Tuesday, June 27, 2006
On the one hand, this is so classically "lurkers support me in e-mail!" that it's a bit offputting. On the other, the specific form of support -- reproducing her article without permission in order to endorse the views well-stated therein -- is exactly the kind of thing that shows how pure copying can be a tool of free speech. If, as I believe, the real frontier of scarcity is time and energy, not a printing press or internet access, then enabling people to speak means not just giving everyone access to speech-creation tools but also letting them copy when copying would best say what they want to say.
(It is quite possible that lurkers often support people via e-mail, and indeed Hirshman's anecdote seems quite plausible. But, as with all claims of this sort, the magnitude is hard to assess.)
Saturday, June 24, 2006
In related news, Henry Jenkins now has a blog. He's been posting on the RIAA and YouTube, as well as other aspects of "convergence culture."
Friday, June 23, 2006
Has anyone done a bibliography of IP-related sf stories? Not the standard cyberpunk/Cory Doctorow stuff where IP is floating around in the background -- that can either be interesting or annoying, depending -- but ones where the plot turns on IP law.
Wednesday, June 21, 2006
From the Nutritional and Dietary Supplement Law Blog comes this report on Pinecrest Consortium, Inc. v. Pharmavite LLC: Defendant makes Nature Made vitamins; Nature Made is an incontestable federally registered mark. Some Nature Made Vitamin E is not, in fact, from natural sources (which may make a difference in performance, and certainly makes a difference in perception).
Plaintiff sues under Florida’s consumer protection law in Florida state court – though the plaintiff is incorporated, it’s apparently an individual customer. Defendant removes, arguing that plaintiff’s complaint is against its federally registered trademark and thus raises a federal question.
Defendant argues that plaintiff’s lawsuit would bar it from using its registered mark in Florida and is thus equivalent to a cancellation, which can only happen federally. Problems with that: (1) A cancellation wouldn’t bar use of the mark, just get rid of the benefits of registration, so there’s no equivalence. (2) Anyway, a registration is an exclusive right to use as against confusing marks, but it’s not an affirmative right to use – a law firm’s name may be a registered trademark for providing law services, but if the firm members all lose their state-issued licenses for malpractice, they can’t continue to offer services under the mark. (3) Anyway again, if plaintiff wins, defendant could still use its mark in Florida, as long as it uses it for natural vitamins.
Bottom line: Just as courts may reject infringement claims even if the PTO refused to register the defendant's mark, courts may conduct an independent analysis of deceptiveness. The PTO's determination -- often on a very limited record, and one that may not reflect present reality -- cannot control.
In the papers, defendant makes a slightly more sophisticated and more deeply wrong argument: Its registration is incontestable, thus it has secondary meaning as a matter of law, thus it can’t be deceptive (because consumers understand the name as a designation of source rather than a claim about composition). If this were true, it might justify complete preemption and thus removal. If only the Lanham Act didn’t provide that incontestability is no defense to a violation of §2(a), which prohibits the registration of deceptive marks. (See also Harjo, a case about cancelling incontestable marks on §2(a) disparagement grounds even after decades of use.) If Nature Made used to be all natural, its registration would have been fine and nondeceptive. But if, despite its secondary meaning, the term also continues to indicate to a substantial number of consumers that the main ingredients are natural and Nature Made now produces artificial vitamins, there’s no Lanham Act barrier to the lawsuit.
This particular claim may fail on other grounds, but removal is silly.
Pacific Bell Wireless, LLC v. Public Utilities Commission, --- Cal.Rptr.3d ----, 2006 WL 1677723 (Cal.App. 4 Dist.)
The Commission imposed a multimillion dollar fine against plaintiff, who was doing business as Cingular. First, the Commission found Cingular's early termination fee for cancelling a wireless service contract without any grace period was an unjust and unreasonable practice, particularly when Cingular admitted the best way for customers to decide whether Cingular's service would work for them was to try the service for some period of time. Second, the Commission found that Cingular failed to disclose known network problems to its customers and misled them regarding coverage and service, which were also unjust and unreasonable practices.
