Friday, January 30, 2026

Santa Clara IP Conference: Where Do We Go From Here?

Moderator: Edward Lee, Santa Clara Law

BJ Ard (copyright), University of Wisconsin Law School

© is often displaced by contract and other regimes in sectors—scaling it up or down would produce minimal impact. Consumer copying for example is often solved by non-© solutions: Spotify changed things, as did rise of cloud-based services which meant people had less to share. Content ID can block fair use but does allow lots of uses that otherwise wouldn’t be fair. Even big-budget productions, like video games, don’t rely on © to deter second-comers but on features that are costly to duplicate, actors/TM/ROP protection, sequelization. It’s not that this sector is representative but hybrid relations that are only partly ©-governed exist across the board. Copyright owners use licensing models to overwrite © provisions. Streaming services continue this trend w/no need for legal enforcement b/c access is built into the system.

© is the only policymaking place where concerns about AI are actually being aired, but © can’t stop AI; big © owners are going to license. Given that © isn’t doing as much work in its traditional domains, we shouldn’t expect it to do work in these new domains. Asking it to solve labor issues, market concentration, privacy is likely to fail.

Colleen Chien (patent): AI’s effects on search for examination; AI can also identify potentially infringing products. AI tools used to digest evidence and make predictions. As we see platforms start to make their own IP infringement determinations, we might find them “good enough” w/o need for lawyers. Discussed need for human review—need to figure out.

Camilla Hrdy (trade secret), Rutgers Law School

Trade secret law is different from other IP; often not defined until mid litigation where you perform “identification,” the law of which is in chaos. California wants you to identify the secret before discovery; courts had maybe been converging on that but the 9th Circuit said no, the Defend Trade Secrets Act has a different standard—not reasonable particularity but sufficient particularity; other circuits say different things. Lack of clarity on fundamental initial issue. What does it mean to keep something secret? Not clear; jury left on its own. What does it mean for a secret to be readily ascertainable? In California, the most important trade secret jurisdiction, there isn’t a requirement of lack of ready ascertainability—even if you could perform reverse engineering in 8 hours you can still be liable for getting it from an employee. NJ has the same rule. Lots of lack of clarity about workers’ high level knowledge and experience—lots of courts think that asking about that is the same as asking whether something is generally known in the field. Not clear about what it takes for a secret to have independent economic value—lots of courts just look at whether you invested in the information. We need more people thinking about trade secret law! People need to talk to practitioners. We don’t know enough!

Keith Robinson (patent), Wake Forest University School of Law

Uncertainty around what counts as invention. Mental conception doesn’t really match with the evidence we look for (documentary: notebook, emails, other records). Identifying a problem rarely matters. Even a highly specific articulation of a problem is typically insufficient unless paired w/ a concrete solution.

Jennifer Rothman (right of publicity), Univ. of Pennsylvania Carey Law School

Identity thicket: overlapping rights. People have been registering marks in names/likenesses for a while; current focus on Matthew McConaghey is perplexing to her (and me). But we might highlight how rights are being separated out w/potentially different controllers and licensees. There used to be a lot more distinction b/t people using name as business name/putting it on goods/services. But now the Lanham Act and states protect use of names, voices, and images as marks, at least if we are commercializing them in some way. The PR stunt of the registrations is more interesting: he has a deal for use of his voice as a voice clone that can speak multiple languages—it’s a way to market his deal. False advertising law is also relevant to these uses. © is also relevant and maybe is less peripheral than Ard said. Are digital replicas uncopyrightable? Unclear! There are pending registrations. If registrable, can there be multiple registrations of a digital replica as you can have multiple registrations of photos of a person? If so, what’s infringement? We’ll see people leveraging © this way more. © one’s personality or “character” bible in the same way people © scripts. Music industry has already made © claims that using similar voices is infringing.

At the federal level Take It Down is about intimate images; No Fakes is also under consideration to regulate digital replicas generally. There’s so much going on: that’s the identity thicket. And one person might not control all these rights; rights conflicts are possible, raising serious concerns about a human-centered approach. Compare to EU approach, focusing on concerns about the underlying person being depicted and secondarily on the public.

Capitol Hill: not clear what will happen, if anything. But it won’t help matters very much b/c unlikely to preempt the thicket that already exists. And won’t address concerns about transferring rights away from underlying person, or about deception licensed by the underlying person. Considering model state ROP law to address more of these issues, especially transferring someone’s own name, likeness etc away from them—has seen SAG realize this is a problem. Might see more of an appetite for repealing CDA 230; shifts in tech to build guardrails; we might see shifts in preferences for authenticity—hopes for the renaissance of theater.

Santa Clara IP conference: How It’s Going: What Went Wrong?

Moderator: Zahr Said, Santa Clara Law

Mark Lemley (patent), Stanford Law School

After 40 years of radical change, things settled down for normalcy in the last 10 years until Trump. 1980-2017: we grant 350,000 a year up from 50,000; now mostly computer/bio instead of mechanical; most inventors were single and now they’re teams; most inventors were from US and now they’re mostly foreign. University patenting started in 1980; now significant. Now first to file (not first to invent); now 20 years from filing (instead of 17 from grant). Patent thickets; patent continuation practice—multiplication from a single application to multiple patents. Lawsuit numbers have tripled. Jury trial was starting to become a thing in 1970s but a small percentage; now a vast majority of trials are before juries. Product producers used to file against competitors; now 50% of lawsuits are filed by NPEs. Patents were invalidated in 70s at around 65%; now it’s 43-45%. 1982: patent appeals consolidated in Fed Cir. Before 1980 there was no reexamination; then inter partes reexam and post-grant review; IPR proceedings became the way most patent validity disputes were resolved. Introduced district court forum shopping—ED Tex, WD Tex, D Del were not where we litigated in 1980.

Hatch-Waxman/pharma litigation against generics didn’t exist until 1984, so pharma patent litigation grows from there. Patent claim Markman hearings were created in 1990s, cemented in 1996; before then, we didn’t know the answer to “who decides what a patent means, a judge or a jury?”

Then there are substantive changes: patentable subject matter broadened to almost everything, then narrowed again. Major changes in prior art; major changes in interferences; obviousness law changed in fundamental ways, narrowing then broadening. Utility doctrine weakened, written description doctrine and full scope enablement became things. All real disputes about infringement are resolved in Markman hearings; changed law of inducement; new concept of joint or divided infringement; we strike down large swathes of rules on inequitable conduct. Ebay changes the rules for injunctive relief: no longer injunctions as a matter of course. We introduce apportionment of damages (renewed from 19th century); we change rules on willfullness/advice of counsel and venue.

If you’ve been litigating for 40 years, everything in the system has changed/been in flux, until about 2017. Not much happened since then! A period of normalcy. 62 SCt patent cases 1982-2018, and none in last 3 terms. Recent SCt decisions have had “instinct for the capillary”—clarification of assignor estoppel, not the central issue in patent law. 3 cases on 271(f) about exporting components from the US that are combined outside the US: the only 3 cases on 271(f) of which he is aware. Whether the post office is a “person” under the Patent Act. Not earthshaking! Contrast to KSR, eBay, and patentable subject matter cases before. Substantive cases began to affirm existing law rather than change it. Fed Cir has also settled down: en bancs used to be 2x/any other circuit, but only 2 in last 7 years (1 design patent, another a damages case that was a dud). Fed Cir Dissent rate dropped from 2d highest to one of lowest; many cases now not precedential.

IPRs turned out to have the same invalidity rate as courts at 1/10 the cost. Even patentable subject matter is pretty predictable. There are still cases but they don’t make fundamental changes.

This is generally a good story.

Then Trump. All is in flux. New PTO director dismantling large swaths of PTO, making IPRs essentially impossible to get; increased quotas; refused to hire new career examiners, offers no promotion path; on track to replace examination with AI; Lemley is skeptical. Part of a broader chaos targeting scientific research; 100% tariff on patented pharmaceuticals to somehow magically reduce drug price; taxing university patents; proposing tax on patents’ assessed value at time of filing. Not clear whether normalcy survives.

Mark McKenna (trademark), UCLA School of Law

Conceptual changes that transformed what TM is mostly for the worst. (1) unbounded expansion of the concept of source in TM. Source used to mean actual historical source: who made the thing you were buying. Infringement was very tightly limited to where consumers would believe D’s products came from P. That was passing off. Only someone tricking consumers into buying directly competing goods—very tightly connected to TM’s theory of harm: illegitimate diversion of trade. Courts, primary drivers here, came to regard that definition as overly limited; commerce was changing and courts wanted to capture newer commercial practices, specifically outsourcing of production and expansion of product lines to adjacent areas by companies—wanted to let Coca Cola to license production to independent bottlers and still maintaining rights. Redefined source as “control over quality” instead of actual historical source. Also started to recognize confusion about use of same mark on products that didn’t compete directly, like pancake mix and syrup. Unmoored TM from traditional focus on direct competition and we never replaced it with a real limit. “Sponsorship or affiliation” confusion is the worst; so open-ended that virtually any conceivable connection can be conceived in those terms even though it has different effects on consumers/competition more broadly. Net effect: confusion is performance art—parties need to use that word, but that’s not what the cases are really about, which is rights in gross.

