Tuesday, July 18, 2017

9th Circuit burps up a correction to recent Gerber case

Bruton v. Gerber Prods. Co., No. 15-15174, 2017 WL 3016740, -- Fed. Appx. --- (9th Cir. Jul. 17, 2017)

On a petition for rehearing, the previous panel opinion and partial dissent were withdrawn and replaced with the following, still partially reviving plaintiff’s consumer protection class action but getting rid of a deception theory, as the dissent had wanted.

Bruton filed a putative class action against Gerber, alleging that labels on certain Gerber baby food products included claims about nutrient and sugar content that violated FDA regulations as incorporated into California law.

Again, the court of appeals rejected the district court’s ruling that the class wasn’t ascertainable. There is no separate “administrative feasibility” requirement for class certification.

However, there was no genuine dispute of material fact on Bruton’s claims that the labels were deceptive in violation of the UCL, FAL, and CLRA.  Her theory of deception was that the combination of “healthy” claims on Gerber’s products, in violation of FDA regulations, and the lack of claims on legally compliant competitors’ products made Gerber’s labeling likely to mislead the public into believing that Gerber’s products were of a higher quality than its competitors’ products.

This theory “may be viable,” since even technically correct labels can be misleading under California law.  However, Bruton didn’t produce enough evidence to survive summary judgment; her own vague, uncorroborated, and self-serving testimony was insufficient.  Further, the record included Gerber’s and some competitors’ labels, but it showed that those competitors made many of the same allegedly illegal claims. “A reasonable jury comparing the labels side by side could not rationally conclude that Gerber’s labels were likely to deceive members of the public into thinking that Gerber’s products were of a higher quality than its competitors’ products that made the same type of claims.”  Likewise, FDA warning letters (informal and non-binding) didn’t indicate that competitors complied with the law.

However, the district court erred in granting summary judgment to Gerber on Bruton’s claims that the labels were unlawful under the UCL. The unlawfulness prong “borrows” predicate legal violations and treats them as independently actionable under the UCL. “The best reading of California precedent is that the reasonable consumer test is a requirement under the UCL’s unlawful prong only when it is an element of the predicate violation.” The predicate violation here was of California’s Sherman Law, which itself incorporates standards set by FDA regulations, and those standards didn’t include any requirement of likely deception. (Though query how that works with modern First Amendment jurisprudence.)


Park claim fails to fly: formerly well-known mark lacks current secondary meaning

Parks LLC v. Tyson Foods, Inc., 2017 WL 3014273, -- F.3d --, No. 16-2768 (3d Cir. Jul. 6, 2017)

District court opinion discussed previously here. Since the 1950s, Parks Sausage Company has manufactured or licensed sausage under the brand name “PARKS,” though its registration expired in the early 2000s.  In 2014, Tyson, the owners of the frankfurter brand BALL PARK, which is responsible for 23% of the revenue of all franks sold in the US, launched the super-premium line PARK’S FINEST, and Parks sued for trademark infringement and false advertising.  Here, the court of appeals affirms the rejection of both claims.

“False advertising claims do not require proof of secondary meaning, so litigants may be tempted to frame a false association claim as a false advertising claim, to ease their evidentiary burden.”  That’s what seems to have happened here, so the court tried to clarify the distinction between §43(a)(1)(A) and §43(a)(1)(B) claims, holding that the false advertsing claim here failed because it was “essentially a false association claim in disguise.”

False advertising requires a misrepresentation of “the nature, characteristics, qualities, or geographic origin” of a product.  “PARK’S FINEST is only misleading in the way that Parks suggests if a consumer makes the connection between PARK’S FINEST and PARKS and has in mind a pre-existing association between PARKS and high quality products. This is a false association claim and nothing more.”  Even the argument that the name would misleadingly imply that the product was a sausage when it’s really an inferior frankfurter depended on the consumer knowing that PARKS was a mark for sausages and making a false association.

Even if Parks argued that “PARK’S FINEST” was misleading for blurring the distinction between frankfurters and sausages, the packaging was unambiguous that the product was frankfurters and the rest of the label couldn’t confuse consumers; plus Parks repeatedly took the position that a frankfurter is a kind of a sausage, meaning that there was no misleadingness by its own lights.

Parks contended that PARK’S FINEST was misleading with regard to “origin,” but that didn’t work both for the reasons given above and because §43(a)(1)(B) is about geographic origin, not other types of false designations of origin.  It’s not the right vehicle “for addressing claims of false designation of origin that are not concerned specifically with geographic origin.” “Geographic origin” “refers solely to the place of origin and not to the creator, manufacturer, or any broader conception of the term ‘origin.’”  (In a footnote, the court commented that it wasn’t resolving the issue of whether a term had to be a “geographically distinctive trademark” before a manufacturer could be found liable for falsely advertising the geographic origin of its goods.  Here “trademark” seems to mean something like “common-law certification or collective mark.”)  Because the name PARK’S FINEST says nothing about the product’s “geographic origin,” there was no valid §43(a)(1)(B) claim.

