by Professor Frank B. Cross
Types of product defects
Manufacturer defect: The product was manufactured in a way that made it unsafe.
Design defect: The product was designed in a way that made it unsafe. EXAMPLE: Ford Pinto case – gas tank was designed to be manufactured too close to the rear bumper.
Defect must make the product unreasonably dangerous. An automobile is reasonably dangerous.
But an automobile assembled without seat belts and airbags is unreasonably dangerous.
A product that is widely known to be dangerous but yet widely accepted to be used to satisfy a need is deemed reasonably dangerous (e.g., guns, kitchen knives, cigarettes). NB: Retailers can be sued for selling a product that is unreasonably dangerous.
Duty to warn: Sometimes the product itself is the best it can be, but there is still a danger there that the ordinary person would not be able to perceive. The product manufacturer has a duty to warn others about that danger. EXAMPLE: Medication side effects. The warning must be conspicuous enough to apprise the person of the nature of the risk. This includes both the font of the warning as well as the placement of the warning. EXAMPLE: Warnings on a pack of cigarettes is adequate as a matter of law per U.S. Congress. A cigarette smoker assumes the risk and thus cannot sue later.
Learned intermediary doctrine:
EXAMPLE: A man goes to a doctor. The doctor prescribes a certain medication for him. He takes it and suffers from adverse effects due to the prescribed medicine. The doctor was not negligent, so the doctor is immune from suit as the doctor was presumably acting in his best interests. He sues the drug manufacturer as a result. The drug manufacturer is immune from suit due to the “learned intermediary doctrine”, to wit: The drug manufacturer was relying upon the doctor (learned intermediary) as to what patients would be appropriate to receive this prescribed drug.
Specific Business Torts
Tortious interference with a contractual relationship: When one business is in privity of contract with another person/business, a competing business cannot interfere with that relationship and try to steal its rival business’ client.
- A contract existed and all the elements of what makes a contract valid under the law are met.
- EXCEPTION: A voidable contract can be considered a valid contract if the contract was not voided prior to the time of the tortious interference.
- The Defendant was aware of the contract.
- The Defendant intentionally induced the breach of contract. AND
- The Defendant inducing the breach must have behaved improperly.
- Must show that the Defendant had an improper motive.
- A corporate officer is immune from liability if acting in the best interests of his/her business.
- A lawyer who gives attorney-client privileged advice to a (potential) client which results in the tortious interference of a contract is immune from suit.
Tortious interference with a business relationship: Same as tortious interference with a contractual relationship except there is no contract.
U.S.A. is a capitalist country, and free enterprise and competition among businesses is encouraged.
EXCEPTION EXAMPLE: It is improper for a competing restaurant to have its employees outside of a rival restaurant handing out flyers to their patrons and encouraging them to eat at the other restaurant, especially if the employees say anything derogatory about the rival restaurant. Thus, it is difficult to make a case for this tort.
Misappropriation (usually, of Trade secrets):
Must show that you made an investment (time and/or $) into the creation of something that is useful in your trade. Business must take reasonable steps to protect the trade secret. Must show that the misappropriated item was used w/o permission or obtained by wrongful means.
Reverse engineering: This occurs when a business buys a rival business’ product, disassembles it, figures out how to make it and thereafter makes a competing product. One is not liable for misappropriation of trade secrets for reverse engineering. NB: You may be liable if the product manufacturer has a patent, however. Injury – There must be some injury suffered because of the misappropriation.
The business must have a protectable trademark.
Categories of TM:
Generic: Not protectable. When the public starts generically referring to a specific brand name to cover a whole host of products that serve that same need. EXAMPLES: Aspirin; thermos; trampoline; Kleenex; band aid.
Descriptive: Possibly protectable. These are names that do not define the product but describe the product. EXAMPLE: Newsweek magazine.
Suggestive/fanciful: Most protectable. These are names that really have nothing to do with the product itself. EXAMPLE: Xerox; Kodak camera. The TM cannot be illegal/immoral and be protected. EXAMPLE: “The only thing better than our leg in your hand is our breast in your mouth.” – Fried Chicken restaurant.
The TM cannot be misdescriptive. EXAMPLE: “Made in Paris perfume” was made in NJ, not Paris. Because it was misdescriptive, the TM was not protected. The TM can be registered with the U.S. Patent and Trademark Office, but this is not required. NB: Once the U.S.P.T.O. approves the TM, the TM thereafter has a presumption of the TM’s validity. Hence, it is recommended that a business register its TM w/ the U.S.P.T.O. The TM must be used. If not used, you lose the right to the TM. Simply said, use it or lose it.
The appearance and packaging of the product can be a protectable TM. EXAMPLE: Scotch tape.
Even color can be protectable in some instances if they are in the same trade. EXAMPLE: Sugar substitutes – Sweet & Low (pink) and Splenda (yellow).
User sophistication is an element. Does a typical user of this product know the difference between the two different product names or is there a possibility of confusion to the consumer? You must look to the intent of the junior user, to wit: the person using the first business’ TM. Bridging the gap: If it looks like the first user looks to expand into the area where the junior user is using the TM. EXAMPLE: Yale Locks looked to expand into other related hardware like tools. Yale Tools was infringing upon Yale Locks’ TM. Yale Locks’ TM was enforceable because it was reasonably foreseeable that Yale Locks would expand into other hardware-related businesses.
Anti-Dilution Laws: State laws that protect TMs even where there is no likelihood of confusion.
Protection against tarnishment of your TM: Your TM may be tarnished if associated with some unsavory practice. A TM is “tarnished” when an infringing mark portrays the infringed mark in a negative light- usually in the context of sex, drugs, crime, etc. EXAMPLE: Debbie Does Dallas tarnished the TM of the Dallas Cowboys as “Debbie” was a porn actress wearing a Dallas Cowboys cheerleader uniform. However, if it was done to be humorous/parody, then it is not actionable.
For Example, Jordache Jeans sold jeans to plus-sized people. While this was a use of Jordache’s TM, it was intended to be humorous or a parody. Garbage Pail Kids – Cabbage Patch Kids.
Protection against the loss of uniqueness of your TM: If your TM is so unique that no one else uses this TM in the U.S.A., you have a cause of action against anyone that attempts to use that TM.
Trade dress: Can be Trade Marked. EXAMPLE: Uniforms; bags; ties – all must have an unique characteristic pattern.