were literally false. Princeton Graphics Operating, L.P. v. NEC
Home Electronics (U.S.A.) Inc., No. 87 Civ. 7257 (CES), slip
op. at 17 (S.D.N.Y. March 13, 1989) (the "March 13th
Decision"). According to the March 13th Decision literal
falsity was to be determined in the context of the audience to
whom the advertising was being conveyed. March 13th Decision at
14-16 (citing Plough, Inc. v. Johnson & Johnson Baby Products
Co., 532 F. Supp. 714, 717 (D.Del. 1982) ("Context can often be
important in discerning [whether] the message conveyed [is
literally false] and this is particularly true where as here,
the target of the advertising is not the consuming public but a
more well informed and sophisticated audience. . . .")).
Given our earlier findings of fact: (1) that the defendant's
advertising proclaiming the MultiSync's compatibility with the
PS/2 was directed at a specific target of sophisticated
consumers in the trade (the "retail channel"); (2) that within
that target group "compatibility" has a common and well-defined
definition; and (3) that the performance of the MultiSync did
not come within the parameters of that definition, we conclude
that plaintiff has established that defendant's advertising
claims were literally false.
Further, in view of our factual finding that these false
claims were made at a time when a monitor's PS/2 compatibility
was a major market issue, we also conclude that defendant's
false claims were about a "material" characteristic of the
MultiSync which would lead consumers to believe the MultiSync
was competitively superior. See Vidal Sassoon, Inc. v.
Bristol-Myers Co., 661 F.2d 272, 278 (2d Cir. 1981)
(misrepresentations made with regard to an "inherent
characteristic" of product include those claims which falsely
depict a product as being competitively superior). Accordingly,
we conclude that defendant's claims of the MultiSync's
compatibility with the PS/2 were in violation of section 43(a)
of the Lanham Act.*fn17
GBL § 350-d
As a threshold matter, with regard to plaintiff's GBL § 350-d
claim (renumbered in 1989 to GBL § 350-e) we must decide
whether plaintiff, by not addressing this pendent claim in its
pre-trial and post-trial briefing or at trial, has waived it.
Plaintiff argues that this claim remains in the case because
the standards for finding liability under GBL § 350 are
substantially the same as under section 43(a) of the Lanham
Act. February 2, 1990 Letter of Daniel Ebenstein at 2.
Defendant argues that since the only claim briefed by the
parties was the Lanham Act claim and because standing under GBL
§ 350 was not briefed by the parties, plaintiff failed to
preserve the state claim. February 14, 1990 Letter of Stephen
Hartman. Moreover, defendant asserts that plaintiff has no
standing to bring a claim pursuant to GBL § 350.
We conclude that the claim pursuant to GBL § 350 survives
despite plaintiff's failure to raise it at trial or address it
in its briefing. It is our view that defendant suffered no
prejudice by plaintiff's failure to brief this claim or address
this claim at trial since the same operative facts establish a
violation of both section 43(a) of the Lanham Act and GBL §
350. See Grant Airmass, 645 F. Supp. 1507, 1509 (S.D.N.Y. 1986);
cf. Procter & Gamble Co. v. Chesebrough-Pond's Inc.,
588 F. Supp. 1082, 1083 n. 4 (S.D.N.Y.), aff'd, 747 F.2d 114 (2d
Cir. 1984). Indeed, any prejudice by plaintiff's failure to
raise the state claim would inure to plaintiff since it has the
burden of persuasion.
Moreover, it is our view that plaintiff's standing to bring
this claim is determined in this instance as a matter of law.
Accordingly, since defendant has addressed the standing issue
as a matter of law in correspondence to the court, defendant
has not been prejudiced by its inability to address
the section 350-d claim at trial.*fn18 Cf. McFadden v.
Sanchez, 710 F.2d 907, 911 (2d Cir.) (late modification of
pre-trial order should not be allowed if seriously prejudicial
to a party), cert. denied, 464 U.S. 961, 104 S.Ct. 394, 78
L.Ed.2d 337 (1983).
GBL § 350-d permits "any person" who has been injured by
false advertising to bring an action, inter alia, to recover
actual damages or fifty dollars, whichever is greater. The
Practice Commentaries to GBL §§ 349-50 state that:
If the principal injury is to consumers and
incidentally to a competitor, competitor standing
serves the purposes of the statute. If competitive
injury is the principal issue, use of GBL §§
349-350 may be misplaced because its purpose is to
protect consumers, not competitors as such.
R. Givens, Practice Commentaries on General Business Law §§
349, 350 at 572 (McKinney 1988).