lack of harm allegations beyond "direct competition plus customer inquiries" insufficient for false advertising standing

Kalmbach Feeds, Inc. v. Purina Animal Nutrition, LLC, 2026 WL 598608, No. 2:25-cv-00617 (S.D. Ohio Mar. 4, 2026)

Previously. Kalmbach sued Defendant Purina for false advertising under state and federal law in connection with its Farm to Flock chicken feed, which Purina represented as helping to defend against viruses such as avian influenza.

Although Kalmbach received a preliminary injunction because of the misleadingness of Purina’s claims, it didn’t sufficiently allege injury, so the court granted Purina’s motion to dismiss with leave to amend.  

Kalmbach alleged that deceived consumers asked why Kalmbach has not also produced a feed that defends against avian influenza. And it argued that direct competition plus customer inquiries satisfied the zone of interest test. The court disagreed. There was no allegation of reputational harm in the operative complaint, so Kalmbach had to allege injury to its sales. Allegations that “[c]ustomers have...been misled by Purina’s false claims – to Kalmbach’s direct detriment” were conclusory. “Put differently, Kalmbach must plead that Purina’s false claims actually hurt it, rather than simply confused customers. Kalmbach does not allege that these confused customers would otherwise have purchased Kalmbach’s feed—Kalmbach just presumes injury.”

Now do trademark infringement!

Commemorating 50 Years of the Copyright Act, part 3

STLR Panel 2: Litigating Fair Use in Copyright

Zahr Said: Substantial similarity is confused. Sedlik is a good example. Laudable for concurrences to recognize need for reform in this crummy, confusing test, but that’s not reflected in the case itself.

First, because the court’s diagnosis of what went wrong is mistaken. Second, the case didn’t go wrong: it was correctly decided. Third, this is a really unusual case, not a run of the mill © case.

Court confused copying and substantial similarity. It made a number of errors along those lines, ignoring intermediate copying—“it’s the photo tattooed on an arm.” P’s counsel encouraged the conflation of the photo and tattoo, even though Ds only conceded that the reference photo Kat von D used was 100% identical to the Sedlik photo. This matters b/c it’s calling for reforms, and the court said it was representative of a too defendant-favorable standard, and that’s wrong. If you treat the unusual as the common, we’ll be mired in further doctrinal mud.

Court thinks the outcome is wrong for the right reasons. But it was right! (I agree and filed an amicus focused on this.)

The timing was also weird—Warhol came down in the middle of it and the court had to revise its analysis. What to do: don’t build reforms on a landfill! Change the language; stop relying on Nimmer’s treatise and use Goldstein on infringement instead—precise, clear, elegant. Clearer thinking.

(or?) Dispense with the test! That’s what the concurrences were thinking about doing anyway.

Daniel Goldstein: Represented blind scholars & National Federation of the Blind in HathiTrust. Kudos to Peter Jaszi. Early commercial ebooks were inaccessible; not interested in the market. University of Michigan, by contrast, considered accessibility key to the digitization of their library, even before Google got the message. Librarians are the best. Intervened as a defendant in the litigation, and university didn’t oppose even though he’d sued universities for ADA violations in the past; publishers didn’t oppose, probably because they didn’t want to lose the first motion in the case.

The romance of the case was important; lots of excitement about blind researchers being able to access works for the first time. And the fair use argument was strong: dicta in Sony about accessible books for the blind being fair use; Chafee amendment; etc.

The publishers wanted to impound the entire library; the National Library Service can only generate about 2000 accessible books/year but publishers never suggested just giving it a copy. ADA was also relevant as a clear & comprehensive national mandate for accessibility/against discrimination against people with disabilities—universities have to offer the same experience when feasible and this was a way for schools in HathiTrust to make the research program available to blind/print disabled students. Why didn’t the publishers ask for the digitization program to pause during settlement discussions? Not sure—seems like a bad call. Their arguments consisted of saying that the Chafee Amendment/Sony dicta was only about making a single book for a single blind person accessible and that universities weren’t authorized to make accessible copies.

Corynne McSherry: Public Resource v. ASTM: Teeny nonprofit that makes government information available online in an accessible way. Conflict with ASTM over building standards. National Archive has a copy of every standard incorporated by reference in the Federal Register; or you might find a copy in the library; or you might buy a copy. Public Resource decided to change that. Eventually won on fair use; thinks this should have been decided on copyrightability. The law that governs us cannot be copyrightable. Fair use is more complicated.

Also, all the creative work in standards is done by volunteers who want to create good standards for their industries; the work done by the profit-seeking entities is not creative. © is not needed.

Fair use is bearing too much weight. Rights holders think fair use is too big, but the expansion of copyright is what creates the need for fair use (as Jessica Litman wrote). But it shouldn’t have to bear so much weight. 102 should have prevented copyrightability of standards enacted into law. We should also have digital first sale, but we had to use—and lose—on fair use instead.

Samuelson: very interested in fact issue v. legal issue in fair use cases. Court said the overall fair use inquiry was mostly law, but what is it that can be found as a fact? Although fair use isn’t tried to juries very often, and Sedlik is an outlier, as is GvO, that is something that not many practitioners have focused on.

Goldstein: in HathiTrust, there was good evidence that publishers had no interest in creating a market for the blind/print disabled, and they donated books to the National Library when they did. That was the key factual part from his POV; the rest was law and policy.

Sprigman: Restatement of © picks up on this—the parties’ interests are relevant. Emphasized in SCt Public Resource case—they resolve it on protectability; some affected parties will be willing to roll the dice on fair use. The less bold among us would have to think twice before using the law that belongs to all. Fair use isn’t just framed as a defense, it’s case-specific.  Maybe the Court has signaled to lower courts that they should be relying on copyrightability.

McSherry: UpCodes cases—ASTM keeps pushing the idea that commercial uses are fundamentally different. They’ve mostly lost in dct, but not entirely. It shouldn’t matter: it’s the law! Make the law more available!

Said: it’s troubling to give the jury an idea/expression instruction unless they have some understanding of the caselaw—they’ll interpret it according to lay understandings. That’s led her to worry about transformativeness. Sometimes it’s a factual question, but Kelly v. Arriba Soft is not the kind of case where a jury would have been able to figure that out.

Fisher: 107 makes explicit that the four factor list is nonexhaustive. Puzzling how few cases press a fifth factor. E.g., shouldn’t it matter for social justice that we provide access to the blind? We’ve known since Rousseau at least that the rule of law requires accessibility. We don’t need to frame that in constitutional terms. [I teach that courts find a way to stuff considerations like this into the four.]

Said: why isn’t that public benefit?

Fisher: that’s controversial as an extension of factor 1. Breyer is willing to do it in GvO, but Sotomayor is not in Warhol. It would be a way to address ambiguity if we had a more sensible allocation of what you were trying to show. [I’m not sure that would help with ambiguity. It’s not the numbering that’s the problem.]

McSherry: we’re always framing it one way or another, including “consider four factors in light of the public interest in …” She doesn’t like good faith as a fifth factor.

Goldstein: could put all his considerations in factor one b/c they were about the accessibility purposes of the use; not transformative, but still a fair use.

Said: Trevor Reed, Fair Use as Cultural Appropriation—interesting argument about factor two, considering whether the work was being appropriated from an indigenous culture—judges are sociologically conservative (but maybe can be invited).

STLR Panel 3: The Role of Fair Use in Copyright

Trevor D. Lohrey: Should we have factors?

Christopher Sprigman: predictability is an issue. Leg history frames fair use as an equitable rule of reason. Court is supposed to be doing something synthetic, not considering factors like in a “test.” A platform for thinking about the individual case with attention to ©’s progress-promoting purpose. Predictability is often a virtue, but not always—like patience. I don’t think we should be looking for a rule.

Laura Heymann: doesn’t fault judges for going through factors in an atomized way. The synthesis is challenging. It’s really about giving more weight to the “fair” in fair use. But judges don’t want to be unmoored.

Peter Henderson: we have examples of conflicting holdings in what looks like the same case. We don’t want to have bright lines.

Heymann: consider folk knowledge that develops around areas of law. “You can copy 300 words or less.” That suggests that people want those kinds of sub-rules.

Henderson: you can also see a desire for that in AI training—don’t output more than 300 words w/o a license, etc.

Barton Beebe: Appellate reversal rate for fair use cases is about 1/3, which is almost exactly the same as for other civil litigation. The dissent rate is 1 in 10, almost exactly the same as for other civil litigation. The hard cases are hard, which is why they’re being litigated—that’s why there’s unpredictability in the individual litigated case; fair use is not that special.

Heymann: though there also effects on nonligitation decisions.

Lohrey: change over time?

Sprigman: The use of the “purloined” manuscript in Nation: a journalist would think that’s how the system works, while a lawyer thinks it’s bad; a lawyer thinks it’s good to keep secrets for your clients while a layperson might object. O’Connor failed to see outside of her bubble. Leval and others helped erode the idea of “good faith.” Fair use is about market competition now. Restatement focuses on how the factors can aid in assessing whether the defendant is undermining fair competition. That’s something that takes time and has slowly matured.

