a lot of balls: golf ball manufacturer states claim for allegedly false UV light comparison

TaylorMade Golf Co. v. TopGolf Callaway Brands Corp., 2026 WL 2244259, No. 3:26-cv-250-GPC-BJW (S.D. Cal. Aug. 4, 2026)

TaylorMade sued Callaway, a competitor in the golf ball market, for federal and state false advertising/unfair competition. TaylorMade alleged substantial investment in innovating and advertising its golf balls, including a golf ball for tour-level performance known as “TP5 Brand.” Callaway has a TP5 brand golf ball equivalent called “Chrome Tour” golf balls.

TaylorMade alleged a misinformation campaign, including through sales reps and influencers and promotion to third-party golf publications.

TaylorMade’s TP5 Brand golf balls allegedly have two layers of coating: the first inner layer is white paint, and the second outermost layer is “clearcoat” that has a low concentration of “optical brightener” for cosmetic and stain-resistance purposes. TaylorMade alleged that the optical brightener had no impact on ball flight, distance, spin trajectory, or any other performance attribute. However, the “clearcoat has the highest potential impact on ball performance in flight” and therefore, its intentional thin coating approach is allegedly a deliberate design decision to improve ball performance. “As such, the splotchiness on its balls under UV light is Plaintiff’s design choice to have a single, thin, clearcoat layer to prioritize performance and not inferior quality or performance.”

TaylorMade alleged that Callaway similarly applies two layers of coating to their Chrome Tour golf balls, but both layers contain clearcoat with optical brightener, resulting in a brighter appearance that allegedly does not increase quality or performance.

TaylorMade was not alleging that uneven paint application cannot impact golf ball performance or quality; rather, it claimed that Callaway’s UV light demonstration was an unreliable way to evaluate paint coverage, paint uniformity or golf ball quality and performance. “In fact, the UV light demonstration only reveals the distribution of optical brightener additives, a cosmetic ingredient that has no bearing on ball flight.” Thus, using a UV light demonstration to make comparative quality claims was false/misleading—but that is what Callaway allegedly did.

For example, one sales agent stated that the demonstration would show whether there is “too much paint” on the ball, and if so, would result in a “mudball.” “Mudball is a derogatory term used to describe a golf ball that has a bad flight, trajectory, shape and distance due to the presence of mud on the ball and is the ‘bane of any pro golfer’s existence.’” The sales rep claimed that dark spots on the ball could “potentially act like a piece of mud is on the ball and who knows where the ball is going to go... all about quality control.”

Thus, TaylorMade challenged the following claims: (1) the use of UV light can measure golf ball quality or performance; (2) the difference in appearance of golf balls under UV light are indicative of overall golf ball quality and performance, (3) the uniform appearance of Calloway’s golf ball dimples and brightness under UV light is indicative of superior quality or performance; (4) TaylorMade’s golf balls are “mudballs”; and (5) TaylorMade’s quality control is inferior to Callaway’s.  

TaylorMade further alleged that the UV light test is unreliable, misleading, and lacks standardization “because it is highly sensitive to other variables including wavelength and intensity of UV light, distance and angle of which the light is held, the duration of the UV light exposure, prior UV exposure, and ambient lighting conditions, none of which can be standardized.”

This campaign was allegedly extensive. For example, MyGolfSpy, “a popular digital platform with over 22 million consumers,” published “Callaway Doubles Down on Speed and Precision With New Chrome Tour, Chrome Tour X, and Chrome Soft Golf Ball” which contained several statements from the alleged misinformation campaign and had a “DIY side note” encouraging consumers to conduct their own UV light demonstration as a way to measure a golf ball’s quality and performance based on its “paint coverage.”

Callaway argued that its claims were puffery.  A claim that golf balls act “like a piece of mud” due to the uneven paint coating on the ball which negatively impacts the ball’s ability to fly straight was a specific and measurable claim and not puffery, as were the other claims about UV light as a method of proof.  The complaint explained why the UV light demonstration wasn’t reliable.

Did TaylorMade have standing under California’s UCL and FAL? Yes, it sufficiently pled lost sales: “because Defendant is a direct competitor, any alleged false misrepresentations about the quality and performance of TaylorMade’s golf ball will increase sales of Callaway’s golf balls and cause sales of TaylorMade golf balls to decrease.” Also, it was independently sufficient that TaylorMade allegedly lost money when it incurred financial expenses to combat the misinformation campaign by responding to inquiries from customers who saw or heard about the UV light demonstration.

What about reliance? In federal district courts, the majority view is that a plaintiff must allege its own reliance and not the reliance of third parties. But the court here adopted the minority view that a “competitor may allege false advertising claims under the UCL and FAL without alleging its own reliance and need only allege it suffered an injury, loss of money or property, as a result of the alleged misrepresentations.” [seems correct]

Given the alleged Lanham Act violation, “unlawfulness” UCL claims survived, as did unfairness claims, which would allegedly “encourage a race to the bottom” where competitors will resort to misleading demonstrations and pseudo-scientific claims rather than competing on the actual merits of their products.

"battery tender" isn't generic for guess what, but keyword advertising is fine

Deltona Transformer Corporation v. NOCO Company, --- F.4th ----, 2026 WL 2236806, No. 24-13590 (11th Cir. Aug. 4, 2026)

Competitors aren’t generally allowed the same freedom as consumers to “genericize” a term. Here, the 11th Circuit finds no error in a district court’s holding that “battery tender” wasn’t generic, despite calling the product category at issue by that name throughout the opinion (“specialized vehicle-battery chargers called ‘battery tenders’”—they recognize when a battery is fully charged so they don’t overcharge and degrade it, an innovation when introduced). [What is the name of this specialized subcategory, if not “battery tender”? This is an exercise for the reader because the court sure won’t tell you, but moments in the opinion offer “battery-maintaining chargers” or “trickle chargers.”]

Deltona federal registrations for “Battery Tender” and “Deltran Battery Tender.” NOCO made similar charges and advertised its own products as “battery tenders.” A jury found for Deltona on its federal and state infringement claims, and further concluded that NOCO had engaged in false advertising in violation of federal law. The court of appeals kicked out some of the theories—specifically, based on keyword purchases and Lanham Act false advertising—and remanded to recalculate damages.

The allegedly infringing conduct: (1) bidding on Deltona’s marks as “keywords” and using them to trigger NOCO’s ads in Amazon search results; (2) using the term “battery tender” in the text of its own Amazon ads; (3) incorporating the term “battery tender” in its product descriptions on Amazon; and (4) holding out its chargers as “battery tenders” in communications with marketing firms and customers.

Category (1) couldn’t infringe, but the rest could. NOCO’s position was summarized by a sales manager: An email drafted by Nook and sent by a NOCO sales manager to a potential customer said, “We understand Battery Tender is a well known brand, but most customers usually refer to the function (battery tender meaning a trickle charger), than the actual brand.” Internal documents showed that NOCO was willing to use “tender” and “battery” in ways that were “passive aggressive.”

The director of advertising at a company that handles Deltona’s marketing testified that one of its customer-service agents spoke to a consumer who had initially reached out to NOCO and was “very confused” when one of its employees “referr[ed] to [NOCO’s] products as a battery tender charger.” And an email exchange in the record shows that a retailer considering whether to stock a new line of battery tenders reached out to NOCO with an inquiry about Deltona’s product.