(2) Connected and mutually reinforcing: structural collapse of what used to be a separate but related body of unfair competition law into TM, and resulting expansion of TM subject matter. Once upon a time, only certain things could be TMs, words or devices that didn’t give info about nature of goods/geographic origin: arbitrary/fanciful words/devices that were separate from but attached to the goods. Personal names, descriptive terms, product packaging/product design wouldn’t count; service marks weren’t affixed to anything for sale. Only technical TMs could be infringed; unfair competition law was not about what somebody owned, b/c by definition they didn’t own anything. P had to show that D was passing off even w/o a TM, so there were additional proof requirements and generally much more limited remedies. Would not bar use of descriptive word, etc.

That system collapsed, mostly b/c of Erie. Unfair competition became understood as state law, not common law, and federal courts started to believe they couldn’t have common law, making lawyers worry about 50 different kinds of unfair competition law. That lack of uniformity wasn’t really happening but courts and lawyers worried that it might. Solved by recharacterizing things that used to be excluded from TM and calling them “unregistered TMs.” Those things were previously unregistrable, not just unregistered. Courts started interpreting 43(a) to give a cause of action for infringement of unregistered TMs. Not what Congress anticipated. Huge change. We lost the orientation of unfair competition as a residual doctrine w/more limited remedies and got a huge amount of subject matter where we didn’t have rules about what could be owned. Had to build that law about what could be owned from scratch and haven’t been particularly successful.

These two things amplify each other: TM is redefined as anything that can indicate source as we’ve expanded source beyond recognition. Incremental; radicalism not notice. Courts act like the assumptions they used to hold under the old system still apply, even though the changes are too great to make that true.

Trevor Reed (copyright), UC Irvine School of Law

Indigenous creative rights: © is silent on status of citizens of over 500 tribes, despite importance of Indian culture to 1970s American culture. Many pieces of indigenous self-determination legislation in the 70s.

Mismatch b/t © and tribal sovereignty: tribes often regulate traditional knowledge; © might call it public domain or give it only thin protection. Eurocentric assumptions: limited times, transfers to certain people only, money is a sufficient remedy, it doesn’t matter where the creativity occurs; divides intangible from tangible. Ignores tribal sovereignty; 301 preemption can conflict. Tribes should, among other things, be able to take over registration and deposit. His objections: Should be no public domain for tribal creativity w/o tribal authorization; federal remedies for violation of tribal rights; tribal courts should be recognized as venues for © claims and tribes’ regulatory authority should be formally recognized.

Pamela Samuelson (copyright), UC Berkeley Law

Statutory damages are the worst! Evolution: until 1909 Act, there was a per sheet penalty dating back to the Statute of Anne, and statutory damages were an improvement (anybody could ask for the PSP and half of the money went to the US gov’t; not used often). Particularly useful when difficult/expensive to prove damages; courts had discretion to grant statutory damages but generally wouldn’t if damages or profits were measurable. Nonpunitive way to get some compensation and deterrence.

1976: good parts: tripartite structure of $750-30,000 as court considers just; up to $150K for willfulness; discretion to reduce awards if innocent infringers or nonprofit educ/library users who thought uses were fair. Compensatory at low end; deterrent in middle; punitive at high end.

Understandable but contribute to problems: Ps can ask for SD at any time before final judgment; they’re mandatory.

In practice: Congress failed to consider how they should be assessed in secondary liability or multiple work cases—in Cox, jury awarded nearly 100K per work, $1 billion. Authors Guild v. Google, estimated risk was above $350 billion. Arbitrary, inconsistent, and grossly excessive awards.

Suggested guidelines: award minimum where there’s no actual damages or profits or P is unwilling to provide evidence; approximate actual damages when fair use/lack of infringement is plausible, 2-3x actual/profits when reckless or intentional; up to 10x if highly willful. Or consider what will deter this D. Cox v. Sony: main issue is standard for contributory infringement, but second issue was the standard for willful infringement, but oral argument ignored it. SG and Cox said focus should be whether Cox knew its own conduct was unlawful; reasonable for Cox to think it was OK to continue to provide service to accounts whose users infringed, especially to hospitals and barracks and the like.

Now getting worse: 1202 statutory damages. Very similar but minimum is $2500 w/maximum 25K. Measured per violation (not defined) not per infringed work. No “as the court considers just” limit. No need to have registered © for eligibility. Way more likely to result in excessive damages.

Said: heard a lot about Erie, more than any other IP conference: what gives?

McKenna: Congress has left the field and SCOTUS justices are no longer picked for being lawyers but for specific hot-button issues. That leaves everything to lower courts.

Lemley: we’ve also decided to abandon the common law and equity for the dictionary definition of whatever terms the judge decides to look up, which is a particular disaster for an IP regime that assumed a common-law development. Many key concepts (infringement standard) aren’t even in the statute. So we’ve abandoned the tools we’ve used for centuries. Leaving us with the executive branch, and leaving aside Trump chaos, one of the challenges is that you won’t get long term consistent development. We’re looking at traditional sources of federal law and finding them wanting.

Samuelson: tech is also a big driver in ©. Generative AI, billions of dollars at stake. Every other tech has pissed off a specific sector: recording industry, movies, etc. Now everyone is mad. Dismantling of federal science community is also hurting. Copyright is the only law on the books is the only thing that seems like it could destroy AI; that’s not going to happen but Ps can ask for impoundment/destruction, or they could end up having control over the models.

Reed: people are losing faith in economic rationales of IP; social justice is becoming a bigger rationale and people want to see more of that, but we keep spinning out more economic arguments. Compare backlash to racist mascots—pressure on corporations to change their TMs.

Farley: what went wrong in Dastar? Unbounded definition needed constraint.

McKenna: Dastar’s biggest fan! But courts haven’t applied it. The case is hard: you have to dig in to get what the court is saying. Whatever else you thought of Scalia, he was smart and engaged with the arguments, and that level of engagement is less common. Also, lower courts don’t like the outcomes it produces and so ignore it. That means TM is used as a back door for copyright, especially for works in public domain.


Santa Clara School of Law: Intellectual Property Conference: How It Started, How It's Going: What Went Right?

Moderator: Brian Love, Santa Clara Law

Jeanne Fromer (trademark), New York University Law School

Search and examination on relative grounds (Europe doesn’t do that)—has critiques but generally doing a decent job. Ironic b/c we think of US as “free market” and Europe as paternalistic but registration works the opposite way. Smaller businesses may not have registrations but can get benefits from opting in; use is still the core of US TM. This is a way to give them some protection/different pathways for TM rights, and having the two paths (registered/unregistered) is generally good. Courts also helped systematize distinctiveness—again with some things that aren’t working great, but the systematization is a good thing. Semantic connection b/t mark and category of goods/services must be evaluated: shouldn’t be protected as a mark when connection is too strong, or protection shouldn’t be easily granted if it’s pretty strong. Focus on consumer perception is also a good one from the perspective of TM’s goals: to keep consumers from confusion in the marketplace and being responsive to how they behave.

Rob Merges (patent), UC Berkeley Law

Volume/velocity of transactions based on IP rights has grown amazingly since 70s/80s, a little bit invisibly in how many business models and transactions enabled. Textualism/literal infringement doctrine gave rise to the practice of claim charts, which made for transactional efficiency: a formalistic procedure. Structures claim interpretation process into fairly narrow channel. This allows a boom in patent licensing. Allows fast development of vaccines—patent licensing is behind the scenes. ROP is also good b/c there are things you can do with property rights that you can’t do with contract alone in terms of transactions.

Rebecca Tushnet (copyright), Harvard Law School

Unlike my predecessors, I’m not going to do an overview, but talk about a specific provision of copyright law. Just as democracy is the worst form of government except for all the others that have been tried, so too with section 512, the safe harbor provisions for internet service providers, which has proven remarkably robust despite multiple efforts to destroy it over the past nearly three decades. I have my own litany of complaints about practical problems with 512, but in terms of dispute management it is a resounding success. I will compare 512 to the recently enacted Take It Down Act and discuss the evolution of caselaw by comparison to Carol Rose’s account of property titling systems.

512 creates a safe harbor against monetary liability and sweeping injunctive relief that would require changes in practices for online service providers that follow certain rules about how to handle complaints of infringement. It divides service providers into four categories, one of which is essentially defunct; service providers that provide connections for content like email or private messaging are supposed to have policies that terminate repeat infringers, and that’s definitely created some problems now, but for decades the key provisions were those for service providers who store content—like YouTube—or provide links or search engines, like Google—who won’t be held liable for direct or secondary infringement if they promptly take down instances of infringement when properly notified about them. 512 explicitly does not require services to monitor their services for infringing content. It does provide for liability without notice if a host or linker has “red flag” knowledge of infringement, but the courts have generally been pretty robust about making sure that general knowledge that infringement is taking place on a platform, or even general knowledge that there are multiple copies of an infringing work on a platform, don’t count as red flag knowledge. So unless a site is something like “top 50 movies to download,” it probably won’t have red flag knowledge.

What went right with 512? Well, one way to measure it is how many disputes it has resolved.  Caselaw v. number of disputes—the number of disputes is in the billions (even if 1/3 of the notices sent to Google are invalid, which seems to be the case, still billions of correctly targeted notices). There are big 512 cases, but not that many of them. The caselaw tells you only what was significant enough to fight in court about for unusual reasons—either reasons of the defendant’s deep pockets and structural significance in the entertainment ecosystem, or reasons of the plaintiff’s specific interests, usually a moral sense of offense. The everyday functioning of the system, though, is that lots of infringing stuff gets quickly taken down, often—if you believe Google—even before anyone has even seen it. And uploaders who disagree with the takedown can file counternotices; a service that honors the counternotice is immune from liability for reinstating the content and the copyright owner has to sue the uploader. Very few counternotices are filed.