Heymann: shortcut for judges can be “is this tech analogous to tech we’ve encountered in the past?”

Sprigman: what Congress meant to do was to take a snapshot of judicial creativity in fair use, but in a way that didn’t freeze it and rather spurred that creativity. In some areas of the Act Congress said very distinctly what it wanted and in others it approved continued judicial innovation—to keep development going. So when people complain we’ve gotten away from the purpose of fair use, I want to ask: what did you think that purpose was?

Lohrey: is fair use now too market-focused and about battling economists?

Sprigman: your answers depend on your priors. He thinks it’s a good development b/c he came from antitrust where those issues are asked every day and there are tools. If the bete noire of © is substitution, he thinks that the question of substitution can be answered much more accurately than a general fairness inquiry.

Heymann: that devolves into fights over market definition, which seems pretty hard. Does milk compete with Coke? [Sprigman says it’s surprisingly difficult to answer that question—which to me doesn’t make the point he thinks it does. I’m not sure that you can solve the difficulties by switching the terms of debate—you just get different difficulties that you might only notice after a bunch of cases.]

Sprigman: hypotheticals can help—it’s theoretically tractable to ask whether the market for one work affects the market for another. In fairness, we have to figure out whose interests count and for how much.

Henderson: you still have to choose your models, components of your models—it constrains degrees of freedom but not infinitely. In the latest evolution of market dilution theory, some of those models aren’t really couched in anything particularly data-grounded. [E.g., the Court’s claims about derivative markets in Goldsmith.] We will often not have data, especially about potential future market harms.

Beebe: one hypothesis—when a court finds fair use it will find that it’s a question of law, and no fair use will be a question of fact.

Heymann: you see some cases saying that there’s no market because the corporation could have exploited it but didn’t and that means there must be none, whereas cases like Monge say that the © owner might change her mind. [I think these can be made more coherent by thinking about the idea of corporate rationality versus individual caprice. But I admit that this doesn’t cover cases like the Seinfeld Aptitude Test case.]

Beebe: don’t ask “is this conduct fair use”; instead ask “should this conduct be fair use?” There is no “is” in fair use in cases of this nature. It’s all “should.” There’s no preexisting rule that we apply to the facts.

Sprigman: many opinions leave lots unresolved. AI cases: One of the Cal. cases finds fair use might give the rule “don’t use pirated datasets”? The other Cal case says: “this is terrible—this shouldn’t be fair use but it is, b/c Ps are so inept. I know in my bones that market dilution harm is happening.” But competition for an industry—w/a class of human authored works—is not something we have experience with. As a matter of © law I think the answer is that © shouldn’t recognize that as a theory of harm, but we can think about how to address it as a different kind of harm—labor law, tax law. © is a poor vessel for that.

Beebe: A human supremacist view: more and more stuff is not the goal. The processes of creativity are important to human flourishing, not the consumption of stuff. The solidarity of sharing it with others. Humans over machines and corporations! Fair use should be resisting both, not just machines.

Ochoa: if fair use is a “should,” are we getting things systematically wrong?

Sprigman: thinks general fairness concerns interesting but not central; fair use law holds up pretty well. Mistakes always exist and don’t seem directional or pernicious.

Beebe: Clarification: Lots of fair use questions aren’t that hard. 80% of the time fair use is an “is.” District judges don’t have time for a lot of “should.” We need is or it will be chaos. But for LLMs/AI training, there is no “is.” The hard questions are at the edges.

Sunder: don’t romanticize what our © has wrought—women as naked models/objectified subjects, not creators. Hollywood gives us sequel after sequel, movies based on commercial products like Lego and Labubu. The cheerleading uniform! The human creator supposedly fostered by this law deserves a closer look. Possibility of hybrid innovation/cyborg creativity—good with human flourishing, not supremacy.

Beebe: fair! Romanticism: thinks of American romanticism of mid-19^th century, very folk-oriented, not the heroic muscular unusual author. But fair to point out that lots of people were not enjoying the mid 19^th century!

Sprigman: Readers should be important in our theories—the people shaped by creativity as well.

Commemorating 50 Years of the Copyright Act, part 2

The 1976 Copyright Act: Mostly Evolutionary, Not Revolutionary Tyler Ochoa

1790 Act adopted the Statute of Anne—not radical even though it was the first for the US. Similar here—major changes, but not radical. Expanded subject matter; protection on creation/fixation instead of publication and preemption of state law; automatic protection without preconditions (by amendment), reduced formalities, codified idea/expression.

But 1909 Act covered “all the writings of an author.” “Original works of authorship” aren’t that different. Likewise, lawyers didn’t necessarily take common-law copyright as seriously as federal copyright, but there was common-law copyright before the Act preempted it for fixed works. Moving the federal protection back to the date of fixation isn’t a huge change.

Formalities: some change.

Codifying idea/expression: It’s a good thing that we wrote it down because of the textualist turn, but it was an existing principle. Not a radical break.

Fair use: same thing.

Exclusive rights: again, evolutionary.

WFH: a reasonably big change in defining what can be WFH, rejecting instance & expense test (which he thinks was a mistake by the courts in the first place).

Duration/renewal: Motion pictures and musical works were heavily renewed, and most other things weren’t. Life plus 50 isn’t just an extension, it’s a fundamental change in measurement. And it’s a change that we haven’t felt the full impact of yet b/c we’re only 50 years out. None of the © granted in 1978+ have yet entered the PD (w/exception of some unpublished works by deceased authors).

Terminations: same idea as renewal term, but new opportunity b/c of unitary term.

Compared to what happened since the 76 Act: rise of computer programs, though the definition of literary works was written to allow them. BCIA: elimination of formalities; elimination of registration requirement for foreign works (subject to limited remedies). Architectural works; VARA; automatic renewal for works 1964-1977—works no longer go into public domain for failure to renew. NAFTA; TRIPS; Uruguay Round restoration—a radical change. Public performance rights for sound recordings. Term extension; DMCA adding 512, 1201, and 1202. Cumulatively this is a radical break with the past, but mostly after 1976. The 1976 act did change from incentives to publish towards natural right of author, but that was a change in principle with fewer radical changes than came later.

Moral Rights, 50 Years Later Xiyin Tang

Poised for a resurgence among concerns for human creators in a world of AI slop. Entrepreneurs are using TM, even trade secret, to protect rights far beyond VARA. Monty Python case is a classic example using TM—but the cause of action was a stand-in for moral rights, by the court’s own admission.

VARA has had limited success—limiting to fine arts likely fell well short of Berne requirements. Also US rights are waivable, though nonassignable. Only 84 adjudications of VARA claims, 71.4% of which dismiss the claims, often on procedural grounds. More concerning are cases that effectively chip away at the scope altogether, further neutering it. First Circuit held that VARA didn’t protect site-specific works of art at all—where the location is integral to meaning—based on the public presentation exception. But this was the type of art that formed the basis of the public justification for VARA in the first place—Richard Serra’s Tilted Arc. SDNY denying injunctive relief in Five Pointz; money is not a good remedy. And the 7^th Circuit found that site-specific art wasn’t just ineligible for VARA, but ineligible for © generally. But site-specific art is the exemplar of postmodern artistic practice.

Nonetheless, predicts that moral rights are posed for a resurgence. AI has led to a new insistence on human creation. Private deals w/AI: authors don’t just get a per-generation payment for summarizing their work, but a link to purchase—attribution. Decision holding that Wu-Tang Clan’s album was a trade secret—independent economic value comes from ability to exploit exclusivity to create an experience that competitors can’t. Secret art could therefore be trade secret art.

Terry Fisher: what about fan fiction and other interventions?

A: Artists care about originals. Maybe expansion of moral-esque rights could impinge on what people do w/a copy of the original, but the Wu-Tang example is about works that exist in an edition of one, and that’s what she’s concerned about.

Keynote Address: Authorship in the Shadow of the 1976 Act Paul Goldstein

AI challenges: believes that transaction costs are the key and that private or public deals can achieve them. But copyright dilution—competition with AI-generated works—should not be actionable because the ideal is that works should be priced as low as they can be without destroying incentives.

Points out that Jane Ginsburg showed that French copyright was initially utilitarian/incentive concerned; moral interests became important later. US: the author-protective provisions that Congress introduced in 1976 are important—a shift in the philosophical base of ©, according to Barbara Ringer, to make the primary beneficiaries of © individual authors.

What do authors want? To be recognized as the authors of their works. Consider Creative Commons, which found that attribution was so commonly desired that attribution became the default. Audiences also want this, which is why they go to concerts instead of watching from the comfort of home. They also want community—shared passion—but the main desire is authenticity, the knowledge that the tiny well-lit figure on the stage is their favorite performer, not a hologram. Authenticity is the consumer-side counterpart of the desire for attribution. Author & audiences meet and form a bond. But aura can be attached to multiple copies of identical objects—ubiquitous reproduction hasn’t led to the withering of aura, but strengthened our desire for it and created new strategies to produce aura.

But TM may overprotect attribution at the expense of popular culture—missing limited term and public interest exceptions. It’s not enough to exclude protection for generic elements; its exceptions for parody and the like aren’t vigorous enough. Presumably this was a concern in Dastar.

