## In the



# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it
N os. 11

- 2260 , 11

- 2375 N EURO S C O ., L TD . an d A VI AT I ON A ND P O W ER G R OUP I NC ., P la intif fs-A pp ellees/ C ross -App el lants , v .
KT URBO, I NC ., D ef endant-Appellant/ C ross-A pp ellee

.
A pp ealsfr o m the United S t ates Di strictC our t fo r the N o rthernDi stricto f Illino is, Eas tern Div isi on. No . 08 C5939

—Jo hn W. Darrah, Judge
.
A RG UE D S EP TE MBE R 5, 2012

— D ECI DE D O CT OB ER 15, 2012

Befo re P OSNER, K ANN E , a nd S YKES, C ircu it Judges . P O SN ER, Cir cu i tJudg e . T hi s l i t i g a t i o n, n o w i n i t s f o urth yea r, i s be tw een c om p etingm anufa cture rs o fhi gh- speed turbo bl owers used by w ast e watertr eat m ent pl ants. The b l o wer s m aint ain the o xy g endi ss o l ve d i n the wat erata l ev elne ede d b y the a er o bi c ( th ati s, o xy g en -2 N os. 11

- 2260, 11

- 2375 depend en t) ba cter i a that pl ay a cr i ti calr ol e in the tr eat
m ent pr oce ss by bre aki ng dow n or gani c waste i nto carb on d ioxide , nitrogen, and w ater. Th e plaintiff s op erat e i n the Uni te d S ta te s as a j o i ntv entu re underthe n am e A P G -N eu r o s , a n d to sim p lify ex p os itio n w e’ll prete n d thatA PG

- N euro s is the pla i nti ffand ( f orfurther si m pli fi cati on) cal l i t Neuros. N euro s was the fi rs t co m pany to o ff ersuch bl owers to w ast e watertre at m ent f aci l i ti es i n N or th A m er i ca. That w as i n 200 6 a nd two ye ar s l ate r the defendant, KT urbo , bega n o ff er i ng i ts own bl owers to thos e f aci l i ti es, tho ugh w i th l i ttl e s uccess . I n 2 00 8 N eu ros w o n a b i ddi ngc o nt es t to s uppl y hi g hspe ed tu rbo b l o wer s to a was te water t r ea tmentpl an t i n Ut a h

. KT u rb o c a me i n th i r d i n th e b i ddi ng

— l ast, because ther e were only th re e bi dd er s. Dis appoint ed wi ththe o ut co m e o fthe b i ddi ngc o nt es t, the c hi efe xe cuti ve offi cerof K Turbo, H eonS eokLee, pre pared a ser i es ofP ow er Poi nt sl i des and r el ate d tabl es that accused N euro s o ffra ud by r epres enti ng t o th e Utah purchaser that i ts bl owers w oul d achi eve a “t ota l effi ci ency” that Lee cl ai m ed, pro babl y c or re ctl y, was unattai nabl e. W aste w ater treatm en t p lants hire con su lti ng en g ineers to sel ect, te st, an d instal l the turbo bl owers. Lee’ s s l i des w er e a i m ed at thos e e ngi neer s. H er e i s a ty pica l sl i de:

### Nos. 11

‐2260, 11

‐2375 34 N os. 11

- 2260, 11

- 2375 Turbo bl owers ar e f ans dri ven byel ectr i ci ty, and they u se a lotof it

— an d it ’s expensi ve; the cos t o fel ectr i ci ty i s the se cond la rgestco st ( afterl abor ) o fo perat i ng a was te wat ert r ea tmentpl an t, a nd the b l o wer s acc o unt f ora substa nti alfr acti on ofthe el ectr i ci ty cos t. M /JI nd ustr i alS o l ut i o ns , “ M uni ci palW as te wat erTr ea tmentPl an t En er gy Basel i ne S tudy, ” PG& E N ew Constr ucti on Energy M anage m ent Pr ogr am , pp. 5- 6 ( J une 2003 ) , ww w . cee1
. or g/ i nd /m ot- sys /ww /pge 1. pd f( vi si ted Oct. 9, 20 12)