The jury held that Deltona was entitled to actual damages of $1.3 million and that NOCO had committed intentional misconduct or gross negligence, entitling Deltona to punitive damages of $5.75 million. The district court ordered NOCO to disgorge profits of over $12 million and issued a permanent injunction. The injunction prohibited NOCO from “selling, marketing, advertising, [or] promoting” its products using the terms “Battery Tender,” “Deltran Battery Tender,” “Deltran,” or “Tender,” the latter of which was included because “[t]here was abundant evidence that [the company’s] use of ‘tender’ on its own was done in a way that caused customer confusion and infringed [Deltona’s] Marks.” The injunction exempted keyword purchases and comparative advertising.

Deltona had a genericity survey, but the jury could have rejected it. The marks weren’t inherently generic because they were registered; they were descriptive with acquired secondary meaning. “The fact of registration puts a heavy thumb on the scale against genericness.” [Does that mean that the burden is clear and convincing evidence? Or something else?]

“Battery tender”

entails some level of abstraction—“tend[ ]” is more a metaphorical than literal description of what a battery tender does, which is to preserve the battery by maintaining its charge. That makes “battery tender” more like “vision center”—which might sell glasses and contact lenses but doesn’t literally sell “vision”—than, say, “liquor store”—which is nothing more than a store that sells liquor. Indeed, the term “battery tender” might even be suggestive; it “suggest[s] characteristics of the good[ ]” and seems to require at least some “effort of the imagination” to understand how the product works.

Sigh. Nothing has “inherent” meaning with the partial exception of onomatopoeia.

Deltona’s co-founder made up the term based on an analogy to a ship’s tender. [But if he made it up to identify this new category and distinguish it from prior types of chargers, that shouldn’t matter—“dry ice” didn’t have to be the term for solid carbon dioxide.] The court says that, “as a matter of historical fact, it’s not accurate to say that ‘battery tender’ referred from the very beginning simply to ‘a kind of battery-charging device,’” but doesn’t explain what the generic word was at the very beginning.

NOCO’s consumer survey found that 78% of 558 respondents reported that they believed that “Battery Tender [was] a type of product” rather than a reference to a particular brand. The jury was free to reject that, though; Deltona had challenged the survey’s methodology on the ground that it included people who might simply have been “exposed” to battery tenders [generic use again!] “from shopping near [them]” when walking through an automotive store or department.

The court then held that keyword bidding alone can’t be trademark infringement because the use of the plaintiff’s mark for keyword-bidding purposes occurs “behind the scenes.” [Twenty years later, they figure this out. Sincerely: thanks, Abitron!] Likelihood of confusion “turn[s] on what the consumer s[ees] on the screen and reasonably believe[s], given the context.” (Citing Eric Goldman and the Second, Ninth, and Fifth Circuit cases to similar effect.)

Use in product titles and product descriptions on Amazon, however, was potentially infringing, as was use in communications with marketing firms and consumers, so that part of the award was upheld. Unlike keyword advertising, “[t]he inclusion of ‘battery tender’ in the description automatically not only affected Amazon search results but also drove shoppers searching for Deltona’s battery tenders to NOCO chargers without alerting them in any way—through a ‘sponsored’ tag or otherwise—that they weren’t really looking at battery tenders.”

“A reasonable jury certainly could have concluded that these explicit statements to customers—that ‘battery tender’ was a generic term—were likely to confuse them.” (Confuse them about what? Not about source or sponsorship, given the statement that it was generic.)

The Florida Deceptive and Unfair Trade Practices Act damages award was also problematic, even though the Lanham Act violation could also violate FDUTPA. Monetary relief in the form of actual damages is available only to a “person who has suffered a loss as a result of a violation of this part,” and Florida law generally defines actual damages as “the difference in the market value of the product or service in the condition in which it was delivered and its market value in the condition in which it should have been delivered.” Thus, Deltona couldn’t base its damages on “harm to its reputation or goodwill,” because consequential damages like that aren’t compensable under FDUTPA.

Finally, the district court erred by instructing the jury on false advertising under the Lanham Act based on the same conduct. Deltona’s complaint alleged unfair competition and false designation of origin under the Lanham Act; it never separately articulated a false advertising theory. It was not enough to use the phrase “misleading description and representation of fact,” when read in conjunction with the complaint’s “numerous allegations involving advertisements” and its generic citation to § 43(a), to warrant a separate jury instruction on false advertising under § 43(a)(1)(B).  In context, the complaint clearly referred to § 43(a)(1)(A). NOCO neither expressly nor impliedly consented to trying a false-advertising claim.

The court of appeals had “substantial and ineradicable doubt” whether the jury was properly guided, so that part of the judgment was reversed.

Disgorgement was appropriate, given the willful conduct. [Recalculation doesn’t seem to be required because of how disgorgement is assessed—even kicking out the keyword advertising doesn’t seem to matter (though you’d think that sales made through keyword ads alone wouldn’t have the right causal relationship).]

Also ok: an injunction extending a ban on standalone use of “tender.” “[E]ven though NOCO seems to have ceased its misconduct, the record shows that it has, after brief interludes, repeatedly returned to infringing Deltona’s marks.” “In fashioning relief against a party who has transgressed the governing legal standards, a court of equity is free to proscribe activities that, standing alone, would have been unassailable.”

But the damage award needed to be reassessed, so remand for a new trial it was.

is an avocado a vegetable or a fruit? Court says it's ambiguous

Parashos v. Once Upon A Farm, No. 26-cv-00314-EMC,  2026 WL 2283647 (N.D. Cal. Aug. 7, 2026)

Once Upon A Farm allegedly violated California consumer protection laws by misleadingly labeling its baby product as the “Wild Rumpus Avocado ‘Fruit & Veggie Blend’ ” when in fact it contains no vegetables (but does contain avocados). The court found the claim implausible.

The front of the pouch displays multiple images of avocados, along with images of apples, banana, and pineapples. The back lists its ingredients as pineapple, banana, apple, avocado and mint.

The FDA classifies avocados as fruit and mint as an herb. So does the pouch contain “veggies”? The target audience is allegedly “health-conscious parents” who are “willing to pay a premium to ensure that the food that they provide to their children is nutritious and includes vegetables.” Plaintiff brought the usual California claims.

Dismissal is appropriate if the claim that a label is misleading “runs counter to ordinary common sense or the obvious nature of the product.” And “a survey of dictionary definitions, of which the Court takes judicial notice, suggests that the question of whether an avocado is a vegetable is not so clear-cut in common parlance, notwithstanding the technical botanical definition of avocados as a fruit.” Avocados, which contain a pit like peaches or cherries, fit the scientific definition of the “product of fertilization in a plant with its modified envelopes or appendages, specifically : the ripened ovary of a seed plant and its contents.” But another meaning of “fruit” is “the usually edible reproductive body of a seed plant especially: one having a sweet pulp associated with the seed.” “Avocados, like peppers, zucchini, and other botanical fruits, lack the ‘sweet pulp’ that would place them firmly within the ‘fruit’ category of popular usage.” Avocados also fit within broad definitions of “vegetable” such as “a usually herbaceous plant (such as the cabbage, bean, or potato) grown for an edible part that is usually eaten as part of a meal.” Different dictionaries variously call an avocado a fruit or a vegetable.