So now we need attribution in ©. 106A (VARA) should be replaced w/an exclusive right for all authors to claim authorship and object to distortion/mutilation/modification of the work, taken from Berne. Generative AI: a user who asks for a story in the style of Raymond Chandler justifies an attribution right. [Hunh? Doesn’t the user, by definition, know?] Style is not copyrightable, but we could draw the line more generously if there was only an attribution right, not a control right; the limited term would avoid the parade of horrors and parody would be allowed.

Lemley: there are lots of circumstances in which creativity requires that you not keep integrity. Tang’s answer was focused on individual copies/single copy works. But your moral right is broader. What do you do about fan fiction?

A: look to what other countries do. They valorize commentary and individual creation as much as the US does. French law has a robust exception for parody and pastiche.

RT: I don’t think that would work. Litigation culture is a big deal.

A: the motion picture studios are why we don’t have a moral right in this country. France, Germany, Canada etc. have moral rights and moviemaking—but the answer was the litigation culture in the US. Would love to see some empirical work on that. On the attribution right, would love to see a full-fledged empirical study of asking © litigants why they sued; integrity touches on vital interests. Turns in part on what the remedies are. One could fiddle with remedies like injunctive relief rather than monetary relief, though then you lose the contingent fee bar.

Barton Beebe: Scalia dismissed tracing the origin of Nile and all its tributaries—what if we recognized moral rights of author and all of those who preceded her and put a burden on her to state her sources? Religious traditions might support this.

Sprigman: other attribution systems exist, but Earth is for the living: part of art’s responsibility is to free itself from the past despite its influence. You are taking a side on what art should do; our perspective is from writers, but may not serve readers very well.

Panel 1: The Copyright Act and Technological Change

R. Anthony Reese: legislative response to digital technologies was the key in the midpoint period; last couple of decades saw less of that other than Music Modernization Act. Focusing on civil, not criminal, amendments. In 1980 we added a definition of computer program; not a big change. We’ve only added one exclusive tech based right—digital audio public performance for sound recordings. Not a response to tech but to political failure of the 1976 Act.

Some expansions to limitations—110 for distance education (not very helpful in pandemic); 111 Family Movie Act allowance for skipping naughty scenes hasn’t created a flourishing business model. But 114’s limits on nonsubscription broadcast transmission enabled HD over the air radio. Also bars on record rental, etc.

We’ve done a bunch of compulsory licensing, mostly tinkering to provisions already there like adding low-power TV to the cable ones already there. DAT licensing; some compulsory license for the digital sound recording public performance right; satellite retransmission licenses; modernization of mechanical licenses to include a blanket license for streaming & download. Copyright Office was not a fan of compulsory licenses but Congress is enamored of them in specific circumstances.

Remedies: 512 limits have been incredibly important. 408 preregistration, maybe has some effect (about 700 works/year); 504(c) allows willfulness to be presumed if you provide false domain name contact info in connection with © infringement.

Sui generis provisions: AHRA (desuetude/written so narrowly as to exclude general purpose computers just as they were about to become the way music was enjoyed), 1201/1202.

Amendments motivated as much by political/legal/market/social developments as by the new technologies themselves. Record Rental Act passed not b/c of CDs but because of shops that rented out tapes and encouraged copying; the worry was that it would get worse w/CDs but the business model already existed. Similarly, low-power TV was added not b/c it was new but b/c the FCC hadn’t previously authorized its deployment.

Jessica Litman: substantive approach is shaped by drafting method—to invite many of the stakeholders who know they’re interested to work out their differences and embody their compromises in statutory language. Overreliance on compulsory license is b/c it’s easier to reach a compromise. Even in the 1909 Act, courts had devised separate rules for different kinds of works; they wanted to incorporate exclusive rights shaped to works, but then that turned out to work really badly when new tech like movies came around. So 1976 Act tried for one size fits all rights, but then everyone needed bespoke exceptions to continue doing the legitimate things they’d done every day. They tried to make exceptions as narrow as possible so they couldn’t be used for anything else (e.g., jukebox exceptions). Insiders make the rules that they and © outsiders will have to follow—unfriendly to outsiders.

How does this method work for insiders? Their efforts make a lot of assumptions that may not pan out. DMCA is a good example. Implicitly incorporate promises about how insiders will treat one another. But none of the promises are legally or morally enforceable, so many get broken. Promises of publishers & distributors to creators turned out to be particularly vulnerable to breakage. Also: If you exclude outsiders from negotiations for as long as you can, you’ll miss important issues on the horizon that aren’t central to anyone sitting around the table.

Result: insiders came out believing that they’d significantly fortified themselves against scary new technologies, and as those have failed, we’ve seen © insiders adopting more combative negotiating postures & developing deep resentment about the interests they believe are eating more of the pie than they should be permitted to eat. Legacy © owners are earning more money than they ever have. But they are nonetheless looking at © with grievance and resentment b/c technical services delivering material are also earning a ton of money—instead of saying “big pie, wow, awesome!” they want that whole pie. That’s led some to believe they’re entitled to hoard rights, money, control, and market share by any means they can manage.

When you call © insiders together to write a statute to fix things, you get the MMA. Has some good things and some bad things buried in the middle—but most of this hoarding is currently coming at the expense of creators. They’re earning less, unlike the legacy industries. When we tell them to compromise on AI, this is also what we may expect.

Pam Samuelson: A happy story on the scope of software copyrights. Wasn’t initially clear whether machine executable code was copyrightable. Initial attacks on copyrightability had to be overcome, but scope was unclear—Paul Goldstein wrote early article expressing concerns about risks of monopolizing functionality. Suggested borrowing patent misuse doctrine.

Whelan v. Jaslow then gave super-broad © protection—early expectations about thin © to avoid protecting functionality were totally ignored. All of the “structure sequence and organization” was protectable if there was a modicum of creativity; everything should be protectable unless there was only one way to achieve it.

6 years of effort followed (Samuelson in the lead!) to get the results right. David Nimmer also wrote an article suggesting that more filtration was required. 2d Circuit adopted this in Altai requiring abstraction, filtration, and comparison. Filtering out unprotectable elements was a really significant advance and got us back to a relatively thin scope. Compatibility is unprotectable.

Fed. Cir. agreed w/dct that we should have © hearing like Markman hearing to do claim construction—another important development. So © turns out to accommodate software well, after struggle.

Mark Lemley: Imagine a collection of model weights that gives a possibility, but not a certainty, of generating an infringing copy: is that a copy? The statute’s answer is incoherent. The right to reproduce the work in copies; copies are copies when they’re fixed; fixed means the copyright owner authorized it. That doesn’t make any sense so nobody pays any attention. We use the same definitions for protectability and infringement, causing the problem. But we do use the part that says fixation means it has to be perceived, reproduced, or otherwise communicated.

The parties in AI cases take some extreme positions—models don’t include content; output is just a collage of intputs—neither of these things are true. Can extract Harry Potter verbatim w/a four word prompt from Llama 3.1. Extraction is possible for some works/parts and some models but not others. New work shows you can expand extraction if you go beyond verbatim extraction.  But again it depends.

Jane Ginsburg shows that you can retrain models to force them to regurgitate a work, and that makes it more likely that they’ll regurgitate other works, suggesting other works are latent.

Is a work latent in a model a tangible copy? It’s complicated. Models don’t store works directly, but encode weights reflecting relationships b/t words or syllables. You can make a copy of a picture using ones and zeros even though the ones and zeros aren’t the picture—deterministically, these are copies. But Microsoft Word doesn’t encode War and Peace even though all the necessary parts are in Word waiting to be put in the right order.

Information theory: can the work be extracted with less than the same information you already have? Compression algorithms: sometimes we can store less than all the info & use it to generate a work. Lossless compression is clearly a copy; lossy compression probably creates non-identical copies that are nonetheless still copies. Compression algos are still deterministic, though—same imperfect copy every time.

AI extraction is rarely deterministic. We can get a result 10% of the time; are the other 90% also stored in the model? That means more works are in the model than there are atoms in the universe. © hasn’t dealt much with nondeterministic copies. Kelly v. Chicago Park District comes closest—a garden is not ©able b/c it’s not deterministically fixed. Compare to video game output cases: you infringe by making a map used w/existing video game to cause it to be played in a new map even though the images aren’t contained in the map.

Kelly is probably wrong: most people would say a garden could be sufficiently replicable to be fixed. Game cases: predictable and replicable—the same map and characters would show up. Though now there are procedurally generated games where the map changes on the fly, but that still involves output. Not all the possible maps exist already in the game.

Challenge: sometimes it’s easy to get out—high degree of predictability and replicability. Sometimes it’s not really possible. Sometimes it requires a lot of work but can be done.

We should say that if it’s easy to get a work out, it’s probably worth saying it’s in the model. But if you have to know what you’re looking for, and keep trying until you get it, then we probably should not call it a copy.

Why this matters: if a copy is in the model, then making a copy of the model infringes the copyright in the underlying work. Meta is distributing the model weights to lots of people.

Maybe those models are fair use—probably be the right result, but harder to reach, especially after Warhol. Fact of intermediate copying might be important (even though he doesn’t think it should be).