. “Tot al ef f i c i e nc y, ” the k e y t e r m i n Le e ’ s s l i de s , i s the r a t i o of in p u t p ow er (ele c tr ica l cu rre n t) t o ou tp u t p ow er (a sp ec ifi ed vol um e ofai r bl own by the bl ower a t a speci fi ed speed). W er e there no pow erl oss , m aki ng the r ati o 1, to ta l e ffi ci en cywoul d b e 10 0 percent. Ev en8 2. 5 per ce nt ofto taleffi ci ency, the fi gure thatthe sl i de accuse d N euro s o fc laim i ng to have at tai ned, appears to be unattai nabl e. But N euro s di d not m ake r epres entat i ons of to ta l effic ien c y. It m ad e re p re se n ta tio n s o f“w ire p ow er ,” w hi ch i s the r ati o ofan e l ec tr ica l curre nt to work ( such as tu rn in g t h e bla d es of a fa n ); bu t t o e st im at e t ot al e ffici ency fro m w ire p ower r equi re s co nsi derat i on o fo ther f acto rs as well, such a s t em perature and hum i dity. K T u rb o ’ s P o we r P o i n tp r e s e n t a t i o n s t a t e s th a ts o me o fNe ur o s ’ s c l a i ms o fwi r e p o we ri mpl y tha ti t s e ffi c i ency cl ai m s ar e ex ag g er at ed, b utthe se a cc us at i o ns tu r ne d o ut to be f al se too
. They were b as ed o n com pu tat i onal errors an d inc orrect assu m p tions. K T urb o’s exp ert ar g ue d th at th e cl ai m ed wi r e po wer i n o ne N eu r o s d ocum e n t i m p lied a 2 t o 7p er c en t o ve rs ta te m en t o f th e e ffici ency ofi ts bl owers, but such ov ersta tem ents do not, as KTurbo a r g ue s, make i ts de f amat ory a cc us at i o nsN os. 11

- 2260, 11

- 2375 5 “s ubs ta nt i al l y t r uthful. ” F o r KTurbo c l ai m ed th atthe ove rs tat em ent w as not 2 to 7 perce nt but at l east 15- 20 or even 26 p e r c e n t. T he re w as no eviden ce of such oversta tem ent; KT urbo ’ s e xpert w oul d not s up porti t. I t was fro m N euro s’ s cl ai m s ofwir e power that KTu rbo ded uce d t hat Neuros w as i m pli ci tl y c l ai m i ng a tot al effi cienc y of 82.5 perc en t. L ee ad m its that th e w ire pow ercl ai m s i m plyatm osta tot aleffici ency of 76 p er c en t, ap p ar en tly an at ta in ab le p er c en ta ge . H ad K Turbo m er el y a ccused N euro s o f“gua ra n tee i ng” unattai nabl e per f or m ance, in the se nse o fwarra nti ng i t, thi s w ou ld n ot necess ar i l y hav e be en an accusat i on o f f r au d. O n e c a n wa r r a n ta l e v e l o fp e r f o r ma n c e th a to ne mayn o tb e c o nfi de nto fa t t a i ning, f o r b y a c c e pt i ng a w ar ra nty a custo m ergr ants the s el l eran opti on t o pay ra th er th an p er for m . C f. Zapat a Her m anos Suc e s or e s , S. A. v. Hea r t hs i deBa ki n g Co

. , 313 F. 3d 385, 389 ( 7th C ir . 2002); O live r W en d ell H olm es , Jr., The C o m m on Law 30 0- 02 ( 18 8 1 )

. T h e s l i d e we r e p r o d u c e d e a r l i e r d i d d e s c r ib e the al l ege d repr ese ntati on that Neur os ’s bl owers achi eve 82
. 5 per ce nt o ft o ta l e ffi ci en cya s a “gua r an te e. ” But N euro s had neve r w ar ra nted thatperfor m ance, and so if it h ad re prese nted thati ts bl owers w er e that e ffi ci ent, kn ow in g t h ey w er e n ot, t h e re p re se n ta tio n w ou ld ha v e b e e n fr a ud ul e nt; a nd tha ti s wh a tKT urb o c l a i med

. Lee m ade hi s Po w er Poi nt pre senta ti on t o a n u m bero f th e en g i ne er i ngfi rm s tha t adv i se was te wat ert r ea tment pla nts o n w hi ch tur b o b lowers to buy. J ud gi ng fro m th e f a c t tha t KTu rb o f a i l e d, s o f a r a s a pp e a r s , t o wrest an y bu siness from N eu ros, t h e cons ulting en gineers6 N os. 11

- 2260, 11

- 2375

w er e no t i m press ed by the slid e s how

. Lee a l so pu bl i shed hi s a ccusati ons on o ne o fKT urbo ’ s websi tes a n d s e n tth e m t o th e s a l e s r e p r e s e n t a t i v e s th a tth e c o mpan y us es t o he l p m ar k eti ts b l o we rs, do ubt l es s ho pi ng the r epres entat i ves w oul d conveythe accusat i ons to th e eng in eers w hom they visi ted on K T urb o’s beha lf

. K T u r b o v ow ed in c or re sp on d en c e t o “ b re ak ” a n d “t er m inate” N euro s. A l l to no avai l

