While the other three defendants in the case settled, Yahoo filed a motion to dismiss Heartbrand’s allegations of violations of 15 U.S.C. §1125(a) as well as common law unfair competition. Heartbrand's allegations against Yahoo stemmed from the fact that when a user searched for “Akaushi” on yahoo.com, the first “paid listing” was lobels.com because Yahoo had sold Lobel's the right to have lobels.com be the first result for the keyword “Akaushi.” U.S. District Court Judge John D. Rainey granted Yahoo’s motion in part and denied it in part. See Heartbrand Beef, Inc. v. Lobel’s Of New York, LLC, et al., 2009 U.S. Dist. LEXIS 8822, Case No. 08-cv-0062 (S.D. Tex. Feb. 5, 2009).
In analyzing Heartbrand's false designation of origin claim, the court focused on the first of five elements used in the Fifth Circuit to analyze claims arising under (a)(1)(A) or (B) – specifically whether the “defendant made a false or misleading statement of fact about its product or service.” The court noted that Heartbrand does not identify any actual statement made by Yahoo. Instead, Heartbrand's alleges that at the direction of other parties, Yahoo placed a link to lobels.com in response to a user searching for the term “Akaushi.” As the court states, “To call this a ‘statement’ would stretch the meaning of that word.” In addition, even if Yahoo’s placement of an advertisement could constitute a statement, Heartbrand had not alleged that Yahoo made a statement about Yahoo's own products or services. Therefore, the court found that Heartbrand has failed to state a claim for false designation of origin.
Regarding Heartbrand’s claim for relief under common law unfair competition, Yahoo apparently did not directly address the claim, and thus gave the court no grounds on which the Court could rely in order to dismiss the state law claim. [Query: How about lack of subject matter jurisdiction?] Apparently, much of the Yahoo’s brief focused on “trademark infringement”; however, because “trademark infringement” was not one of the counts against Yahoo, the court found Yahoo’s arguments related to trademark infringement irrelevant. As such, the court denied Yahoo’s motion to dismiss Heartbrand’s claim for relief under “common law unfair competition.”