Opinion ID: 790154
Heading Depth: 2
Heading Rank: 2

Heading: California Scents's Reliance on Pestco's Jury Demand

Text: 29 The legal issues asserted by each party are distinct, as is evident from a comparison of the elements of the parties' respective claims. To prevail in its business defamation and business disparagement counterclaims, Pestco would have had to prove facts that were unnecessary to California Scents's trade dress infringement claims, and vice-versa. Compare 4 J. Thomas McCarthy, McCarthy on Trademarks & Unfair Competition § 27:99 (4th ed.2004) (defining elements of common law product disparagement as (1) publication, (2) of a false and disparaging statement of fact about the product of plaintiff, (3) made with either knowledge of falsity or with reckless disregard of its truth or falsity, (4) with intent to harm plaintiff's interest, and (5) specific damages), with Disc Golf Ass'n v. Champion Discs, Inc., 158 F.3d 1002, 1005 (9th Cir.1998) (requiring plaintiff in trade dress infringement suit to prove that (1) the trade dress is nonfunctional, (2) the trade dress is inherently distinctive or acquired distinctiveness through secondary meaning, and (3) there is a likelihood that the public will confuse the alleged infringer's trade dress with that of the plaintiff's). 30 Nonetheless, we conclude that Pestco's business disparagement and business defamation counterclaims and California Scents's trade dress claims turn on the same matrix of facts, Las Vegas Sun, 610 F.2d at 620, and concern[ ] the same general area of dispute, In re N-500L Cases, 691 F.2d at 23. Aside from their false advertising claims, the basic dispute between the parties concerns whether Pestco infringed on California Scents's trade dress. The facts relevant to that dispute were central not only to California Scent's claims for trade dress infringement and unfair competition, but also to Pestco's counterclaims for business disparagement and business defamation. Indeed, Pestco would have been required to prove as part of its disparagement and defamation counterclaims that California Scents's statements—that Pestco infringed on or copied California Scents's trade dress—were untrue or misleading. See Fin. Programs, Inc. v. Falcon Fin. Servs., Inc., 371 F.Supp. 770, 776 (D.Or.1974) (To support a claim of commercial disparagement, a plaintiff has the burden of establishing that the defendant has made untrue or misleading statements which disparage the quality of the plaintiff's product or services.); 4 McCarthy on Trademarks at § 27:103 (The plaintiff in a commercial disparagement claim always bears the burden of proving that the alleged disparaging statement is substantially false or misleading.). 31 The substantial factual overlap underpinning the parties' respective claims compels our conclusion that Pestco's jury demand on its counterclaims was directed, at least in part, to the same issues as California Scent's complaint. On this basis, we hold that California Scents's reliance on Pestco's jury demand to preserve its own right to a jury trial on its complaint was reasonable. See Rosen, 639 F.2d at 92; In re N-500L Cases, 691 F.2d at 24. Therefore, the district court erred in concluding that California Scents was not entitled a jury trial on its trade dress and unfair competition claims.