Famously, in construing a tariff statute, the Supreme Court held that while “botanically speaking,” tomatoes are fruits, in “the common language of the people,” they are vegetables. Nix v. Hedden, 149 U.S. 304, 307 (1893), as are the technical seeds beans and lentils. Avocados are like tomatoes: “commonly served at meals as ingredients in e.g. burritos and sandwiches, and not, like fruits, as a sweet snack or a part of a dessert. And people eating chips and guacamole are not likely to think they are eating a fruit dip.” At the very least, the claim wasn’t unambiguously false. See, e.g, Henderson v. Gruma Corp., 2011 WL 1362188 (C.D. Cal. Apr. 11, 2011) (granting a motion to dismiss on the grounds that a label promising “Garden Vegetables” was confirmed by the inclusion of avocado powder, dehydrated onion, garlic powder, and bell pepper); Gates v. Upfield US Inc., 2024 WL 3362857 (C.D. Cal. July 9, 2024) (“Avocado oil is a type of vegetable oil known for its healthy qualities”; granting a motion to dismiss because a product labeled “made with avocado oil” and “79% vegetable oil spread” would not imply to a reasonable consumer that the product was made without other forms of vegetable oil).

Nor was this plausibly misleading. The front label was ambiguous enough that a reasonable consumer would have consulted the back label. “Ambiguous” in this context does not simply mean “susceptible to more than one reasonable meaning,” but rather that a reasonable consumer “would necessarily have required more information before concluding that the products’ front labels were making a specific promise.” Such “inherent ambiguity” was present here. The context reinforced that, with explicit reference to “Avocado” in the name of the product and a label showing multiple images of avocados, as well as bananas, apples, and pineapples. There was no other conceded vegetable shown. “There is thus an ambiguity as to whether the product contains vegetables other than avocados. Faced with this ambiguity, the reasonable consumer is expected to check the back label for complete information.”

The likelihood that a reasonable consumer would look to the back label was underscored by the fact that the product’s “target audience” was allegedly “health-conscious parents” who “would have particular reason to check the back label.”

trademark claim proceeds with essentially no detail, despite trade dress failure

Honest Company, Inc., v. Butterblu, LLC, 2026 WL 2211834, No. 2:26-cv-00019-WLH-MBK (C.D. Cal. Jul. 28, 2026)

Honest sued former partner Butterblu for trademark infringement and related claims. Honest sells products in the diaper and wipes, skin and personal care, and household and wellness categories. It registered two trademarks for HONEST registered for swaddling and crib blankets and various children and infant related products, and also owned HONEST BABY CLOTHING (and logo) for baby and toddler-related products.

The parties previously entered into an agreement (where Honest took over ownership of all products in inventory, and Butterblu sourced, marketed and sold these products in exchange for a service fee. Honest alleged breach for, among other things “secretly developing and selling a baby apparel product line in direct competition with Honest Baby Clothing brand products.” Honest claimed rights in two print designs with stylized holiday trees and a striped, pastel rainbow used on various products that Butterblu allegedly copied.

claimed Honest design

Claimed Honest design

Consumers allegedly commented on online forums, such as Reddit, that Butterblu’s products “look like” Honest products but “rebranded” or similar language, that Butterblu is the “creator” of Honest’s products, and otherwise expressed confusion as to the source of and/or affiliation between the parties’ respective products. Honest alleged that “at least one” consumer has contacted Honest with questions about a recent purchase in which the consumer intended to buy Honest products from Amazon but instead received products bearing a Butterblu label.

Honest pine PJs

Butterblu pine PJs

Honest rainbow PJs

Butterblu rainbow PJs

Butterblu’s website allegedly includes a misleading statement that “Honest’s new leadership team ultimately decided to exit the apparel space.”

Showing a common tolerance for trademark claims, despite Butterblu’s argument that Honest didn’t plead use of its marks, it was enough to allege that Butterblu “has used Honest’s intellectual property without authorization” and “mislead consumers and prospective consumers into believing the Infringing Products are affiliated or associated with, or sponsored by, Honest” and to submits screenshots showing that Butterblu “sold products that bear striking resemblance to its own products.” Products, not marks. Ugh.

And pleading that Reddit users have commented on forums about Honest and Butterblu products looking similar and have expressed confusion “as to the source of and/or the affiliation between the Parties’ respective products” also sufficed.

Plus, “many courts have held that an ex-licensee’s continued use of a trademark is enough to establish likelihood of confusion,” and the court agreed. Ugh again! Which trademark? Especially because the court also says that the trade dress infringement claim failed for want of pleading secondary meaning.

Explain to me how this screenshot shows use of the Honest marks?

Honest alleged that intentional copying showed secondary meaning. But “proof of deliberate copying is not determinative ... competitors may intentionally copy product features for a variety of reasons.” Thus, pleading intentional copying alone is insufficient. The online comments about “looking like” or “rebranding” weren’t enough because they didn’t specifically discuss the two claimed prints, and “looking like” does not equal confusion. Why doesn't this also doom the claim about trademark infringement, since the commenters doesn't seem to depend on the word marks or logo?

False advertising: Butterblu argued that Honest’s own public statements confirm the truth of the alleged false statement that Honest was exiting apparel, and, that the continued availability of remaining products during a sell-through or transition period does not render the “apparel-exit” statement false. But “[w]hether the alleged misrepresentations are false or misleading is a factual question generally inappropriate for resolution on a motion to dismiss.” The complaint alleged that “HONEST-branded apparel continues to be advertised, offered for sale, and sold to consumers, contrary to the representations made on Butterblu’s website” and that “Honest has a one-year sell off period for existing inventory.” Honest also argues that Butterblu knew that the statement was misleading because Honest explicitly stated in its earnings release that it was “ ‘exiting our relationship with our current apparel provider’ —i.e., Butterblu” and did not state that it was exiting the apparel space as a whole. This was enough on a motion to dismiss.

consumers face more skepticism than competitor in online gaming case

Mitchell v. Skillz Platform Inc., 2026 WL 2212876, No. 26-cv-00674-AMO (N.D. Cal. Jul. 31, 2026)

Although competitors can aggregate harm to sue under the Lanham Act, consumers—the direct victims of false advertising—tend to have more trouble. Skillz just lost a big claim to its main competitor over falsely advertising that it didn’t use bots in mobile cash games. Here, with similar allegations under various state laws, the consumers struck out. Plaintiffs didn’t sufficiently allege reliance, causation, or lack of an adequate remedy at law (for the restitution claim).

Representations that users match with “real players” and have “no bots guaranteed” were plausibly false and deceptive, as were representations that users match with “players of equal skill.” But the representation that users can make “easy withdrawals” was non-actionable puffery with no set meaning.

The claims failed because plaintiffs didn’t allege that they relied on or even read any particular representation. “Most of the representations are allegedly located across Skillz’s website and social media accounts, so it is not reasonable to infer that Plaintiffs must have seen them.” Even an in-app badge displayed “in front of every single player, every time they launch a Skillz-powered application” since at least the beginning of 2024 wasn’t enough to plead that they actually read the alleged misrepresentations. Seems pretty fixable, but language quoted rejecting the RICO claim was bad news (and maybe another reason to avoid RICO claims): “[A]s the Ninth Circuit noted in a similar case, ‘there may be no single, logical explanation for gambling—it may be an addiction, a form of escape, a casual endeavor, a hobby, a risk-taking money venture, or scores of other things.’ As a result, it may well be that the representations ‘did nothing to influence [users’] perceptions’ or that users ‘played fully aware of how the [platform] operate[s].’” While the evidence in the competitor case tends to negate that idea, “users had to launch a Skillz application before seeing the in-app badge, so they might have already decided to play before seeing the representations at issue here.”

