Pulse Entertainment Corp. v. David, No. CV 14-4732 (C.D. Cal. Sept. 17, 2014)
This case concerns a lifelike animation of Michael Jackson performing a previously unreleased song that appeared during the 2014 Billboard Music Awards and a related CNN interview segment. Pulse alleged that its team developed the animation over eight months, and that the animation was meant to coincide with and publicize its launch as a new company. “David owns Hologram USA—Pulse’s competitor in the field of human animation.” Pulse alleged that defendants had no involvement with the creation of the animation, and that they didn’t own or control the technology used to create it. In May, Hologram sued Pulse for patent infringement for creating the animation.
Also in May, David gave a CNN interview that aired with the caption “MICHAEL JACKSON HOLOGRAM: HOW’D THEY DO IT? Company behind hologram gives CNN demonstration.” In the interview, David allegedly said that he and Hologram created and produced the animation and the underlying animation techniques and technology. He also used “we” while describing the process employed to create the animation. While the animation played on screen, the interviewer stated that “[t]his MJ likeness used at the Billboard Music Awards was created by Hologram USA.” CNN took the interview segment down from its website after it was informed that neither David nor Hologram was involved in the creation of the animation. But David allegedly republished the segment on his companies’ websites and on his Twitter account.
Pulse’s §43(a)(1)(A) claim failed because of Dastar. §43(a)(1)(A) doesn’t ban false designations of “the author of any idea, concept, or communication embodied” in goods. Pulse didn’t allege physical reverse passing off. The animation here, as Pulse alleged, “exists wholly separate and apart from any projection technique. . . [It] is not dependent on a method of projection, and it can be displayed in a variety of ways. In that regard, it may be likened to a cartoon animation or a CG character in a feature film or television program.” So, the complaint alleged false designation of authorship status, which is exactly what happened in Dastar. The dismissal was with leave to amend, though the court expressed skepticism that this could successfully be done.
On to §43(a)(1)(B). The court used the standard definition of “commercial advertising or promotion” (obligatory note that Lexmark ought to affect the “defendant in commercial competition with plaintiff” aspect), and asked whether the speech at issue was commercial speech. Relevant considerations include “(1) whether the statements are in a typical advertising format; (2) whether the statements refer to a commercial product; and (3) whether the defendant had an economic or commercial motivation for making the statements.” Also, false advertising claims are grounded in fraud and thus must be pled with particularity.
Pulse didn’t specify David’s exact statements, but alleged that he falsely took credit for the animation. Pulse also alleged the following allegedly misleading statements: (1) “What you saw at the Billboard, you saw a digital head connected to an actor. We capture the body and the head in real time. And, we have the sync marks and we can attach the two together”; (2) “What you saw at the Billboard was ‘Super Michael.’ You saw Michael beyond the controversy, beyond the problems that he faced in his real life”; (3) that the animation could be adapted for “education, military, politics—it can apply—be applied across the board”; and (4) that “there is no end to how you can apply this, all we really need to do is apply our imagination.” In addition, Pulse alleged that the interviewer stated that “[t]his MJ likeness used at the Billboard Music Awards was created by Hologram USA.” Further, Pulse alleged that after the segment was removed from CNN’s website, Hologram republished the segment, with the complained-of caption and interviewer’s statements, on their websites and on David’s Twitter account.
To the extent the complaint relied on the original CNN broadcast, it failed to satisfy Rule 9(b):
Most of the obviously false and deceptive statements were made by CNN (or its interviewer) rather than by Defendants. Even though Defendants participated in the interview, Pulse fails to plead sufficient facts to show that Defendants either knew of the false caption and interviewer’s statement before the broadcast aired or otherwise participated in their creation.
The only specific statements attributed to David weren’t materially deceptive. They were just descriptions of the animation and the technology’s potential uses. In a footnote, the court also noted that CNN’s initial broadcast wouldn’t qualify as “commercial advertising or promotion.” “David’s statements were made in an ordinary interview format on a national news program regarding an event that received widespread publicity. There are no facts alleged indicating that Defendants had an economic motivation or that the statements were intended to influence consumers to buy defendants’ goods or services.”
The allegations of republication came closer to stating a claim, since reposting “arguably” adopted the false statements. (I’d go much further—beyond arguably. There are a number of cases, including the foundational Gordon & Breach, finding that use of someone else’s noncommercial speech in one’s own commercial speech is subject to Lanham Act false advertising claims.)
However, here Pulse didn’t specify “exactly when the segment was reposted, all of the websites to which it was reposted, for how long it was made available, or provide any other contextual facts that would allow Defendants to prepare a responsive pleading.” Again, dismissal was with leave to amend—and here I suspect that’s possible.