. KT urbo was l i ke a gnat th atb uz ze s an no y i ng l y a r o und a pe r so n’s head but neverm anage s t o l and and bit e. The s ui t ch ar g es KTurbo w ith vi o l at i o ns o fthe La nh a m Acta nd the I l l i no i s Uni f o r m De c e pt i v e T r a de P ra c tic es A c t, an d w ith d efa m at i on , also u n d er Il lin ois l a w. KT urb o fi l e d p a r a l l e l c o un t e r c l a i ms. A b e nc h tr i al re su lte d in a j u d gm en t in fav or of N eu ro s o n i t s c laim ofdef am ati on a n d an aw ar d of$1 0, 000 i n gene ra l dam age s a nd $5 0, 000 i n pun i ti ve dam age s. Th e j ud ge rej ecte d al l o ther cl ai m s, i ncl ud i ng the co unterc l ai m s. K Turbo’ s a pp ealchal l enges o nl y the j ud gm ent fordef am ati on; N euro s’ s cr oss - appeal chal l enges the dism i ssa l o f i ts Lanh am A ct and D ecepti ve Trade Pr acti ces A ct c l ai m s. K Turbo ar gues that eve n i fi t def am ed N euros b y f al se sta tem ents (as cl ear l y i t di d), i t had a “qual i fi ed p riv ileg e” to d o s o. T h is p r i v i l eg e is av aila b le in ca se s in whi chthe pub l i c ha d a n “ i nt er es t” in the makingo fthe st at em en ts th at tu rn ed ou t t o b e fa lse

. K uw ikv. Sta rm a rk Star M arket ing & Adm inis tration, Inc. , 61 9 N .E
. 2d 129, 13 4- 35 (Ill . 199 3); Parke rv. H o use O ’ Li t eCorp. , 75 6 N
. E.2 d 286, 29 8 (Ill. A p p . 200 1); H ayw ood v. Luce nt Technologies, Inc. , 32 3 F.3 d 52 4, 53 3 (7 th C ir. 20 03 ) (Ill in ois law ); Res t at e m e ntN os. 11

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- 2375 7 (Se cond) of Torts §§ 59 3-9 8A , 5 98 c om m en ts d -f (1 97 7). T h is is pretty v ague, but w e nee dn ’ t worr y about that i n this case , si nce the pri vi l ege , wh at ev er i ts preci se boundari es, i s f or f ei ted i fthe sta tem ent i s m ade with know l edge o f i ts f al si ty orwith rec kl ess di sr ega rd f orthe tr uth ( w hi ch co urts i n defa m atio n case s l i ke to cal l “a ctual m al i ce”

— w hy we don’tkno w , s in c e “ m al i ce” i m pli es d elib er at e ra th er th an m er ely rec kle ss w ro n gd oin g). K uw ik v. Starm ark Star M arket ing & Adm inis tration, Inc. , sup ra , 61 9 N .E .2d at13 5-3 6; N aleway v. Agn ich , 897N .E .2d 90 2, 91 3 (Ill. A p p . 200 8); Gian t Sc r e e n Spor t s v. Canadi an Im pe r i al Bank o f C om m er ce, 553 F.3d 527, 536 (7th C ir. 2009) (I ll inois l aw ); Res t at e m e nt, sup ra , § 600. KT urbo was w ar ned re peatedl y, not onl y b y Neuros b u t a l so by disinter est ed so urces , that i ts a c c usati ons w er e f al se; i t i gnor ed the w ar ni ngs and refused to i nvest i gat e th e truth o fthe accusat i ons. I ts conduct w as not onl y di sr eputabl e but re prehensibl e. K Turbo com pla i ns per functor i l y about th e aw ar d of pu ni ti ve dam ag es . Th e g ener alr ule i s no i nj ury no t or t, M cCa nn v. Hy-Vee, Inc. , 663 F.3d 926 , 930-31 (7th C ir. 2011), and ther e i s no ev id en ce that Neuros w as i nj ured by t he f a l s e c l a i ms th a tK T u rb o ma d e . B u tth e r e a r e e x c e ptio n s ( w hi ch i s why w e ca l l i t the “g ener al ” r ule )

. One is f ortr espass , bec ause a co nti nuing tr espass m ay ri pen i nto a pre scr i pti ve ri ght a nd thus depri ve a pro perty own ero fti tl e t o hi s l and. A n ot h eri s f ordef am ati on per se, wh ich m eans, so f aras r el ate s t o a busi ness vi cti m , de f am ati on that i m pu gns the defendant’s co m pete n c e o r h on es ty
. Tui t ev . Co r b i tt, 8 66 N
. E.2 d 114, 121 (I ll

