Wednesday, September 30, 2020

impersonating company to solicit intimate images for private use isn't TM infringement/false advertising

AdoreMe, Inc. v. Watson, 2020 WL 5769083, No. CV 19-8830 FMO (AGRx) (C.D. Cal. Jul. 14, 2020)

A fundamentally commercial cause of action can be a bad tool to address even bad noncommercial behavior. AdoreMe sued Watson for trademark infringement and false advertising under federal and state law, and an unfair business practices claim under state law. Watson, who failed to respond, allegedly operates a phishing scam through which he “preys on unsuspecting women by (a) posing as a talent scout for Adore Me; (b) impersonating Lindsey Hayes Kroeger (‘Ms. Kroeger’) – a well-respected talent scout – and/or pretending to be affiliated with her; and (c) using, unlawfully and without authorization, Adore Me’s name, trademark, and reputation to obtain nude and intimate photographs from women.”

AdoreMe sought default judgment, which the court denied. Even where well-pled allegations exist, “[t]he district court’s decision whether to enter a default judgment is a discretionary one,” considering factors including the merits of plaintiff’s substantive claim and the sufficiency of the complaint.

Trademark infringement requires use “‘in commerce’ and ‘in connection with the sale, offering for sale, distribution, or advertising of any goods or services.’ ” (Citing cases that “noncommercial” uses don’t trigger the Lanham Act.) The court found that AdoreMe’s allegations of commercial use were conclusory and insufficient to state a claim.

[Query whether false advertising precedents could have been any help: although offering goods/services without intent to sell them as advertised is false advertising, that’s essentially always coupled with actual sales of something else—bait and switch. Advertising something without the intent to provide any services at all may not be the requisite “advertising,” though courts have stretched the definition of use in commerce/commercial use so far already that this seems like an odd place to stop. Indeed, one could create a category of “fake commercial speech” and treat the defendant as engaged in “advertising” of services while still robustly protecting ordinary noncommercial speech.]

Likewise, the allegations that “Defendant has profited and will continue to profit from his unlawful actions because the intimate photographs of his victims are highly valuable and the private property of those women” didn’t allege facts showing actual profit/plans to profit (implicitly defined as profit monetarily). [Side note: under California right of publicity law, the benefit to the defendant doesn’t have to be commercial; Kroeger’s potential claims are easily the strongest here.]

So too with the Lanham Act false advertising claims. This wasn’t plausibly “commercial advertising or promotion.” [Again, I might have attempted to estop defendant from challenging commerciality, but that is innovation and I can easily see why the court didn’t want to do that on a default judgment, where it’s easy to make bad law.]

The state claims were the same. [I wonder whether you could get something useful out of UCL “unfairness.” This seems like the kind of conduct the FTC thinks is unfair.]

Finally, the court was skeptical of the sufficiency of the support for plaintiff’s damages claims. “To recover damages after securing a default judgment, a plaintiff must prove the relief it seeks through testimony or written affidavit.” AdoreMe submitted only the declaration of its General Counsel, which didn’t sufficiently establish her qualifications and competency to assess and calculate AdoreMe’s damages. She also relied on potentially inadmissible evidence, e.g., supporting the statement that “approximately 1% of people who visit a company’s social media will ultimately make a purchase on the company’s platform” with a citation to a link to a website “upon which the court has no basis to rely.”

The court told AdoreMe to file an amended complaint and move for default judgment quickly or have the case dismissed; to consider retaining an expert to substantiate its damages calculations; and to consider limiting its claims. Given these instructions, it’s not incredibly surprising that AdoreMe apparently instead abandoned the lawsuit. One hopes that social media companies will nonetheless cooperate with shutting down such schemes.  

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