The false association claim then failed for want of a showing of secondary meaning.  As a surname-based mark, PARKS was required to show acquired distinctiveness; it didn’t have that any more.  Parks argued that inherent distinctiveness should have been a jury question because “parks” is also the plural of “park,” as in recreational land, and therefore could be seen as an “arbitrary” mark. “But it is undisputed that Parks was named after its founder, someone who Parks describes with justifiable pride as ‘an important figure in the history of American Business,’ and Parks’s reputation is closely linked to its founder,” so no reasonable juror could conclude that PARKS was anything other than a reference to the founder. (Isn’t there a logical problem here?  If in fact PARKS lacks acquired distinctiveness, why wouldn’t the hypothetical reasonable consumer encounter the mark in ignorance of its history, and thus not make the “link” as described, leaving her to figure out what was going on?)

Of note in the secondary meaning discussion, Parks tried to use its confusion survey to show secondary meaning; that didn’t work well.  An Ever-Ready survey shows consumers only the potentially-infringing product and asks open-ended questions to determine whether they believe the product is associated with the senior mark; it can also provide evidence of secondary meaning. This kind of survey works best for commercially strong marks.  “Holders of weaker marks more frequently employ a Squirt survey,” as here.  A Squirt survey puts two products side by side and asks consumers about their beliefs about source.  “[A] well-designed Squirt survey may show a likelihood of confusion. What it does not do or even purport to do, however, is prove secondary meaning.”  Because of how the survey is conducted, “a consumer who had never heard of PARKS could still conclude that the two products were affiliated.” Follow-up questions might have allowed participants to identify the source of PARKS or PARK’S FINEST, which could have shed light on secondary meaning, but the survey didn’t ask them.


Parks argued that proof of likely confusion proved secondary meaning, but that’s just wrong.  The evidence sometimes overlaps, but not always. “Establishing that two marks are similar does not necessarily lead to any valid conclusion about whether either of the two has secondary meaning.”

Bee aggressive: Copied ad leads to grab bag of claims

Fischer v. Forrest, 2017 WL 2992663, -- F. Supp. 3d –, 14 Civ. 1307 (S.D.N.Y. Jul. 14, 2017) (report and recommendation)

Fischer invented Fischer’s Bee-Quick, a product used to facilitate honey harvesting, and marketed it using, among other things, the following four phrases:
a) “Are you tired of your spouse making you sleep in the garage after using Butyric Anhydride?”
b) “Are you tired of using a hazardous product on the bees you love?”
c) “Fischer’s Bee-Quick is a safe, gentle, and pleasant way to harvest your honey”
d) “A Natural, Non-Toxic Blend Of Oils and Herbal Extracts”

Defendants were in some way involved with Brushy Mountain Bee Farm, which initially resold Fischer’s product, using the text (whose authorship was disputed):
This 100% Natural, non-toxic blend of oils and herb extracts works just like Bee Go and it smells good! Fischer’s Bee Quick is a safe, gentle, and pleasant way to harvest your honey. Are you tired of your spouse making you sleep in the garage after using Bee Go? Are you tired of using a hazardous product on the bees you love? Then this is the product for you!

Around 2010, Brushy Mountain decided to sell a comparable product that performed the same function; Brushy Mountan bought a third party product and labeled it as “Natural Honey Harvester,” but continued to use nearly the same promotional text.  A 2011 Brushy Mountain catalog used the phrases as follows:
For years we have promoted the use of a natural product to harvest honey but an unreliable supply of such a product has forced us to come out with our own. This 100% Natural, non-toxic blend of oils and herb extracts works just like Bee Go® and it smells good! Natural Honey Harvester™ is a safe, gentle, and pleasant way to harvest your honey. Are you tired of your spouse making you sleep in the garage after using Bee Go®? Are you tired of using hazardous products on the bees you love? Then this is the product for you!

Fischer also alleged that defendants intentionally removed copyright management information (“CMI”) from Fischer’s promotional brochure and the Fischer’s Bee-Quick bottle photos. Defendants changed the textual reference in one of the phrases from “Fischer’s Bee-Quick” to “Natural Honey Harvester,” and allegedly also stripped the metadata from Fischer’s original Fischer’s Bee-Quick bottle photo displayed on Brushy Mountain’s website, and overlaid the photo with a watermark of the Brushy Mountain Bee Farm logo.

There were lots of factual disputes; the magistrate recommended not granting summary judgment on the ground that Fischer’s copyright registration was invalid, even though the first submission (of several) to the Copyright Office didn’t contain the brochure at the heart of the case.  The magistrate also recommended finding the brochure as a whole copyrightable, and concluded that the relevant portions evinced enough originality to be protected, at least as a whole. The “rhetorical questions that play on the worries of beekeepers” were unique and the whole of the brochure was greater than the sum of its parts, although the phrase “A Natural, Non-Toxic Blend Of Oils and Herbal Extracts” was merely descriptive of the product ingredients. Even in isolation, though, most if not all of the rhetorical questions were long enough for copyright protection, particularly the “sleep in the garage” bit.

Unfortunately for Fischer, the copyright claim still had fatal problems.  (1) He did not register before the infringement began, so he was not eligible for statutory damages or attorneys’ fees.  (As an aside, the magistrate analyzed the relevance of secondary liability to the rule that infringements that continue past the date of registration don’t provide eligibility for statutory damages—although two of the vendors for  which Brushy Mountain was allegedly secondarily liable began their infringing activities after the registration, their infringements were republications of the initial ad, and thus part of an ongoing series of infringing acts that didn’t restart the clock.)  (2) Fischer elected statutory damages and declined to submit evidence of actual damages (which probably would have been hard to prove; this is not the type of work for which there is a licensing market in which money changes hands).  (3) Defendants agreed to remove the challenged text, mooting the claim for injunctive relief.  With nothing left for a court to do, the magistrate recommended granting summary judgment to defendants on the copyright claim.