Cingular challenged the Commission’s jurisdiction and argued that the Commission violated Cingular’s due process rights. The court rejected both challenges.
During a period when rapid growth was overwhelming Cingular’s capacity to serve existing and new
One of Cingular’s arguments was that federal law prohibiting states from regulating phone rates and entry of a wireless provider into a market, 47 U.S.C. § 332(c)(3)(A), preempted any state regulation of this type. A determination that Cingular’s services were not worth the prices paid, Cingular argued, was necessarily a regulation of rates, as was a required refund of termination fees. Likewise, a determination that Cingular’s network coverage was inadequate was necessarily a regulation of entry into the market.
In Bastien v. AT & T Wireless Services, Inc., 205 F.3d 983 (7th Cir.2000), the plaintiff alleged AT&T signed up wireless subscribers without first building the necessary infrastructure, leading to lots of failed calls. The Seventh Circuit found preemption of plaintiff’s contract and Illinois Consumer Fraud Act claims because plaintiff’s claims would directly affect the federal regulation of tower construction, location, and service, as well as quality of service and hence rates. Relief would require AT&T to do more than the FCC required, either in quality of service or lower rates.
Bastien was not on point, since the Commission wasn’t trying to get Cingular to provide more service or lower its rates, just stop its false claims and unfair contractual conditions. In Bastien, the complaint didn’t explain any particular false promises or representations by AT&T, whereas here there was detailed documentation of misrepresentations.
The FCC itself has concluded that § 332(c)(3)(A) doesn’t generally preempt money damages based on state consumer protection claims: “A carrier may charge whatever price it wishes and provide the level of service it wishes, as long as it does not misrepresent either the price or the quality of service. Conversely, a carrier that is charging a 'reasonable rate' for its services may still be subject to damages for a non-disclosure or false advertising claim under applicable state law if it misrepresents what those rates are or how they will apply, or if it fails to inform consumers of other material terms, conditions, or limitations on the service it is providing.”
In other words, the problem was not that the poor service was not, in some absolute sense, worth the rate paid, which would have been a disguised rate regulation and therefore preempted; the problem was that Cingular got money it wouldn’t have received if customers had known what they were signing up for. While I agree with the outcome, it might be worth dissecting this reasoning: we are assuming that fully informed consumers wouldn’t have signed contracts with Cingular at the same price. The standard requires comparison to a “true” market price rather than to a just price – even though the former may be just as much an illusion as the latter. The thing that's weird about this is that the counterfactual -- Cingular disclosed its bad service, and fewer people signed up -- is unlikely; the more likely scenario is that Cingular wouldn't have entered markets where it had to acknowledge its significant limitations, and thus one can see the false advertising prohibition as a limit on entry. But it's easy to understand why Cingular doesn't want to come out and say that.
Another notable argument is that the Commission denied Cingular due process because the statute governing its actions was so broad that it was punished for actions it could not have known were unjust and unreasonable. In the course of rejecting this argument, the court pointed out that Cingular’s argument would invalidate lots of common-law and statutory prohibitions on fraud, which deliberately don’t fully specify in advance what conduct is deceptive and misleading.
The court simply didn’t buy that Cingular had no way of knowing it was unjust and unreasonable to charge up to $550 for service cancelled in the first day, even when it admitted that the best way for customers to determine whether Cingular’s service was right for them was to try it, or that it was unjust and unreasonable for Cingular to fail to disclose network and coverage limitations. Past Commission actions against various creative deceptive practices and numerous customer complaints to Cingular over its policies further established that a reasonable company would have known its conduct fell within the Commission’s prohibitions.
Tuesday, June 20, 2006
But not the end of Suh’s complaints. As the title of his piece indicates, he thinks
Sunday, June 18, 2006
Tercica, Inc. v. Insmed Incorporated, 2006 WL 1626930 (N.D. Cal.)
