Court: Court of Appeals for the Ninth Circuit; March 24, 2002; Federal Appellate Court
Avid Identification Systems, Inc. appeals the district court's denial of its motion for partial summary judgment and its request for an injunction against Schering-Plough Corporation and Schering-Plough Animal Health Corporation in a case alleging unfair competition under the Lanham Act and California law. Avid contests the court's ruling that there were no disputed facts regarding the accuracy and materiality of Schering's statements. The appellate court has jurisdiction under 28 U.S.C. 1291 and has partially reversed and partially affirmed the lower court's decision, remanding for trial.
The court reviews the summary judgment de novo, outlining that a false advertising claim under the Lanham Act requires a false statement, evidence of deception, materiality of the deception, proof of interstate commerce, and injury to the plaintiff. The district court determined that Schering's market share statements were too vague to be actionable; however, the appellate court disagrees, finding the specific market share claims of 86, 90, 92, and 98 percent to be actionable. Avid provided evidence that these misleading statements were made in proposals and advertisements, establishing a presumption of consumer deception.
Additionally, Avid has raised triable issues regarding Schering’s claims about the migration rate of their products, which may have been misleading. Consequently, the appellate court reverses the summary judgment on Avid's Lanham Act claims and remands for trial. Avid's state law claims under California Business and Professions Code 17200 are also reversed due to their congruence with the Lanham Act claims.
Avid alleges that Schering interfered with its prospective economic advantage under California law, which requires proving five elements: 1) a probable future business relationship for the plaintiff; 2) the defendant's knowledge of this relationship; 3) intentional acts by the defendant to disrupt it; 4) actual causation; and 5) damages resulting from the defendant's conduct. Avid failed to demonstrate a triable issue concerning Schering's intentional disruption, causation, or damages. Consequently, the district court's summary judgment in favor of Schering on this claim is affirmed. The decision is partially reversed and remanded, with each party responsible for its own costs. The ruling is not intended for publication and cannot be cited in this circuit, except as allowed by Ninth Circuit Rule 36-3.