Another way to measure success: 512 immediately became the default rule around the world, at least in practice—even in Europe, 512 compliance was for a long time sufficient to avoid being sued successfully—suggests 512’s utility as a workable compromise between interests of IP owners and accused infringers (compare the fate of the similar section 230, which definitely spurred US dominance in tech but was not routinely accepted as the final word on intermediary liability in non-IP situations).

Europe eventually diverged, at least formally, by requiring intermediaries to engage in licensing attempts and screening. But I say formally because even today it doesn’t seem to me that this has worked except for music and popular video; major forms of copyrightable works like photographs and texts are just not amenable to that kind of licensing requirement because ownership is not concentrated enough for comprehensive licensing regimes to form. European regulators have the benefit of not actually needing to require exact compliance with what looks like the plain meaning of the law; being a “good guy” is generally enough in the EU, something that is often surprising to US lawyers, who expect a law that doesn’t explicitly have a good-faith standard to not have a good-faith standard for compliance. The DMCA, that is, is still shaping behavior on the ground around the world.

There was a major attempt in the last 10 years to gut DMCA and put in concepts like notice-and-staydown in the US, which would require services to search for and remove similar copies after receiving notice about the location of one infringing copy. This was a brilliant branding move by 512’s haters—staydown sounds almost like takedown, so how hard could it be? But it is actually a huge technical challenge, especially for smaller services, and would have been a huge gift to YouTube in maintaining its dominance. Fortunately, this attempt fizzled, which is one reason that sites like Wikipedia, Reddit, Ravelry, and the Archive of Our Own can operate in relative confidence without the resources of a Google or Microsoft.

What about my complaints? Well, there’s definitely complexity, as the Supreme Court’s recent attempt to tackle intermediary liability for internet service connection providers makes clear; we’ll see what happens in the Cox case and that will tell us a lot about what 512 means for connection providers in the US. And counternotice law is a mess: when abusive notices are sent, it’s very hard to hold the sender accountable. But I want to make the case that the crud that’s accrued around various aspects of 512 is the standard fate of almost any law allocating rights, no matter how clear.

In her justly famous 1988 article Crystals and Mud in Property Law, Carol Rose explained that all clear legal rules, particularly rules created by legislatures, face pressure from two sources: the ignorant and the conniving, the fools and the scoundrels. The ignorant don’t know about the law, no matter how clear and crystalline it is, and they are subject to mistakes that make them lose out despite them not having done anything morally wrong. They didn’t know that land can only be transferred by a writing, so they rely on an oral agreement and hand over their money and are out of luck. The scoundrels exploit the clarity and hard edges of the legal rule to get unfair outcomes: the law says a mortgage has to be fully paid by a date certain or the borrower defaults and loses the land, so a conniving lender can hide out and make it impossible to find them until the time has passed and they get the land and most of the money. These abuses and unfairnesses pile up and courts for completely understandable reasons will make up special exceptions to allow equity back in, muddying the clarity of the written rule. Equity of course has its own costs: it makes disputes more unpredictable, therefore expensive, disadvantaging poorer actors, and equity is also more reliant on the biases of the factfinder who may have its own predispositions about the characteristics of good guys.

I believe that much of the uncertainty that has accreted in the corners of 512 law is the inevitable effect of this crystals and mud dynamic; it is not unique to 512 and therefore it’s extremely unlikely that changes to 512 could do anything more than restart this process: replacement rules would either be mud all the way down, which I think is worse, or be a different and probably worse crystal that would not make either creators or intermediaries better off. Rose concludes that, when the mud gets too bad, the legislature often intervenes to put a new crystalline rule in place—the fact that 512 has survived some reasonably well-resourced legislative assaults to me suggests that this isn’t one of those situations where the mud has fully gummed up the works.

I want to end by comparing 512 to the recently passed Take It Down Act, aimed at sexually explicit images “indistinguishable from an authentic visual depiction” published without the consent of the person shown in the picture. TIDA is not a safe harbor regime. Instead, it requires two things that aren’t in 512 to avoid liability: (1) services must remove accused images within 48 hours of receiving notice (with no clarity on what qualifies as receipt: I give it about 6 months before someone uses a mailing address and sues based on the time the mailed notice arrived at a building); (2) services must make reasonable efforts to remove known identical copies.

There are no counternotice provisions, even if the content was fully protected by the First Amendment; no safe harbor against liability; no guidance on what counts as reasonable efforts or what qualifies as knowledge. 512 does better on all these counts. Harbinger of attempts to do even more in proposals like Take It Down which cover any use of a digitally altered likeness, even as the White House is posting AI-altered images on official accounts.

Graeme Dinwoodie (International IP), Chicago-Kent College of Law

US jurisdiction over foreign © claims was done right. US wanted to become a leader in int’l © law to enable more effective enforcement. Led to NAFTA, TRIPS. Public law side interventions not always received enthusiastically outside the US—intrusion on sovereign choices. But private litigants used them successfully to argue that US law shouldn’t be applied extraterritorially. Predicate act: foreign profits from US infringement can be secured in US courts, often w/o regard to law of other country, but there are limits to that; would have liked more comity-facing analysis.

Historical reluctance globally to adjudicate claims of foreign © infringement. SDNY, a few years after 1978 Act, allowed claims for infringement in various South American countries to proceed. Impulse to provide relief under multiple foreign © laws were spot on. NY was where D was amenable to jurisdiction; hope that British courts would do the same thing in similar circumstances. For some time, this case was alone, in part b/c of fear of foreign “bramble bush” of law. Eventually, this approach got appellate endorsement in Boosey & Hawkes v. Disney—simply having to apply foreign © law of 18 countries was not a reason to decline jurisdiction. Not a torrent of cases, but the availability of such relief has structured private behavior. Has also been embraced by courts in Europe.

Especially valuable for small authors w/no resources to litigate cross-continent. Streamlining duplicative litigation is not inherently pro-© owner: Computer Associates v. Altai didn’t just occur in NY, but also in France. After they won in the US, Altai unsuccessfully sought an anti-suit injunction from relitigating in France, but it would have been more efficient for a small defendant to secure global clearance in a single case. (Altai won in France, but would have been much faster/cheaper in one court.) Better than seeking enforcement of US law to entire dispute. Enhances legitimacy/embraces sovereignty. But it does create complexity in applying foreign law; the good news is that public law has reduced divergence; there weren’t 18 different rules in the Disney case.

Different constraints in TM/patent. In patent, distaste for litigating foreign patents in Fed Cir and ECJ. ALI principles endorse doing patent/TM, with patent invalidation being given only inter partes effect. And in last few years, courts signaled more willingness, though Albright in Texas wants to grant anti-suit injunctions. That’s where this is going, along with jurisdictional issues. Will be a dialogue b/t patent judges in different countries; likely to be more respectful of sovereignty and thoughtful than the public law debates we’re going to see.


Wednesday, January 28, 2026

False endorsement claim can proceed against gov't issued license plates and gov't facility named for Roberto Clemente

Clemente Properties, Inc. v. Pierluisi-Urrutia, --- F.4th ----, 2026 WL 125574, No. 23-1922 (1st Cir. Jan. 16, 2026)

The representatives of the family of a famous deceased Puerto Rico baseball player, Roberto Clemente, sued the Commonwealth of Puerto Rico and several related defendants over the use of Clemente’s name and image on commemorative license plates and registration tags. The court of appeals partially reversed the judgment in favor of defendants on the trademark claims, showing the breadth of “use in commerce” compared to “commercial advertising and promotion.”

ROBERTO CLEMENTE is registered for various promotional goods and charitable/educational services, though the court of appeals didn’t note the goods and services; it hardly matters given the theories at issue.

Ciudad Deportiva Roberto Clemente operates a youth sports facility (of the same name) on land donated by the Commonwealth, but is in poor repair (plaintiffs blame the Commonwealth); the complaint didn’t make clear what its relationship was with plaintiffs. Appellants authorized Ciudad Deportiva “to use the trademark, name and likeness of Roberto Clemente” on commemorative vehicle license plates.

Then, in 2021 the P.R. legislature enacted new laws requiring any driver who acquired a new Puerto Rico license plate in calendar year 2022 to purchase a special plate commemorating the 50th anniversary of Roberto Clemente’s 3,000th hit for $21 extra; any member of the public who did not need to acquire a new license plate could also pay $21 to exchange their existing license plate for the commemorative plate. Another law added a mandatory $5 surcharge to registration tags issued in calendar year 2022 in return for a commemorative tag. Both the plate and tag had an image of Roberto Clemente; the words “Clemente,” “anniversary,” and “3000 hits”; and the numbers “21” and “50.” The money was to go in “the Roberto Clemente Sports District Fund,” for the exclusive use of the Department of Sports and Recreation. Drivers who got registration tags were also presented the opportunity to make a donation to the Roberto Clemente Sports District Fund.

“Puerto Rico’s citizenry reacted negatively to the new commemorative license plates and registration tags, and the public believed that appellants were receiving some financial benefit for the charges associated with the commemorative items.” Also, the Transportation Secretary made a televised statement, in January 2022, that the funds collected for commemorative plates and tags would go to “the Roberto Clemente Foundation.” And a permit issued by the Department of Transportation and Public Works lists the $5 surcharge for vehicle registration tags next to the words “Roberto Clemente Fund.”