The parties are competitors in the drug market for the treatment of growth failure in children. Plaintiff makes Increlex, an FDA-approved drug it has begun to commercialize. Defendant had an FDA approvable letter for its drug iPlex. In statements to investors, made generally available on its website, Insmed stated that plaintiff’s Increlex caused two times as many serious adverse events than iPlex; this statement was also repeated by a news report by an independent party and by defendant’s press release. Defendant made other comparative and absolute safety- and efficacy-related statements, also appearing in communications to investors and newspaper articles. Though defendant had no head-to-head studies, it repeatedly compared iPlex to Increlex in words and charts – a major no-no in FDA’s opinion when it comes to communicating to doctors and patients.
After the FDA approved iPlex, defendant continued to make statements to investors inconsistent with the approved labeling. These included apparently false statements that a major advantage of the product was that it didn’t need to be coordinated with food intake, which can be an important consideration for children, as well as claims that might generously be deemed “hopeful,” such as that iPlex is a long-term treatment even though the FDA-approved package insert warns that efficacy beyond one year hasn’t been established.
Plaintiff sued in
The court did find that plaintiff and defendant were competitors for standing purposes even though the statements were made before competition began; imminent competition suffices. The complaint failed to state a claim because the investor communications at issue didn’t constitute “commercial advertising or promotion” for Lanham Act purposes. They were made to potential investors, not to consumers. Nor were they made for the purpose of influencing consumers to buy defendant’s goods or services.
Query: Is this rule inconsistent with the growing consensus among courts that confusion among investors can constitute trademark infringement? See, e.g., Checkpoint Systems, Inc. v. Checkpoint Software Technologies, Inc., 269 F.3d 270 (3rd Cir. 2001).
Thursday, June 15, 2006
Fitzgibbons was a member of the medical staff at Western Medical Center (WMC), a trauma center in
After the acquisition, IHHI received a notice of default on $80 million in loans, which was reported in the Orange County Register. Fitzgerald then sent an email to a number of people questioning IHHI’s financial conditions, predicting its bankruptcy, and mocking its principals. According to IHHI, this email found its way to Blue Cross, with whom IHHI was negotiating for higher insurance payments, and stalled negotiations at a cost of over $500,000. IHHI sued for defamation, breach of contract, tortious interference, and violations of the Unfair Competition Law.
But there’s a twist: IHHI argued that the anti-SLAPP statute doesn’t apply to competitors engaged in commercial speech. Fitzgibbon belonged to an entity formed to purchase WMC (an entity whose offer was rejected before WMC’s then-owner accepted IHHI’s). Prior courts have been understandably concerned about subjecting run-of-the-mill trademark and false advertising cases between competitors to the substantial barriers thrown up by the anti-SLAPP statute.
The court of appeals stated that “in most cases,” a competitor’s statements would not be protected by the anti-SLAPP law, but there is no per se rule. In an earlier case, in which the defendants allegedly solicited their former employer’s customers with false statements that the employer used toxic chemicals, the court held that such speech didn’t concern a public issue because the defendant’s business wasn’t in the public eye. Here, by contrast, IHHI was already in the public eye. Furthermore, Fitzgibbons was an ex-competitor, not an active competitor – sour grapes are not the same as competition for SLAPP purposes.
Because Fitzgibbons was protected by the anti-SLAPP law, IHHI had to show a likelihood of success at an early stage in order to avoid dismissal, and this it could not do. Fitzgibbons disclosed the facts on which he based his opinions; IHHI didn’t disprove those facts. The contract between IHHI and the staff didn’t waive Fitzgibbons’ First Amendment rights: The court construed the contract narrowly because it involved free speech, and held that (1) an email to a limited number of people wasn’t “public” for purposes of expressing public support, and (2) the contract wasn’t specific enough require public support for the entire life of the contract; it was limited to pre-acquisition public support.
Jacquetta Lannan, Comment, Saving 17200: An Analysis of Proposition 64, 46 Santa Clara L. Rev. 451 (2006): Lannan is critical of the recent amendment to California’s consumer protection law, arguing that its heightened standing requirements will not deter clever extortionate lawyers but will make it more difficult for meritorious cases to succeed. She proposes several reforms, from requiring court approval of attorneys’ fees to a sort of modified class action procedure with fewer constraints on class representation. The latter proposal is intriguing, but as stated probably has serious due process problems. Still, the Comment is a passionate critique of Prop 64 as an overresponse to a legitimate issue.
