Tuesday, April 30, 2019

Instagram hashtags aren't nominative fair use because they're visible to consumers

Align Technol., Inc. v. Strauss Diamond Instruments, Inc., 2019 WL 1586776, No. 18-cv-06663-TSH (N.D. Cal. Apr. 12, 2019)

Nominative fair use purports to be a test, but cases like this make me want to say that it’s a fairness judgment.  Here, defendant’s use of Instagram hashtags wasn’t fair use because they’re visible to consumers, unlike keyword ads, and thus “too much” (and also, the court thinks, used to refer to defendant’s product, which doesn’t make very much sense to me, since defendant’s product is for use with plaintiff’s product); likewise, using a picture of plaintiff’s product (which has the plaintiff’s mark on it) isn’t fair use, but there the court may think that using a different drawing would be ok.

Align’s Invisalign straightens teeth. Align’s iTero Element scanner takes scans of a patient’s mouth, teeth and gums, which helps in implementing the Invisalign system. The scanner includes a computer system with an attached “wand,” which uses a protective sleeve that slides over and covers the portion of the scanning wand that is inserted into the patient’s mouth. Align’s sleeve is disposable and single-use only, and has a number of other wonderful features that Align touts and the court repeats; “[a]n inferior quality sleeve may affect the performance of the iTero Element scanner system as a whole and may also increase risk to patients in cross-contamination, fluid transfer, discomfort and inconvenience.”  Align has registrations for iTero, iTero Element, and Invisalign for dental services, dental and oral healthcare devices, and computer-aided modeling.

Strauss sells dental instruments and related goods, including is the MagicSleeve, a silicone sleeve that covers the wand portion of intraoral scanners. It is reusable, and according to Align, inferior to Align’s sleeve.

Three problems: (1) Hashtags containing Align’s marks.  For example, two pictures show the MagicSleeve in use with a patient. The text says, “If you are a digital scanner user, be prepared to cut your overhead down. Our brand new MagicSleeve is autoclavable and allows for a faster scanning time. Shop now -> https://straussdiamond.com/product/scanner-sleeve/.” The third hashtag says “#invisalign,” and the fifth says “#itero.”

(2) One screenshot from a video says “Order Today.” To the right is a picture of an Align iTero Element machine with a Strauss MagicSleeve on the wand. A stylized image of a row of teeth is on the screen, and on the upper left is an image of both rows of teeth, and on the bottom left is a picture taken of someone’s mouth showing a couple of teeth. “[T]he machine itself has the normal ‘iTero element’ logo in tiny letters on the front of it because that’s how an iTero Element machine looks in real life.” Beneath the picture of the machine is Strauss’s domain name.  The problem is that the image of the iTero Element machine with the stylized pictures on it “was actually created by Align, then copied by Strauss, which superimposed an image of its MagicSleeve on top of the wand.”
screen shot with iTero image
iTero's image
(3) False claims: Concededly false advertising of “25% faster scanning time.” Allegedly false advertising that the MagicSleeve produces scans that are just as sharp as the ones produced by using an iTero Element sleeve.

The court found that the hashtags wasn’t nominative fair use because in some cases “Strauss used the marks to refer to its own product,” and “in all cases, Strauss used more of the marks than is reasonably necessary to identify the product.”  The court understood the hashtags to be references to Strauss’s own product, which doesn’t make a lot of sense to me as a linguistic matter; hashtags do generally contribute to one’s understanding of the topic under discussion.  But the court didn’t like the context. For example, the illustrated nine-step instructions for using the MagicSleeve had several hashtags listed, including #itero, #iteroscanner, #iteroelement and #invisalign, along with #scannersleeve and #diamondprovider, and then hashtags about dentistry (e.g., #dentist, #cosmeticdentistry) and attractive teeth (e.g., #straightsmiles, #beautifulsmiles). “These hashtags are all collectively being used to promote and describe the MagicSleeve. It is not credible to view the hashtags containing Align’s marks as referring to Align’s products (the foundational assumption of nominative fair use) and the other hashtags as referring to the MagicSleeve. They are all together references to the MagicSleeve.”  Citation: Public Impact, LLC v. Boston Consulting Group, Inc., 169 F. Supp. 3d 278 (D. Mass 2016) (use of competitor’s mark in social media hashtag “likely” to confuse “even a sophisticated consumer”).

What a mess.  Yes, they’re references to something that can be done with the MagicSleeve—it can be used with an iTero—but that doesn’t make them uses of the marks as marks for Strauss, any more than the reference to “dentistry” is a trademark use of the word dentistry.