Then the legislature transferred Ciudad Deportiva’s land back to the Commonwealth for the purpose of building the “Roberto Clemente Sports District” “as a sports and recreational facility for the enjoyment of Puerto Ricans and sports tourism.” Plaintiffs alleged that the law communicates “some kind of tacit endorsement of Roberto Clemente to this project” by expressly referring to “his vision of building a Sports City for the benefit of our young people and future generations.” The court of appeals, notably, is open to this theory even though it seemingly doesn’t think much of the lawyering.

The district court found that government-issued plates and permits weren’t use “in connection with goods or services.” But they were: license plates and registration tags are goods, and the Commonwealth collected money for them; the PTO even has a classification for license plates. Also, to the extent that the parties disputed “use in commerce,” the court of appeals suggested that the Second Circuit was right that the definition in the Lanham Act only applied to acquisition of rights, not to infringement—missing the Supreme Court’s fairly clear instruction to the contrary in Hetronic.

“While trademark owners suing state governments have generally lost, neither the district court nor the Commonwealth Defendants cite a case suggesting that government activities are inherently, or even presumptively, non-commercial.” Accepting the well-pleaded allegations of the complaint, “the Commonwealth Defendants did not use Clemente’s name or image simply to offer commentary about Clemente or to conduct some administrative government task.”

What about naming the Sports District after Clemente? Well, those allegations were “tied” to the other claims because “[p]roceeds from the sale of license plates and registration tags were set aside to raise money for the Sports District. And the Commonwealth Defendants invoked Clemente’s name when soliciting donations for the Roberto Clemente Sports District Fund.” If an infringement claim can proceed against “defendants who use someone’s name or image to solicit donations in support of public non-profit services,” which they can—citing United We Stand, about political parties—then it can proceed against the Sports District on remand.  

The 43(a)(1)(A) false association claim survived. Plaintiffs satisfied Lexmark by properly alleging reputational harm: “appellants’ business interests in licensing the Clemente mark for merchandise or other projects were plausibly impacted by this public blowback. This is especially so where appellants’ business reputation is built in part on an association with charitable endeavors, and the public backlash was in response to the perceived extortionate nature of the commemorative license plates and registration tags, goods that all Puerto Rico residents who needed new plates or tags in 2022 were forced to purchase.”

True, plaintiffs didn’t assert valid rights in Clemente’s image—they can’t just claim a trademark in “any pictorial depiction of Roberto Clemente.” However, they can still bring a false endorsement claim without having rights in a specific image. Use of Clemente’s likeness, the court said, was a “symbol” or “device” under 43(a). (This is an anachronistic reading of the meaning of the terms at the time, but that ship has long sailed.)

And likely confusion was plausible. This wasn’t like the use in the case relied on by the district court: a calendar that featured many “[p]hotographs of baseball, its players and assorted memorabilia” where Babe Ruth was just “one ballplayer among the many featured in the calendar.” The use of Clemente’s name and image in connection with a project whose proceeds were to be collected for “the Roberto Clemente Sports District Fund” was different enough to make confusion plausible, especially given the allegations of actual confusion and allegations that Clemente “was a highly recognizable figure whose name and image appellants had licensed for use in a different license plate program.” The Commonwealth expected to collect $15 million from the program, which could be recovered under the Lanham Act. (I have … questions about this statement. After all, the reason for the backlash was that people who needed a license plate during that year had no choice but to pay. Isn’t there a causation problem? Voluntary purchasers aside, as to whom I can see a disgorgement argument, confusion can’t have played any role in the payments made by people following the law that required them to have plates/permits.)

The court also therefore revived the dilution claim. (Household name fame as a mark for goods and services, as opposed to as a figure of baseball history, seems unlikely.)False advertising failed, though, because “commercial advertising or promotion” is substantially narrower than “use in commerce”/“use in connection with goods and services.” At most, the Commonwealth used “methods that communicate information to the public,” but that didn’t make its speech “commercial speech.”

Nor did the alleged infringement constitute a Fifth Amendment taking of appellants’ property. (There’s a further issue the court of appeals didn’t mention, consistent with its lack of interest in the goods/services specified in plaintiffs’ registration: Because of their failure to plead any “trademark” other than the registered matter, their trademark doesn’t cover the uses at issue even if there’s a false endorsement. So whatever exclusive right the registered trademark grants, the Commonwealth’s use shouldn’t be considered within the scope of that right.)

Plaintiffs argued that the Commonwealth engaged in a “categorical taking” because a trademark is property and the Commonwealth violated plaintiffs’ right to exclude. A “categorical taking” doesn’t require a contextual inquiry; a “regulatory taking” requires balancing to figure out if the government did so much damage to the value of property that it ought to pay. A non-physical, regulatory taking is only “categorical” where it “denies all economically beneficial or productive use” of the plaintiff’s property.

This case obviously wasn’t a categorical taking. First, physical invasion (the usual categorical taking) wasn’t possible for intangible rights. Second, the Commonwealth wasn’t alleged to have deprived them of all economically beneficial use of their marks.

Plaintiffs argued that (1) they had a right to exclude others from using the mark and (2) the commonwealth violated that right to exclude, drawing on recent Supreme Court precedent that requiring landowners to allow union organizers access to their land was a taking. But isolated instances of infringement didn’t equate to preventing a trademark owner from exercising their right to exclude, the way that the state’s labor law had prevented landowners from suing organizers for trespass.

Also, a temporary and partial physical incursion is still a physical incursion: “In the case of physical property, allowing even one individual to temporarily occupy or possess the property physically displaces the owner from possession or control of that portion of the property, however small.” But “[u]se of a trademarked word or image does not necessarily have the same effect.” (Note: I think the court should be talking about infringement, not “use.” Not all use of a trademark is within the scope of trademark “property” right, and the court worsens its point w/r/t takings analysis by not being more precise.)

It's not just that the TM owner can keep using the mark in the TM use sense during government infringement. It’s that it can still keep using the right in the “property right” sense during infringement: it can still sue the government, and other alleged infringers, because it still has that right. So the value of the right has not been completely destroyed, as it would have to be for a nonpossessory act to constitute a categorical taking. So balancing it is.

Also, interestingly:

There is special reason for caution in the trademark context: a trademark owner’s right to exclude is less robust when compared to other forms of property—and even when compared to other forms of intellectual property. Thus the “background limitations” on any property interest in trademarks might well be exceptions that swallow the rule, or at least require more careful assessment than the more straightforward limitations that apply in the case of physical property.

(Perhaps another way to say it: infringement is neither trespass nor nuisance; it is infringement, which is why intangible rights have to be analyzed differently.)

However, Puerto Rico had sovereign immunity, so defendants couldn’t be sued in their official capacities. The Lanham Act purports to abolish state sovereign immunity, but the Supreme Court found that unconstitutional for want of sufficient tailoring to the prevention of constitutional violations by the States, and Puerto Rico is, per circuit precedent, treated like a state for sovereign immunity purposes “unless the language of a particular statute demands [a different] result” or “some other compelling reason” exists. 

What about Section 1122(a) of the Lanham Act?  Section 1122(a) provides that “[t]he United States, [as well as] all agencies and instrumentalities thereof, ... shall not be immune from suit ... for any violation under this chapter.” 15 U.S.C. § 1122(a). And the Lanham Act’s definition of the “United States” “includes and embraces all territory which is under its jurisdiction and control.” But the clear statement rule requires any act of Congress that purports to waive or abrogate sovereign immunity to be “unmistakably clear in the language of the statute,” and this wasn’t, because the phrase “territory which is under [the United States’] jurisdiction and control” was open to multiple interpretations. “Whether the word ‘territory’ captures Puerto Rico is itself ambiguous, given Puerto Rico’s status as a self-governing commonwealth.”

The court found that, “[p]articularly in the Lanham Act, it also seems plausible that Congress used the words ‘all territory’ (singular) to ensure that the statute would cover the entire geographic scope of the United States, rather than refer to the territories (plural) of the United States as political or governmental units.” Such a geographical reading would be consistent with provisions of the Lanham Act governing the importation of goods “into the United States,” and defining the fame of a mark based on recognition by “the general consuming public of the United States.” Indeed, it wasn’t even “unmistakably clear” that the attempted revocation of sovereign immunity—which referred to the States—showed an intent to waive Puerto Rico’s sovereign immunity.

Of course, prospective injunctive relief was still possible, but not here. The district court found no ongoing violation of federal law because the sale of license plates and registration tags occurred only during calendar year 2022. What about the “unauthorized use of the Roberto Clemente trademark in connection with the Roberto Clemente Sports District”? This argument was waived. (!)

Qualified immunity: You might think you know how this will go, but these aren’t cops. Also waived at this stage! The individual defendants “specifically argued that appellants had not established a claim ‘under the Lanham Act’ and identified a particular element of one Lanham Act claim that they believed was missing” as their qualified immunity argument, and since they were wrong about that on the law, too bad. However, failing to properly invoke qualified immunity on a motion to dismiss does not necessarily preclude defendants from doing so at a later stage of litigation.

The court also was “skeptical” of plaintiffs’ argument that the Lanham Act abolished qualified immunity by waiving/trying to get rid of sovereign immunity. “[W]hen legislators have chosen to abolish qualified immunity, they have done so with much greater clarity.”