DMCA claim:  Fischer alleged that defendants stripped the metadata from Fischer’s original Fischer’s Bee-Quick bottle photo displayed on Brushy Mountain’s website, but the magistrate recommended rejecting that argument because he submitted no evidence that the metadata included CMI; not all metadata is CMI. Fischer also argued that the allegedly infringing ad had CMI stripped from it because defendants changed the phrase, “Fischer’s Bee-Quick™ is a safe, gentle, and pleasant way to harvest your honey,” by replacing “Fischer’s Bee-Quick™” with “Natural Honey Harvester”:
  
side by side comparison
Fischer argued that the product’s name, because it had Fischer’s name in it, was CMI.  To prevail on a §1202 claim, Fischer had to show that defendants “intentionally remove[d]” CMI that was “conveyed in connection with copies ... of [his] work or ... displays of [his] work.” The relevant “work” here was the the brochure, while defendants created derivative works of the brochure. The creation of infringing derivative works didn’t qualify as the “removal” of CMI from the original work. 

The magistrate was also skeptical that even more direct “extraction” of phrases from a larger work could constitute “removal” of CMI, since the statute contemplates “copies” of a work and extraction of “distinct elements” of a work doesn’t constitute a “copy.” 
If, for example, someone extracted and reproduced several sentences from a copyrighted Sherlock Holmes story, without crediting the Conan Doyle Estate, it would stretch the definition of “removal” to say that CMI had been “removed” from the copyrighted “work.” It might be copyright infringement, but it would not be a DMCA violation.
This conclusion makes total sense—otherwise Blurred Lines should also have been the basis of a §1202 claim—but it requires a bit of fancy footwork to reconcile with the idea that substantial similarity can constitute a violation of the reproduction right, further strengthening my view that the derivative works right should be where such claims live.

Even assuming that the relevant “work” was the four key phrases collectively, Fischer didn’t show that the phrases contained CMI.  “The DMCA’s expansive definition of CMI cannot trigger liability any time a person’s name is contained in a copyrighted work without reference to how that information was used and displayed on the work itself.”  The name of the product discussed in the work is not CMI for the work; such a name, even if includes the author’s name, “does not have any CMI significance—it simply is part of the product’s name (just like Kellogg’s Corn Flakes or Wrigley’s Chewing Gum).”

Fischer didn’t plead a trademark infringement claim, the magistrate reasoned, because he consistently alleged only “counterfeiting,” even when represented by counsel. 

Fischer’s §43(a) false endorsement claim also failed.  This claim was based on Brushy Mountain’s use of URLs that, even after they switched products, still contained “fischer” as part of the address string, e.g., http://brushymountainbeefarm.com/Fume-Pad-w_-Fischers-Bee-Quick/productinfo/777F/
 
page for Fischer replacement, with Fischer's name still in URL post-domain path
The judge applied the multifactor confusion test, and found that the claimed strength of the mark, mark similarity, and product similarity all favored Fischer.  But there was no evidence of actual confusion or bad faith, which the judge found to be the most significant under these circumstances.  This wasn’t a domain name case; the use of “Fischers.com” or “Fischersbeequick.com” to sell a competing product would support a false endorsement claim. But a name “buried in the post-domain paths of the Brushy Mountain web pages” wasn’t likely to confuse consumers about Fischer’s endorsement or approval. “No consumers are likely to believe that Fischer has somehow endorsed or approved Natural Honey Harvester when viewing the post-domain portion of the URL, if they even see it at all.”  Likewise, consumer sophistication favored defendants.  “Whether defined as the typical consumer of beekeeping products, or internet users writ large, no ordinary consumer is likely to see Fischer’s name in the post-domain path of the URL and wonder if that signified his endorsement of a completely different product in the accompanying web page.”  Nor did Fischer provide evidence that, as he contended, the use of his name in the address led Brushy Mountain’s pages to appear higher in search results, or that, even if that were true, that fact would have any bearing on consumer confusion..

Fischer’s only evidence of actual confusion was an undated review on the Brushy Mountain website complaining: “The first bottle I bought last year worked well but this new stuff was a complete waste of time and money.” But there was no evidence that the commenter ever bought Fischer’s product, as opposed to two different bottles of the replacement product; defendants submitted an affidavit stating that the review was posted two and a half years after Brushy Mountain stopped selling Fischer’s product.

The New York unfair competition claim is like a §43(a) claim, but requires “‘either actual confusion or a likelihood of confusion, and there must be ‘some showing of bad faith’ on the part of the defendants.” So that was a no-go too.

Note: why not a right of publicity claim?  Would the court’s CMI reasoning “this is a product name, not an author name” also apply there?  Would there be any other defense?

The magistrate also recommended tossing out Fischer’s false advertising claim, which was based on the statement, “For years we have promoted the use of a natural product to harvest honey but an unreliable supply of such a product has forced us to come out with our own. This 100% Natural, non-toxic blend of oils and herb extracts works just like Bee Go® and it smells good!”  Fischer primarily argued that “our own” was false, because they bought a third-party product, though he also claimed that “the third-party manufacturer makes nothing but cleaning products, calling into question if the product is even food-grade, let alone ‘100% Natural”’  Furthermore, the only thing one defendant said about whether the product was “actually natural” in deposition was “I assume so.”  Given where the burden of proof lies in a private false advertising claim, this wasn’t enough to proceed on the 100% natural claim, even though it was material.