. 2006). A nd that w as th e ch aract er of K T urb o’s def amat i o n o fNeur o s. KTurbo a cc us ed i t o f co m m i tt i ng8 N os. 11

- 2260, 11

- 2375 cri m i nal fra ud ag ai nst i ts cu st om ers. I t’ s har d to i m agi ne a m or e dam agi ng ac cusati on t o m ake ag ai nst a busi ness. W h en d efa m at ion p er se is p ro ve d , th e p lain tiff is enti tl ed both to gener aldam age s

— whi chmean s “c o m pen sa to ry ” d am ag es w ith ou t p ro of of inj u ry , id .; Van Horn e v. M uller, 705 N .E .2d 8 9 8 , 903 (Ill . 199 8); Res t at e m e nt, sup ra , § 621 com m ent a

— and, i fthe defe nd ant in com m i tti ng the defa m ati on w as gr oss l y negl i gent or w orse, to pu ni ti ve dam age s as w ell. Sl ovi ns kiv. Ell i ot, 92 7 N
. E
. 2d 1221, 1224-25, 1228 -29 (I ll

. 2010). C om p en satory dam age s without pro ofo fi nj ury sounds l i ke an o xy m o r o n, tho ug h: f o r whati s th er e to c o m pen sa te ? But ther e ca n neverbe ass urance that an acc usati on, however gr oundles s, i s no t be l i eve d by s om e one, and doubtl ess em plo yee s o r sal es re ps ofN euro s had to answer qu estion s pu t to them by con su lti ng engine ers, an d perhaps eve n by shar ehol ders ofthe p ar ent c om panie s, concer ni ng Lee’ s i nfl am m ato r y a c c us a t i ons. S o a m odest aw ar d ofdam age s, tho ugh not base d on evi dence ( w hat k i nd o f“e vi de n c e” w oul d enabl e a n accura te est i m ate o fthe type o f cost that w e’ ve sugge ste d N euro s i ncurr ed f ro m the defa m ati on?) , can re aso nabl y b e thought c om p ensat or y. The j ud ge m ay ha ve pul l ed th e $1 0, 00 0 fi g ur e o uto fhi s ha t, b ut the fi gure i s a pp ro pri ate l y m odest, co nsi deri ng tha t a si ngl e hi gh- speed turbo bl ower cost s m or e than $10 0, 000 and th a tthe APG

- Ne ur o s j o i ntv e ntur e s o l d s o me 500 ofthem i n the fi rs t few ye ar s o fi ts exi ste nce. The pun i ti ve da m age s a w ar d of$5 0, 000 w as too s ma l l, a n d th o u g h Ne u r o s i s n o ts e e k i n g mo r e , weN os. 11

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- 2375 9 cannot f orbearto not e that the co nd uct o fKT urbo was outr age ous. I t i s a substa nti al com pany and s hou ld h ave b ee n ord er ed to p ay s u b st an tia l p u n itiv e d am ag es . In o r der i ngthe s l ap- o n- th e- wri sta war d tha t he di d the di st ric t j udg e m ayha ve b ee n c o nc erne d tha t an y m u ltip l e of ge n er al d am ag es gre at er th an five w ou ld r un a f o ulo fthe S upr eme C ou rt’ s dec i si o ns pl ac i ngt i g ht l i m i tat i ons, i n the nam e o fdue proc ess , on the r ati o of puni ti ve to co m pen sa to r y damag es . I n St at eFa r m M ut ual A u to m o bile Ins
. Co
. v. Ca m pbel l , 538 U
. S. 408, 425 (2003 ), the Court sai d that “few aw ar ds [ of pu ni ti ve d am ages] ex ce edinga s i ng l e- d igi t r at i o b etwee n pun i ti ve a nd c om p en sa to ry d am ag es , to a sign ifica n t d eg re e, w ill s a t i s fy d u e p r o c e s s . . . . [ F ] o u r ti me s th e a mo u n to fc o mpen sa to r y da m ag es mightb e cl ose to the l i ne o fc o ns ti tu
tional i m propri ety
. ” But the Court quick l y a dd ed that ther e was m er el y “ a pre s um ption ag ai nst a n award that has a 145- to-1 r ati o, ” id

. a t4 2 6 ( e mpha s i s a dde d)

— th e aw ar d th e low er co u rth ad u p h eld

— and as we expl ai ned i n M athias v. A cco r E conom y Lodg ing, Inc. , 34 7 F
. 3d 672 (7t h C ir. 20 03 ) , t h e p re su m p tio n ca n be reb u tt ed in case s i n w hi ch the aw ar d of co m pensato rydam age s i s v er y s m al l, a s indeed the Suprem e Cour t had i nd i cate d i n the S t a t eF a r m case , 53 8 U
. S. at42 5; se e a l so B M W of N o r t h A m erica, Inc. v. G o re, 51 7 U.S