Chief Judge Barron partially dissented and would have affirmed the dismissal of claims for damages against the individual government defendants. The dissent would have read the district court to have found qualified immunity as to them on the ground that it was not clear that “use in commerce” covered the issuance of official license plates. The district court wrote, after discussing that element, that the individual defendants “were merely complying with their official duties to enforce a law as adopted by the legislature. As per the caselaw and other applicable law to date, any reasonable public official in their situation could have concluded that no trademark or proprietary rights were being violated by the imposition of the license fees that Plaintiffs have challenged in this case.” There was no clearly established precedent that governmental conduct akin to that involved here satisfies the “commercial use” element. “[W]hile out-of-circuit precedent establishes that private parties may violate the Lanham Act when they issue ‘marquee license plates,’ it does not speak to the distinct issues that this governmental context raises. Nor are those issues resolved by precedent that provides that, in general, state officials may violate the Lanham Act when they act in their official capacity.”


Friday, January 23, 2026

Non-TM owner can use 43(a) to challenge confusing use

Postar v. Hyland, 2026 WL 145934, No. 5:24-CV-019-H (N.D. Tex. Jan. 20, 2026)

This case allows a non-TM owner to bring a false advertising/unfair competition claim over allegedly confusing use of a trademark, and I think it’s right to do so, despite some fumbles over other parts of the law.

The facts are complicated, but the basics are:

In 2017, twin brothers Michael and David Postar split their interests in Affordable Storage, a self-storage business that they jointly owned and operated for many years. As part of the split, the brothers assigned certain registered trademarks associated with the business to a holding company in which they both own a 50% stake. Michael has exclusive rights to use those marks in Lubbock County, whereas David has exclusive rights to use them in Tom Green and Midland Counties. Years after the split, David, through his company Gargoyle Management, Inc., licensed a derivative of one of the marks to the brothers’ former employee, Gavin Hyland. Hyland and his wife operate their own self-storage business, Slaton Affordable Storage, Inc. Their two locations—one of which is in Lubbock County—are also named Affordable Storage.

Michael’s resulting trademark infringement claim failed because he is not the owner of the mark, and the holding company requires unanimous consent to act.

Slaton Affordable Storage opened in 2011 in Lubbock County using the Affordable Storage name and a yellow smiley face, which the other Affordable Storage businesses also used. David argued that the brothers didn’t view SAS as competition, because potential customers were unlikely to drive to Slaton or Brownfield when they had Affordable Storage options closer to home, and they even encouraged Hyland to use the Affordable Storage name and smiley face logo and included the Slaton and Brownfield locations in their own Affordable Storage advertising and websites. Several ads suggested that all Affordable Storage locations were “Under Same Ownership.”


SAS location

Michael acknowledged at deposition that he knew SAS was using the Affordable Storage name and smiley face logo as early as 2011 and that he first objected to SAS’s branding in 2020 or 2021. Six years after the Hylands opened the Slaton location, Michael told SAS’s co-owner in a recorded phone call that “[Y]’all can use the name. Anybody can use the name affordable storage, if you wanted to. ‘Cus there’s a whole bunch of them out there. You also have the rights to use a regular smiley face. Anybody can use a regular smiley face.”

word + design registration

In 2017—the same year as the split and transfer to the IP holding company, Postar IP—the Postars applied to and received two registrations for their logos with disclaimers of “AFFORDABLE STORAGE.” (The other has a crown on the smiley face.) Postar IP then entered into a license agreement permitting SAS to use the registered marks for three years; although an early draft said that SAS would stop using the Affordable Storage name and smiley face signage at the conclusion of a three-year term, SAS refused to sign. Still, absent an extension, SAS agreed to immediately stop using the registered marks when the license expired. “But SAS continued to use (and still uses today) its original Affordable Storage name and smiley face signage.”

SAS then entered into a second license agreement with David granting SAS a perpetual, non-transferable license to use, relevantly, an image of a yellow smiley face with arms, legs, and gloved hands standing next to the phrase “Affordable Self Storage.”

Image licensed under second license 

Fundamentally, Michael argued that David was using his former employee to compete with Michael in Lubbock County, where Michael has exclusive rights, even though David cannot unilaterally assign Postar IP’s rights. There was also a binding arbitral award concluding that Michael had exclusive rights to use the Smiley Mark and its iterations in Lubbock and that David couldn’t grant any license that wasn’t subject to Michael’s rights. A later arbitration panel concluded that “any ‘derivation’ (mark that includes one of the Postar IP marks or a variation of one of those marks) is the property of Postar IP.” Thus, the mark licensed to SAS, which created the same impression as the registered marks, belonged to Postar AP, although the panel didn’t void the second license agreement because SAS was no longer using the licensed mark.

Michael lacked statutory standing under §32: he was not the registrant. Neither brother may act alone on behalf of Postar IP.

However, the court reasoned, §43(a)(1)(A) (false designation of origin) and (B) (false advertising) were still available, although it applied the materiality requirement to both claims so there was no difference in analysis. Section 43 “does not require a plaintiff to establish ownership of a trademark as an element of its cause of action.”

SAS argued that they didn’t do anything to associate their business with Michael, just used the same name and logo they’ve used for years.  A reasonable jury could find otherwise, given that, as early as 2018, the first arbitration award found that only Michael could use the smiley mark in Lubbock County and that there were strict limits on David’s ability to license it. Then, the final arbitration award concluded that David lacked authority to grant second license. “If the jury believes Michael’s account, it could find that the Hylands and SAS misleadingly associated their self-storage business with the original Affordable Storage brand by continuing to use the name and smiley face logo after the parties agreed that they would cease such use at the end of the three-year lease term.” Or it could find otherwise.

And a jury could also find that the signage—“which is somewhat generic and located in areas where Michael does not have Affordable Storage locations”—was unlikely to cause confusion.  

Michael provided enough evidence of confusion to get to a jury: his declaration stated that “[c]onsumers or customers of the Hyland Defendants have called [him] or [his] Affordable Storage businesses confused about who owned the stores in Slaton or Brownfield and complained about the service they have received or their ability to reach someone on the phone to discuss the Hyland Defendants’ services.” SAS packages were sent to one of Michael’s locations, and SAS received an invoice from a gravel company that was intended for one of Michael’s businesses. True, some of the evidence was from 2018, but SAS was using the  Affordable Storage name and logo in 2018, and Michael’s declaration wasn’t temporally limited.

Materiality: This was a closer call, but the evidence of misdirected packages and invoices was “somewhat probative. Drawing all inferences in Michael’s favor, the fact that items meant for one entity were sent to the other suggests that a customer could be equally deceived into thinking that the two Affordable Storage businesses are the same.” Statements of actual confusion were also probative of materiality. (This seems to conflate confusion with materiality, though I suppose one could argue that if consumers were complaining to him the issues mattered to them.)

Also, self-storage was “in commerce” even if it was a local business.  

Injury: “If the jury agrees with Michael’s theory of the case—that the defendants are falsely associating themselves with the Affordable Storage brand by using unauthorized marks or the Affordable Storage name and signage in areas where he has exclusive rights—then it stands to reason that Michael is ‘likely’ to be injured by that conduct.”

The court also allowed a reverse passing off claim to proceed for reasons that are mysterious to me. The court even describes the theory as that “misrepresented themselves as the original Affordable Storage brand in a way that creates a likelihood of consumer confusion.” That’s just … regular old palming off. (The state claims survived too.)

The court also seemed to misunderstand the non-preempted misappropriation claims, focusing on the disputed claim that Michael “created” the mark—a theory that would clearly be preempted by the Copyright Act. (It said “the fact that the Registered Marks were assigned to Postar IP years after they were first used says nothing about who created them.”) The goodwill in the mark is something different. A jury could find that Michael and SAS compete in Lubbock County, plus the disputed existence of confusion also meant that competition was disputed. (I dunno, it could just mean that people don’t pay much attention to locations when they search.)

David might be liable for encouraging the infringement, if any.

The limitations-period/laches defense also required trial. The parties agreed that Texas law sets out a four-year limitations period for the Lanham Act claims. (Again, the court seems a bit confused about the difference between laches and a limitations period.) Michael sued in January 2024. Obviously, he knew about SAS’s use for a long time, even including it in his own ads. But he argued that the federal violations did not occur until the defendants entered into the second license agreement; a jury “could find that at all times before then SAS’s use of the Affordable Storage name and the smiley face logo was with Michael’s consent.” And that was within the limitations period; Michael’s theory was that the first license was just to allow SAS to transition away from the marks. (There seems like a naked licensing problem before the first license.)

For the state law claims, the continuing-tort case law and the appropriate limitations period was “far from clear.”


Monday, January 19, 2026

11th Circuit affirms defense TM verdict; evidence of confusion is not evidence of harm for disgorgement

Florida Virtual School v. K12, Inc., 2026 WL 127063, No. 24-10449 (11th Cir. Jan. 15, 2026)

A pretty good example of why granting registrations to highly descriptive (at best) terms is a bad idea! Also a good example of why not having a harm requirement in trademark infringement encourages this kind of litigation—although the lack of harm matters to remedies, it isn’t part of the main case, making litigation seem much more attractive.