In response to Tony Reese: maybe we could say they’re unfixed but derivative works which don’t require fixation. Reese” points out that the RAM copy cases about duration of presence in computer—not a great way to do it but we did do it. Also compare Google Books: how much of a book you can assemble by doing searches was relevant to the fair use analysis.

A: maybe that functional approach is practically the best way to go. If I can prove that it’s in there somewhere but it costs $10,000s to do that each time, that’s not a real way to get a “copy.” It is also really hard to resolve such questions as a matter of class actions—courts would like to have an answer, and an answer depending on a work by work, model by model analysis is not going to be desirable to them. Even if it’s the truth.

Tang: incidental copies in the course of streaming music, for example, raise similar questions.

Samuelson: a new round of cases about using YouTube performances—allegations of 1201 violations to say that scraping the video to use that data for training. Even if the stream itself wasn’t a copy, if you can make a copy from it, what to do? Should there be a meaningful distinction b/t access controls and copy controls? Reese said yes! (And he was right.)

Gellis: is vibe-coded software copyrightable?

Lemley: depends on how vibey you were! Maybe a selection and arrangement ©, though for code that will be less broad.

Samuelson: divinely authored works cases are also relevant.

RT: For Samuelson: courts often seem to divide over whether there are 2 ways to have a thin ©: the first way is that anyone who does the same thing can make a nearly identical work, but they can’t engage in reproduction; but the second and more controversial one is that anyone can copy chunks of the work as long as they don’t copy nearly the whole thing: Sedlik concurrences and Thomas’s dissent in GvO. Do you think that these are both examples of thin ©?

Samuelson: we’re close to a thin © but not as thin as Goldstein suggested (which was an exact copying standard). Dennis Karjala suggested a rule of exact copying being needed for infringement; emulating functionality is really important for freedom. Lotus v. Borland—that’s actually a case allowing copying the interface (that is, a chunk) as a method of operation. You still have to write/code the functionality independently. Fed Cir ©ability ruling in GvO was a real step backwards—wrong as a matter of law.

Lemley: Thin ©: if the test is virtual identity, one way to test is for really close identity (99% or close), but © in general protects protectable expression. One approach would be to say that identical copying of even a small fragment is infringing under this virtual identity standard; the other approach would require copying the whole work verbatim or close to verbatim. That will matter a lot where most of what I copied was not protectable.

Reese: part of the problem is that most courts dealing with this look to Feist, but Feist isn’t about either of those things. In these kinds of cases, not very much of what you put into your work is ©able, b/c you’re using facts/all you get is selection, coordination, and arrangement. Infringement means parsing carefully which thin part of your work is protected by ©, but that doesn’t say anything about whether partial copying infringes a thin ©. There’s no original understanding to look back to!

Commemorating 50 Years of the 1976 Copyright Act, Stanford Law School

The Copyright Act at 50: Evolution and Impact

Shira Perlmutter

Copyright Act took a long time, with input from lots of interest groups and attention to detail—hundreds of contending and overlapping interests were involved. Hard to imagine this process today. Desire to avoid need for constant amendment/future-proofing. But did they do enough? Didn’t create a general right to exploit the work publicly, which would have obviated the need for continued parsing the scope of each right, like public performance.

Some changes over time, most prominently the DMCA. More than codifying common law principles; tech-specific obligations. Less durable as business models evolved; might have unexpected consequences in Cox. [Hunh? Cox is not a DMCA case.] 1201: some provisions are highly detailed and technical, and outmoded. But the rulemaking process is flexible and fair-use based and has produced new exceptions. Allows © owners to rely more securely on TPMs, enabling the celestial jukebox. Fair use has also played a critical role as a flexible judicial tool. The bones are solid, even with AI.

Q: registration requirement is tough on creators. Can’t get protection [statutory damages] before infringement.

A: You can register—the issue is remedies.

Chris Sprigman: why do you think that it was ill-considered to add to fair use that unpublished status isn’t dispositive?

A: b/c courts had already walked back their overreading of unpublished status. Worried about accretion of more specific language in a statute that’s supposed to deal with rapid change. [Seems like a levels of generality issue; unpublished seems general enough to be robust.]

Sprigman: it’s always good when Congress talks back to the Supreme Court.

Laura Heymann: say more about moral rights?

A: A patchwork in the US; would love to see Dastar reversed and some additional protections provided.

Q: how to design AI training licensing framework?

A: Doesn’t have proposal but thinks it would be possible; easier in areas w/high value works. Small low value works w/authors who aren’t organized are harder. At some point there may be a statutory solution building on experience in the private sector with making a licensing system work.

Tyler Ochoa: Cox v. Sony?

A: Personal views! Shocked at how short the decision was and how little thought there seemed to be about the implications. Threw out decades of © law quickly w/o analysis. Repercussions well beyond the facts. Congress clearly intended to continue the separate treatment of © contributory liability from patent and aiding and abetting liability. [Don’t you know that only Supreme Court cases count? My line on this: “This is easy and you are all stupid” is a poor way to think in drafting most Supreme Court decisions.]

Do We Need a New One? William Fisher

Statute has grown by accretion, not revision, and only when there can be agreement by major stakeholders. Hypothesis: useful to start fresh. Draft from Oren Bracha, William Fisher, Ruth Okediji, and Talha Syed. A couple of points: Limit scope of adaptation right. Reproduction right/substantial similarity is almost overlapping with it, but matters when there’s no reproduction. Independent of exclusive rights of © owner, wants to have rights attached to, at least initially, authors rather than owners—right to attribution, generously defined, and to integrity, narrowly defined. Shorter duration. Compulsory licenses not just for music covers but for educational uses.

Sprigman: Why is remuneration for authors the first principle? The Court has said that’s a means to an end. Why not “vibrant creative environment”?

A: order isn’t meant to connote hierarchy, but worth thinking about. Utilitarianism isn’t the only goal; fair treatment of artists is also a goal.

Q: like the use of lessons from laws around the world. Was that a reason to delete statutory damages, which aren’t available in many places around the world?

A: there are well-known specific defects in the US system of statutory damages. The substantial range for willful infringement per work becomes bizarre & punitive. There are workable models that would function more like liquidated damages in contracts. The functions of augmented damages, including incentives to bring suit, could be adequately performed by enhanced damages for abusive positions (doubling) and attorneys’ fees. Fees should be more likely for small creators and less likely for deep pocketed plaintiffs.

About Face: Deepfakes and the Misuse of Copyright Madhavi Sunder

Denmark is granting © in a person’s face to combat deepfakes. Incentives/progress/access aren’t just buzzwords but the raison d’etre of our law. But roughly a decade ago, things began changing, not just b/c of AI: using © as a tool to redress noneconomic social harm: safety, protection, dignity, reputation.

Denmark goes beyond using © to serve non © ends/do an end run around 230, as past proposals in the US have done (thanks for the shout-out) to expanding the scope of © beyond what it should cover.

Denmark’s amendment covers life of the author+50 years and protects all natural persons against digitally generated images of personal characteristics. Limitations for caricature, satire, parody, criticism of power, social criticism, etc. But this would cover foreign nationals as well. Includes a takedown right. Drafters suggest that the new right is not really copyright but personality right, and the law should be changed to be officially called the “Copyright, etc. Act.” [It’s ©, Jim, but not as we know it!] Attribution and integrity for authors is not the goal; broad dignity harms to individuals, society, and democracy.

EU is considering whether to adopt a similar proposal. US may be heading in a similar direction—Jennifer Rothman identifies convergence between ROP and ©. Digital replica report by Copyright Office suggests new laws are needed.

Faces and voices aren’t authored in the way © has traditionally required; we allow soundalikes. However, some people (Balganesh, Gilden) suggest that © has always had concerns with dignity. Likewise, the Court allowed photographers to own © in depictions of faces. This tension raises charges of unfairness, as in Moore v. University of California. Descendants of enslaved people can’t claim ownership of daguerrotypes of their ancestors; Prince, who decried ownership of his name and music, becomes the subject of a photographer’s © claim at the Supreme Court. Surveillance: your face belongs to us. The issue about face is not whether property, but whose property.

IP and blackface: Jim Crow was a minstrel character—“love and theft” of black dances and bodies—loved and despised, coveted and expropriated. Elvis painstakingly listened to recordings of Black artists on repeat so he could copy them, and Tennessee then called its voice ROP law the ELVIS Act—irony! Digital replicas are the next frontier. Abba has created a concert featuring digital replicas of their younger selves; they sang and danced in motion capture suits with monitors and cameras everywhere. This show will last as long as people will pay to see it.

Sunder’s about-face: She criticized the goal of efficiency in © and argued for considering other interests like semiotic democracy. Is this the same thing? No. © can’t be everything everywhere all at once. Doctrinal coherence matters. Doctrinal collapse b/t © and privacy has structural harms including threats to the rule of law. © is too consequential and long-lasting and easy-to-get to be careless about; statutory damages and notice and takedown are big deals.

© is about authors, whether you’re a high protectionist or low protectionist. In an age where we’re all curated online, we should have a low threshold for protection, but not create mutant copyrights far from the real thing.