Wednesday, June 14, 2006
The big picture may just be that businesses will rarely get help from the Seventh Circuit for noncontractual disputes; as with the Sherman Act, when certain judges see more of the Lanham Act, they seem to like it less.
Tuesday, June 13, 2006
In the April 2006 issue of the Texas Law Review (not yet available on the website), student Karla S. Lambert has an informative Note, Unflagging Television Piracy: How Piracy of Japanese Television Programming in East Asia Portends Failure for a U.S. Broadcast Flag. Though the title promises more than it delivers – there is simply no good evidence yet about how hard it is to work around Japan’s new DRM – Lambert tells a compelling story about the demand for Japanese cultural productions in East Asia and the unlikelihood that technical measures can stem that demand. Among other things, she discusses the cultural effects of copying specifically Japanese content in other cultures, where it is transformative in important ways (even if not in ways recognized by the fair use doctrine in US law). She also draws insightful comparisons between the response of Japanese television producers to VCD piracy and the response of manga and anime producers to doujinshi and fansubs.
"The problem is there's no copyright [ed: trademark] laws, so as soon as you put a good product on the street, people will copy your stamp," he said. "A good dealer will let his customers know and say, 'Hey, next week we're coming out with a different stamp on our bag. We only sell from this corner or this house, so only buy from me.' "We have a standard theory of how trademarks promote efficient markets, but I'm not sure there's much empirical work on the subject. Seems like drug markets might be a place to start, though the unavailability of any formal law at all is a confounding variable. We don't want efficient drug markets (just as we don't want efficient markets for child pornography); is there any way to tell how much absence of TM protection contributes to inefficiency?
Wilchcombe v. Teevee Toons, Inc., 2006 WL 1553939 (N.D.
Plaintiff sued defendants for copyright infringement, false advertising under the Lanham Act, and breach of fiduciary duty, alleging that they unlawfully used the musical work and sound recording of the song “Tha Weedman” on the album Kings of Crunk by Lil Jon and the Eastside Boyz.
The court dismissed the fiduciary duty claims because plaintiff didn’t allege any actual fiduciary or confidential relationship in his complaint. The copyright claims survived despite plaintiff’s initial claims in his cease-and-desist letters that he was a coauthor with Lil John. Rather than treating the letters as an admission at this stage of the case, the court allowed plaintiff’s claims to proceed. (Side note: plaintiff claims to be sole author, with no intent to be a joint author with Lil John. He is trying to make the rigid and possibly unfair rule about joint authorship – without the primary author’s intent to create a joint work, a contributor isn’t an author no matter how substantial her contribution – work for him, so that Lil John could have played a big role in creating the work and still lack any copyright interest in it. This shows one of the serious problems with intent-based joint authorship doctrine: How do we pick the primary author whose intent controls in the first place?)
It may be that the plaintiff didn’t understand the legal implications of coauthorship: He’d just be entitled to a share of whatever profits there were and wouldn’t be able to prevent his coauthor from licensing the work, even for a nominal sum. This could present special problems of allocation in the context of one song on an album; the recording contract probably didn’t say much of relevance about individual songs, and “Tha Weedman” was not a successful single.
Defendants moved to dismiss plaintiff’s false advertising claim as barred by Dastar. Plaintiff’s basic allegation is that, by claiming defendants as the sole authors and performers, defendants misrepresented “the nature, characteristics, qualities, or geographic origin” of their goods. The court said that this was not necessarily the same as a “passing off” claim barred by Dastar and refused to dismiss the claim. Most publicly available post-Dastar decisions have not allowed these types of claims to proceed, but the ability to plead around Dastar was always there and perhaps plaintiffs are finally learning to do so.