Florida Virtual, a state-funded initiative, has federal registrations for “Florida Virtual School” and “FLVS” for educational services. K12, a for-profit competitor, initially launched with “Florida Virtual Academy” and “Florida Virtual Program.” Florida Virtual sued K12, which settled and adopted the name “Florida Cyber Charter Academy.” But Florida Virtual sued again when K12 launched a new program, “Florida Online School,” adding unfair competition, false advertising, and breach of contract claims. K12 counterclaimed for cancellation of Florida Virtual’s registrations for fraud against the USPTO. The trial court rejected all the claims (fraud on the PTO was barred by the settlement agreement despite some decent evidence of misrepresentation), and the court of appeals affirmed.

Of relevance to the breach of contract claims: K12 agreed to (1) pay Florida Virtual $600,000; (2) stop using the Florida Virtual Academy (FLVA) and Florida Virtual Program (FLVP) names and acronyms; (3) not use additional “Prohibited Marks”; and (4) transfer domain names containing the prohibited marks to Florida Virtual in 2016, until when it could use them to redirect to itself. The settlement agreement included a list of “Approved Marks” available to K12, but the parties agreed that there would “be no presumption against K12’s choice of a mark” not on that list.

As is not uncommon, nobody apparently followed up on the domain name transfer. If you have outside counsel do the litigation, you must have someone internal calendar issues like this for your team! Followup is where things are most likely to fall apart. This has been your practice pointer for the day! Thus, when Florida Virtual objected to K12’s Florida Online School (FLOS) in 2019, it also raised concerns with K12’s continued use of FLVA.com as a redirect to its other websites. K12 then transferred the FLVA.com domain to Florida Virtual and began the process of renaming its program “Digital Academy of Florida,” but Florida Virtual still sued.

False advertising: The false advertising claim was based on a checklist on K12’s website for “comparing K12 to other online learning solutions.” The checklist showed two columns, each listing several features of an online education program. “K12-Powered Schools” showed checked boxes next to each feature while “Other Online Learning Solutions” had an unchecked box next to each.

Florida Virtual’s survey expert concluded that the checklist misled around 18 percent of consumers into believing that Florida Virtual offered services that its competitors did not, but the district court concluded that the survey portrayed the checklist “out of context” and granted summary judgment on the false advertising claim because there was no other evidence of consumer deception.

The analysis here is weird; the court didn’t like that the survey didn’t show parents other virtual school options and ask them if they actually had the features at issue—but that’s falsity, which usually is established by evidence other than the survey. Still, the court reasoned, the checklist wasn’t literally false, because, although one reasonable reading of the checklist is that K12 provided “the checked services while other schools [did] not,” another reasonable reading was that K12 was “inviting consumers to do their own research and fill out the checklist—not stating that it possessed features the other providers definitely did not.” (The vagueness of the “other” category leads me to a similar ultimate conclusion—if such a comparison is even falsifiable, it doesn’t seem that Florida Virtual showed that all other online options in fact had the features in question. A better criticism would be that the survey didn't test the alternate meaning if it didn't give respondents the option to say "this is a checklist I can use" or something like that, along with "this means those other schools don't have those features.")

Even assuming falsity as to Florida Virtual—which did offer all the features—the survey “did not allow respondents to review the websites of K12’s competitors and assess whether they provided the same services as K12.” [Again, this is about falsity, not misleadingness.] Thus, the survey was unreliable for assessing a “marketing tool” whose stated purpose was to allow users to “weigh [their] options” when comparing K12 to other providers.

Trademark infringement: The district court excluded the lost-profits testimony of Florida Virtual’s damages expert, who wrongly/without foundation assumed that every Florida Online School student would have enrolled in Florida Virtual School absent the alleged infringement. With this lost-profits testimony excluded, there was no evidence of actual damages.

Florida Virtual sought disgorgement of not only K12’s profits related to Florida Online School, but also the profits from its other programs because the continued use of FLVA.com as a redirect to these programs’ websites was allegedly an independent act of trademark infringement. The district court disagreed and struck testimony unrelated to Florida Online School; Florida Virtual had not “based its trademark infringement arguments on [K12’s] use of the FLVA.com domain,” and the claim was released by the settlement agreement.

The court of appeals affirmed the rejection of Florida Virtual’s actual damages remedy. The only evidence Florida Virtual had of damage did not show that confusion caused the damage. First, a parent testified that she wanted to enroll her daughter in Florida Virtual School in 2020, but accidentally enrolled her in Florida Online School instead. But she realized her mistake and withdrew her daughter before classes began, then attempted to enroll her daughter with Florida Virtual, but ultimately “decided to go back to brick-and-mortar at the end of the day” (at the point that Covid shutdowns in Florida had ended). This was not a lost customer.

Second, there was other arguable evidence of confusion among students, parents, and school officials. “But there is a difference between general confusion and actual damages, and Florida Virtual did not bridge that gap.” The court highlighted some examples (most of which arguably just show that the purported mark is near-generic or generic):

A social worker contacted Florida Virtual for a Florida Online School student’s enrollment records after the student’s father said he had “been enrolled in FLOS (Florida Online School) which is a part of FLVS.”

A sixth grade Florida Online School student told his teacher in an email that he was “just starting Florida Virtual School.”

A parent emailed her son’s Florida Online School teacher to withdraw him “from Florida virtual school.”

In an email to a Florida Online School teacher, a parent said, “I am new to the Florida virtual school.”

A parent contacted both Florida Virtual and Florida Online School employees to ask about the status of her daughter’s enrollment in Florida Online School.

Even viewed in the light most favorable to Florida Virtual, “these examples demonstrate confusion—but that’s all. They do not show that the confusion diverted students from Florida Virtual to K12, or otherwise injured Florida Virtual.” And the damages calculation was no help because the expert assumed that Florida Virtual would have obtained all of K12’s registrations absent the allegedly unlawful conduct. “That conclusion was not an abuse of discretion.”

But, because there’s no harm requirement, that didn’t end the case, just kept it a bench trial.

There was no error in finding Florida Virtual’s marks weak. FV conceded descriptiveness, but the 11th Circuit presumes relative strength from incontestable registrations (boo). Still, that presumption can be rebutted by showing commercial weakness, which K12 did. Florida Virtual’s director of marketing testified that it had changed its logo six times since 1997 and acknowledged that changing a logo “can dilute a brand.” And its senior director of marketing and communications “discussed a nearly $5 million effort to rebrand [Florida Virtual’s] global operations as recently as 2020.” 

“In a 2018 survey, only 30 percent of parents with school-aged children recognized Florida Virtual’s brand—even when prompted. And in a 2020 survey, just 1 percent of respondents named Florida Virtual as an online education provider without prompting.” There was other survey evidence showing 50% prompted recognition, but that wasn’t much more than K12’s. There was also evidence of third-party use of “Virtual School” modified by the names of various Florida school districts; though FV argued that the geographic designation removed any confusing similarity, the district court could reasonably take a different view.

On similarity, the word marks were “nearly identical,” but Florida Virtual “operates in a crowded field of similar marks on similar goods or services,” where “slight differences in names may be meaningful,” and the design marks looked “nothing alike.” There was no error in finding similarity to be neutral.

Customer overlap: the court found this factor neutral because Florida Online School’s only customer was Hendry County School District, not “individual parents and students.” Florida Virtual argued that it “also partners with school districts,” so its customers are similar either way, and Florida Online School still “catered to the same general kinds of individuals,” which was all that was required. “[W]ere we reviewing de novo, we might agree that this factor weighs in Florida Virtual’s favor. But we are not—and it was not clear error for the court to determine that this factor was neutral.” K12 presented evidence at trial that the Hendry County School District was the only one purchasing services from Florida Online School, meaning there was no overlap. Anyway, “error in its analysis of one of the subsidiary factors” is “not enough to allow us to overturn” the trial court’s decision.

Similarity of advertising: Both parties “use[d] digital media to reach their customers and facilitate services,” but they targeted different audiences: K12 “primarily market[ed] to school districts,” while Florida Virtual advertised directly to students and parents. This minimized the overlap.

Intent: “While there was some evidence—like K12’s continued use of FLVA.com—that could suggest intent to infringe, other evidence supported the court’s finding,” including the name changes when challenged.

Actual confusion: “Short-lived confusion or confusion of individuals casually acquainted with a business is worthy of little weight, while confusion of actual customers of a business is worthy of substantial weight.” Reasonable minds could disagree whether it was the marks that caused any confusion reported, and thus the trial court did not clearly err.

For example, the parent mentioned above testified that she believed the two programs to be “one in [sic] the same,” because she “thought there was only one” online education provider in Florida. Because of that belief, she “didn’t feel the need to research” her options “in depth.” “[I]t was reasonable for the court to conclude that the source of her confusion was her mistaken belief that there was only one provider, not the similarity of K12’s marks. After all, if [the parent] was convinced there was only one online provider, it would not make a difference to her whether the program she signed up for was called Florida Virtual School, Florida Online School, or something completely different, like Digital Academy of Florida.” The story was similar with the other purportedly confused parent, who the district court found was confused about the flexibility of the schedule offered, not the name of the school. “[S]he testified that she did not care which program her son went to, so long as it had a flexible schedule.”