Novo struggles once again to allege deception by sellers of compounded drugs

Novo Nordisk v. Zealthy Inc., 2026 WL 2212889, No. 25-cv-06391 (ALC) (S.D.N.Y. Jul. 31, 2026)

Novo Nordisk makes the FDA-approved Ozempic, Rybelsus, and Wegovy, while Zealthy markets and facilitates access to drug products, including compounded medications containing semaglutide. Novo alleged that Zealthy made false representations to consumers that compounded semaglutide medications are “equivalent” to Plaintiffs’ medications, “clinically studied,” “evaluated by the FDA,” and “deemed safe and effective.” Specifically, Zealthy stated that “GLP-1 medications, with active ingredient semaglutide, are FDA-approved for type 2 diabetes and have proven effective for weight loss,” “[m]edications with the active ingredient semaglutide have shown 15-20% average weight loss,” and “semaglutide is the active ingredient in Wegovy and Ozempic,” among other similar messages. This allegedly violated the Lanham Act and NY GBL § 349.

The court found that Novo failed to state a claim.

Lanham Act false advertising: As to FDA approval, Novo argued that Zealthy’s statements about GLP-1 medications being FDA-approved were false in that such statements represent compounded semaglutide products as FDA-approved. But Zealthy also facilitates prescription of Novo’s FDA-approved medications, and so its statements could reasonably describe Novo’s own medications, making them not literally false. Novo failed to allege facts indicating likely deception and thus didn’t properly allege implicit falsity. It also failed to allege deliberate deception, which could lead the court to presume deception.

Clinical efficacy: Novo argued that Zealthy misled consumers by describing semaglutide medications as effective without having conducted any clinical studies on the products. But Novo bore the burden of showing falsity, not lack of substantiation.

Equivalence: Novo pointed to statements that “semaglutide is the active ingredient in Wegovy and Ozempic,” “Zealthy also offers semaglutide, the active ingredient in Ozempic® & Wegovy®,” and “[i]f you were thinking about doing the medication or you were on the medication and insurance doesn’t cover it anymore, this is a great replacement, it’s the same medication, semaglutide, and it works just the same.” But there was no showing of falsity there. Although Novo alleged that compounded medications were manufactured through different processes, and that compounded medications do not have the same “effectiveness assurances” as FDA-approved drugs, that wasn’t enough to allege that the two types of medications do not “work [ ] the same.”

However, Novo would have had standing if it had pled falsity/misleadingness. Indeed, the court would be inclined to presume injury given that the ads drew direct comparisons between Novo’s products and compounded drugs. In addition, claims about FDA approval were not FDCA-preempted because (1) it’s preclusion when it comes to the federal Lanham Act, and (2) the court wouldn’t have to interpret or apply the FDCA to conclude that compounded drugs aren’t FDA-approved. On the other hand, “[e]valuating whether Defendant falsely asserted that compounded medications have shown certain levels of weight loss, and whether such statements could only be made with the backing of clinical trials, may well be precluded by the FDCA.” So too with equivalence.

Given this result, the court declined to address the state law claims.

not with a bang, but with a whimper of whipped dogs? VIP prevails in Ninth Circuit

VIP Prods., LLC v. Jack Daniel’s Properties, Inc., No. 25-2027 (9th Cir. Aug. 4, 2026)

VIP prevailed on remand on the confusion claim but lost on dilution by tarnishment. The court of appeals reversed, holding that JDI didn’t show that VIP’s parody dog toy product would tarnish the marks it proved were famous—the Jack Daniel’s name and overall trade dress (which seems to mean the bottle shape & general colors, not the print components thereof).

Although this was a fact question, the court of appeals can “correct errors of law, including . . . a finding of fact that is predicated on a misunderstanding of the governing rule of law.” Bose Corp. v. Consumers Union of U.S., Inc., 466 U.S. 485, 501 (1984).

The key error of law was to fail to disaggregate what JDI owned into famous and non-famous matter. Fame requires a “household name.” But the district court declined to “delineate between ‘Jack Daniel’s’ and ‘Old No. 7’ when finding that Jack Daniel’s trademarks are famous,” accepting JDI’s argument that “[a]ll of VIP’s Bad Spaniels marks associate all of Jack Daniel’s famous marks with poop, regardless of whether the marks themselves reference poop.” This erroneously lowered JDI’s burden. “The TDRA does not permit borrowing fame from one senior mark to establish the fame of another.” The district court didn’t conduct any separate analysis as to “Old No. 7,” and the record didn’t show that it was famous, so no tarnishment claim could rely on it.

The “Bad Spaniels” mark “does not itself refer to defecation” and therefore was not facially tarnishing. The court then concluded that dilution requires a “mark-to-mark” comparison, not a general comparison. “[C]ourts may not consider senior marks that are not famous or junior marks that are dissimilar when determining the likelihood of reputational harm to the senior mark.” Given that, JDI’s other senior marks, including “Old No. 7,” were irrelevant. As for  “43% POO BY VOL.” on the dog toy, “that phrase does not mimic or reproduce any famous, similar mark. The equivalent language on JDPI’s product, ‘40% ALC. BY VOL. (80 PROOF),’ is not a mark.”

The question was whether either famous mark was “portrayed in an unwholesome or unsavory context” that is likely to tarnish the reputation of the famous marks. The district court reasoned that “‘Bad Spaniels’ creates a negative association with Jack Daniel’s whiskey by associating whiskey with dog feces and is likely to tarnish Jack Daniel’s trademarks,” even though “ ‘Bad Spaniels’ as a trademark [for a chew toy] does not tarnish Jack Daniel’s.”

While “using a famous mark or a closely related depiction on a product that is of poor quality or pornographic or illegal may be tarnishing if the other requisites are met,” the proof here failed. JDI’s expert Dr. Simonson testified that there would be tarnishment based on the “Associative Network Model” supported by “numerous empirical studies.” But he didn’t conduct any studies on Bad Spaniels specifically. He first asked “whether the allegedly dilut[ing] product will bring or call to mind the allegedly diluted mark”; then “whether it has affected the brand equity and brand association of the allegedly diluted mark.”

Since the point of VIP’s product was to bring Jack Daniel’s whiskey to mind, the key was the second step; Simonson testified that it was satisfied by “conclusions that apply to all products and services regarding the impact of adding a negative association onto the association of the existing brand.” Specifically, “when food or beverage is associated with defecation, disgust is generated in the consumer’s mind with respect to that food or beverage.” Simonson acknowledged that “[n]o [consumer] would think that there’s poo in the Jack Daniel’s product” but that VIP nevertheless “created a mental association between Jack Daniel’s and poo, or Old No. 2, and therefore, for those people exposed to this product, [VIP] diluted or more specifically, tarnished the Jack Daniel’s whiskey.”