Regardless, this was more use than necessary. The pictures already show that the MagicSleeve is meant to be used on the wand of an iTero scanner. “The hashtags themselves just indicate a vague association between the term in the hashtag and the MagicSleeve. None of the hashtags are reasonably necessary to identify Strauss’s product.”  [Again, that’s not the test in the 9th Circuit, which is whether you need to use the mark to identify the trademark owner/product once you’ve decided to talk about it.]  Then, bizarrely in context, the court says: “In fact, the hashtags do not perform an identification function. For example, #straightsmiles and #beautifulsmiles are not meant to identify the MagicSleeve but to imply that this product is associated with having a beautiful or straight smile. Likewise, #dentist and #cosmeticdentistry are too vague to serve as a useful identifier; rather, they indicate that the MagicSleeve is associated with dentistry.”  Which seems true, but exactly why this isn’t trademark use and why the court’s first reason was wrong.  But then:

In a similar fashion, the hashtags with Align’s marks indicate an association with Align’s iTero and Invisalign products. But they don’t identify the MagicSleeve – you can’t read the hashtags and figure out that this product is the sleeve that goes on the wand of an iTero scanner. All the reader can glean from the hashtags is an implied association.

OK.  If you replace “association” with “subject matter,” this becomes somewhat more coherent, but I don’t understand why the court ignores the rest of the post, which would explain why and how the hashtags are being used.  This reasoning does highlight just how often nominative fair use is really just a quick and dirty confusion inquiry, with the court substituting its own judgment for evidence about reasonable consumers.

What the court really wants is an unfair competition argument, but it doesn’t really have much in the way of principles to get it.  The court described one image: a woman in a dental chair who is having her mouth scanned by someone using an iTero scanner with a MagicSleeve on the wand. “The textual sentences that use Align’s mark (‘If you are an iTero user, be prepared to cut your overhead down. Our brand new scanner sleeve is autoclavable and allows for faster scanning time.’) are a classic case of nominative fair use.”  And the hashtags #itero, #iteroscanner, #scannersleeve, #iteroelement and #orthodontics were “less of a laundry list,” so that could in theory be a set of references to Align’s products, references to Strauss’s, and reference to the overall product category.

But it was still more than reasonably necessary to identify Strauss’s product, because the hypothetical version of the ad without the hashtags was just as good at identifying Strauss’s product [still the wrong test].  The identification came from the picture and the textual sentences; “the use of the marks in the hashtags is never reasonably necessary to identify the MagicSleeve. You would have to imagine a pretty terrible ad for the hashtags to do any identifying – maybe just a picture of the MagicSleeve with no illustration or text explaining what it is for, leaving the viewer to wonder if he should put it on his finger to do the dishes, wear it for protection when sewing, or what other use is contemplated.”

This at least clearly indicates the problem the court is having: “too much” is not, as it more often has been in NFU cases, about using the text mark and not the font/symbols in a discussion. Instead, as in the early Playboy v. Welles case, the problem is that Strauss is just repeating “itero” too often.  But hashtags aren’t wallpaper backgrounds: they have a purpose both for the reader of the individual post (this is what the post is about, if you had any doubts) and for searching.

But the court has thought of that!  Apparently NFU does not require that a competitor is allowed to participate in hashtag searches.  Although this is indeed a function of the hashtag, the court disagreed that it was allowed by NFU; previous cases about metatags were not relevant because metatags just work behind the scenes, whereas hashtags are visible to consumers.  [So “necessary” here means “necessary to physically speak the advertising message,” not “necessary to reach consumers.”] Anyway, many of these hashtags “are simply implausible as search terms. Someone looking for information about how to get straight teeth might search for ‘adult braces’ or ‘straight teeth,’ but it is unlikely they would search for #beautifulsmiles or even #straightsmiles.”  Might they look for Invisalign?  If so, uses of those non-trademark terms seem not particularly relevant.  Also, searches aren’t the only thing hashtags are used for—trending/locally trending topics can also be important.  Nonetheless, the court concluded, the inclusion of #beautifulsmiles and “other implausible search terms … confirms that the intended audience of the hashtags is, at least in part, the viewer of the ad, implying association between the MagicSleeve and the terms in the hashtags.”  [Again, the court is equivocating about “association,” using the “talking about” meaning with respect to the non-Align terms and “trademark meaning” for the Align terms.]

Second, the iTero image was different. This was a reference to Align’s product. “This is like a Volkswagen repair shop putting a picture of a Volkswagen (including the VW logo on the car) in an ad to show what it repairs.”  The first and second prongs of nominative fair use were satisfied—“the MagicSleeve is not readily identifiable without some reference to an iTero scanner” [still the wrong test] and there’s no more use than necessary because the only reason why the word “iTero” appears in the ad is that Align stamped the word on the front of its iTero scanners. However, part three is “the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.” And a copy-paste from Align’s website (with the MagicSleeve added on) was “something else”: “Align created pictures for the screen of the scanner, so the overall image is distinctive.”  The use of the same distinctive image suggests that the MagicSleeve is endorsed or authorized by Align. 