. 55 9, 58 2- 83 (19 96 ); K unz v. D eFeli ce, 538 F.3d 667, 679 (7th C ir. 2008); A lexa nd er v. C i ty o

f M ilw a uk ee, 474 F.3d 437, 454 (7th C ir. 20 07 ). “T h e p ro p er foc u s o fa n aly sis of th e ra tio its elf is th e ad eq u acy of the com bined aw ard of com p en satory and pu ni tive dam age s t o m oti vate the pros ecuti on o f a m er i tor i ous c l ai m . I fco m pensato rydam age s a re sl i ght,10 N os. 11

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- 2375

a s i ngl e- dig i t r ati o is li kel y t o be insuffi ci ent. ” Gavi n v . AT & T Corp. , 464 F.3d 634 , 641 (7th C ir. 2006). The g r av i tyof t he i nj ur y t o the v i ct i m o fa wro ng ful act i s o nl y o ne co nsi derat i on i n deter m in in g a pro per penal ty, as i s o bvi ou s ifo ne thi nks o fpunishm ents, often sev ere, for crim inal attem p ts th at infl ict no inj u ry ata l l

. O r ifo ne c o ns i der s th e f ac to r s th ate nt eri nt o the d e t e r mi n a t i o n o f fi n e s f o r c r i me s c o mmi t t e d b y f i r ms an d ot h er org an iza tio n s. Se e, e.g ., U .S .S .G . § 8C 2.4 (a). A pr i nc i palg o alo fpuni sh m en t i s det er r en ce , a nd i n the M at hi as cas e a n award ofpuniti ve dam age s ca p ped at $20, 000 ( $40, 00 0 for the tw o pla i nti ff s) , as urg ed by th e defen dan t be ca us e th atwoul d b e fourt i m es the com p en satory aw ard , w ou ld h ave h ad a negligible de terre n t e ffec t. T h at m ay be tru e o f th e a w ar d of $5 0 ,0 00 in thi s ca se, co nsi deri ng the pote nti alga i ns to KT urbo had i t s ucceeded i n expel l i ng i ts f or em ostc om peti torfro m th e N or th A m er ica n m ar ke t. It sh ou ld co n sid er its elf f or tunate that N euro s has n’tchal l enged the adequacy o fthe p un i t i v e - da mag e s a wa r d. So m uc h for d e fa m ation; l et us turn to N eu ros’s ch al l en g e to the di smi ss alo fi ts La nham Actc l ai m . The di s mi s s a l ma y s e e m a c a de mi c g i v e n the ab s e nc e o fp r o vabl e inj ury, f orther e i s no co ntenti on that g ener al dam age s m ay be a w ar ded f orvi ol ati ng the Lanham A ct, an d the Actl i m i ts puni ti ve da m ag es t o thr ee f o l d the actual dam age s, 15 U
. S. C . § 11 17( a)

— an ev en low er rat io than the puniti ve- dam age s a w ar d m ade by the dist ri ct j ud ge to pu ni sh KT urbo f ordef am ati on. But the A ct per m i ts the a war d o fa tt o r ne y s’ fee s to the pr ev ai l i ngN os. 11

- 2260, 11

- 2375 11 partyi n “exce pti onalcas es, ” id

. , a te rm the m eani ng o f whi chwe st r ug g l ed wi thi n N ight i ngal eHom eHe al t hc a re, Inc . v. An o dy ne Thera py, LLC, 626 F
. 3d 958 (7th C ir. 2010), co nc l udi ngtha t ana war d i s appr o pr i ate ifthe o ppo sing p ar ty ’s “ c laim or d efe n se w as ob j ec tiv ely u n re as on ab le

— w as a c laim or d efe n se th at a ra tio n al litig an t w ou ld pu rs ue o nl y b ecause i t w ou l d i m pose dispr opor ti onate cos ts on hi s o pp onent. ” Id

. at96 5. It is al so appropri ate w hen a party ’ s v i ol ati on of the Act i s e speci al l y e gr egi ous. S ee, e. g. , BA SF Corp
. v. O l d Wor l d Tr adi ng Co. , 41 F
. 3 d 1 0 8 1 , 1 0 9 9 ( 7 th Ci r . 1 9 9 4 )

. Th e de t e r mi na t i o n of u n re as on a b len es s o r eg re gio u sn es s is to be m ad e in th e fi rst instan c e b y the district cou rt, w hich w asn ’t done i n thi s case because the j ud ge rul ed the La nham Ac ti n a p p l i c a b l e . I ftha tr u l i n gwa s e r r o r, wh i c h we have now to co nsi der, the case m ust be r em anded f or c o ns i de r a t i o n o fwh e the r t o a wa r d a t t o r ne y s ’ fees