As for “our own,” that wasn’t literally false; while it could mean that defendants selected the ingredients and personally created the product, but “another reasonable interpretation is that defendants marketed a natural honey harvesting product, from whatever source, under their brand name,” which was true. There was no evidence of consumer deception, even though Fischer testified that unnamed competitors had responded to the ad by making their own knockoffs—even if knockoffs emerged, that didn’t mean the ad caused them, or that consumers were deceived.


Thursday, July 13, 2017

Court gags on Utah's ag-gag law

Animal Legal Defense Fund v. Herbert, No. 13-cv-00679 (D. Utah Jul. 7, 2017)

The court strikes down Utah’s ag-gag law, relying on Alvarez, Reed, and the idea that not all access procured by lying is “trespass” or “harmful.” H/T James Grimmelmann, who thinks the reasoning doesn’t quite work, perhaps because of the court’s reluctance to rely on the legislature’s obvious speech-suppressive intent.

A series of high-profile investigations into agricultural facilities in the mid- to late 2000s spurred a new round of ag-gag laws. While one might once have thought that film of workers jabbing sick cows in the eye, grinding up live chicks, and skinning calves alive might have led to increased protections against animal abuse, it instead mostly led to increased protections against investigation of agricultural facilities. (One wonders what Upton Sinclair would have thought: the animal rights organizations aimed for the heart, and apparently hit the public in the eye.) Utah’s law was introduced, according to its sponsor, because of “a trend nationally of some propaganda groups . . . with a stated objective of undoing animal agriculture in the United States.” Another representative, a farmer, stated that the bill was targeted at “a group of people that want to put us out of business,” and noted that farmers “don’t want some jack wagon coming in taking a picture of them.” The sponsor of the Senate bill said that the bill was meant to address the “vegetarian people that [are] trying to kill the animal industry” by “hiding cameras and trying to . . . modify the films and stuff like that.”

Utah’s law criminalized “obtain[ing] access to an agricultural operation under false pretenses,” as well as (1) bugging an agricultural operation; (2) filming an agricultural operation after applying for a position with the intent to film; and (3) filming an agricultural operation while trespassing.

In 2013, Amy Meyer became the first person to be charged under the law—apparently the only person ever charged under an ag-gag law nationwide. She was arrested while filming what appeared to be a bulldozer moving a sick cow at a slaughterhouse, though she was on public property at the time and thus not subject to the law. She was actually charged, though the State dismissed the case without prejudice (!). This is an interesting case study not of chilling effects (of which more below) but of licensing effects—the police, whose acts are likely to be far more important than those of prosecutors, and harder to constrain, felt empowered to suppress her recording because they had a general sense that some kinds of recording were illegal, and prosecutors backed them up.

Meyer, joined by ALDF and PETA, sued. The state challenged their standing. Allegations of subjective chill aren’t injury in fact, but “a plaintiff need not expose himself to actual arrest or prosecution to be entitled to challenge a statute.” In the Tenth Circuit, standing requires (1) that in the past, the plaintiff engaged in the kind of speech implicated by the statute; (2) that the plaintiff has a desire, but no specific plans, to engage in the speech; and (3) that the plaintiff presently has no intention of engaging in the speech because of a credible threat the statute will be enforced.  This test was satisfied by all three plaintiffs.  No concrete plans to violate the law were required.

The state argued that lying and recording without permission weren’t protected by the First Amendment at all.  Starting with lying: lying is speech, but some speech is outside the First Amendment categorically.  Alvarez, however, says that “lies are not categorically unprotectable by the First Amendment,” though lies that cause “legally cognizable harm” are outside of First Amendment protection.  Do the lies targeted here—“obtain[ing] access to an agricultural operation under false pretenses”—cause legally cognizable harm?

The state identified two kinds of harm from such lies: (1) danger to animals and employees, and (2) trespass. The first is (no pun intended) bullshit.  There was no evidence of it, and no evidence that it motivated the law’s enactment.  Plus, even though some lies could endanger animals or employees, not all would, e.g., “the applicant who says he has always dreamed of working at a slaughterhouse, that he doesn’t mind commuting, that the hiring manager has a nice tie.”  These are interesting examples because they’re all, in some way, unfalsifiable.  There are falsifiable lies that also wouldn’t inherently pose dangers, though they might be somewhat more correlated with various risks—e.g., the applicant who claims to have a college degree but doesn’t; the applicant who fails to report a conviction twenty years ago; and so on.  Query what the fate of a more specific law targeted at lying about qualifications ought to be where the job itself doesn’t actually require a particular qualification.

On to trespass: the state argued that access to private property procured through misrepresentation is trespassing, and trespassing is inherently legally cognizable harm.  But misrepresentation doesn’t always negate consent, and with consent there is no trespass.  Courts to consider the issue have concluded that it depends on the type of harm, if any, the liar causes. “[I]f the person causes harm of the type the tort of trespass seeks to protect—interference with ownership or possession of the land—then her consent to enter becomes invalid, and from that point on she is not merely a liar, but a trespasser as well.”  This is where James Grimmelmann objects, as I understand it; trespass can also be about interference with the right to exclude, which is why we teach Jacque v. Steenberg Homes, and that is inherent in the tort.  But there is still physical trespass that harms only dignitary interests—as in Jacque—and dignitary interests have at best a mixed track record against First Amendment interests (note that I am doing the usual slip/slide between coverage and protection here, sorry).  Anyway, without interference with ownership or possession, the consent given to the liar remains valid even if procured through misrepresentation. 