It’s nice to see some focus on causation here! The court compared the situation to one in which a skier believes that only one airline, Delta Air Lines, offers a flight from Atlanta to Salt Lake City; she books the first flight that comes up in her search, which happens to be on American. “Did she book with American instead of Delta because their names were too similar? Of course not—it’s because she thought there was only one option.” (Cf. Conopco, Inc. v. May Dept. Stores Co., 46 F.3d 1556 (Fed. Cir. 1994) (rejecting similar evidence of actual confusion where consumer testified that she believed that national brands made the products used in house-branded alternatives).

Florida Virtual also argued that it was error for the court to discount evidence demonstrating actual confusion: twenty-one emails from employees, parents, students, and others. But it was not clear error for the district court to find that the emails were not reliable evidence of confusion, but rather of “the fact that online educational service providers exist in a muddled marketplace replete with generically and descriptively named participants.” It was also not clear error to point out that, without survey evidence, there was “no way to filter out latent marketplace confusion that the parties agree exists in the online education market.”

Consumer sophistication: The trial court found that Florida Virtual’s customers were sophisticated given “the nature and importance of a parent’s choice of where to educate their child.” This is, of course, a normative statement, not an empirical one, as the parents above demonstrated. Students looking for a college are “relatively sophisticated consumers” because of “the nature, importance, and size of the investment in a college education.” It was not clear error to apply that logic to schools where “parents, not students, are the ones making that decision. Plus, the evidence showed that some of Florida Virtual’s customers were school districts and administrators, and we would expect them to have a developed understanding of their online education options.”

Friday, January 16, 2026

CFP: Yale/Harvard/Stanford Junior Faculty Forum, May 21-22

 Please share widely! 

Request for Submissions

Harvard/Stanford/Yale Junior Faculty Forum

May 21-22, Yale Law School

 Harvard, Stanford, and Yale Law Schools are soliciting submissions for the 2026 Harvard/Stanford/Yale Junior Faculty Forum, to be held at Yale Law School on May 21-22, 2026. Ten to fifteen junior scholars (with one to seven years of teaching experience) will be chosen, through a double-blind selection process, to present their work at the Forum. A jury of accomplished scholars will choose the papers to be presented. A senior scholar will comment on each paper. The audience will include the participating junior faculty, senior faculty from the host institutions, and any invited guests. There is no publication commitment. Yale Law School will pay presenters’ travel expenses, though international flights may be only partially reimbursed. 

The goal of the Forum is to promote in-depth discussion about particular papers and more general reflections on broader methodological issues, as well as to foster a stronger sense of community among American legal scholars, particularly by strengthening ties between new and veteran professors. 

TOPICS: Each year, the Forum invites submissions on selected topics in public and private law, legal theory, and law and humanities topics, alternating loosely between public law and humanities subjects in one year, and private law and dispute resolution in the next. For the upcoming 2026 meeting, the topics will cover these areas of the law:

Antitrust

Bankruptcy

Civil Litigation and Dispute Resolution

Contracts and Commercial Law

Corporate and Securities Law

Intellectual Property

Private Law Theory and Comparative Private Law

Property, Estates, and Unjust Enrichment

Taxation

Torts 

QUALIFICATIONS: Authors who teach law in the U.S. in a tenured or tenure-track position and have not been teaching at either of those ranks for a total of more than seven years are eligible to submit their work. American citizens or permanent residents teaching abroad are also eligible, provided that they have held a faculty position or the equivalent, including positions comparable to junior faculty positions in research institutions, for not more than seven years, and that they earned their last degree after 2016. Authors must be qualified as of the date of submission. We accept jointly authored submissions, but each of the coauthors must meet the qualification requirements. Papers that will be published prior to the Forum are not eligible. There is no limit on the number of submissions by any individual author. Faculty from Harvard, Stanford, and Yale Law Schools are not eligible.

 

PAPER SUBMISSION PROCEDURE: Please use the following form to submit: https://docs.google.com/forms/d/e/1FAIpQLSeE-Y1decyDrkmejVoztM2oPI3MrLfxdP3kCT500H1TwUBiMg/viewform?usp=header. The deadline for submissions is February 20, 2026. Remove all references to the author(s) in the paper. The form will ask for the title of your paper; under which topic your paper falls; an affirmation that your paper satisfies the non-publication qualification above; and the year in which you began teaching in one of the qualifying positions above. Each paper may only be considered under one topic. Any inquiries about the form should be directed to Christine Jolls. 

FURTHER INFORMATION: General inquiries concerning the Forum should be sent to Christine Jolls (christine.jolls@yale.edu) at Yale Law School, Norman Spaulding (nspaulding@stanford.law.edu) at Stanford Law School, or Rebecca Tushnet (rtushnet@law.harvard.edu) at Harvard Law School.

Christine Jolls

Norman Spaulding

Rebecca Tushnet

 

Friday, January 09, 2026

court rejects TM owner's attempt to require full chain of custody for first sale defense, but where is the burden of proof?

ZAGG Inc. v. Ichilevici, 2026 WL 63142, No. 23-cv-20304-ALTMAN/Reid (S.D. Fla. Jan. 8, 2026)

ZAGG sells a variety of screen protectors, power management solutions, mobile keyboards, cases, and personal audio products, including my beloved Mophie. Defendant DVG resells products, including ZAGG products, through Amazon. ZAGG sued DVG for false advertising and trademark infringement; DVG counterclaimed for false advertising/unfair competition/defamation. Here, the court rejects the parties’ cross motions for summary judgment on trademark and also leaves for the jury the related question of whether DVG’s listing of its ZAGG products as “new” was false advertising, while dismissing the rest of the counterclaims.

DVG bought its ZAGG products in a liquidation pallet from a wholesaler. ZAGG argued that DVG’s advertisements are false because “Amazon’s guidelines require a product listed for sale as in ‘New’ condition to be ‘brand new’ and [ ] covered by a manufacturer’s warranty.”

Both parties produced Amazon pages supporting their views: it seems that Amazon’s buyer-facing “Condition Guidelines” define “New” as: “Just like it sounds. A brand-new item. Original manufacturer’s warranty, if any, still applies, with warranty details included in the listing comments. Original packaging is present for most New items but certain items like shoes may be re-boxed.” However, the Amazon FBA Guidelines and Seller Central, in defendants’ telling, “simply require that the item is brand-new and unused, free of blemishes, smudges or dirt, and in the original packaging,” and defendants submitted an expert report in support of this view.

Past cases haven’t involved listings where a seller, like DVG here, notifies purchasers that “it is not an authorized reseller” of ZAGG products and urges them to “check with the manufacturer to see if a warranty may apply.” Thus, there was a disputed question of material fact on literal falsity.

The court also sent the “liquidation” theory of falsity to the jury, though I’m not sure it should have under its own standards, given that ZAGG had the burden of proof here. The “thrust” of ZAGG’s argument was that, because DVG couldn’t “verify the full chain of custody or history of each individual item,” it couldn’t confirm that was actually selling “brand new” items.  Sure sounds like lack of substantiation to me.

Later, the court found that ZAGG submitted enough to get to the jury on injury: “diversion of sales to a direct competitor [is] the paradigmatic direct injury from false advertising.” “There’s no question that ZAGG and DVG are direct competitors and that they sell the exact same products.”

Trademark infringement: Again, ZAGG argued that defendants had the burden of proving a complete chain of custody, back to sale by ZAGG, before they could raise a first sale defense. (So much for selling your used stuff!) The court’s research did not find any cases imposing this trace-to-manufacturer requirement. DVG disclosed the identity of its supplier and produced documents and testimony about that supplier’s sales to DVG. The circumstances weren’t suspicious, as in another case where defendant claimed to have “found [products] in storage units he acquired,” and the plaintiff submitted “proof that the products [the defendant sold] were returned product not to be resold.”

There was no record evidence behind ZAGG’s speculation that DVG was selling counterfeit or damaged goods; it conceded that all the products it bought in test buys were genuine. DVG also attested (under oath) that all the ZAGG products it buys are “independently sorted and graded in accordance with Amazon’s condition guidelines before sending them to Amazon’s warehouses” and that “[m]any of the products come in their original case packs from the factory.”

“So, while DVG may not know where its supplier gets its ZAGG inventory, that break in the custodial chain isn’t sufficient, standing alone and at summary judgment, to render the first-sale doctrine inapplicable as a matter of law. We’ll therefore permit DVG to assert its first-sale defense at trial.” Still to come: who has the ultimate burden of proof here? I would think it would have to be ZAGG, even if first sale is labeled a "defense" for convenience: The burden is still on ZAGG to show that defendants sold infringing products, and, just as the defense "this mark isn't confusing because it's different enough" would not shift the burden of proof to defendants, "this mark isn't confusing because it's a legitimate good from the TM owner" seems like it shouldn't do so either. 

There were also disputed issues on the “material difference” exception to the first-sale doctrine. “A material difference is one that consumers consider relevant to a decision about whether to purchase a product. Because a myriad of considerations may influence consumer preferences, the threshold of materiality must be kept low to include even subtle differences between products.” ZAGG argued that some of the products have been “opened, repackaged, restickered, or damaged,” and DVG’s products don’t “carry the manufacturer’s warranty.” DVG argued that it “meets or exceeds” the terms of ZAGG’s warranty because it offers to replace customers’ defective items without charging them a $10 shipping fee. This was a jury question, including on DVG’s expert testimony that any damage to the products’ packaging likely occurred in transit.

DVG’s defamation counterclaim based on ZAGG’s trademark reports to Amazon was dismissed because it didn’t show falsity or negligence. One claim that a test buy product had been “altered” and three that the product was “wrong” were not shown to be false: the first had been opened and the packaging seal removed, and the other three had different SKUs than listed. DVG didn’t meet its burden of showing that the different SKUs didn’t matter.


