Leatherman Tool Group, Inc. v. Coast Cutlery Co.
2011 U.S. Dist. LEXIS 117955
D. Or.2011Background
- Leatherman seeks a preliminary injunction against Coast to stop false statements that Coast knives use 440C steel, are hardened to 57–59 HRC, and are individually hardness tested.
- Coast admitted advertising 440C steel and 57–59 HRC; Leatherman independently tested 61 Coast knives finding none were 440C and only two had 57–59 HRC.
- Coast learned in 2010 its Chinese factory used 420 steel instead of 440C; Coast later acknowledged this in 2011 press materials.
- Coast issued a corrective notice to e-retailers in July 2011 directing changes from 440C to 400 series descriptions; effectiveness was disputed.
- Leatherman claims ongoing false statements through Coast materials; Coast argues corrective actions have been taken and no irreparable harm shown.
- Court analyzes Lanham Act false advertising claim, materiality, interstate commerce, irreparable harm, and public-interest/balance of equities.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Coast's statements were false advertising under § 43(a). | Coast falsely claimed 440C steel and specified hardness. | Corrections were made; statements were not materialized into ongoing promotions. | Statements were false; Coast’s materials contained discredited claims. |
| Whether the statements were deceptive and had tendency to deceive. | Literal falsity creates presumption of deception. | No rebuttal evidence to the deception presumption; survey insufficient. | Literal falsity creates a presumption of deception; Coast failed to rebut. |
| Whether the deception was material to consumer purchasing decisions. | Steel type and hardness are key purchase factors; misstatements influence decisions. | No substantial proof of materiality; no intentional falsehood shown. | Evidence supports materiality; probable influence on purchasing decisions found. |
| Whether Coast's conduct entered interstate commerce and injured Leatherman. | False statements disseminated via website, catalogs, packaging; injury presumed from deception. | Needs show of actual injury and inter-state dissemination; corrective actions occurred. | Statements entered interstate commerce; injury not proven at this stage; irreparable harm not shown. |
| Whether irreparable harm and balancing of equities favor Leatherman. | Likely irreparable harm due to market confusion and loss of goodwill. | No presumption of irreparable harm post-eBay; corrective actions mitigate harm. | No likelihood of irreparable harm established; injunction denied on this basis. |
Key Cases Cited
- Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (U.S. 2008) (establishes four-factor test for preliminary injunctions)
- Alliance For The Wild Rockies v. Cottrell, 632 F.3d 1127 (9th Cir. 2011) (sliding-scale approach to injunctions)
- Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134 (9th Cir. 1997) (false advertising elements and deception framework)
- Coastal Abstract Serv., Inc. v. First Am. Title Ins. Co., 173 F.3d 725 (9th Cir. 1999) (definition of commercial advertisement in Lanham Act context)
- Collegenet, Inc. v. XAP Corp., 442 F.Supp.2d 1070 (D. Or. 2006) (literally false statements create deception presumption)
- eBay, Inc. v. MercExchange, LLC, 547 U.S. 388 (U.S. 2006) (presumptions of irreparable harm not allowed; traditional equitable principles govern)
- Flexible Lifeline Sys. v. Precision Lift, Inc., 654 F.3d 989 (9th Cir. 2011) (applies eBay to injunctions; rejects irreparable harm presumption)
- Salinger v. Colting, 607 F.3d 68 (2d Cir. 2010) (presumptions of irreparable harm rejected; equitable standard retained)
- CoxCom, Inc. v. Chaffee, 536 F.3d 101 (1st Cir. 2008) (reiterates post-eBay approach to injunction standards)
- Healthport Corp. v. Tanita Corp. of Am., 563 F.Supp.2d 1169 (D. Or. 2008) (evidence standard for materiality in false advertising)