“Thus, a competitor who enters a business to steal secrets while posing as a customer is a trespasser, as is the man who is invited into a home while posing as a repairman, but is in fact just a busybody looking to snoop around (because both have interfered with ownership or possession of the property).” 

Okay, that’s a little harder to explain, because the secret-stealer may cause economic harm, but not to the land, and the busybody may not cause any economic harm (and we may have to default to the concept of high-risk categories, since someone who will lie to get into your house poses obvious dangers to you and your property).  Contrast those people with the court’s examples of liars who don’t cause trespass-type harm: “the restaurant critic who conceals his identity, the dinner guest who falsely claims to admire his host, or the job applicant whose resume falsely represents an interest in volunteering.”  These seem to be, respectively, socially productive, social, and hard-to-see-how-a-jury-could-judge-harm lies.  It’s not clear to me that the concept of “possession” helps much here in figuring out the difference between lies that are generally recognized as causing more harm than they’re worth and lies that aren’t.  It seems that trespass doctrine itself may encode the same “lies that cause harm” category as Alvarez, with all the resulting questions about when the inquiry should be retail or wholesale.  I can’t say that feels wrong to me, but it does expose the structure of Alvarez’s consequentialism. 

Back to the court’s reasoning: “the Act here is immune from First Amendment scrutiny under the State’s trespass theory only if those who gain access to an agricultural operation under false pretenses subsequently cause trespass-type harm.”  Because such people don’t necessarily cause harm, and the law sweeps in trivial, harmless lies—“an applicant’s false statement during a job interview that he is a born-again Christian, that he is married with kids, that he is a fan of the local sports team,” or the use of a local address for an applicant who’s out of town—the law is subject to First Amendment scrutiny.

The state argued that the court should construe “false pretenses” to exclude harmless white lies and cover only lies material to a person’s access.  That had vagueness implications, and might cover the applicant who’s really a fan of the crosstown rival rather than the local team, but regardless, the lie’s materiality to the owner does not itself make a liar into a trespasser, as several cases about undercover investigations have held.  So when is an invited guest a trespasser? The court offered the example of a landscaper who gets a contract by misrepresenting his previous experience, then does a great job—has he committed a trespass?  The court found the “trespass-type harm” standard to be the most persuasive.  The materiality of the lie might render it harmful, but not in a legally cognizable way.  Ultimately, absent a further showing of harm, at least some of the lies criminalized by the law were protected by the First Amendment.

The state then argued that obtaining a job under false pretenses causes legally cognizable harm.  Alvarez says: “Where false claims are made to effect a fraud or secure moneys or other valuable considerations, say offers of employment, it is well established that the Government may restrict speech without affronting the First Amendment.” This might work if the law were limited to obtaining employment under false pretenses, but instead it covered “access,” which would include “lying about wanting to take a tour, lying about an interest in acquiring the facility, or lying about wanting to write an article about the facility for Modern Farmer.”

The First Amendment also applied to the recording provisions, even though the state argued that the act of recording wasn’t speech.  But we know that speech-suppressive laws can operate at different points in the speech process.  The government can’t circumvent the right to disseminate a video by regulating the making of that recording instead.  The state can regulate the act of recording, but the regulation must be justified and tailored appropriately.

Finally, the state argued that the First Amendment wasn’t implicated because the law applied only to speech on private property, to which the First Amendment didn’t apply. The state’s argument conflated “a landowner’s ability to exclude from her property someone who wishes to speak” with “the government’s ability to jail the person for that speech.” The First Amendment is not itself a license to trespass on private property, or a defense to a private trespass claim.  (But isn’t that exactly what it is here, run through a concept of consent?  After all, the state is involved in the enforcement of the private trespass claim, as it was in NYT v. Sullivan.  One way to think about it, tentatively: what we are really talking about is the idea of consent, and how some lies don’t vitiate consent; it might be a different question if the state explicitly legislated to make clear that a particular lie vitiated consent, but absent that there is a common-law background against which relevant harm is defined.  Framed like that, this implicates the question of standing/legislative competence to identify harm, but at least provides a roadmap for how one might alter the definition of harm by finding something new and cognizable.) 

Generally, a landowner can remove someone from her land even when that person wishes to exercise First Amendment rights. But the question here was whether the state could prosecute a person based on her speech on private property, without even justifying or tailoring the law.  It can’t.  The state certainly couldn’t criminalize any criticism of the government on private property.  (Could it criminalize political discussions without the consent of the property owner on whose property the discussions were held?  This hypothetical has some relevance to various proposals about whether, for example, Delaware ought to change its corporate law so that shareholders should have to affirmatively vote to allow corporations to give political donations.)

What level of scrutiny applies?  Under Reed, a law is content-based “if determining whether someone violated the law requires looking at what was said.”  Still, it’s not entirely clear what level of scrutiny is applied to anti-lying laws after Alvarez, in which a plurality applied strict scrutiny and two other Justices applied “proportionality review,” seemingly a variant of intermediate scrutiny.  The court wasn’t sure what the “narrowest” ground in Alvarez was, because it characterized the disagreement among justices as “one of kind—whether to apply strict or proportional scrutiny—not of breadth.”  That seems odd to me; ordinarily we’d say intermediate scrutiny was the narrower ground, but in any event, lower courts have generally applied strict scrutiny to laws implicating lies post-Alvarez.