First, it was error to rely on “Old No. 2,” which wasn’t famous. Second, even including that reference, the testimony didn’t establish a harmful association between any such reference and JDPI’s two famous marks—“Jack Daniel’s” and its registered trade dress. Although Simonson opined that “it really doesn’t matter whether” poop-themed references are made “on this thing that looks very much like a Jack Daniel’s bottle, or any other product that creates an association between Jack Daniel’s and defecation,” but Bad Spaniels was “a parodic dog toy not intended for human consumption. There is no evidence in the record from which a court could reasonably infer that scatological references made on a dog toy have the same likelihood of generating disgust as identical references on a consumable product meant for humans might.  Dr. Simonson’s opinion to the contrary is pure conjecture.” There was no evidence that recognizing a negative message on one parody product would harm the reputation of the referenced product. Simonson’s reliance on the ANM “ignores that Bad Spaniels is an obvious parody. “ “[P]arody is a relevant factor in evaluating likelihood of dilution,” even if not dispositive (citing Haute Diggity Dog, Deere, and Hormel v. Jim Henson Prods. as well as the Timmy Holedigger case cited by the Supreme Court in JDI and Jordache v. Hogg Wyld).

The parody’s dual message impacts the dilution analysis because, “where a parody is successful and ‘not particularly subtle,’ it is a common-sense conclusion that consumers are more ‘likely to see [it] as the joke it was intended to be.’” It was error to disregard the parody in the context of tarnishment. “Dr. Simonson’s analysis ignored the effect of a ‘humorous difference’ on whether Bad Spaniels harms the reputation of JDPI’s famous marks” (emphasis added).  Although survey or expert testimony isn’t required, JDI here rested its case on expert testimony, which was insufficient here.

FDCA mostly preempts claims against ineffective decongestant

Yousefzadeh v. Johnson & Johnson Consumer Inc., --- F.4th ----, 2026 WL 2192415, Nos. 24-3296 (L), 25-119 (CON) (2d Cir. Jul. 30, 2026)

Oral phenylephrine (oral PE), used in popular products as Nyquil Severe Cold & Flu, Advil Sinus Congestion & Pain, and Mucinex Sinus Max, was long considered an effective nasal decongestant. In 1994, the FDA published a final monograph determining that oral PE was generally recognized as safe and effective as a nasal decongestant.

Starting in 2007, however, scientific studies began casting doubt on that finding. Indeed, in 2016, some studies concluded that oral PE “[was] no more effective than [a] placebo” as a decongestant. Yet, the FDA has continued to require manufacturers to adhere to its existing labeling requirements denoting oral PE as effective.

In September 2023, the FDA convened an expert panel that concluded, by a unanimous vote of 16-0, that oral PE products were ineffective as nasal decongestants, and in 2024 it proposed an administrative order to remove oral PE from the nasal decongestant monograph. Until the administrative order becomes final, however, the FDA stated that, “[f]or now, companies may continue to market OTC monograph drug products containing [oral PE] as a nasal decongestant.”

What does this mean for this consumer protection lawsuit alleging that, in the past decade, drug manufacturers have sold some $12 billion’s worth of ineffective nasal decongestants? This consolidated complaint alleged NY GBL and common-law claims as well as RICO claims (which will not be further discussed because they are RICO claims).

The district court found FDCA preemption and also rejected a Lanham Act claim in a related case. The court of appeals found that the FDCA expressly preempted the majority of the consumer plaintiffs’ state law claims. “Defendant Manufacturers followed the FDA’s prescribed labeling requirements by designating their decongestants’ purpose as decongestion. Defendant Manufacturers cannot now be sued for complying with those FDA specifications.” Loper Bright didn’t change things because it didn’t “subvert agencies’ authority to promulgate preemptive regulations pursuant to the authority vested in them by statute -- authority the FDCA vests in the FDA here. Indeed, the Supreme Court has given preemptive effect to federal regulations since before Chevron.”

The discussion is extensive, but a couple of points: There was no duty to update the labeling merely because the ingredient didn’t work; “a monograph drug could be considered misbranded if it has a dangerous effect on the user, even when the drug’s label conforms to the monograph requirements, thus allowing a manufacturer to add a safety disclaimer to the product’s label.” But it’s not automatically misbranded if it is simply “ineffective when used as recommended or suggested in the label.” Thus, the FDA had declined to impose additional labeling requirements for ineffectiveness as opposed to safety risks. “Because monograph drug manufacturers cannot utilize [a specifically provided-for] process to unilaterally change their labels’ efficacy information, … their obligation is to conform to the applicable monograph, not to update their labels to reflect new scientific evidence.” To require additional disclosures would be to impose a requirement other than that imposed by the FDCA, and “any such compulsory language would not be permissible if it was inconsistent with the statements required by the FDA.”

What about failure to disclose in marketing and advertising, as distinct from labeling? The statute’s express preemption “voids state law marketing and advertising claims, not only labeling claims,” by specifying that its preemptive effect extends to “any requirement relating to public information or any other form of public communication relating to a warning of any kind for a drug.” Allowing failure-to-disclose claims would create an end run around federal labeling rules.

Not preempted: Allegations that using “Maximum Strength” or “Max Strength” on certain products constituted a false statement that the products work better than other oral nasal decongestants, such as pseudoephedrine. No FDCA provision or regulation addresses phrases such as “Maximum Strength” or claims of comparative strength. “Defendant Manufacturers therefore voluntarily and on their own accord placed these Maximum Strength statements on their products; they were not obligated to do so. Consequently, these additional statements are subject to the misbranding provision’s requirements and cannot be rescued by the monograph or approved NDAs.”

In addition, manufacturers who obtained FDA approval through the NDA (new drug application) process could have an independent duty to update their drugs’ labels through the prescribed process to reflect newly acquired information bearing on a drug’s efficacy. While that process is unavailable for monograph drugs, it is available for brand-name NDA drugs, so the court remanded for consideration of this theory as well.

What about the related Lanham Act claim, not brought by consumer plaintiffs?  The district court didn’t abuse its discretion in dismissing the claim because the competitor-plaintiff neglected many opportunities to preserve or raise the claim. Given the fact that there’s no preemption of federal claims, this seems like a serious error on its part.

interactive website offering illegal-in-CT ghost guns wasn't covered by CUTPA, but any sales were

Connecticut v. Indie Guns LLC, NO. (X06) UWY-CV23-6072307S, 2026 WL 2322641 (Ct. Super. Ct. Aug. 6, 2026)

The state sued Indie Guns for selling illegal ghost guns into Connecticut. Indie Guns defaulted, but the court only granted partial default judgment—merely having an interactive website doesn’t make the company subject to the Connecticut Unfair Trade Practices Act (CUTPA), although selling illegal products into the state is deceptive and unfair in violation of the law.

“[A]n out-of-state or foreign company that operates an interactive internet website is not, on that basis alone, engaged in trade or commerce in Connecticut.” And CUTPA requires such in-state trade or commerce, so this isn’t about personal jurisdiction but the scope of the law.

The state argued that the website was deceptive and unfair because it advertised its products to all consumers without warning of their illegality, and offered to sell to Connecticut consumers.

A violation of a Connecticut criminal statute such as the ban on ghost guns does constitute a CUTPA violation via unfairness. Unfairness requires considering: “(1) [W]hether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise—in other words, it is within at least the penumbra of some common law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers, [competitors or other businesspersons].” “Inarguably, selling and delivering illegal gun parts in Connecticut readily satisfies all three criteria.”