Note: That does not follow in the slightest.  The copyright analysis could well be different (though that the actual teeth in the Strauss picture seem to be different, at least based on the quick searches I did), but the fact that Align made the picture doesn’t make the picture distinctive as trade dress—indeed, as an image of the product design, it is presumptively unprotected.  Without a showing that the audience would recognize the picture as the same picture Align uses, this reasoning is nonsense, but it’s at least nonsense that perhaps is easier to avoid for future marketers. The court nearly says as much: Strauss can “likely” put a MagicSleeve on an iTero scanner, take a picture of that, and use that image in marketing.  

But the court has actually created a Dastar problem in its reasoning: “Align’s marketing people created that image, and any reasonable observer would understand it was a picture created for an ad. When it starts showing up in Strauss’s ads for the MagicSleeve, reasonable people would infer sponsorship or endorsement by Align.”  This is just passing off without secondary meaning, which doesn’t seem actionable after Dastar (consider Dastar’s discussion of Wal-Mart).

With NFU out of the way, the court found likely confusion using the ordinary multifactor test.  Note how the reasoning on intent contradicts the court’s analysis of the necessity of using a #trademark hashtag: When asked why Strauss “include[s] the iTero, iTero Element, and Invisalign hashtags in its Instagram post,” Strauss’s Vice President Lital Lizotte testified: “Most likely because it has a high following.” This showed an intent to trade on Align’s goodwill—except that’s also an intent to reach customers interested in Align products.

There was “some anecdotal evidence” of actual confusion. According to Align, one dentist told an Align trainer that he “did not know that Align did not approve of the use of Strauss Diamond’s MagicSleeves with Align’s iTero system” and, in a second instance, that it was the trainer’s “understanding that this dentist did not know that the MagicSleeves are not an Align sponsored product.” [This is pretty weak tea even for association evidence: it's a double negative rather than a claim that the dentists affirmatively thought there was an affiliation.] Another clinical trainer for Align declared her understanding that a dentist who called Align to complain about the performance of an iTero Element being used with a Strauss MagicSleeve believed the MagicSleeves “to be Align-supported products.” Still, anecdotal evidence is entitled to little weight; this factor was neutral.

Perhaps surprisingly, the cost of the products here was held to be low/supporting a finding of confusion.  The MagicSleeve is $360 for one pack (15 sleeves), or $24 a unit, a low enough cost that “consumers are not expected to be taking great care in analyzing the products’ packaging.”  Still, it’s for a dental practice, where the customers should be sophisticated, making this factor neutral overall.

Result: likely confusion.  Here's one question going forward: can another competitor use the same hashtags with text that makes clear that it's an independent product not affiliated with Align?  What if it adds #independent #notaffiliatedwithalign?  Would that change the NFU analysis or the multifactor confusion analysis?

Counterfeiting: Not likely to succeed (though it is notable that Align thought it worth claiming). First, as far as the court could tell, none of Align’s registrations covered scanner sleeves. Second, “counterfeiting is the ‘hard core’ or ‘first degree’ of trademark infringement that seeks to trick the consumer into believing he or she is getting the genuine article, rather than a ‘colorable imitation.’ ” There were substantial differences between the parties’ sleeves in shape, color, and design.

False advertising: Strauss conceded that its 25% faster claim was literally false.  As to “just as sharp of a scan,” Align “submitted persuasive evidence that the MagicSleeve will often produce a lower quality scan. The design of the MagicSleeve means that the window is more likely to be out of place …. The complicated cleaning instructions are likely to result in blurry screens. Align has submitted a large number of customer complaints about the quality of the scans taken with the MagicSleeve.” The court was persuaded that the MagicSleeve “often” results in blurrier scans, but it didn’t know exactly how often.  It hadn’t been shown that “just as sharp of a scan” was “always or even usually false.”

Irreparable harm: since dental professionals and patients are likely to believe that the MagicSleeve is endorsed or approved by Align, “Strauss’s continued use of Align’s marks will result in Align losing control over its reputation and goodwill as a result.”  This is irreparable harm. And Align showed that the MagicSleeve was lower quality, which risked Align’s reputation if it was wrongly blamed for that.

Perplexingly, the court found a higher risk of irreparable harm because iTero is fanciful, and Invisalign is strong and famous, “so Strauss’s use of them almost automatically tells a customer they refer to a brand.” [Citing Qualitex, which is about distinctiveness, not harm.] 

And 25% faster was a completely unjustified swipe at Align, which would therefore suffer irreparable harm.  [The court is standard in using intent to infer irreparability (but even if we presume that intent to produce damage results in damage, why would that be irreparable damage in particular?); the two concepts lack much logical connection but certainly fit an equitable conception of injunctive relief.]

The court declined Align’s request to enjoin sale of the MagicSleeve, which was distinguishable from the particular ads at issue.  But a more limited injunction against the particular conduct at issue wasn’t moot.

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