Here’s where everything would be much simpler if we just admitted this was a viewpoint-based law; there’s a reason they’re called “ag-gag” laws.  But instead, the court reasoned that the law was content-based because determining whether there’s been a lie requires scrutinizing what the person said.  The state argued that an anti-lying provision is content-neutral because it barred all persons, regardless of the message they intend to disseminate, from lying to gain access to agricultural operations.  But that’s not the test under Reed.  As for the recording provisions, the question was whether criminalizing the recording of a particular location was a content-based restriction.  It was, because the law criminalizes the recording “of” the operation, not merely any recording “at” the operation.  “[A] person standing on agricultural operation property who films a passing flock of geese is certainly at an agricultural operation, but nobody watching the film would contend it was a recording ‘of an agricultural operation.’ … In short, if a person walks off an agricultural facility with a recording, the only way to know whether she is criminally liable under the Act is to view the recording.”  That’s content-based.

The court’s reading of Reed is readily defensible (though it doesn’t address the internal contradictions of Reed, as it has no reason to do so).  Essentially, at least outside of commercial speech, only time/place/manner restrictions are exempt from strict scrutiny.  One might wonder what is left for the concept of viewpoint-based laws.  In a pre-Reed world where content-based meant “not time, place and manner, but covering broad categories in some way that doesn’t inherently suggest that a government attempt to distort debate is afoot,” the concept of viewpoint-based regulation did useful work in identifying government attempts to distort debate that would get scrutiny that was strict in theory and fatal in fact.  Post-Reed, who knows?

Unsurprisingly, the law didn’t survive strict scrutiny.  The court didn’t have to wade too far into “complex policy questions” because of the breadth of the law.  The government identified four allegedly compelling interests: (1) the law protects animals from diseases brought into the facility by workers; (2) it protects animals from injury resulting from unqualified or inattentive workers; (3) it protects workers from exposure to zoonotic diseases; and (4) it protects workers from injury resulting from unqualified or inattentive workers. The state explicitly disclaimed reliance on privacy or property interests.  As the court noted, there’s no mention of worker or animal safety in the legislative history, which was instead “rife with discussion of the need to address harm caused by ‘national propaganda groups,’ and by ‘the vegetarian people’ who are ‘trying to kill the animal industry.”

Even assuming that animal and worker safety were actually the reasons for the law, there was no evidence that the law advanced those interests.  The targeted harm was entirely speculative, and that can’t establish a compelling state interest. 

At most, there was “some evidence in the record of Plaintiffs’ undercover operatives perhaps prolonging suffering of animals by not reporting abuse in a timely manner.” The state didn’t claim that the law furthered the interest of quickly addressing animal abuse by agricultural operations, but even had it done so, the law wasn’t “remotely” tailored to that goal.  Several states require employees who record abuse to turn over the recording to authorities within a certain time period.  While not opining on the constitutionality of such a provision, that would be both more narrowly tailored to and more effective at addressing delays in reporting animal abuse.

Even if the state had shown a compelling interest in animal and employee safety, it hadn’t shown narrow tailoring.  Narrow tailoring requires that a law be “actually necessary” to achieve the state’s interests, and may not be over or underinclusive.  The record didn’t show necessity, and was both hugely overinclusive, criminalizing “the most diligent well-trained undercover employees, and underinclusive because “it does nothing to address the exact same allegedly harmful conduct when undertaken by anyone other than an undercover investigator.”  What the law was perfectly tailored to do was preventing undercover investigators from exposing agricultural facility abuses. ß We are apparently having a general debate over whether, or in what circumstances, courts can look at what the government officials responsible for a policy were actually trying to do, based both on what they said and on what they wrote into the policy.  If you think that the analysis above was too much work for an obvious conclusion, or that it may have unintended consequences for much less pernicious laws, as I do, then it may be useful to rely more heavily on the objectively manifested indicia of intent: who was targeted?  There’s often no separate need to ask “why.”


Anyway, as the state didn’t contend that preventing such exposure was a compelling state interest, that was the end of the analysis, and of the law.

Documents from my ICE suit

Available here, via Public Citizen. From what we have, I think it's fair to say that most seizures are legitimate counterfeits, so to speak.  That doesn't excuse ICE or the brand owners who supply them with information from the obligation to comply with the law, of course, especially when the exceptions are particularly likely to serve free speech values.  But it's much better than the alternative.

Wednesday, July 05, 2017

Another thought on ICE's statements

This isn’t specifically IP-related, but I’m pondering the part of my FOIA suit requesting training materials for ICE agents relying on case law, etc.  Initially, the ICE spokesperson who responded to my inquiry said that ICE based its seizure decisions on consultation with agency and Department of Justice attorneys, including consideration of “potential fair use provisions and federal circuit-specific case law.”  When ICE didn’t produce any documents relating to any of that, we used the initial statement as evidence that ICE hadn’t met its FOIA obligations.  The court found it perfectly plausible that all ICE used to determine counterfeit status were manufacturers’ guides, rather than materials of its own.