Several issues: Is putting Sammie Norris and Lil John’s names on the credit line for the song “commercial advertising or promotion,” as required for false advertising? This is a narrower standard than mere “use in commerce,” which will suffice for traditional passing off. I would think it would at least matter whether the credit is given on the inside of the jewel box, where it can only be seen post-purchase, or on the outside. No authorship credit for individual songs is available on internet sites like Amazon, so there’s no advertising or promotion there. However, plaintiff did allege that defendants advertised Sammie Norris and Lil John as the authors of the song, and Lil John and the Eastside Boyz as the performers of the song, in promotional material and advertising, as well as in materials distributed with the album.
Even if plaintiff alleged materiality and deception, can he possibly prove that a reasonable consumer would care that a composer/performer was omitted from the credits? The question is not whether consumers would have refused to buy the CD if they knew that Lil John was misrepresenting his authorship of one song (the Milli Vanilli problem), but whether they would have still bought the CD if they knew that plaintiff was the author. The fact that Amazon and similar sites don’t even bother to ID songwriters or individual performers may also be relevant evidence of nonmateriality. Given how many albums are sold by groups in all genres that do not do their own songwriting and do not perform all the instruments, I find it difficult to imagine plaintiff defeating a motion for summary judgment.
I do not know what arrangements, if any, the publisher made with Rowling's publishers. The standard, at least for the Buffy books I read (Buffy the Vampire Slayer and Philosophy is my favorite thus far, though the gender studies one looks interesting) is for the cover to emulate some but not all of the distinctive elements of the source work's trade dress, which you'd think would be taking more than necessary according to the nominative fair use test. In addition, most of the academic studies of single pop culture artifacts I've read don't have disclaimers, even as reviewers label them part of "the canon of Buffy."
(Annoyingly, most of these books have standard ridiculous copyright warnings saying you can't reproduce any part of the text without permission, even when the work relies on repeated, sometimes extended, quotations from the source texts. This isn't irony, it's hypocrisy.)
Copying graphic elements on book covers serves the same function as emulating the shape and color of national brands does for house brands: It's a shortcut, a way to catch the shopper's scanning eye. We could call that initial interest confusion, but it would be better to call it just initial interest.
I do wonder, however, about whether these books are making legitimate use of others' trademarks under non-US law. I know that house brands don't generally imitate national brands in Europe, but I haven't seen any discussion of the relevant legal principles Over There.
[T]he very term user-generated content is loaded with implicit assumptions. When, for instance, did the word "user" last have a positive meaning? It's all warm spoons and Irvine Welsh characters nicking purses. Couple it with "generated", a dehumanising word which undermines creativity, and you've put these pesky users firmly in their place. Power is "generated", art isn't. Top it off with a dash of "content", a sloppy generalisation at the best of times, and you've put this stuff firmly in a box marked alien and poor-quality."Consumer" and "user" are very popular words in copyright scholarship these days, and they're much less inviting words than "reader" or "artist." Why that should be, in a society that values capitalist consumption so highly in other ways, is an interesting question in itself. The market may have taken the place of God and kings, but somehow true sovereignty hasn't descended on us through our credit cards.
Thursday, June 08, 2006
But the real devil is in the unit of measurement: Damages are awarded per work infringed, not per infringing work. If a story about Star Trek: Voyager's Seven of Nine and Chakotay were infringing, would the number of works infringed be the number of characters infringed, the number of Voyager episodes infringed (making it less expensive for fans to write post-Season 1 than post-Season 4!), or just one, some sort of overall copyright in Voyager's characters and situations? There isn't much case law on point; broadcast of infringing episodes from a series led to a finding that each episode was a single "work" for damages purposes because each had an independent economic life for syndication purposes, but that doesn't seem to translate when someone starts creating new stories based on the sum total of episodes broadcast. As with other aspects of copyright law, the derivative works right -- especially as applied to characters -- fits awkwardly in assessing damages.