Cathy Gellis: Implications for national treatment?

A: will think about it—interested in whether we’re replicating it for ourselves.

Lemley: is the right alienable in Denmark? © as a regime is usually about being able to sell rights.

A: all premised on consent.

Quasi-copyright and the Copyright Act, Rebecca Tushnet

My focus here is on 1201 and 1202. My argument is that their evolution in the courts shows something about the workings of the legal system and the incentives of both plaintiffs and judges.

As most of you know, 1201 prohibited circumvention of access controls and trafficking in technology that circumvented rights controls or access controls, with a variety of statutory exceptions that are essentially too complicated to be used, and a provision for allowing additional temporary exceptions after Copyright Office rulemaking, but only for the direct access control circumvention provisions not for the trafficking provisions, so you have to both have an exemption and somehow get the technical capacity to use the exemption which is illegal for someone to give you.

Tony Reese wrote a great article explaining the benefit to the copyright owner of characterizing a technological protection as an access control rather than a rights control – no individual circumvention is allowed in the absence of an exception– thus in every case, copyright owners plead that a TPM is an access control, and courts have uniformly accepted this characterization—so this supposed four part scheme of access and rights controls, direct circumvention and trafficking, quickly became a two part scheme involving only access controls. Rights controls immediately lapsed into desuetude.

Because of how broad 1201’s access control provision was it initially seemed to offer copyright owners broad new rights. This was especially important for manufacturers of machines that happened to have software in them—providing compatible products, for example, could be reframed as violating access controls. However, in two prominent decisions courts—using interpretive methodologies that would probably not be adopted today—interpreted 1201 to try to prevent its use to control markets that aren’t really based on the value of the copyrighted works; the major cases are perhaps tenuously based in the statutory language but they probably do track what Congress thought it was doing.

These two decisions, Chamberlain and Lexmark, dampened the appetite among many non-copyright-reliant manufacturers to use 1201 to try to control repair and resale. There’s a real case to be made that 1201 has importance for phones and apps, but it’s no longer a big part of copyright litigation.

In addition, the rulemaking process proved so exhausting that the Copyright Office decided to streamline it for existing exemptions. And because the trafficking provisions only cover traffickers, not customers of traffickers, people with exemptions use circumvention software they got from elsewhere and we all just generally ignore the issue in the exemption process. I would suggest that, at least for the time being, we’re no longer in a legal innovation phase with 1201.

Meanwhile, 1202 litigation has exploded. 1202 covers knowing removal of copyright management information that facilitates infringement or provision of false CMI, and although there were always a few cases about it, it has been discovered in the last decade—as causes of action sometimes are because lawyers are innovative—and gained new prominence in cases like the AI training cases. 1202 doesn’t require registration in order to get statutory damages and so questions about what constitutes removal of CMI or the relevant intent are actively being litigated. Pam Samuelson and her coauthors have written a good article about the arguments, but I just want to point out that lawyers have done exactly what they’re good at: pushing the boundaries of the law in order to achieve interests for their clients even when the more obvious claim—like copyright infringement—won’t work for copyright-specific reasons.

Given this increased use, it’s not surprising that we see countervailing theories attempting to limit the growth of 1202 cases. One court even recently dismissed a lawsuit brought under 1202(b)(1) against ChatGPT on Article III standing grounds—under the TransUnion case, 1202 can’t constitutionally authorize a private cause of action for internal CMI removal that goes no further—plaintiffs didn’t allege any actual harm beyond the removal of CMI in the training dataset, so they didn’t have standing to seek damages, and they didn’t plausibly allege that a substantial amount of their creative expression would appear in future results, so they didn’t have standing to seek injunctive relief.

I have some broader thoughts about this incredibly abbreviated account, based on Carol Rose’s classic article, Crystals and Mud in Property Law: Fools and scoundrels are the bane of the law because they make it unpalatable to follow the most natural understanding of a clear rule. Hard edged rules written into law—like the prohibition on circumventing access controls—predictably lead scoundrels to abuse their fellow citizens, as in Lexmark and Chamberlain, and subjects fools to disproportionate liability, especially where statutory damages are involved. Courts then understandably push back, inventing equitable limits and turning a clear rule into something more muddy. But muddy rules are expensive to navigate and create their own set of problems.

In Carol Rose’s story about real property law, legislatures eventually intervene to create a new and different clear rule designed to solve the problems created by existing fools and scoundrels under the previous regime. This works for a while and then the infinite creativity of humans, both good and bad, produces new fools and new scoundrels.

I think Rose’s story has key lessons for copyright. (1) Future proofing is something of a myth. It’s worth trying, because immediate obsolescence when a few facts about the market change is not good—I’m looking at you, vessel boat hull and mask works protection and 512(b)—but the idea that you can set and forget a law ignores the fact that lawyers and judges are human beings—at least for now—and human beings are collectively really good at finding ambiguity or opportunities for arbitrage.

(2) If we face a situation where we don’t trust that the legislature will intervene, or can intervene productively, then things get a lot harder. When that’s combined with a judicial approach to statutes that focuses on the dictionary meaning of specific words rather than an appreciation for the structure of the legislation and the context in which the legislature was operating, scoundrels are likely to prosper and fools are likely to be abandoned to their fates. I don’t have solutions but I am predicting a long roll in the mud.

Lots of interesting comments; I think both the legislative process (actual deliberation) and judicial concepts of the role (neither entirely free to disregard the statute in favor of the common law/equity nor laser focused on individual words in isolation from the structure and purpose of the law as a whole) need change from where they are.

Tony Reese pointed out that the Copyright Office testified in the legislative history that many things were "clear" but didn't need to be in the statute--should we revise to make those things explicit? I think the issue w/that is the fools/scoundrels problem--one reason you might not write out the exact wording is that you can't foresee what will happen when clever lawyers get their hands on it directly and treat a principle as a rule. This is a classic content moderation problem! 

court gives guidance on disclaimer placement, AI alterations in enforcement proceeding

InSinkErator LLC v. Joneca Company LLC, 2025 WL 4631972, No. 8:24-cv-02600-JVS-ADS (C.D. Cal. Nov. 24, 2025)

Previous discussion of this false advertising case. In a separate order, the court deals with other compliance issues than those below. It rejects the claim that the injunction requires Joneca-controlled search results to display the disclaimer as part of the result. Consumers will only be able to buy the product by clicking on the link and therefore will see the disclaimer as long as the underlying result page complies with the injunction.   

InSinkErator moved to enforce the preliminary injunction and the court granted the motion in part. The injunction barred “Joneca, its officers, agents, servants, employees, and attorneys, and all other persons who are in active concert or participation therewith and who have actual notice of the injunction” from “[m]aking any false and deceptive horsepower claims regarding Joneca-made garbage disposal products.” Joneca was further enjoined from “[a]ssisting, permitting, or causing to be made by any third party any false and deceptive horsepower claims ... including on retailer or wholesaler websites.” It was required to include the following disclaimer on all online listings of its products: “Horsepower claimed on package does not indicate motor output or motor power applied for processing.”

InSinkErator reviewed Joneca’s online product listings and found that the disclaimer was sometimes included in a tab that customers had to click into or scroll down to in order to obtain more product information. It argued that this wasn’t good enough.

Civil contempt requires clear and convincing evidence, that (1) the party violated a court order, (2) beyond substantial compliance, and (3) not based on a good faith and reasonable interpretation of the order. Violation of a court order is shown by the party’s “failure to take all reasonable steps within the party’s power to comply.”

InSinkErator argued that some of Joneca’s disclaimers weren’t “clear and conspicuous.” “Instead of appearing at the top of the page or in the first image of the product, the disclaimer sometimes appears in an expandable section containing product details near the bottom of the webpage.”

Joneca argued that the disclaimer was placed in the “first permitted or technologically feasible location given each retailer’s specific restrictions,” usually located next to an explanation of the product’s horsepower.

The court indicated that the spirit of its order “was that any reasonable consumer would come across the horsepower disclaimer before making a purchase” because horsepower is “one of the top purchasing considerations for garbage disposals.” “This is made evident by the inclusion of horsepower in the product title of every online listing shown to the Court.”

The court then provides some guidance that might or might not be generalizable:

For physical packages, the Court’s Order required the disclaimer to be bordered in red and affixed to the front of the package. It would thus be difficult for any consumer to purchase a physical unit without seeing the disclaimer. Any online disclaimer should be similarly conspicuous and immediately viewable just like on a sign or product package in a physical store.

A reasonable consumer may not click through all of the online product details before making a purchasing decision. Thus, to be sufficiently conspicuous—analogous to the disclaimer on a physical package—the online disclaimer must be immediately viewable to the consumer without additional navigation on the product listing. This means that the disclaimer must not be located only in a product description lower on the page or in a separate tab, but rather at the first feasible location at the top of the page. Where it is feasible, this should come in the form of a text entry in the product highlights. Otherwise, it should be added to the first product image immediately viewable to a consumer on the product listing page. Where the disclaimer is included at the top of the listing page in the product highlights, Joneca need not also include the disclaimer in the first product image.