Now, I will admit that I too suspected that the initial claims were bullshit, in the specific sense of being made with complete indifference to their truth or falsity in order to achieve a non-truth-related conversational aim, that of getting me to shut up and go away.  (That worked really well, as you can see.)  But it’s depressing—I wish I could say extraordinary—that the court didn’t even count that statement as evidence that such guidance existed.  What does it mean for a democracy when a court tells us we shouldn’t take official statements seriously, even—maybe especially—statements made at such a low level about matters that are relatively low-stakes?  Is government only to be trusted when it's under oath?

Today in likely unlicensed goods

These Joker fireworks:
And just because the typo is awesome--not a portmanteau word you see that often, or usually want to have go together:
"open cap to explose the fuse"

NFL is advising ICE to seize obvious parodies, my FOIA suit reveals

When last I reported on this, the judge had ordered ICE to unredact materials showing company advice to ICE to seize parody merchandise, since such merchandise wasn't counterfeit and there could be no legitimate law enforcement interest in keeping this advice from the public.  Indeed, ICE's subsequent production showed that, like the NHL, the NFL has instructed ICE that obvious parodies/nonconfusing uses are counterfeit:
From NFL manual: Dallas Sucks shirt is counterfeit because "NFL licensed merchandise will never favor one Club over another or make derogatory use of another Club's marks"

Another supposedly counterfeit shirt showing Minnesota player urinating on Green Bay Packers logo inside outline of Wisconsin
So, what do we know?  (1) Despite ICE's initial claims to me via its spokesperson and a lawyer, ICE relies only on industry guides to identify counterfeits, not on any independent sources.  (2) Those industry guides identify what they don't like, not what is within the scope of counterfeit goods.  (3) Most of what ICE seizes is truly counterfeit, but when it seizes parody merchandise, it implicates First Amendment interests in free speech.

What next?  (1) ICE should improve its guidance to agents, though I'm not sure how that is best to be accomplished.  (2) Industry guides should limit themselves to true counterfeits.  I will note that thus far it doesn't seem that clothing brands, which also provided guides to ICE, overreached in the same way, so it can be done.  Calling the NFL/NHL!

a few misrepresentations aren't commercial advertising or promotion

Solmetex, LLC v. Dental Recycling, Inc., No. 17-cv-860, 2017 WL 2840282 (S.D.N.Y. Jun. 26, 2017)

The parties compete in the market for devices for removing particulate from dental office wastewater. (Did I mention how much I love learning about market niches I never even considered? This job is the best job.) The court here dismisses defendant DR’s amended counterclaims against Solmetex.  In 2009, DR entered into an exclusive marketing contract and licensing agreement with the Michigan Dental Association and its subsidiary; MDA agreed to promote DR’s product to its members. Solmetex, upon learning of a 2017 promotion, allegedly made two kinds of misrepresentations about DR’s product to MDA and another third party.  Solmetex allegedly told representatives from MDA that DR’s product hadn’t been tested by a relevant organization, wasn’t compliant with safety standards, and couldn’t replace Solmetex’s product, and repeated these statements in a C&D to MDA.  DR alleged that these statements were false, but MDA nonetheless terminated its marketing and licensing agreements with DR as a result.  Solmetex also allegedly contacted an unknown representative of the dental distributor Henry Schein and stated that DR’s devices “were not approved by the EPA ..., and infringed a patent.” In reality, the relevant EPA rule had been put “on hold” by the Trump administration, and Solmetex had no patents on its devices, but DR lost at least one sale as a result.

Solmetex sued DR for allegedly unlawfully marketing its device as equivalent to Solmetex’s product, which among other things produced counterclaims and then amended counterclaims.  The court found that DR didn’t sufficiently allege “commercial advertising or promotion” for its Lanham Act claim—it didn’t plausibly allege that Solmetex’s isolated misrepresentations were disseminated to the wider purchasing public. Though DR alleged that Solmetex requested that MDA disseminate the alleged misrepresentations to its members, it didn’t allege that this actually happened.  So too with similar allegations about Schein.  Although DR could plead based on information and belief, “such allegations must be accompanied by a statement of the facts upon which the belief is founded.” DR’s sole factual support for alleging that the statements were widely disseminated is that a single representative from Schein told a single member of the purchasing public that DR’s product was not EPA-approved and had infringed upon a patent. Even assuming that Solmetex was plausibly the source of Schein’s misrepresentation, this allegation didn’t support the inference that Solmetex conducted “a wide-reaching false advertising campaign disseminated to the wider purchasing public,” as required.

The common law unfair competition counterclaim also failed.  In New York, that’s misappropriation.  Product disparagement generally involves no misappropriation and therefore must be plead as a claim for trade libel, which it was not here.  Alleged violations of Delaware and Massachusetts consumer protection statutes also failed. Delaware’s Deceptive Trade Practices Act required a “pattern [ ] of deceptive conduct,” not alleged here; two instances of deceptive conduct weren’t enough.  Massachusetts Gen. Laws c. 93A requires that the conduct “(1) fall within at least the penumbra of some common-law, statutory, or other established concept of unfairness, (2) it must be unethical or unscrupulous, and (3) it must cause substantial injury to a consumer or another businessman.” But DR didn’t get past the first element because it hadn’t successfully alleged another wrong.

Tortious interference: DR alleged that Solmetex’s false representations caused MDA to terminate its marketing and licensing agreements with DR, but didn’t allege that MDA breached a contract by doing so. DR also failed to plead that Solmetex acted solely out of malice, or used dishonest, unfair, or improper means, as required for a tortious interference claim. While misrepresentations can constitute dishonest, unfair, or improper means, they must rise to the level of an independent tort to do so.


