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Logo Icon POOLE & SHAFFERY, LLP OBTAINS FEDERAL COURT JUDGMENT AND PERMANENT INJUNCTION AGAINST CLIENT'S COMPETITOR FOR FALSE ADVERTISING

On May 29, 2014, United States District Court Judge, the Hon. Ronald S.W. Lew, ordered the entry of judgment for a permanent injunction against DriTherm International, Inc., a New Jersey based seller of a pour in place insulation product for underground piping, and its owner, because of various marketplace misrepresentations that had been made by DriTherm regarding the product's technical specifications, physical and performance properties which were determined to be unsupported by valid testing.

The judgment for permanent injunction was issued as the result of the federal court lawsuit filed by Poole & Shaffery, LLP in 2013 on behalf of its client, Gilsulate International, Inc., a California based company, which manufactures and sells the underground piping insulation and corrosion protection product, Gilsulate®500XR. That lawsuit included claims for violation of the federal statute prohibiting false advertising (the Lanham Act) and associated state law causes of action for false and deceptive advertising and unlawful business practices. The lawsuit was filed after DriTherm had failed to comply with cease and desist directive letters from two federal agencies.

The detailed permanent injunction issued against DriTherm International and its owner (link here to copy of Judgment for Permanent Injunction) requires, among other things, that they may not represent the installed densities and thermal conductivity values of the DriTherm product without appropriate and valid new testing.

Laura Duncan, President of Gilsulate International Inc. stated in a press release that "It is has been frustrating to see DriTherm's misrepresentations impacting owners, engineers and the industry for years with their product's false purported capabilities. The industry, engineers and end-users typically rely on the published performance properties and repeatedly awarded contracts based on what is published. This judgment for permanent injunction vindicates Gilsulate's concerns and sets verifiable testing standards and requirements for the industry to aid end-users and engineers they are receiving product capabilities set forth in specifications. Unfortunately, the significance of these findings is that for many years, many customers of DriTherm purchased a product that did not meet engineered specifications for the designs of their underground piping systems."

In addition to the requirements of the injunction dealing with density and thermal conductivity, DriTherm and its owner are enjoined from representing any product performance characteristic that is not supported through valid and appropriate testing and is required to provide that testing to Gilsulate in connection with all future performance representations. Also, the injunction prohibits DriTherm from disparaging and making false or fabricated statements regarding Gilsulate or the Gilsulate®500XR product.

The Judgment for Stipulated Permanent Injunction was the result of a settlement reached on the eve of trial.

David S. Poole and Samuel R.W. Price headed up the Poole & Shaffery team that represented Gilsulate International in this matter.