So too with deception, which requires (1) a representation, omission, or other practice likely to mislead consumers; (2) interpreted reasonably under the circumstances; that is (3) material. “When a defendant sells a product to a buyer, the defendant represents, expressly or implicitly, that the product is legal in the state in which the buyer purchases or receives delivery of the product.” (Given that this was a test buy, there was no actual deception, but the state as enforcer isn’t required to show that.)

But there liability ended. CUTPA  defines “trade” and “commerce” as “the advertising, the sale or rent or lease, the offering for sale or rent or lease, or the distribution of any services and any property, tangible or intangible, real, personal or mixed, and any other article, commodity, or thing of value in this state.” (Emphasis added.). Actual sales/shipment to Connecticut definitely constitute engaging in trade or commerce, but not “the mere existence of an interactive website.” Although this does require the AG to wait until illegal products are shipped to Connecticut, so it creates some risk, that’s a policy decision for the General Assembly to make. (The court also commented that reaching Connecticut via distributors or other independent contractors would support application of CUTPA to a manufacturer.)

In part because of the default, we don’t actually know how many times Indie Guns sold into Connecticut. “Those practical challenges are likely why the state focuses on the Indie Guns’ website, rather than on gun sales, as the basis for imposing civil penalties. Those practical challenges, however, do not permit the court to speculate about the extent of Indie Guns’ sale of illegal gun parts to Connecticut consumers. Nor do those challenges permit the court to ignore the geographic scope limits of CUTPA.”

The state was entitled to judgment that Indie Guns acted willfully when it sold a ghost gun part to the investigator. But the state didn’t seek the $5000 maximum penalty for that sale. It was entitled to a permanent injunction against sales into Connecticut.

Foiled: Reynolds must face "Made in USA" class

Washington v. Reynolds Consumer Products LLC, No. 1:24-cv-02327-ALC-RFT, 2026 WL 2210008 (S.D.N.Y. Jul. 30, 2026)

The court certified a class of NY consumers under the NYGBL’s false advertising provisions, based on alleged falsity of aluminum foil that’s sold with a label claiming, “FOIL MADE IN U.S.A.”

Plaintiffs argued that reasonable consumers expect that the raw materials used in the products are sourced from within the United States and that a substantial amount of the transformation of raw materials into the foil takes place within the United States. But the only commercial source of aluminum is bauxite. “Since 1981, none of the bauxite mined in the U.S. was used for aluminum, and in 2013, U.S.-mined bauxite comprised less than 0.1 percent of world production.” Thus, plaintiffs alleged, Reynolds must be sourcing from outside the US.

To make aluminum foil, bauxite is processed and refined into alumina, which is then turned into aluminum through smelting. The resulting ingots undergo further processing to make aluminum foil. Plaintiffs alleged that a substantial portion of this processing occurs outside of the United States.

Reynolds’ (bad) argument was that the “Made in the U.S.A.” label referred only to the final foil itself, not to the ingots (as if people knew about the processing stages of aluminum foil).

Only discussing parts of the certification standard: Reynolds argued that plaintiffs lacked proof of a classwide definition of “made in USA,” common evidence of consumer exposure to the label, and common evidence of a price premium. But they had enough for certification on commonality and predominance.

The Third Circuit still stands alone in its extreme ascertainability rulings. The proposed class was comprised of all persons who purchased Reynolds Wrap aluminum foil labeled with the words “FOIL MADE IN U.S.A.” in New York from March 27, 2021, to the present, which was ascertainable “because the putative class has been concretely identified by subject matter, timing, and location.”

Plaintiffs had a common theory of deception. “Defendants focus much of their analysis on whether or not Plaintiffs can prove materiality and injury, rather than show whether these questions are common because they may be determined on a classwide basis.” All class members would have been exposed to the “FOIL MADE IN U.S.A.” label on the front of all aluminum foil products. Common evidence was required to determine materiality to a reasonable consumer.

And price premium injury was common injury; they proposed a damages model consistent with their theory of liability. Plus, given that statutory damages would be less than $50 or $500 here, most class members would opt for statutory damages over actual damages. “Statutory damages can be assessed on the basis of common proof,” creating a perfectly viable common damages model even without the proposed conjoint analysis.

Beats plausibly deceived consumers with Android feature claims

Saucedo v. Beats Electronics, LLC, 2026 WL 2210908, No. 26-cv-01363-RFL (N.D. Cal. Jul. 31, 2026)

Saucedo’s California claims against Beats partially survived for alleged misrepresentations about the Android compatibility of its headphones. The Amazon product page allegedly said, “Whether you’re on iOS or Android, you can enjoy the same seamless compatibility.” The accompanying footnote did not distinguish between features, saying only: “Requires an iCloud account and a compatible Apple device running the latest operating system software or a compatible Android device running the latest operating system software with Google Play Services enabled.” The Amazon page also claimed “Personalized Spatial Audio with dynamic head tracking” as a feature of the headphones, without any qualifier about its availability on Android within the graphic or nearby it.

 

“A reasonable consumer could plausibly read these representations and be deceived into thinking Android users would be able to use the Personalized Spatial Audio feature.”  Even if she should have looked beyond these, deception was still plausible. Though a separate graphic about “Apple and Android Compatibility” listed specific features that users could “[e]njoy,” it was plausible that users would not understand that as an exclusive list of cross-platform features. And one of the Frequently Asked Questions addresses the Personalized Spatial Audio feature, but does not disclose that the feature is unavailable on Android devices. It states:

Do my headphones have Spatial Audio?

Beats Solo 4 has personalized Spatial Audio with dynamic head tracking and uses built-in gyroscopes and accelerometers to surround you with sound as you move, creating a truly immersive listening experience on Apple platforms. You can customize your Spatial Audio in your iOS settings by going to Settings > Personalized Spatial Audio and following the on-screen instructions.

An “almost entirely illegible” disclaimer (which isn’t super clear) didn’t help: “Compatible hardware and software required .... iPhone with TrueDepth camera required to create a personal profile for Spatial Audio, which will sync across Apple devices ....”

"disclaimer"

Plaintiff was granted leave to amend to add allegations that she might repurchase the headphones because she might “reasonably, but incorrectly, assume the product was improved.” “It seems possible that Saucedo could plausibly allege that given the rapid pace at which technology develops,” so the request for injunctive relief was dismissed with leave to amend.

 

insurer can't use "promotional event" exclusion to avoid coverage for recurring club nights

Acosta v. Clear Blue Specialty Ins. Co., 2026 WL 2093910, No. CV-24-03681-PHX-DJH (D. Ariz. Jul. 21, 2026)

Plaintiffs are models trying to recover for claims resolved by consent judgment in their underlying lawsuit, one of the many against adult clubs around the country.

In various social media posts, the insured used plaintiffs’ images to advertise club events, such as “Champagne Saturdays,” “Latin Ladies Night,” “Working Man Specials,” and “2 por 1 Martes.” Plaintiffs claim that their injury constituted a “personal and advertising injury” under the policy.

But the Policy excludes coverage of “personal and advertising injury” that arises out of “exhibitions and related marketing,” defined as:

(a) The creation, production, publication, performance, exhibition, distribution or exploitation of motion pictures, television programs, commercials, web or internet productions, theatrical shows, sporting events, music, promotional events, celebrity image or likeness, literary works, and similar productions or work, in any medium including videos, phonographic recordings, tapes, compact discs, DVDs, memory cards, electronic software or media, books, magazines, social media, webcasts and web sites.

(b) The conduct of individuals in shows, theatrical productions, concerts, sporting events, or any other form of exhibition.