— p l us i nj u n c t i v e r e l i e f, a u th o r i z e d i n th e s a me s e c t i o n o ft he Act an d a l so s o ug htb y Neur o s an d de nied b y the dist ri ct c ourt
. W i thout m eani ng to prej ud ge the det er m i nation on re m and, w e p oin t o ut thatKT urbo per si ste d i n i ts f al se re prese ntati ons to th e engi neer i ng co m m unity concerni ng N euro s’ s bl owers eve n afterthe sui t was fi l ed an d co m pel l i nge vi den ce was pr es en te d tha t th e re prese ntati ons w ere f al se. Thi s wei ghs in f avo r ofan aw ar d ofat torneys’ fees by i nd i c ating that thi s par t o f KTurbo ’ s defen se ( as o ppo se d t o i ts a r g um en t th atthe Lanh am A ct w as i napp l i cabl e be cause K Turbo w as n ot en ga ge d in a d ve rt isin g or p ro m ot ion , a res p ec ta b le ar gum en t, a s we ’ r e ab o utt o s e e ) wa s o b j e c t i v e l y u nr e a-12 N os. 11

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s o nab l e : KT urb o p e r s i s t e d i n de ny i ngtha tthe s l i de show and r el ate d m ar ket i ng ac ti vi ti es w er e dece p tive l ong afteri t was ev i dent thatthe denia l was f ri vol ous. Bu ti s the La nh a m Acta pp l i c a b l e ? I t ’ s l i mi t e d t o mi s r e pre se n ta tio n s “ in co m m er c ial a d ve rt isin g or p ro m ot ion ,” 15 U. S

. C. § 11 25 ( a) ( 1) ( B) , a nd i n San de rs on v. Cul l igan In t ’ l Co

. , 4 15 F .3d 62 0, 62 4 ( 7th Ci r. 20 05) , we hel d that th r e e p e r s o n - t o - p e r s o n c o mmun i c a t i o n s a tt r ad e s h o ws di d no t co ns ti tu te co m m er ci ala dve r ti singo r pr o m o ti o n, whi l e i n First H eal th G rou p C o rp. v. B C E E m ergis C o rp ., 26 9 F
. 3d 80 0, 8 03

- 04 (7th Ci r . 2 00 1) , we sa i d tha t th e sta tutor y t er m i s li m ited t o “pro m oti onalm ate ri aldi ssem inated t o anon ym ou s recipien ts” an d that “an ad verti sem entr ea d b y mil l i o ns ( o r e ve n tho us an ds i n a tr ade m aga zi ne) i s a dvert i si ng, wh i l e a p er son-to
p erson pitch by an ac cou nt exec ut ive is n ot,” before hol ding that i n any even t the defendant’s pro m oti onal m ate rials did notm ake f al se orm i sl eadi ng r epres entat i o n s . I n b e t we e n th o s e t wo d e c i s i o n s c a me I S IIn t ’ l, Inc. v. B orden LadnerGervais , LLP , 31 6 F
. 3d 731, 73 3 ( 7th Ci r . 2 00 3) , whi chhe l d tha t se ndi ngl et te r s to the pla i nti ff’ s business partner s, warni ng t h em ( f al sel y) that if th ey co n t i n u e d d ea lin g w ith th e p lain tiff t h ey w ou ld be l i abl e f orpatenti nfr i ngem en t, w as not com m er ci al adv er ti singo r pr o m o ti o n. Th e s e c a s e s do no t ho l d tha t “ a dv e r t i s i ng o r pro m otio n ” is alw ay s lim ite d to p u b l ish ed or b ro ad c as t m at er ials

— an int er p re ta tio n th at w ou ld p u t u s a t o d d s w i th all seve n o th erfedera l co urts o fappeal s t o have consi dered th e is su e. LidoC h em , Inc. v. Stoll erEn te rpr is es, Inc. , N o. 10

-N os. 11

- 2260, 11

- 2375 13 1686 , 2012 W L 40097 09, at * 6 (6 t h C ir
. Sept

. 12, 2012 ); P odiatri stAss’ n, Inc. v. La Cruz A zul D e P uer to Rico, Inc. , 33 2 F.3 d 6, 19 -20 (1s t C ir. 20 03 ); Fa shio n B o utiq ue o f Sh o rt H ills, Inc. v. Fe ndi U SA , Inc. , 314 F.3d 48, 57-58 (2 d C ir. 2002); P roc to r & G a m ble C o . v. Ha ug en , 22 2 F
. 3d 1262 , 12 73- 74 ( 10th C ir. 20 00 ); Po rou s M e di a Corp. v. Pal l Corp. , 173 F
. 3d 1109 , 11 21 (8t h C ir. 19 99 ); C o a st a l A b strac t Serv ice, Inc. v. First Am e r i ca n Ti t l eIns . Co. , 173 F.3d 725, 734-35 (9th C ir. 1999); Se ve n- Up C o. v. Coca

