Free for a Fee

By Eric Goldman

General Steel Domestic Sales, LLC v. Chumley, 2013 WL 1900562 (D. Colo. May 7, 2013)

The Lawsuit

General Steel Corporation and Armstrong Steel Corporation compete in the “prefabricated steel building business.” Chumley, a former employee of General Steel, launched Armstrong Steel and ran Google ($GOOG) AdWords ads on the keyword “General Steel” with ad copy such as:

General Steel Buildings www.ArmstrongSteelBuildings.com Price Your Building Online Or Let Us Do It. Guaranteed Lowest Prices!

and

General Steel Buildings Price an Armstrong Steel Building Online in Minutes Or Let Us Do It. www.ArmstrongSteelBuildings.com.

(As usual, the court doesn’t discuss whether Armstrong Steel broad-matched the word “steel”).

Eventually, Armstrong Steel made its ad campaign more clearly comparative, buying the keyword “General steel buildings” to display ad copy such as:

Don’t Buy General Steel Without Pricing Armstrong First. Price a Steel Building in Minutes! www.ArmstrongSteelBuildings.com

In addition to the keyword advertising campaign, Chumley (or an employee of his) issued press releases that contained false claims and were attributed to a fictitious employee, and the defendant’s website made additional false claims.  Chumley further falsely published Internet postings in the name of General Steel’s CEO.  Rebecca Tushnet discusses the false advertising angles of the case.

General Steel sued Armstrong Steel and Chumley for false advertising and trademark infringement.  After a bench trial, the judge ruled for General Steel on the false advertising claims and for the defendants on the trademark claims.

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