Thursday, January 08, 2026

Temu's "cheaper and way better quality than Shein" claims were potentially falsifiable, not puffery

Roadget Business PTE. Ltd. v. PDD Holdings Inc., 2026 WL 44864, No. 24-2402 (TJK) (D.D.C. Jan. 7, 2026)

Plaintiff, aka Shein, sells low-priced fashion and lifestyle products through a website and mobile application. Defendant runs a competing, discount-driven online platform—Temu. “Each platform has accused the other of engaging in unlawful, multifaceted campaigns to interfere with the other’s competitive posture.” This is Shein’s countersuit alleging trade secret theft, intellectual property right infringement, false advertising, and other unlawful acts. The court allowed trade secret claims and false advertising claims, but dismissed product disparagement or trademark dilution claims (Temu didn’t move to dismiss all of Shein’s claims).

In May 2022, Shein’s mobile app allegedly was the most downloaded app in the United States, and as of the filing of the complaint, Shein had over 33 million followers on Instagram and nearly 10 million followers on TikTok. Shein says it is “one of the most popular” online fashion and “lifestyle brands” worldwide.

Shein alleged that its success stemmed from its data-driven trade secrets about anticipating demand. Shein allegedly owned copyrights in both its photographs and its designs. Shein owns several trademark registrations for the SHEIN brand and its affiliate brands, and consumers allegedly associate all these brands with “the sale of high-quality fashion and home goods at a fair price.”

Temu, by contrast, functions as an “online marketplace” where independent third-party sellers sell their own goods. Temu allegedly stole Shein’s Best Seller Data; used or “instructed” its sellers to use copyrighted images of Shein products as promotional images on the Temu website and app; refused to let sellers “discontinue the sale of infringing products” on Temu, even when sellers request such removal; used the SHEIN trademark (or close variations, like “She/in”) in online ads, including sponsored ads on Google, which suggest that “authentic” Shein merchandise is sold on Temu, but when consumers click on the ads, they are directed to Temu’s website, which offers no SHEIN-branded products for sale; created “fake” accounts that use the SHEIN mark—for instance, by using the handle @SHEIN_USA—to “promote its own website” and to “trick consumers” into downloading its mobile app; and instructing paid influencers to “disparage” Shein’s products. E.g., one influencer (with over 137,000 followers) allegedly posted a series of pictures of herself wearing different Temu apparel with the caption, “Shein Alternatives, cheaper but way better quality! Check Temu.com out! So freakin cute and so freakin cheap!”  

Product disparagement: The court applied Massachusetts law as alleged by Shein. In Massachusetts, a plaintiff bringing a product disparagement claim must plausibly allege that the defendant “(1) published a false statement to a person other than the plaintiff; (2) ‘of and concerning’ the plaintiff’s products or services; (3) with knowledge of the statement’s falsity or with reckless disregard of its truth or falsity; (4) where pecuniary harm to the plaintiff’s interest was intended or foreseeable; and (5) such publication resulted in special damages in the form of pecuniary loss.” As is common with respect to mass advertising claims, Shein failed on (5).

Special damages are “essential” to a product-disparagement claim, and must be pled with specificity. They “limit[ ] a plaintiff’s recovery to the ‘pecuniary loss that results directly or immediately from the effect of the conduct of third persons’ acting in response to the alleged disparagement.’ ” If a statement was so “widely disseminated” that it is impossible to identify specific customers who chose not to buy the plaintiff’s products, then the plaintiff may show “that the loss of the market has in fact occurred and that no other factor caused that loss.” A plaintiff asserting that theory must at least allege “facts showing an established business and the amount of sales before and after the disparaging publication, along with [facts supporting] causation.”

The only, conclusory allegation about attendant damages is that Shein was “harmed by the dissemination of the Influencer Statements because they caused consumers to believe that SHEIN-branded products were inferior in quality to products sold by Temu when this is untrue.” Shein didn’t even allege that it lost any sales, let alone that any such hypothetical losses were solely attributable to influencer statements.

Dilution: Shein failed to allege fame. The very “nature of a dilution claim itself makes it difficult to state claim to relief that is plausible on its face.” Its allegations were conclusory, and worsened by the fact that it apparently tried to claim fame for its other “affiliate” marks, including SHEIN CURVE, DAZY, SHEGLAM, ROMWE, and LUVLETTE. It’s not acceptable to lump marks together like that.

Shein alleged that it “has invested significant time, effort, and money promoting, advertising, and marketing its business operations across multiple channels,” and that the “SHEIN brand also enjoys a significant presence on social media.” These allegations were “without more, conclusions, which are not a proper factual basis for a finding of fame.” Shein didn’t allege “how or since when it promoted its marks, or even how much money it invested in any such marketing.”

Shein’s complaint likewise offered no details whatsoever on the “amount, volume and geographic extent of sales” of any products offered under the SHEIN brand, let alone any of its affiliate brands. On “actual recognition of the mark,” a plaintiff cannot “simply allege” that “it has attained widespread and favorable recognition.” That Shein—as a “brand” or marketplace—allegedly enjoys a large social-media presence with “million[s]” of “followers,” says little about consumer recognition of the “trademarks ... in suit.” The Lanham Act protects “the mark,” not “the designer” or “the brand itself.”

“Shein’s alleged popularity on social media also says little about consumer recognition among the general population.” “Many brands are advertised” on social media and have a significant following there, but “not all are famous.” As for its registrations, “[o]ne cannot logically infer fame from the fact that a mark is one of the millions on the Federal Register.”

“[S]tating legal conclusions and reciting relevant factors is insufficient no matter the pleading standard. But especially so when a claim is inherently ‘difficult’ to establish because Congress prescribed a ‘purposely rigorous’ element—in this case, fame.” Shein’s alleged global revenue and growing customer base, or the number of downloads of its “shopping app,” “do not speak to the alleged fame of the SHEIN or any other mark.”

False advertising: Shein did better here, though the “influencer guidelines” were a “close call.”

First, were the accused statements “commercial advertising or promotion” or merely “[p]rivate communications with business partners.” True, providing guidelines to non-customers, without more, wouldn’t be false advertising. But Temu alleged more: that Shein “provided influencers with guidelines” that “require[d] them to make ... false” statements on social media, which were then made; these should, Temu alleged, count as Shein’s statements.

And social-media posts by paid influencers undisputedly qualified as commercial advertising under the Lanham Act. Thus, a plaintiff can state a false advertising claim by alleging that “the defendant itself, or through its paid agents, made false statements in commercial advertisements.” Shein plausibly alleged its agency theory of liability.

Temu’s puffery argument was a closer call, but the statements couldn’t be deemed puffery as a matter of law. (Not every court would agree, though I’m sympathetic.)

Temu’s Influencer Guidelines allegedly “instruct” influencers to include, among others, the following statements in their “Instagram Caption”: “Shein is not the only cheap option for clothing! Check Temu.com out, cheaper and way better quality!” and “Looking for clothes better than Shein but cheaper than revolve? Check Temu.com out.” And Shein gave examples of posts that used these/nearly these captions.

Claims that Temu’s clothes are “cheaper” but “way better quality” than Shein’s were actionable because they made “specific” claims that can “be[ ] proved false” or can “reasonably be interpreted as ... statement[s] of objective fact.” “Cheaper” was undoubtedly “objectively verifiable.” While statements like “better” generally “amount[ ] to little more than an exaggerated opinion of superiority that no consumer would be justified in relying on,” saying that a “product can do something ‘more efficiently,’ ‘easier,’ ‘quicker,’ or ‘safer’ is more specific.” This is especially true when a statement “make[s]” an “explicit comparison” to “other brands” about “particular characteristics that would be important to a consumer.” A reasonable consumer could “believe” that the advertising party actually “test[ed]” and compared competing products and “deduced” that one was “superior in these ways.”

“Here, a reasonable consumer could think just that.” Quality is a specific enough characteristic for clothes, and it’s material, “particularly in the fast-fashion context, where buyers know that low prices (a key selling point) can come at the cost of quality.” Indeed, the fast-fashion context itself renders the statement less “vague” and “unmeasurable,” “because there are only so many ways in which one company’s clothing article can be of ‘better quality’ than another’s.” Also, the “way better quality” claim appeared next to the verifiable claim that Temu’s clothes are “cheaper” than Shein’s, and was made by an “influencer” (depicting herself wearing Temu’s clothes) “whom consumers perceive as having personal experience with—i.e., as having ‘tested’—the products they promote.” How other courts treat a “a specific word is of little help unless that word is used in a sufficiently similar context,” and most of the cases cited by Temu involved general claims of superiority—e.g., “better customer service” and “better coverage,” or “better data network”—with no reference to specific features or specific competitor products.

Although a news article appended to the complaint stated that “Temu’s prices” for clothing “are usually ... 20-30% lower than on SHEIN,” that didn’t show that Temu’s prices are always cheaper than Shein’s—which Temu would need to show to establish that the alleged influencer statements, portraying particular products, are true.

For similar reasons, Shein stated a claim for contributory false advertising, which is available under the Lanham Act, since it’s available for trademark and 43(a) has the same introductory language applied to both causes of action.  “[C]ontributory liability is a common law theory of derivative liability that requires no express statutory basis.”