- Cola Co. , 86 F. 3d 1379 , 13 84- 85 ( 5th C ir. 1996). A llbu t one o f th ese cas es w as d ecid ed before S a n d e r s on , a nd f our w er e deci ded befor e FirstHealth , an d there is no su ggestion i n eith er San de r s on or First H ealth ( o r f o r tha t m at te r i n I S IIn t’ l ) o f an intenti on to c r ea te a n i nt er ci r cui t co nfl i ct
. The c as es fr o m the ot h er circ u its are n ot inc on sis te n t w ith t h e h old in g in San de rs on tha t th r ee pe r so n- to
- per so n c o m m uni ca ti o ns at trad e show s d o n o t a d d up to com m ercial ad verti singo r pr o m o ti o n o r the ho l di ngi n ISI Int’ l that l ett er s threa teni ng sui t f orpa te n t infr i ngem ent a re not co m m er ci ala dve r ti singo r pr o m o ti o n; a nd i n First H ealth the Lanh am A ct was hel d app l i cabl e. A classic a d v ertisi ng cam p aign is not the only f orm o fma r k e t i n gemb r a c e d b y th e s t a t u t o r y t e r m “ c o mm er ci aladver tis i ng o r prom oti on. ” P odiatri stAss’ n re quir ed m er el y “ som e m edi um o r m eans thro ugh w hi ch the defe nd ant di sse m i nated i nfo rm ati on t o a p ar ti cul arc l as s o fc o ns um er s. ” 33 2 F
. 3d at2 0. And the m os t re c en t c as e, L ido C hem , expl ai ned that “the re quir ed l ev elo fdi ss emi na ti o n t o the r el ev an t pur ch as i ng pu b l i c ‘ wi l l v a r y a c c o r di ng t o the s pe c i fi c s o f the i nd ustr y. ’ ” 2 012 W L 40097 09, at* 6.14 N os. 11

- 2260, 11

- 2375 If “ad ve rt isin g or p ro m ot ion ” ju st m ea n t “ ad ve rt isin g,” then “pr om oti on” w oul d do no workin the sta tute. M o r e i m po r ta nt( bec au se o fthe fr eque nc y o fr edu nda nt lan gu ag e in st at u te s, se e, e.g ., La m ie v. U nited Sta tes Trustee, 540 U .S. 52 6, 53 6 (2 00 4); M o ska l v. U nited St a tes , 49 8 U .S. 1 0 3, 11 9-2 1 (1 99 0) (S c alia , J. , d iss en tin g); U nited State s v. C oste ll o , 666 F.3d 104 0 , 1 049 (7th Cir. 2012); B row n v . Griggsv ille C o m m un ity U nit S c h o o l D istrict N o . 4 , 12 F. 3d 681, 68 3- 84 ( 7th Ci r. 19 93) ) , ther e a re i nd u str i es i n w hi ch pro m oti on

— a sy st emat ic c o m m uni ca ti ve e ndea v o r t o p e r s u a d e p o s s ib l e c u s t o me r s t o b u y the sell er ’ s pro du ct

— t a k e s a f o r m o the r tha n pu b l i s hing o r bro adcasti ng. The de f acto custo m er s ( de f acto r ather than de j ure because theyar e the purchase rs ’ ag ents, ra therthan the purchas er s) f orhi gh

- speed turbo bl o wer s us ed i n was te wat er tr ea tment pl an ts are the co ns ul ti ng eng i ne er s who m an ag e th e pl an ts ’ b i ddi ng an d pur ch as i ng . Le e’ s r o ad sh o w vi sit ed m o sto fthe engi neer i ng co m panie s that do thi s, an d each s how pre sente d prom oti onalm ate ri al s that t ra shed N euro s, K T urb o’s m ost p rom inen t com p etitor.