A separate point: Pinchefsky's advice to the hopeful fan writer is to ask permission first. This seems badly mistaken to me; the good news is that it seems hard to imagine that most fans will follow the advice. Many authors (or their publishers) won't answer, simply from inertia or misunderstanding or fear or all the other things that inhibit "yes" answers from people who might be copyright owners, the kinds of things Larry Lessig, Patricia Aufderheide, and others have been talking about for years. Most others will say no, for similar reasons and also because they think their rights extend further than the law allows. If you asked the authors or publishers if it was okay to publish a negative review, I bet you a bunch would fail to reply or say no! A not unrelated point: Pinchefsky's suggestion to contact the author isn't relevant if, as is often the case, the author doesn't own the copyright. (Whom should I contact about Smallville? Even before the WB died, that was an impossible question to answer.)
Since I strongly oppose the clearance culture, I say instead: Don't ask permission to remix, to write post-episode stories and alternate universe stories and stories where the characters wake up with wings or with differently sexed bodies. If we don't hold on to fair use with both hands, we'll find that norms have shifted.
Does this mean I think fan writers shouldn't sign individual authors' releases, as Pinchefsky discusses? Such releases purport to preclude fan writers from later claiming that a copyright owner's sequel/new story infringes a storyline that first appeared in an unauthorized fan work. I understand the copyright owners' concerns, though I think they're extremely exaggerated. There are a couple of stories (as in, literally, two stories) of strike suits -- or threats to sue, since nonlawyers rarely distinguish the two -- by angry fanwriters that circulate in the fan community, but you don't need to be a fan to bring a strike suit, as everyone from Michael Jackson to Dan Brown knows to their sorrow. To the extent the releases make the copyright owners or authors more comfortable with openly acknowledging fan fiction, I'm perfectly comfortable with them, but they should not seduce fans into thinking that asking for permission is the default.
I find myself revisiting fan fiction issues a lot these days, in part because my thinking has changed somewhat since I wrote the original piece, and relatedly because of the explosion of fan photomanipulations, videos, and other works that fall outside the category of literary works; fair use analysis is less prepared to deal with them.
So, my friend, former debate teammate, and U. Chicago fellow David Fagundes is blogging the World Cup from Germany. David is an engaging writer; soccer fans should check out his blog.
Thursday, June 01, 2006
Plaintiff alleged patent, false advertising, unfair competition, and unjust enrichment claims. The Lanham Act false advertising claim is based on defendant’s use of a pest control system called “Tubes in the Wall.” (Insert obligatory Snakes on a Plane reference here.) Plaintiff alleges that defendant knowingly or recklessly made material false or misleading statements about its system that deceived or have the tendency to deceive a substantial segment of the audience. Defendant argued that plaintiff failed to state a claim, or in the alternative failed to plead with the necessary particularity.
The court agreed that, even under FRCP 8(a)’s liberal standard, merely reciting the elements of the cause of action without identifying allegedly false claims was not enough to enable the defendant to prepare an adequate responsive pleading or Rule 12(b) motion. Without knowing the statements plaintiff claims were false, defendant can’t argue truth, or puffery, or anything else.
The court went on to join what in my count is the minority and hold that plaintiff also had to satisfy Rule 9(b)’s particularity requirements, because its Lanham Act and unfair competition claims were essentially fraud claims. Given that a plaintiff can succeed under the Lanham Act without showing intent, whether the claim is for trademark infringement or for another form of false advertising, I find this result odd, but I’m far from a procedure maven.
The Lanham Act and common law portions of the complaint were dismissed with leave to amend. Claims of false patent marking survived. (Random question: Can any patent types tell me whether marking a newly manufactured item with an expired patent number violates the false marking provision?)
Michael Madison suggests joint authorship, at least when Chihuly gave his collaborators lots of leeway by writing things like "Here's a little sketch but make whatever you want." I'm not sanguine about the chances of joint authorship, which in the 9th Circuit (among others) requires that the person who was generally considered the author before the dispute erupted to have intended to treat his collaborator as a joint author. And the reason that Chihuly's name is on the works -- he's the core of the business, the author-figure on whom a large industry is founded -- is good reason to believe he didn't intend that, no matter what the collaborator thought. If Chihuly contributed any copyrightable expression at all, he will probably get 100% ownership.