Some of Joneca’s online disclaimers are not immediately viewable to consumers on a product’s landing page and thus Joneca hadn’t taken all reasonable steps to bring these product listings into compliance. Joneca argued that the various online product listing policies of its retailers prevented compliance. “But nowhere in Joneca’s declaration does it claim to have requested a variance from any retailer’s listed policy or otherwise sought an accommodation in light of this Court’s Order…. The potential for accommodation is underscored by InSinkErator’s submission of images of product listings from Home Depot’s website with text in the first image, despite the plain language of its policy disallowing such text.”

Thus, “Joneca must work with its retailers to modify the location of the disclaimer to conform to the above requirements in order to come into compliance with the preliminary injunction.” However, the court declined to find Joneca in civil contempt because it applied its initial disclaimer pursuant to each retailer’s online listing policy in good faith.

A footnote worried about AI page changes [yes, now every compliance person should have the same worries!]: “[T]o the extent a listing on Amazon or Walmart comes out of compliance, such as because of an AI-generated text box, Joneca should work with the retailer to include the disclaimer per the criteria listed.”

former TM owner states valid damages claim against licensee of current TM owner that drove it out of business via infringement

Wagner Zip-Change, Inc. v. Tubelitedenco, No. 23 C 05077, 2026 WL 673148 (N.D. Ill. Mar. 10, 2026)

Wild facts! Wagner was until 2021 in the business of selling sign lettering products, including its trademarked Jewelite Trim (also known as “trim cap”), “a plastic molding that adds dimension to cut-out sign letters.” It obtained an exclusive license to use the mark in 1987. It contracted with a third party, Vidon, for manufacture, and sold its products to distributors, which then sold them to sign companies and other end users. Defendants were among the largest distributors.

Vidon allegedly began manufacturing a knock-off version of Jewelite Trim. Tubelite then allegedly entered into a distribution agreement with Vidon. Tubelite allegedly (1) made false and misleading statements that Vidon’s knock-off trim cap was “the original trim cap,” that Vidon was just a “different name” for Jewelite, and that the product was “the exact same”; (2) used the Jewelite mark in connection with the sale and promotion of the Vidon trim product; and (3) filled at least several hundred customer orders for “Jewelite,” “Wagner Jewelite,” and “Wagner” trim cap with the Vidon product. Tubelite’s conduct allegedly “contributed greatly” to driving Wagner out of business, resulting in at least $4.5 million in lost sales. Wagner ultimately gave up its rights in the Jewelite mark, which was then assigned to Vidon.

Wagner sued Tubelite for violations of the Lanham Act and state law claims for unfair competition and tortious interference with prospective economic advantage.

Under these circumstances, the court rejected Tubelite’s argument that, though its use of the mark was confusing, Wagner couldn’t sue because (1) it’s not the current user of the mark and (2) Vidon is the mark’s current owner.

Wagner was suing for damages, not an injunction. Violation of its past rights gave it a cause of action. Cases requiring use for trademark rights “simply stand for the proposition that a plaintiff claiming infringement must show that it had rights in the mark when the alleged infringement took place.” It was enough that “Wagner had enforceable rights in the mark when Tubelite used it to sell Vidon’s products.”

For statutory standing, a plaintiff must (1) “allege an injury to a commercial interest in reputation or sales” that (2) “flow[s] directly from” the defendant’s violation of the statute. “Wagner easily satisfies that test, alleging (1) a commercial injury (loss of millions in sales) that (2) directly resulted from Tubelite’s misleading use of the Jewelite mark.” Nothing in Lexmark required a plaintiff to show current rights in the mark or likelihood of a future injury. “Nor would that requirement make much sense. Consider the consequences: defendants who appropriate another party’s mark so successfully as to actually drive that party out of business—as Tubelite is alleged to have done here—would effectively be immune from suit under the Lanham Act. That would be an exceedingly odd result.” Indeed, Lexmark itself commented that “a competitor who is forced out of business by a defendant’s false advertising generally will be able to sue for its losses.”

Tubelite also unsuccessfully argued that Wagner’s false association claim fails because Vidon, as the Jewelite mark’s current owner of record, has an incontestable right to use the mark. Incontestability had nothing to do with the issue here. Vidon acquired the mark after the alleged misuse of the mark took place. [Maybe Vidon has such a right, but it didn’t have such a right.] “Second, Tubelite—not Vidon—is the defendant in this action, and it has presented no legal authority to suggest that it can assert Vidon’s rights in its own defense.” Anyway, there were lots of exceptions to incontestability.

Sometimes dumb arguments make for bad explanations that omit nuance, but sometimes they lead courts to articulate the reasons for the rules, and that’s nice.

delay still defeats Lanham Act presumption of irreparable harm

Skillz Platform Inc. v. Voodoo SAS, 2026 WL 717220, No. 24-CV-4991 (VSB) (JW) (S.D.N.Y. Feb. 12, 2026)

Skillz sought an injunction against defendants’ allegedly false representations about not using bots, and against defendants’ use of bots, in their gaming applications. Skillz has showed up before litigating against other gaming companies’ bot-related representations. Its games including those where players can compete to win cash prizes in head-to-head, skill-bracketed tournaments that ban bots. Defendants run similar games and advertise themselves as, e.g., “fair” and “skill-based” games that are played against “real players” with “no bots allowed.”

The magistrate recommended against an injunction solely on grounds of delay. The relevant date for measuring delay was not the filing of the initial complaint, but at the time Skillz learned of the alleged harm. Even after filing, it waited seven weeks to move for a preliminary injunction. Without more evidence about when it first learned of the bot use, this “undercuts the sense of urgency that ordinarily accompanies a motion for preliminary relief and suggests that there is, in fact, no irreparable injury.”

In addition, the claims of irreparable injury were too remote and speculative to justify emergency relief. Although the parties do compete, Skillz didn’t show a logical causal connection between the alleged false advertising and (1) its own sales position or (2) the overall cash gaming market.

Skillz showed that its sales and market share decreased since 2021, but not that the alleged false advertising played any role in that beyond unsupported speculation by a self-serving declaration. So too with harm to the overall market. “Courts in this circuit have frequently rejected such speculative arguments in deciding whether to issue a preliminary injunction.” [Now do trademark infringement!]

Without evidence of harm to Skillz’ own reputation, as opposed to allegations that distrust was harming the overall market, money damages could redress any injury.

damages requirement trips up another false advertising case with sophisticated customers

Agilent Technologies, Inc. v. Axion Biosystems, Inc., 2026 WL 734986, No. 23-198-CJB (D. Del. Mar. 12, 2026)

Agilent alleged patent infringement and false advertising by Axion in the advertising of its impedance-based cell assay products. E.g., “The simple and sensitive assays of the Maestro Z accurately measure tumor growth and immune cell killing of 3D cancer spheroid models.” Agilent contended that the Maestro Z platform doesn’t actually accurately measure the impedance of 3D spheroids, but only of cells in contact with electrodes on a 2D surface. 

The court granted Axion’s summary judgment motion. Even assuming a genuine dispute on literal falsity and on whether the statements were fact, not opinion, Axion still prevailed.

“For a false advertising claim seeking injunctive relief, if a plaintiff can prove the statement in question is unambiguous and literally false—then actual deception or a tendency to deceive is presumed and need not be proven.” However, “where a plaintiff seeks only money damages for a Lanham Act violation”—regardless of whether the plaintiff is asserting that the statements are literally false or simply misleading—then “plaintiff must present proof of actual deception.” Axion sought both an injunction and money damages; for the injunction, actual deception could be presumed.

But there was not enough evidence of actual deception for misleadingness or damages. A consumer survey or other customer testimony “is not absolutely required if other evidence of actual customer deception exists.” Agilent’s own corporate representative testified about the purported experience of a prospective customer, but this was double hearsay, not admissible at trial. [Agilent apparently didn’t respond that this was evidence of state of mind subject to an exception.] She “could not recall [any] specific case” of customers saying that they wanted the feature at issue. “This vague testimony amounts to a conclusory assertion backed by no actual facts on the key point in dispute.” Nor did the court’s reading of the record support the idea that “Axion’s own collaborators, … who Axion stated are ‘representative of an Axion customer,’ were deceived.” Given their extensive experience with the products, “whatever views they came to regarding Axion’s products and their capabilities were surely gleaned from their own extensive research efforts.”

Thus, claims requiring actual deception failed. The remaining claim (literal falsity/injunctive relief) failed for want of a showing of injury.  

Agilent’s damages theory wasn’t based on any lost sales or reputational damage, and instead focused solely on prospective corrective advertising costs. The Third Circuit “does not place upon the plaintiff a burden of proving detailed individualization of loss of sales” as “[s]uch proof goes to quantum of damages and not to the very right to recover.” And the parties compete directly. Still, there was no real evidence of harm: the testimony was “so vague, conclusory, and/or inadmissible that it cannot be good evidence of anything.” [Now do trademark infringement!]

drug makers face rocky road in making claims against sellers of compounded weight loss drugs

Three different cases reading Lexmark differently but mostly kicking out claims:

Eli Lilly & Co. v. Aios, Inc., 2026 WL 836624, No. 25-cv-03535-HSG (N.D. Cal. Mar. 26, 2026)

Eli Lilly sells Mounjaro and Zepbound, GLP-1 inhibitors containing tirzepatide. These are the only FDA-approved medicines containing tirzepatide in the United States, and the FDA has not approved any tirzepatide product in oral or compounded form.