“ Ne g a t i v e ” a ds

— ads thatdeni gr ate a com peti tor

— a re a co nventi onalth ou gh fre quentl y di spara ged for m o f com m er ci aladver ti si ng. KT urbo ’ s neg ati ve ads r eached f e we r c us t o mer s tha n a co nv e nt i o na l c a mpa i g n o fa dver ti si ng o r prom oti on would have d on e, but thatwas b ecause ther e a re few ercusto m er s f orhi gh- speed turbo bl owers i n w ast e w ate r tr eat m ent pl ants than th ere a re f ordog col l ar s. Road sho w s a re a com m on m eth od of prom otion; it i s, for ex am p le, the sta nd ard me th o d o fp r o mo t i n gI P O s . A n d r e me mb e r th a ts o me ofKT urbo ’ s f al se sta tem ents w er e posted o n one ofi tsN os. 11

- 2260, 11

- 2375 15

w ebsi tes

— a r emi nde r tha t m etho ds o fa dve r ti sing a n d p r o mo t i o n a r e c h a n g i n gw i th i n n o v a t i o n s i n c o mm unica ti ons m edia ; t h ey ar e no l onge r, i ftheyev erwere, co nfi ne d t o ne wspa pera nd mag az i ne a ds, r adi o a nd tel evi si on co m m er ci al s, and bi l lboar ds. T he distr ict cou rt w as trou bled by the f act th at “th ere is n o ev iden ce th at th e statem en ts at issue w ere p re se n te d to an y m em b e r s of th e g en er al p u b lic.” W ell ofco urse not; m em ber s o fthe gener al p u bl i c do no t buy hi gh- speed turbo bl owers oradvi se w ast e water treatm en t p lants on th e p urc ha se of su ch blow ers. T h ere i s no b as i s f o r l i m i tingthe La nha m A ct to a dve r ti sing orpro m oti on di re cted t o the ge ne r al pu bl i c, an d th e c ase law d oe s n ot d o t h at . See , e.g., Lid o C hem , I n c . v . S to ller E nte rpr is es, Inc. , sup ra , 2 01 2 W L 4 00 97 09 , a t * 8 ( appl y i ng the Act to l ett er s s ent a nd s tatem ents m ade to di str ibutor s o ff ar m chem i cal s) ; P orous M edia Corp. v. P all Corp
. , s upra , 1 73 F. 3d at 1114 ( applying the A ct t o an “al er t” sent onl y t o l ar ge m ake rs o fai r fi l ters and to re se llers oft h e filte rs ); C o a stal A bstra ct Serv ice, Inc. v. First Am e r i ca n Ti t l eIns . Co. , s upra , 173 F. 3d at 735 ( to sta tem en ts made o nl y t o o ne o ft wo o r thr ee na ti ona l r efi nan c in g c om p an ies ); Se ve n- Up C o. v. Coca

- Cola Co. , sup ra , 86 F.3d at 13 81 (only to i nd ep en d en t soft drink bott lers)

. W ha t a dv e r t i s i ng i s notd ire c te d to su b se ts of th e p u b lic ( dog o w ners i n ourprev i ous e xam ple ) r atherthan to 314 m il l i o n i ndi vi dual s an d m i l l i o ns o ffi r m s? One o fthe subset s is engi neer i ng fi rm s, and others ar e s ubsets o f e n g i n e e r i n g fi r ms s u c h a s th e c i v i l e n g i n e e r i ng fi r ms th atwer e f ax ed adv er ti se m en ts i n CE D e s ign Lt d. v. Ki ng A rc hite ctural M et als, Inc. , 637 F.3d 721 ( 7th Cir. 2 0 11).16 N os. 11

- 2260, 11

- 2375 N o one doubted that thos e ad ver ti sem ents ( chal l enged un d er a differen t statu te) w ere

— advert i si ng. The Lanham A ct c l ai m sho uld nothave bee n d ism iss ed ; n or th e pa ra llel c laim u n d er th e I l l i n ois U niform De cep tive Trad e Prac tices A ct, 815 I L C S 510/1 ets eq . , a st at u te ge n er ally th ou gh t in d ist in gu ish ab le f ro m the Lanh am A ct e xc e pt o f c o ur s e i n i ts ge og ra p h ica l sc op e, M uz ik o w ski v. P a ram o un t P ictu res Corp
. , 477 F.3d 8 99 , 907 (7t h C ir. 20 07 ); Israel Trav el A dvisory Service, Inc. v. Isra el Identi ty To urs, Inc. , 61 F. 3d 1250 , 12 59 ( 7th Ci r. 19 95); Thomps on v . S pr i n g- Gr e e n L awn CareCorp. , 4 66 N. E. 2d 10 04, 1 01 3, 1 01 6 ( I l l

. A pp. 19 84 ) , a nd di smi ss ed bythe di st r i ctc o ur t o n the sa m e g r o und a s Ne ur o s ’ s c l a i m un de r the La nh a m Actwa s di s mi s s e d. A FF I R MED I N P ART, R EV ER S ED AN D

R EMA NDE D I N P ART .

10- 15- 12