Simpson Strong-Tie Company Inc. v. MiTek Inc.

Background

Simpson Strong-Tie Company Inc. designs, manufactures, and sells structural connectors for building construction. It gives its products alphanumeric names and uses those names in its website, packaging, catalogs, publications, and advertising materials. Simpson alleged that it owns copyrights in its Wood Construction Connectors Catalog and supplements.

Simpson alleged that MiTek, which sells competing construction products, used Simpson’s product names as MiTek product names, stock numbers, reference numbers, and reference series in MiTek’s website, mobile application, catalogs, labels, and other materials. Simpson alleged that MiTek’s use of the names, including in an alphabetical reference index, deceived consumers into believing that MiTek’s products were equivalent or interchangeable with Simpson’s products, or that MiTek’s products were actually Simpson’s products.

Simpson asserted five claims: false advertising under the federal Lanham Act; false advertising under California Business and Professions Code section 17500; passing off under the Lanham Act; unfair competition under California Business and Professions Code section 17200; and copyright infringement. MiTek moved to dismiss all claims under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a complaint does not state a legally sufficient claim.

Federal Claims

For the federal false-advertising claim, MiTek argued that a product name could not be a statement capable of being proven true or false and that Simpson had not adequately explained how MiTek’s reference index was false advertising. Simpson responded that MiTek’s use of the names implied that its products were the same as, or equivalent to, Simpson’s products.

The court explained that a false-advertising claim can be based on an implied statement, not only an explicitly false statement. The court found that Simpson had alleged that MiTek placed Simpson’s product names next to similar MiTek product names and supported those allegations with images and citations to MiTek’s website, catalogs, publications, packaging, and marketing materials. The court held that these allegations were sufficient to support an implied false-advertising claim and denied MiTek’s motion to dismiss that claim.

For the passing-off claim, MiTek argued that Simpson had not alleged that its product names were distinctive enough for protection under the Lanham Act. The court explained that passing off involves selling one party’s goods as those of another and may be express or implied. The court also stated that even a generic mark may support a passing-off claim. Simpson alleged that MiTek used Simpson’s product names as its own product names and as reference numbers for MiTek products, creating a false impression that MiTek’s products were Simpson products or were connected with Simpson.

For the copyright claim, the parties did not dispute that Simpson owned valid copyrights in its Wood Construction Connectors Catalog. MiTek argued that Simpson’s product names and alphabetical product index were not protectable. The court acknowledged that MiTek raised serious questions about whether those materials were sufficiently original for copyright protection. But the court concluded that it needed a fuller record and was not prepared to decide at the pleading stage that the names and index were legally unprotectable. The court therefore denied the motion to dismiss the copyright claim.

State Claims

For the California Unfair Competition Law claim, MiTek argued that Simpson had not alleged an actionable statement, had not adequately pleaded standing, and had not identified which statutory theory—fraudulent, unfair, or unlawful—it was pursuing.

The court found that Simpson adequately pleaded standing by alleging that MiTek’s misleading use of Simpson’s product names caused Simpson to lose sales. The court rejected MiTek’s argument that Simpson had to allege its own reliance on the alleged misrepresentations, explaining that a competitor may plead a causal connection between the challenged conduct and its injury. The court also found that Simpson’s federal and California false-advertising allegations could serve as the basis for its unfair-competition theories. It denied the motion to dismiss the unfair-competition claim.

For the California false-advertising claim, MiTek repeated its arguments that Simpson had not alleged an actionable statement or adequately pleaded standing. The court rejected those arguments for the same reasons stated in its discussions of the federal false-advertising and unfair-competition claims. It denied the motion to dismiss the California false-advertising claim.

Disposition

The court denied MiTek’s motion to dismiss the complaint. The order did not finally decide whether MiTek was liable for false advertising, passing off, unfair competition, or copyright infringement. Instead, it held that Simpson’s allegations were sufficient for the case to proceed past the pleading stage. MiTek was ordered to file its answer by April 19, 2021. Judge Virginia K. Demarchi issued the order.