Skydive Arizona, Inc., has sold skydiving services under its SKYDIVE ARIZONA trademark since 1986.
Cary Quattrocchi, Ben Butler, and others, d/b/a 1800SkyRide (“Skyride”), operate an advertising service that makes skydiving arrangements for customers and issues certificates that can be redeemed at a number of skydiving drop zones.
Skydive Arizona sued Skyride in the District of Arizona for false advertising, trademark infringement, and cybersquatting. On its false advertising claim, it alleged that Skyride misled consumers wanting to skydive in Arizona by stating that Skyride owned skydiving facilities in Arizona when it did not. It also alleged that Skyride deceived consumers into believing that Skydive Arizona would accept Skyride’s skydiving certificates when it would not.
Following partial summary judgment and a trial, a jury awarded Skydive Arizona $1 million in actual damages for false advertising, $2.5 million in actual damages for trademark infringement, $2,500,004 in profits resulting from the trademark infringement, and $600,000 for statutory cybersquatting damages.
Skyride appealed the court’s finding of liability for false advertising on summary judgment on the ground its false statements were not material to consumers’ purchasing decisions. In particular, Skyride argued that customer James Flynn’s declaration that supported the materiality element was ambiguous and fell short of survey evidence that courts often accept as proof.
The Ninth Circuit wasn’t convinced. “Skydive Arizona’s decision to proffer declaration testimony instead of consumer surveys to prove materiality does not undermine its motion for partial summary judgment. Although a consumer survey could also have proven materiality in this case, we decline to hold that it was the only way to prove materiality. Indeed, as we held in Southland Sod [Farms v. Stover Seed Co., 108 F.3d 1134, 1140 (9th Cir.1997)], consumer surveys tend to be most powerful when used in dealing with deceptive advertising that is ‘literally true but misleading.’ Here, Defendants’ advertisements were both misleading and false. Flynn’s declaration proved that consumers had been actually confused by SKYRIDE’s websites and advertising representations. The district court’s materiality finding was further supported by Skydive Arizona’s evidence of numerous consumers who telephoned or came to Skydive Arizona’s facility after having been deceived into believing there was an affiliation between Skydive Arizona and SKYRIDE.”
The case cite is Skydive Arizona, Inc. v. Quattrocchi, __ F.3d. __, No. 10-16196, 2012 WL 763545 (9th Cir. Mar. 12, 2012).