"Herbal" doesn't include animal products

VBS Distribution, Inc. v. Nutrivita Laboratories, Inc., --- Fed.Appx. ----, 2017 WL 4118381, No. 17-55198 (9^th Cir. Sept. 15, 2017)

VBS makes a commercial television live auction show named “DAU GIA TREN TRUYEN HINH” (“Fight Price on Television”). It primarily auctions jewelry, particularly diamonds. VBS claimed a unique trade dress made of: a) the unique style and format of the show, b) its time slot and date selection, each week on alternate weekdays, from 5 to 7 p.m., on Tuesdays and Thursdays, c) the price range for its auctioned items, ranging from about $300 to $3000, d) its ‘least to most expensive’ format in which the least expensive items are sold first, ascending to the most expensive items at the end of the show, e) the length of the show, 2 hours, f) its focus on live TV auctions of jewelry, particularly diamonds, g) its carefully selected vendors, who appear on the show with the show’s host, h) unique and proprietary camera angle and special lighting techniques developed by Plaintiffs using an Apple ipad tablet, [and] i) the number and selection of items sold, usually about 30 items.”

VBS sued over a co-host’s activities advertising on KVLA, VBS’ competitor, for a show entitled “Diamond at a Surprise Low Price,” using the same hostess, some of the same vendors, the same style as provided by the same technician, the same time slot of 5:00 pm–7:00 pm, but on Mondays, Wednesdays and Friday instead of Tuesdays and Thursdays, the least to most expensive format, the same auctioning of approximately 30 items each show, the content is virtually identical, and the price range of products is virtually identical ($300–$3,000). KVLA also advertises a supplement, Arthro–7, on its show.

The court of appeals reversed and remanded the denial of a preliminary injunction in this trademark infringement, trade secret, and false advertising case.  TM: Although the overall configuration of VBS’s live auction television show was functional, it could still claim protectable trade dress in its “overall look and feel of VBS’s live auction show, regardless whether individual elements that constitute part of the claimed trade dress are functional.” (Looking at the initial decision, it appears to me that the real problem is the failure to describe the trade dress with reasonable specificity--I don't think anyone could have a TM on the idea of a two-hour timeslot with products presented in order of increasing price; it's possible that other elements in the show might, maybe, be protectable in the presence of secondary meaning, but saying that there are unique camera angles doesn't give enough information about what those angles are to see, not just whether all the claimed aspects are functional, but also if there's a real trade dress at issue, and not just a set of unprotectable ideas.  I think this one might be ripe for re-dismissal with more explanation on remand, though the "same hostess" thing is very interesting--query whether the public policy favoring free job mobility should affect the scope of any rights VBS might have.)

Trade secret: VBS’s customer list contains identifying information that wasn’t readily accessible to the public or to other businesses, including purchase histories, methods of payment, and amounts of payment. Because VBS had the names of people who had already expressed an interest in purchasing jewelry from an auction television show, the customer list had independent economic value o VBS’s competitors. Thus, the district court shouldn’t have rejected trade secret misappropriation claim on the ground that VBS failed to show that a reasonably diligent competitor couldn’t readily get the information in the customer list.

False advertising: The district court erred in failing to find literal falsity for two statements.  Nutrivita advertised that Arthro-7 was “100% herbal,” but its own ingredient list includes animal products, and animals aren’t made of herbs.  (The reasoning below was that both sides just asserted: Ps that herbal isn't animal products, and Ds that the industry accepts animal products as herbal.  At some point, we have to figure out what words mean, and the court of appeals seems right on this point: without anything but the dictionary, you can identify literal falsity.)  Nutrivita’s CEO also admitted that there was no basis for its claim “8 Million Bottles Sold,” making it literally false, though “Doctor Recommended” was not literally false and VBS didn’t put in evidence of misleadingness.  (On the 8 million bottles, the reasoning below was that falsity was plausible but there wasn't evidence of likely success on the merits, which appears to have been too opaque for the court of appeals and is for me as well.)

Remanded for further consideration of the remaining PI elements.