## Facts

- Neuros Co., Ltd. and a related company marketed high-speed turbo blowers to North American wastewater-treatment plants and claimed to be first in that market.
- KTurbo, Inc., a competing blower manufacturer, entered the market later and competed for the same projects.
- In 2008, a Utah wastewater-treatment plant solicited bids; Neuros won and KTurbo finished last among three bidders.
- After losing the bid, KTurbo’s CEO created PowerPoint slides and tables accusing Neuros of fraud by claiming an unattainable “total efficiency” for its blowers.
- KTurbo distributed the materials to consulting engineers and engineering firms that advise wastewater-treatment plants on selecting and installing blowers.
- KTurbo also circulated the accusations through sales representatives and posted them online.
- Neuros alleged the campaign harmed its business reputation and sales by portraying it as dishonest about product performance.

## Issues

1. Whether KTurbo’s slide presentations and related communications constituted “commercial advertising or promotion” actionable under § 43(a) of the Lanham Act and the Illinois Uniform Deceptive Trade Practices Act.
2. Whether the district court properly found defamation and properly awarded $60,000 in damages.

## Decision

- The Seventh Circuit affirmed the judgment for Neuros on defamation and affirmed the $60,000 damages award.
- The Seventh Circuit reversed the dismissal of the Lanham Act and Illinois deceptive-trade-practices claims.
- The court reinstated those statutory claims and remanded for further proceedings.

## Legal Principles

- “Commercial advertising or promotion” under the Lanham Act can include targeted communications in a specialized market when aimed at the relevant purchasing decision-makers and disseminated as part of a concerted effort to influence purchasing decisions, even if not distributed through mass media.
- Negative statements about a competitor’s goods or commercial conduct (including accusations of dishonesty) may qualify as actionable promotional speech when made in a competitive sales context.
- Statements characterizing a competitor’s conduct as “fraud” can constitute defamation when they assert factual wrongdoing rather than mere opinion or technical disagreement and are likely to harm business reputation.
- Appellate review will not disturb a bench-trial defamation judgment or damages award absent a showing of reversible error in the trial court’s findings.

## Conclusion

The Seventh Circuit held that KTurbo’s industry-directed slide campaign accusing a competitor of fraud could fall within the Lanham Act and parallel state deceptive-trade-practices law, requiring further litigation, while also affirming that the same accusations supported defamation liability and a $60,000 damages award.


Neuros Co., Ltd. v. KTurbo, Inc., 698 F.3d 514 (7th Cir. 2012)