Law Firms Mentioned:Gessler Blue LLC | Locke Lord LLP
Organizations Mentioned:American Society of Home Inspectors, Inc. | International Association of Certified Home Inspectors | Locke Lord, LLP
By Kenneth H. Ryesky, M.B.A., J.D.
The American Society of Home Inspectors’ tagline “Educated. Tested. Verified. Certified.” did not cause injury to the International Association of Certified Home Inspectors.
A national trade association was unable to show that a rival’s slogan caused it to suffer harm to a reputational or commercial interest, the U.S. Court of Appeals in Denver has held. The International Association of Certified Home Inspectors (InterNACHI) alleged that the American Society of Home Inspectors, Inc.’s (ASHI) use of the tagline “Educated. Tested. Verified. Certified.” and ASHI’s willingness to promote novice inspectors caused InterNACHI to lose potential members and dues revenues. The appellate court held that InterNACHI was not entitled to a presumption of harm merely because ASHI was its direct competitor. Having shown no likelihood of harm, InterNACHI was not entitled to injunctive relief (American Society of Home Inspectors, Inc. v. International Association of Certified Home Inspectors, June 14, 2022, Wolpert, C).
The American Society of Home Inspectors (ASHI), a national trade association, sued its competitor, the International Association of Certified Home Inspectors (InterNACHI) and its founder, alleging that InterNACHI’s founder had publicly disparaged ASHI in an InterNACHI forum online. InterNACHI counterclaimed with Lanham Act allegations against ASHI, alleging deceptive advertising by the use of ASHI’s tagline “Educated.
Tested. Verified. Certified.” The federal district court granted summary judgment to ASHI, finding that InterNACHI failed to show the requisite injury causation element of its Lanham Act allegation. InterNACHI appealed.
Although there are local and regional affinity organizations of home inspection professionals, ASHI and InterNACHI the only such associations that operate on the national level. Each organization provides similar services to its members, including continuing education and listing on their respective directories and websites (which amounts to publicly advertising the members’ services). The main difference in the services provided is that ASHI publicly lists those who hold its “novice” class membership on its website. InterNACHI’s InterNACHI claimed that ASHI’s tagline “Educated. Tested. Verified. Certified.” is misleading because it falsely imputes a higher level of experience to ASHI’s “novice” members than the “novices” actually possess.
Lanham Act-evidence of harm. The court found that InterNACHI failed to show that ASHI’s tagline proximately caused harm to InterNACHI’s commercial interests. Here, InterNACHI commissioned a professional survey that arguably showed some degree of public perceptions that ASHI’s “novice” members were being attributed with more extensive experience and qualifications than they actually possessed by being listed in ASHI’s “Find an Inspector” Internet search utility. While this survey may well have probative value in determining that members of the public are misled, the survey does not show that any home inspectors (whose membership dues are a major revenue source to InterNACHI) were misled.
Evidence of ASHI’s significant increase in membership during the time it used its tagline at best proved that ASHI benefitted from the tagline; the evidence did not show that the tagline affected InterNACHI’s own membership or otherwise caused any harm to InterNACHI. ASHI’s membership spike had other possible causes, including the disbandment of a third national home inspector professional organization whose former members joined ASHI.
InterNACHI’s evidence included an e-mail from a former ASHI president who said that his own son viewed InterNACHI as a way to bolster his credentials as a home inspection professional because InterNACHI’s online educational resources were better than ASHI’s. This was disingenuous to InterNACHI’s contention that it was losing members to ASHI. And neither was InterNACHI’s founder’s unexplained and unsupported bare contention that ASHI’s “use of th[e] slogan in connection with the Find an Inspector tool is harmful to InterNACHI” adequate evidence.
Lanham Act-presumption of harm. The court declined to find that InterNACHI was entitled to a presumption of harm on account of its direct competition with ASHI. Here, ASHI was at worst a competitor in the same market as InterNACHI. There was nothing to show that ASHI had disparaged InterNACHI, or even touted its own membership benefits as being superior to those of InterNACHI. Moreover, membership in ASHI and membership in InterNACHI are not mutually exclusive; there are home inspectors who have joined both, and it is very common for a home inspector to enlist in one (or both) national organizations and also join a local or regional organization.
The case is No. 21-1087.
Attorneys: Geoffrey N. Blue (Gessler Blue LLC) for American Society of Home Inspectors, Inc. Matthew Furton (Locke Lord LLP) for International Association of Certified Home Inspectors.
Companies: American Society of Home Inspectors, Inc.; International Association of Certified Home Inspectors
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