Opinion ID: 767757
Heading Depth: 4
Heading Rank: 2

Heading: Deliberate Intent or Bad Faith

Text: 53 Though literal falsity alone does not raise an inference of damage to goodwill, some courts have created a presumption of damages when literal falsity is accompanied by deliberate intent or bad faith. The Ninth Circuit reasons that 54 the expenditure by a competitor of substantial funds in an effort to deceive consumers and influence their purchasing decisions justifies the existence of a presumption that consumers are, in fact, being deceived. He who has attempted to deceive should not complain when required to bear the burden of rebutting a presumption that he has succeeded. 55 U-Haul Int'l, Inc. v. Jartran, Inc., 793 F.2d at 1040-41; see also Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1146 (9th Cir. 1997); Resource Developers, Inc. v. Statue of Liberty-Ellis Island Foundation, Inc., 926 F.2d 134, 140 (2d Cir. 1991). 56 In Porous Media Corp. v. Pall Corp., 110 F.3d 1329 (8th Cir. 1997), the court followed the Ninth Circuit's reasoning and permitted a presumption of money damages where there existed proof of willful deception. Id. at 1336. However, acknowledging that a plaintiff seeking monetary relief under the Lanham Act generally must meet a higher level of proof than those seeking injunctive relief, the court clarified the presumptive damages rule as extending only to cases of comparative advertising where the plaintiff's product was specifically targeted. Id. at 1334-35. Otherwise, stated the Porous Media court, a plaintiff might enjoy a windfall from a speculative award of damages by simply being a competitor in the same market. Id.; see also Harper House, Inc. v. Thomas Nelson, Inc., 889 F.2d 197, 209 fn.8 (9th Cir. 1989). 57 The reasoning of Porous Media is applicable to the present case since Schmitt specifically targeted Balance Dynamics' balancer, which was the only product of its kind in the market. However, as statedabove, the evidence shows that Balance Dynamics did not suffer marketplace injury as a result of Schmitt's advertisements. Therefore, even if the advertisements were found literally false and Balance Dynamics presented evidence of willfulness or bad faith, the evidence defeats any presumption of damage to goodwill in the present case.