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Sales rep crosses the line by first hinting, then flatly misstating, that his company was part of a competitor

A sales rep working for a company called Alliantgroup made marketing phone calls to customers of a competitor, BDO. The Alliantgroup sales rep used a script that said things like, “I am calling because you are part of the BDO Alliance and we are having great success with BDO Alliance firms.”  See BDO Seidman LLP v. Alliantgroup L.P., No. H-08-905, slip op. at 4, para. 13 (S.D. Tex. Jun. 8, 2009).

All by itself, the script was problematic; according to the court, it strayed too close to suggesting an association between Alliantgroup and BDO. And not surprisingly, the Alliantgroup sales rep couldn’t seem to confine himself to the script: The judge believed testimony by people who had been telephoned, to the effect that the sale rep had said that Alliantgroup was part of the BDO Alliance.

The judge described the sales rep as “not a credible witness” when he denied having any intent to misrepresent.  Finally, the judge found that the sale rep’s conduct had created actual confusion.  The judge concluded that:

Alliantgroup, with its usage of the BDO and Alliance marks, crossed the line into unfair competition …. Its marketing campaign intentionally manipulated the targeted customers into believing Alliantgroup was affiliated with the BDO and the Alliance when it was not. Alliantgroup offers the same services, bears a similar name, targets the members of the plaintiff’s organization, continued marketing even though it knew it was causing confusion, deliberately misled as to affiliation, and admitted none of the use of Plaintiff’s marks had any legal purpose apart from deriving benefit from the goodwill of the Plaintiff.

The judge slammed Alliantgroup, enjoining it from using BDO’s trademarks and indicating that she would award BDO its attorneys’ fees.  In subsequently-filed documents, BDO requested in excess of $46,000 in attorneys’ fees, plus $4,600-some in court costs.

(For other commentary, see Margaret A. Esquenet (Finnegan Henderson), in Incontestable, June 2009.)