Defendant operates telehealth platforms focusing on drugs for weight loss, including compounded tirzepatide. Eli Lilly alleged that its Fella telehealth platform engaged in the unlicensed practice of medicine: For example, the non-physician founder allegedly “frequently tells customers that he can help increase their dosage amounts of Fella’s knockoff drugs if they contact him or his non-physician customer success team directly.” Fella also allegedly changed patient prescriptions “en masse,” based on Fella’s business needs, rather than individualized patient needs. Many patients allegedly learned that their prescription now contained an additive “not through their doctor but rather when their prescription arrived from Fella Health.” Eli Lilly alleged that these weren’t “personalized prescriptions”—rather, Fella is offering “an untested, unapproved, one-size-fits-all drug” to patients without complying with the California Medical Practice Act’s requirement that prescriptions be made with “an appropriate prior examination and a medical indication.”

Eli Lilly also alleged deceptive conduct with claims such as “[o]ur science-backed methodology delivers results that outperform traditional weight loss methods”; “[o]ral tirzepatide is the same active ingredient as the compounded injectable (tirzepatide)”; and “[o]ur advanced oral Tirzepatide treatment, developed through cutting-edge research, offers a safe and effective solution tailored to support your weight loss journey and overall health.”

Eli Lilly alleged that Fella knew these statements were false. In a Reddit post, Fella’s Head of Customer Sales wrote that “oral [tirzepatide] can be fairly ineffective (though not totally ineffective), and some may experience more GI discomfort due to daily administration.” One of Fella’s customer success leads wrote that “[t]he oral version is less effective than the injectables, but it’s still better than not being on the medication at all.” Fella’s founder wrote on Reddit that “oral [tirzepatide] is slightly less effective than subcutaneous.”

But Fella’s website states that oral tirzepatide is “science-backed” and that Fella uses a “science-backed methodology,” while its Head of Customer Sales wrote that patients generally lose 15% of their body weight in one year on oral tirzepatide. Eli Lilly alleged that oral tirzepatide has never been studied in clinical trials and that Fella has no science at all supporting its oral product. The statistic cited by Fella on its female-targeted Delilah website, that patients using oral tirzepatide experience a weight loss average of “22.5%,” was derived from Eli Lilly’s clinical trial on injectable tirzepatide, not oral or compounded tirzepatide.

Eli Lilly sued for violations of the UCL, FAL, and Lanham Act, along with civil conspiracy.

Fella argued that Lilly lacked standing because they weren’t competitors and Eli Lilly couldn’t allege “something very close to a 1:1 relationship between [Eli Lilly’s] lost sales and the sales diverted to a defendant.” The court disagreed: Lexmark directed the court to use the zone of interests test and proximate cause, both of which Lilly properly alleged.

Lilly alleged that “Fella’s unfair, deceptive, misleading, and false practices, including its false and misleading statements, cause irreparable harm to Lilly’s brand and customer goodwill by promising results that consumers cannot obtain from Fella’s product,” and, because Fella relied on Lilly’s studies on its product, consumers would also think that Lilly’s product would be that bad. Plus, Lilly alleged injury to its commercial interest in sales. E.g., on Reddit, one of Fella’s customers said he “was on zepbound” until mid-November 2024, but “stopped” when the medicine became too expensive and eventually switched to Fella. Lilly also had standing under the UCL and FAL, but only as to false advertising, not to the UCL claim based on allegedly unlawful corporate practice of medicine. “Eli Lilly does not plausibly allege how Defendants’ claimed lack of authorization to practice in itself causes it any injury.”

Commercial advertising or promotion: It was plausible that the Reddit posts were made for the purpose of influencing customers to buy Fella’s products. Although this was a closer question than statements on Fella’s own website, the Reddit statements “tout Fella’s success with statistics, refer to Fella’s oral and injectable tirzepatide products, and adequately reflect an economic motivation, such that the allegations support a reasonable inference that ‘the economic benefit was the primary purpose for speaking.’”

However, Lilly struggled with its literal falsity arguments, since “lack of substantiation” is not itself a valid theory under state or federal law. For example, Lilly alleged that Fella’s statements regarding its patients typically losing 15-22.5% of their body weight were false because those statements are in reality based on the results of Eli Lilly’s clinical trials, which were performed on injectable and non-compounded tirzepatide. And it’s true that a plaintiff can show falsity by showing that even reliable tests do not establish the proposition asserted by the defendant. “But here, Eli Lilly has not alleged that Fella made any representation regarding the specific basis for its statements about the weight loss results typically achieved for its patients, and Eli Lilly does not allege any contrary facts (as opposed to the purported lack of supporting facts).” Lilly didn’t plausibly allege that Fella’s statements about the existence of rigorous “research” and “testing” were false just because oral tirzepatide has never been subject to the particular mechanism of a clinical trial or study. [Seems like a consumer survey should be relatively easy to do to find deceptiveness even if not literal falsity.]

The only allegedly false statements sufficiently pled were those made in connection with Fella’s promotion of “personalized treatment plans.” Whether defendants actually personalize customers’ treatment was capable of being proven true or false, not puffery.

Novo Nordisk A/S v. Amble Health, Inc., No. 4:25-CV-01048, 2026 WL 776100 (N.D. Ohio Mar. 19, 2026)

The parties allegedly are competitors in the sale of drug products containing semaglutide. Novo Nordisk sells the only FDA-approved medicines containing semaglutide in the United States, Amble is a telehealth company that sells drugs purportedly containing semaglutide, produced at compounding facilities. Novo Nordisk alleged that these compounded drug products are mass produced and create a higher risk to patients than Novo Nordisk’s medicines, because the FDA does not conduct pre-market reviews of compounded drugs for safety, quality, or effectiveness.

The complaint also alleged that Amble’s ads falsely claims that its drugs are personalized: “tailored to you,” and are “tailored to your personal goals,” with “personalization” of “active ingredients, dosage, and form of a medication to meet an individual’s personal needs.” The complaint alleged that, to the contrary, the compounded drugs were “ordered in bulk and sold to patients off the shelf.”

The court found that Novo Nordisk didn’t plausibly allege injury in fact. The complaint alleged sales diversion as well as reputational harm because compounded drugs might “undermine the reputation for quality and safety established on Novo Nordisk’s FDA-approved medicines.”

But defendants’ use of “personalized” didn’t plausibly threaten to harm Novo Nordisk’s reputation. “At base, [Plaintiff] appears to argue the mere fact a medication is compounded makes it an inferior version of an FDA-approved product with the same active pharmaceutical ingredients. But compounding is a federally recognized and regulated pharmaceutical practice ….” Novo Nordisk needed at least facts supporting an inference that Amble’s compounded medication fails to meet consumer expectations, which it didn’t. Nor did it plausibly allege that any of Amble’s customers were harmed by the compounded medication “such that they could draw unwarranted conclusions about the safety and efficacy” of Novo Nordisk’s drugs.  Although Novo Nordisk pled that “the FDA has received reports of adverse events, some requiring hospitalization related to overdoses from dosing errors associated with compounded ‘semaglutide’ products,” dosing errors don’t show that the term “personalized” in and of itself has led to any patient diversion. [The court is weirdly going back and forth between reputation and sales diversion.]

Even with Article III standing, Novo Nordisk didn’t properly allege statutory standing via the proximate cause element: The “personalized” message didn’t plausibly cause the harm. Compounded medications require prescriptions, and the physician’s prescribing decision, not the ads, was the proximate cause of the patient using the compounded medication instead of Novo Nordisk’s product.

Eli Lilly & Co. v. Willow Health Services, Inc., No.: 2:25–cv–03570–AB–MAR, 2026 WL 639976 (C.D. Cal. Feb. 3, 2026)

Eli Lilly alleged its medicines are backed by rigorous science and quality controls. It has FDA approval for two injectable tirzepatide-based medicines. At the time of the complaint, there was no FDA-approved oral tirzepatide. Willow operates a telehealth platform that markets and sells weight-loss treatments directly to consumers. Willow offers compounded tirzepatide products, including an injectable formulation and an oral formulation.

The FDA allegedly has expressed particular concern about compounded GLP-1 drugs, many of whose components are manufactured by facilities that are not subject to the same regulatory oversight as domestic manufacturers. It has warned about dosing errors, adverse events, and the use of unapproved salt forms in compounded tirzepatide products. 

Willow allegedly marketed its products as clinically validated and comparable to, or superior to, Lilly’s FDA-approved medicines: that its tirzepatide treatment has undergone “extensive testing,” is supported by “science,” and produces significant weight loss outcomes. Imagery of physicians and references to board-certified doctors allegedly reinforced the impression of medical endorsement.

Willow also allegedly claimed that its product is a “premium” blend that delivers “better results” than tirzepatide generally. Then it reiterates that its medication undergoes extensive testing. Lilly alleged that, in fact, Willow has no clinical studies supporting these claims, and no testing has been conducted on Willow’s compounded products to demonstrate safety or effectiveness. 