Trade libel/slander: disparaging DR’s product allowed only a claim for trade libel, not slander.  The trade libel claim failed on the merits.  Trade libel requires both malice and special damages.  Special damages requires the victim to name the individuals “who ceased to be customers, or who refused to purchase,” and itemize “the exact damages.” The counterclaims itemized damages only with regard to one lost sale as a result of misrepresentations by Schein. Assuming that Solmetex was the source of these false statements, DR didn’t plead allegations that the unnamed Solmetex representative knew the statements were false, entertained serious doubts as to the statements’ truth, or spoke solely out of spite or ill will, as required for malice. DR admitted that the representation that its device was not EPA-approved was true (albeit misleading), and didn’t allege that Solmetex’s employees were generally familiar with the company’s patents (or lack thereof). (An interesting variation on corporate knowledge or the lack thereof, since a corporation can only act through its agents; if the right hand doesn’t know what the left hand has patented, then apparently there can’t be malice.)

Monday, July 03, 2017

FilmOn's chutzpah doesn't pay off; labeling it a site of (c) infringement is protected by anti-SLAPP law

FilmOn.com v. DoubleVerify, Inc., 2017 WL 2807911, No. B264074 (Cal. Ct. App. Jun. 29, 2017)

FilmOn, an Internet-based entertainment media provider, sued DoubleVerify, a provider of authentication services to online advertisers, for trade libel and related claims for falsely classifying FilmOn’s websites under the categories “Copyright Infringement-File Sharing” and “Adult Content” in confidential reports to certain clients that subsequently cancelled advertising agreements with FilmOn. The court of appeals affirmed the grant of DoubleVerify’s anti-SLAPP motion.  DoubleVerify was engaged in conduct in furtherance of its constitutional right of free speech in connection with an issue of public interest, even though its information was provided confidentially and not disseminated.

DoubleVerify argued that its reports concerned matters of public interest because the prevalence of adult content and copyright infringement online had received attention from both the public and government regulatory agencies. DoubleVerify submitted, among other things, press reports concerning numerous lawsuits filed by media production companies against FilmOn, as well as complaints filed and injunctions entered in a number of federal district courts against FilmOn for copyright infringement.

The trial court analogized DoubleVerify’s reports to more public media advisory efforts, observing it was “not any different, really, than the Motion Picture Association putting ratings on movies.”  Because of the “massive amount of attention” paid to FilmOn’s relationship to copyright infringement, DoubleVerify’s reports clearly concerned a matter of interest to the public. On the merits, the trial court found FilmOn failed to establish a probability of success because the undisputed evidence showed DoubleVerify’s statements were essentially true and DoubleVerify did not make the statements with the intention to harm FilmOn’s business.

On appeal, FilmOn argued the statements at issue didn’t concern “a public issue” or “an issue of public interest,” because (1) the reports contained only “[b]asic classification and certification decisions” with “little to no analysis or opinion”; and (2) the reports were made “entirely in private, to individual companies that subscribe to [DoubleVerify’s] services.”  The anti-SLAPP statute doesn’t define the key terms, but it should be construed broadly to protect free speech.  Thus, an issue of public interest is any issue in which the public is interested, though mere curiosity isn’t enough.  Moreover, the breadth of the statute means that it covers even private communications about a public issue.

As for the claim “[b]asic classification and certification decisions that contain little to no analysis or opinion are not constitutionally protected activity within the ambit of the anti-SLAPP statute,” the court of appeals examined All One God Faith, Inc. v. Organic & Sustainable Industry Standards, Inc. (2010) 183 Cal.App.4th 1186 (OASIS).  In that case, a commercial trade association sought to develop an “organic” certification for use by its members with their personal care products. A nonmember competitor sued, arguing the certification was contrary to federal standards for the term “organic,” and thus using an “ ‘OASIS Organic’ ” seal would be false advertising. The court of appeals affirmed the denial of an anti-SLAPP motion, reasoning that the association wasn’t being sued for its opinion about what made a personal care product “organic,” but for authorizing its members to use the seal on their products in the market. While the former might be a matter of public concern, “certification of commercial products—the activities that [the plaintiff] seeks to enjoin”—didn’t further such speech, because the protected conduct, articulating a standard, would be complete before any authorization occurred.  Thus, the act of placing a seal on a member product communicated nothing about the proper standards for labeling a personal care product organic.  However, FilmOn’s business tort and trade libel claims were based entirely upon the message communicated by DoubleVerify’s “tags.” And advertisers only abandoned FilmOn based on the tags because they believed that the public would be interested in whether adult content or copyright infringing material appears on a website. Thus, the claims were based on conduct in furtherance of speech.

Also, the conduct concerned issues of interest to the public. DoubleVerify showed that the presence of adult content on the Internet generally, as well as copyright infringing content on FilmOn’s websites specifically, had been the subject of numerous press reports, regulatory actions, and federal lawsuits. The public debate over legislation to curb children’s exposure to adult and sexually explicit media content also showed that DoubleVerify’s reports identifying such content on FilmOn’s websites concerned an issue of public interest.  Common sense also supported this conclusion.

Nor did the private nature of the communications matter.  It’s just not true that to qualify as speech in connection with an issue of public interest, “the statement must itself contribute to the public debate.”