(c) Merchandising, advertising or publicity programs or material for the operations and material described in (a) or (b) above.

Plaintiffs argued that a “promotional event” is not “a party at a nightclub but rather an ‘event’ thrown in furtherance of promoting something…”

The insurance company responded contested images were advertisements for “promotional events” as the events advertised “were not ordinary nightclub evenings.” They touted “drink specials, free admission for women, reduced dance pricing, and other deals.”

The policy didn’t further define “promotional event,” so the court analyzed the terms of the policy as written and from the “viewpoint of one untrained in law or in the insurance business.” Sampedro v. Clear Blue Specialty Insurance Company, 2026 WL 1291919 (M.D. Fla. May 12, 2026), held that the same exclusion unambiguously excused the insurer from defending the nightclub in a similar case involving ads for “the ‘Pretty Chicks & Kicks’ and ‘Tastee Tuesday’ events.” The court reasoned that, even under such a definition, “[the nightclub’s] promotional events promoted the nightclub itself through alcohol sales and DJ appearances.”

Nobriga v. Clear Blue Specialty Insurance Company, 2026 WL 1998727 (D. Conn. July 10, 2026), used dictionary definitions to define a “promotional event” as “a noteworthy happening or social occasion or activity serving the means of furthering the growth or development of something, particularly the acceptance and sale of merchandise through advertising, publicity, or discounting.” Based on this definition, ads for the café’s “Cinco de Mayo Party,” “Halloween and St. Patrick’s Day parties,” and “Baseball Night” constituted advertisements for “promotional events.” “[E]ach advertisement offered discounts on food and entertainment with the goal of bringing additional customers through [the café’s] doors, and tied such discounts to specific holidays or themed nights such as baseball night” making them “advertising” for “promotional events.”

The court agreed that a “promotional event” need not be in furtherance of something other than a business itself. But it thought that the common understanding of “promotional event” wasn’t broad enough to encompass “every promotion put in place by a business.” While holiday parties qualify as “promotional events,” the same couldn’t be said for ads “tied to…a recurring weekly promotion[,]” such as “Baseball Night.”

Here, some of the events advertised seemingly occurred on the same day each week or at a defined time every day. Those were “a routine part of” the insured’s business, not a “noteworthy happening” or “social occasion,” and were untethered to anything but the promotions themselves. There was no special food; “merely offering drink and dance specials does not definitively transform a promotion into a promotional event,” nor did giving the promotion a title. “The lack of ties to a special occasion or specific occurrence” made the exclusion inapplicable. “To rule otherwise would require reading the word ‘event’ out of the phrase ‘promotional event.’”

The court also rejected the insurer’s argument for judgment on the pleadings that the exclusion applied because the underlying litigation arose out of the publication of a celebrity image or likeness. But not all recognized models are “celebrities.” More facts were required.

Clear Blue Specialty Ins. Co. v. 05 Petete, Inc., 2026 WL 2196263, No. 26-1891 (E.D. Pa. Jul. 29, 2026)

Similar result here on the same language. One underlying plaintiff pled herself out of coverage by pleading that she was a “social media celebrity,” but the others didn’t. “Being well-known in one’s profession or endeavors does not by itself raise one’s status to the level of a celebrity.”

As for the promotional events exclusion, “Contrabando’s High-Voltage Wednesdays,” “Exclusive Fridays,” “Matinee Sundays,” and “Euphoric Saturdays” were “certainly promoting Euphoria’s nightclub itself and are using the images of plaintiffs to do so.” But the ads were

merely encouraging the presence of patrons on Wednesdays, Fridays, Saturdays and Sundays generally and are not pointing to any Wednesday, Friday, Saturday or Sunday in particular. It is the standard business of a nightclub to sell liquor to its clientele and to provide musical entertainment. The offer of reduced prices from time to time is a standard business practice to entice customers. The reduced prices are not tied to a specific event or events but are in place for all Wednesdays, Fridays, Saturdays, and Sundays.

“While the World Series is an event, the baseball season is not an event. Likewise, while the grand opening of Euphoria’s nightclub or the opening of any business would be an event, its continual and regular day-to-day operation is not in ordinary parlance deemed to be an event or series of events. Such operation may continue for years.” Thus, the ambiguous policy language was construed against the drafter/insurer and it had a duty to defend against three of the underlying plaintiffs’ claims, and thus a duty to defend in the underlying lawsuit.

executive liable for false advertising can't be made to disgorge salary, 9th Circuit rules

Multiple Energy Technologies, LLC v. Casden, 2026 WL 2196259, No. 24-4691, --- F.4th ---- (9th Cir. Jul. 30, 2026)

The parties compete in the market for “bioceramic” athletic wear components that are supposed to enhance the wearer’s circulation, support muscle recovery, and provide other health benefits. This case “asks whether an officer of a corporation can be sued for tortious interference of contract when he is found to have induced the corporation to breach a contract.” Normally, an agent acting on behalf of a principal is immune from that kind of to avoid double recovery from the principal (for the breach) and the agent (for interference). There’s an exception when “the supposed agent acts not for and on behalf of his principal, but … to benefit himself at the expense of his principal.” The court applied those principles: it was not enough to avoid immunity that the agent benefited by inducing a breach (e.g., he got a bonus for sales goals) as long as he was also seeking to advance the company’s interests.

The district court also awarded disgorgement and attorney’s fees for a separate claim brought by the plaintiff under the Lanham Act; the disgorgement was also reversed.

In 2019, MET sued Hologenix for falsely advertising its product, Celliant, as being FDA-approved. The parties settled with Hologenix agreeing to pay $2.5 million (in installments) and to refrain from representing that its product was FDA-approved or that the FDA determined that it has health benefits. Before Hologenix made all its payments, though, it filed for bankruptcy.

MET then sued Hologenix’s CEO, Casden. Hologenix allegedly continued to represent that the FDA determined that Celliant has health benefits—representations that Casden approved or made himself—in violation of the settlement agreement. MET alleged tortious interference with Hologenix’s performance of the settlement agreement (including by voting to file for bankruptcy) and violation of the Lanham Act.

The district court found no immunity for Casden, stating that he “was eligible for a bonus of up to fifty percent of his base salary per year based on Hologenix’s business performance” and “[t]hus, by falsely promoting Celliant, Casden positioned himself to gain personally.” A jury’s “advisory finding” was that “Casden acted to advance his own personal interests at the time he interfered with the Settlement Agreement,” although the jury also found that he was “acting in his official capacity on behalf of Hologenix.” It awarded MET $2.5 million in damages for the tortious-interference claim.

The jury also returned a verdict in MET’s favor on its false-advertising claim under the Lanham Act and awarded nominal damages of one dollar. The district court then awarded MET disgorgement of Casden’s salary earned from 2020 through 2023, trebled that amount, and also awarded attorney’s fees of nearly $600,000 under the Act. The total came to over $6 million.

I won’t say much about the rather straightforward agency law issue with tortious interference. “Where an employee acts within the scope of his employment, it does not matter whether his conduct in inducing the breach of contract was motivated by ‘ill-will or malice on his part.’ ”

Lanham Act: The disgorgement ruling was erroneous. “Casden’s salary is not his profits.” The statute says that, under the statute, to assess “profits,” the plaintiff “shall be required to prove defendant’s sales only” and the “defendant must prove all elements of cost or deduction claimed.” “But MET failed to show that Casden had any sales.” Hologenix made sales, but it wasn’t the defendant (citing Dewberry Group, Inc. v. Dewberry Engineers, Inc., 604 U.S. 321 (2025)). Without sales, no profits.