What if he didn't contribute copyrightable expression, only general ideas? The works might still be works for hire, or he might have a license of some sort. Let's assume, as a thought experiment, that Chihuly's assistant creates a work for hire; copyright then vests initially in the hiring party. What happens when the assistant leaves Chihuly's employment and creates a new work that is substantially similar to the old one?
It seems to me we have a variant on the underlying dispute in Fogerty v. Fantasy, where the jury decided that John Fogerty didn't infringe Run Through the Jungle with the similar song The Old Man Down the Road. I've long thought the best way to explain that case -- and perhaps this is a way to understand the old Maltese Falcon case as well -- is to say that any substantial similarity isn't the result of the artist copying his earlier work, but of both works springing from some ur-work that isn't fixed but only exists, like a deeper well, in the artist's mind. Or at least, to preserve authors' freedom to transfer copyright in specific works but still continue to use a distinctive style, we have to treat them as people who are not copying their own prior works.
The twist in my Chihuly hypothetical is that, from the law's perspective, the assistant was never the "author" of the first work, unlike Fogerty, who sold the rights his initial authorship gave him. Should that make a difference? Does the author have a special access to some Platonic ideal of an ur-text? If so, is "work for hire" a fundamentally illegitimate concept? On the other side, what are we to make of authors whose audiences believe that later works in a series show poor characterization -- that the Vampire Lestat they know wouldn't do what Anne Rice says he did? If it's not infringing for Anne Rice to write a sequel to her vampire books for a new publisher, why is it infringing for someone else to do so?
Piazza’s Seafood World, LLC v. Odom, -- F.3d – (5th Cir. May 4, 2006)
This case involved constitutional challenges to two
Plaintiff sells food, including Chinese-farmed Ictaluridae (catfish) under the trade names “Cajun Boy” and “Cajun Delight.” Though it originally sold mostly
The court of appeals agreed with the district court that Piazza’s use of the “Cajun Boy” and “Cajun Delight” trade names was only potentially misleading, not actually or inherently misleading, because Piazza largely sells its products to wholesalers and it labels its products with their country of origin. Though the state’s interest in preventing deception was substantial, the statute goes further than necessary to serve that interest because there was no actual deception in this case. As a result, the law, as applied to plaintiff, flunks the test set forth in Central Hudson Gas v. Public Service Commission , 447 U.S. 557 (1980), for regulations of commercial speech.
“Potentially misleading”? “Inherently misleading”? If you’re wondering where the Lanham Act or other trademark or consumer protection laws make this distinction – well, you’re not the only one. (Note also that Central Hudson doesn’t make much room for dilution laws – if Louisiana decided that the “Cajun” label was an important property interest of in-state producers, like “Olympic” is an important asset of the USOC, since that’s not an interest in avoiding deception the regulation would be subjected to stringent First Amendment scrutiny.)
The name "Cajun" is misleading, full stop, when applied to non-Louisiana food; contextual information on the package and buyer sophistication may prevent many purchasers from
The name "Cajun" is misleading, full stop, when applied to non-Louisiana food; contextual information on the package and buyer sophistication may prevent many purchasers fromrelying on this misleading name, but it seems unlikely that this is a federally registrable trademark. (There's an apparently unrelated live registration for CAJUN BOY for processed meats by a Louisiana corporation.) Applying a potentially/inherently misleading distinction to federal trademark and false advertising law would, to put it mildly, disrupt many settled doctrines and presumptions.
Relatedly, I take issue with the court’s facile assumption that labeling with country of origin is enough to eliminate the deceptive nature of the name. Do buyers – even institutional buyers – inspect the packaging? (“Chinese” was stamped on each case of catfish, but I’m unclear whether buyers saw the cases before placing orders.) The usual rule – with support in the empirical literature – is that a smaller disclosure can’t correct a false claim in the main part of an ad, though it can sometimes clarify an ambiguous claim. “Cajun” doesn’t seem that ambiguous to me.