek passed off USAA’s trade secrets as its own product could be viable under§43(a)(1)(B).
Patent law is supposed to reward manufacturers forinnovation, not trademark law. Dastarsaid that an ad that gave consumers the false impression that a product was “quitedifferent” from the plaintiff’s product could create a valid cause of actionfor Lanham Act false advertising, but didn’t sanction a false advertising claim“premised entirely on false designation of authorship.” USAA didn’t allege facts similar to thoseposited by the court in Dastar, butjust restated its false designation of origin claim. Baden Sports, Inc. v.Molten USA, Inc., 556 F.3d 1300 (Fed. Cir. 2009), involved a similar situation,and held that “authorship, like licensing status, is not a nature,characteristic, or quality, as those terms are used in Section 43(a)(1)(B) ofthe Lanham Act.” Similarly, allegations that “Mitek engaged in classic falseadvertising by misrepresenting its role in the development of RDC technologyand [in] misrepresenting the nature, characteristics, and qualities of USAA'sservices and products” failed to state a claim. So too with the “proprietary,” “key role,” etc. allegations.
Moreover, USAA failed to plausibly plead materiality: “Asthe Supreme Court noted in Dastar,whether Mitek or USAA owned the product in question would be immaterial to aconsumer purchasing this product.” (Unless the consumer feared getting sued for patent infringement ….)
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