Willow allegedly marketed its drops as effective and, at times, superior to injections, but no clinical data supported the effectiveness of any oral tirzepatide product.

And Willow allegedly misrepresented that its medications were custom, “personalized,” and tailored to each patient’s unique needs, rather than standardized formulations delivered to all patients. Willow’s intake questionnaire “purports to assess whether Willow’s treatment is appropriate” but recommends its medication to all users regardless of the information provided.

After Lilly sued, Willow added a disclaimer to its website stating that its products are not FDA-approved and have not undergone clinical trials, but Lilly alleged that this bottom-of-page statement didn’t affect the overall message. Lilly also alleged that survey conducted by the National Consumers League found that many consumers incorrectly believe  thatcompounded GLP-1 drugs are FDA-approved and clinically tested. Willow’s advertising allegedly mirrored the types of statements the FDA has identified as false and misleading in warning letters sent to compounders and telehealth companies: “clinically proven,” “backed by extensive clinical research,” and “personalized.”

Lilly alleged that Willow’s marketing falsely equates its untested compounded products with FDA-approved medicines, diverting sales and harming Lilly’s reputation. It further alleged that adverse events associated with compounded tirzepatide products are often mistakenly attributed to Lilly’s medicines, further damaging its goodwill.

Statutory standing: “[T]he test forecloses suit only when a plaintiff’s interests are so marginally related to or inconsistent with the purposes implicit in the statute that it cannot reasonably be assumed that Congress authorized the plaintiff to sue.”

“If the plaintiff can demonstrate that the defendant is a direct competitor, there is a presumption of a commercial injury to plaintiff sufficient to establish standing.” Willow argued that wasn’t a direct competitor of Lilly evidenced by the fact that Lilly didn’t have direct evidence of lost sales and it actually had an increase in sales of Mounjaro and Zepbound. Lilly argued that the presumption of commercial injury conferred by direct competition couldn’t be rebutted. [Gotta say, that seems correct for the motion to dismiss stage.]

The court recognized “a split of authority in the Ninth Circuit on whether a presumption of commercial injury arising from direct competition is sufficient on its own to establish standing, or whether a plaintiff must also allege concrete facts demonstrating lost or diverted sales.”

Lilly alleged that Willow’s conduct “results in potential patients being lured away” and that “Willow[’s] ... materially false statements ... influence consumers’ ... decision to purchase Willow’s [drugs] instead of Lilly’s FDA-approved medicines.” Lilly also alleged that the products compete at “similar prices” causing consumers make purchasing decisions “based on factors other than pricing, including comparative safety and effectiveness.” These allegations, together with the presumption arising from direct competition, were sufficient to plead commercial injury.

What about proximate cause? A plaintiff “ordinarily must show economic or reputational injury flowing directly from the deception wrought by the defendant’s advertising; and that that occurs when deception of consumers causes them to withhold trade from the plaintiff.” Proximate causation may be adequately alleged when “there is likely to be something very close to a 1:1 relationship between” a plaintiff’s lost sales and the sales diverted to a defendant.

The court seems to read this Lexmark quote as a requirement rather than an example. But if I plausibly allege that my competitor & I would likely have split the sales garnered by a competing false advertiser, it’s got to be the case that I have standing. It’s not the 1:1 relationship that creates proximate causation but that, although the parties are at distinct parts of the value chain (as the parties were in Lexmark), a 1:1 sales relationship can justify finding proximate causation—a legal rather than factual conclusion—at a greater competitive distance than a more unbalanced/hard-to-prove loss ratio would have.

Reading Lexmark that restrictively, Lilly still failed to plead “a direct causal link between any advertisement by Willow and a patient choosing a compounded medication over Lilly’s product.” “Critically, regardless of advertising or patient intent, obtaining a prescription medication requires a physician to prescribe it. The physician’s prescribing decision, not Willow’s advertisements, is the proximate cause of the patient using the compounded medication instead of Lilly’s product.”

Lilly objected in vain that this ruling would categorically eliminate Lanham Act claims for prescription drugs. You still need “allegations showing a direct link between advertising and lost sales,” taking into account “the fact that prescriptions, a foreseeable and legally required step, determine whether a patient can actually obtain the product.” [Honestly, I’m not sure how hard this would be for Lilly to plead. The whole point of these services is that they contract with doctors to prescribe exactly what the services offer. A patient who contacts a doctor through one of these services is extremely likely to end up with their products. I don’t think Lilly should have to plead it, but it seems very plausible.]

CEO/sole owner is liable to bankruptcy estate for deliberate false advertising campaign that ended in bankruptcy

In re Vital Pharmaceuticals, Inc. (VPX Liquidating Trust v. Owoc), 2026 WL 822473, No. 22-17842-PDR, Adv. Pro. No. 24-01009-PDR (Bkrcy. S.D. Fla. Mar. 24, 2026)

This is an interesting case about false advertising and individual officer liability in bankruptcy. The court begins:

Corporate officers who breach their fiduciary duties do not become immune from accountability simply because they are also the only stockholders. Florida law imposes fiduciary obligations on directors and officers for the protection of the corporation itself—not for the benefit of any particular class of shareholders, and not subject to waiver by a sole owner who later finds it convenient to argue that no one was harmed but himself. When those obligations are breached and the corporation is driven into bankruptcy, the right to enforce them passes to the trustee or liquidating trust.

Owoc was VPX’s founder, sole shareholder, sole director, and CEO. A jury found that his and VPX’s false advertising of energy drinks was willful and deliberate, resulting in a judgment approaching $300 million.

At its peak, VPK generated over $1 billion in annual revenue, but its commercial success was based on claims about a proprietary ingredient that Owoc called “Super Creatine.” VPX falsely advertised that it offered significant physical and mental health benefits. VPX had “no corporate will separate from Mr. Owoc’s own.”

Because the jury was instructed that “VPX and/or Mr. Owoc acted willfully if they knew that their advertising was false or misleading or if they acted with indifference to whether their advertising was false or misleading,” its willfulness finding “necessarily encompassed a determination that Mr. Owoc either knew that the advertising was false or acted with indifference to whether it was.”

The judgment was one of the principal reasons for VPX’s bankruptcy filing; the resulting trust sought to hold Owoc liable for breach of fiduciary duty arising from the false advertising.

This claim requires: (1) the existence of a fiduciary duty; (2) a breach of that duty; and (3) damages proximately caused by the breach. Collateral estoppel applied to prevent Owoc from relitigating whether he willfully and deliberately engaged in false advertising of Super Creatine.

As VPX’s sole director and CEO, Owoc owed VPX fiduciary duties of care, loyalty, and good faith. A breach under Florida law requires at least gross negligence, which is “synonymous with engaging in an irrational decision making process.” The false advertising jury’s findings were preclusive: “A director who causes the corporation to engage in a years-long false advertising campaign that he knew was false, or acted with indifference to whether it was false, is the precise ‘knowing and deliberate indifference to the potential risk of harm to the Company’ that … breaches the fiduciary duty of care.” The damages were the judgment entered against VPX. Thus, there was liability (quantification of damages was for later).

The court rejected Owoc’s arguments, including that VPX was in pari delicto (equal fault) with him and thus barred from making the breach claim. The court disagreed: the doctrine “is not a tool for the powerful to insulate themselves from the consequences of their own misconduct.” It was designed for situations when two parties were independently at fault, voluntarily engaged in the same wrongdoing, and then fought about their relative entitlements arising from that shared wrongdoing. “In that situation, a court steps back and says: we will not sort this out.” It follows that, “when the parties were not independently at fault, when the plaintiff was not a voluntary wrongdoer, or when the very nature of the claim is that the defendant wronged the plaintiff rather than that both wronged each other,” the doctrine doesn’t apply. That was the case here.

While a bankruptcy trustee cannot sue third parties for their role in wrongdoing if the corporation itself was an equal participant (given that corporations can’t act without individual humans so the humans’ wrongdoing is attributed to the corporation), “an agent’s misconduct is not imputed to the principal if the agent was acting entirely in his own interest and adversely to the interest of the corporation.” “VPX’s liability in the Monster False Advertising Litigation was the legal consequence of Mr. Owoc’s own conduct being attributed to the entity he wholly controlled. The jury’s finding of willfulness against VPX reflects Mr. Owoc’s willfulness, not some independent institutional decision by VPX to deceive.”

Allowing Owoc to point to the fact that the law attributed his acts to VPX as a shield against accountability to VPX would be “to let fiduciaries immunize themselves through their own wrongful, disloyal acts—a “transparently silly result.” And if Owoc could do it here, so could every sole owner-operator, which would “systematically immunize the most powerful actors in closely held corporations from the most fundamental obligations corporate law imposes on them.”

Nor did the business judgment rule protect Owoc because of the breach of fiduciary duty. “This is not a case of a business judgment gone wrong — a risky but good-faith marketing strategy that backfired. It is a case of a director who caused his corporation to make claims he knew were false or misleading, or acted with indifference to whether they were false or misleading. The rule was not designed to shield such behavior.”