But the fee award survived. The jury found that Casden’s representations concerning Celliant were “deliberately or intentionally false” in violation of the Lanham Act, so there was no abuse of discretion.

challenge to FTC's substantiation requirement isn't yet ripe

Xlear, Inc. v. U.S. Fed. Trade Comm’n, 2026 WL 2150208, No. 2:25-cv-00484-DBB-CMR (D. Utah Jul. 27, 2026)

In 2021, the FTC brought a civil action against Xlear because its COVID-19 claims allegedly lacked substantiation and violated the FTC Act. “Xlear is a developer and manufacturer of xylitol-based hygiene products such as nasal sprays, toothpastes, mouthwashes, and chewing gums that allegedly promote good health and reduce the risk of disease.” Advertising its nasal spray as effective for the prevention and treatment of COVID-19 allegedly violated Sections 5 and 12 of the FTC Act, as well as the COVID-19 Consumer Protection Act of 2021. In March 2025, the enforcement action was dismissed with prejudice.

Not satisfied, Xlear sued, seeking a declaratory judgment under the APA that Sections 5 and 12 of the FTC Act “do not and cannot impose an affirmative burden of substantiation on regulated parties.” It alleged that its xylitol-based hygiene products are effective “against various pathogens,” yet fear of the likelihood of future FTC enforcement allegedly prevents Xlear from taking steps to advertise its products’ benefits, including protection against COVID-19, which it alleges “remains a serious health risk” to Americans. It argued that precedent upholding the FTC’s substantiation requirement is no longer good law under Loper Bright Enterprises v. Raimondo, and that the requirement chills Xlear’s First Amendment speech rights and violates its Equal Protection rights by allegedly shifting the burden of proof to defendants to show that their advertising claims are substantiated. [I’ve been waiting for this argument for a while.]

The claims weren’t ripe. “Here, Xlear cannot point to a definitive position the FTC has taken on advertising claims it has yet to make—let alone one that inflicts an actual, concrete injury—because whether an advertisement is deceptive turns on its content, making it a fact-specific inquiry.”

Xlear argued that it was making a facial challenge. To win such a challenge, Xlear needed to show that Sections 5 and 12 of the FTC Act never require a health claim to be substantiated. It didn’t. Loper Bright didn’t matter because “the court is not interpreting the statute, much less deferring to agency action. Rather, the court is determining the ripeness of the case and addressing the standard for a successful facial challenge.”

Xlear also argued that the FTC has taken a definitive position/final action by highlighting the substantiation requirement going back to 1984. But the “distinction between ‘general statements of policy’ and ‘rules’ is critical” because “ ‘general statements of policy’ ... neither determine rights or obligations nor occasion legal consequences.” An agency’s “policy statements ‘do not establish a binding norm—or in other words, do not have the force and effect of law.” Nor can they be “enforced against parties” or “expose them to civil and criminal liability.” “Thus, even if the court were to agree that the substantiation requirement represents the FTC’s definitive statement of its position under the first prong of the final agency action test, the requirement still fails under the second prong because the FTC’s substantiation requirement does not determine the rights and obligations of the parties.”

I wonder what the Texas district court hearing the gender-affirming care cases thinks about this argument, since it is very much ripe there.

always plead a first use date: court struggles with famous foreign marks doctrine without it

Teng v. Tao, No. 2:25-cv-05360-WLH-AJR, 2026 WL 2055494 (C.D. Cal. Jun. 5, 2026)

Teng sued Tao for various trademark-related claims. Teng is allegedly the chairman of Plaintiff Heilongjiang Tang Huo Kung Fu Catering Co., a Chinese company that operates restaurant businesses abroad. The Tang Huo Kung Fu brand allegedly operates widely in Asia, including in China and South Korea and has received various awards and media recognition, under these marks:

Teng alleged that overseas reputation has created recognition of their marks among certain U.S. consumer communities, particularly in Asian communities in the United States, such as in Los Angeles (specifically Los Angeles’ Koreatown) and Berkeley, California, but alleged no first use in US commerce, though it did allege that, when Tao filed to register at the USPTO in 2019, it had already existed for 11 years with nearly 300 restaurants in China and 150 restaurants in South Korea, among other locations. Teng did not allege first use in the US or anything more than an application to register in the US, which was abandoned.

Defendants operate at least one restaurant in California using the name “TANG HUO KUNG FU SPICY HOT POT.” Defendant Tao Jin secured a registration for its word + design mark in July 2020.

The court concluded that plaintiffs didn’t, and apparently couldn’t, allege a valid ownership interest in the mark at issue. They claimed that the famous mark exception applied under Grupo Gigante (whose logic I don’t think survives Abitron, but the Fourth Circuit’s Belmora workaround probably does).

Under Grupo Gigante, “where the mark has not before been used in the American market, the court must be satisfied, by a preponderance of the evidence, that a substantial percentage of consumers in the relevant American market is familiar with the foreign mark.” “At this stage, the Court is persuaded that Plaintiffs have sufficiently alleged the necessary level of consumer recognition necessary to invoke the famous mark exception to the territoriality principle with respect to the market in which Defendants use the mark.” (That is, Berkeley and LA’s Koreatown.) But they needed to replead to actually allege a date of first use (which was also key to their cybersquatting claim).

False association: §43(a) doesn’t explicitly require ownership (citing Blinded Veterans). Thus plaintiffs sufficiently pled a claim. (Query: suppose they’re the junior user, full stop—if ownership isn’t required for a §43(a) claim, why can’t big entrants use reverse confusion to eliminate small senior users? Is your answer “causation”? Is your answer that this wouldn’t work because the small senior user could assert a counterclaim? But, if there’s no registration, how would a §43(a) counterclaim be resolved except by using ownership priority rules? Abandoning a separate concept of unfair competition has caused many such puzzles.)

Anyway, plaintiffs sufficiently pled confusion, e.g., a post on Red Note that a customer was disappointed in the quality of defendants’ food, apparently attributing the failure to Tang Huo Kung Fu.

Puzzlingly, the court held that the inability to make a trademark infringement claim also meant there was no actionable statement under California’s FAL, despite the survival of the false designation of origin claim.

Cancellation of registration: Fraud requires pleading with particularity. “Fraud in procuring a trademark registration or renewal occurs when an applicant knowingly makes false, material representations of fact in connection with his application.” “Plaintiffs’ insufficient allegations of foreign fame and diaspora recognition do not establish U.S. use or ownership. Without a plausible allegation that Plaintiffs possessed superior U.S. rights at the time of the trademark application, Plaintiffs cannot demonstrate that any USPTO statement about ownership or others’ rights was false, much less knowingly false.” (Plaintiffs’ counsel really needs to use Belmora to replead.) Nor did they allege facts demonstrating that any specific USPTO submission was actually false, material or made with an intent to deceive.

They also sought cancellation on §2(a) false affiliation grounds. Under Belmora, “[t]o determine if a petitioner falls within the protected zone of interests, we note that § 14(3) pertains to the same conduct targeted by § 43(a) false association actions—using marks so as to misrepresent the source of goods.” That worked here for services, too, at the pleading stage.