The Battle for Our Attention: Empirical, Philosophical and Legal Questions: Northeastern University School of Law

 Panel 3 - Media and Communication Systems for Attention Capture

 This panel will address how different fields, from media studies to economics, think about attention, how it is captured and valued. Do different types of media (political news, advertisements, sexual content, etc.) produce different attentional patterns? How is attention captured through technology? What issues does attention distortion raise? 

David Simon, Associate Professor of Law, Northeastern University (moderator)

Nick Seaver, Associate Professor of Anthropology, Tufts University

Attention as a method of control—a name for how we can be disciplined/enrolled into projects of bosses or other people who want to control us. If we thought of attention that way we’d change how we regulated and valued attention.

Mouse jiggler: one form of resistance to this type of discipline. Bosses use bossware to surveil whether you’re “working.”

That also reveals just how lousy our techniques for detecting attention are. Very hard to know! We use “impressions” or sales as proxies. Self-driving cars use torque on the steering wheel to check whether you’re prepared to take over—but that means that you can just use a weight to “pay attention” for you. Even the most safety-focused forms of “attention” have been turned back into discipline from above.

Bridget Todd, Fellow at Berkman Klein Center

Podcasting: what makes it different? Identity mediates our experience of digital technologies. Podcasting is inherently a medium for people who like to talk. Opposite of short-form content, with some exceptions. Deep dives into complicated/nuanced issues. [Books?] Requires attention!

Asking “who benefits from this attention?”: conflict entrepreneurs. They effectively hijacked conversations around identity. Our current media landscape is tailor-made for conflict entrepreneurs to do this. It makes us more divided, suspicious, lonelier, and less curious. Focuses attention on differences among individuals, values, identities. Bite-size journalism makes people more black-and-white in their thinking, less nuanced. What can we do? More exposure to complicated narratives: a man who waited for 6 hours to speak in support of an anti-trans bill in Wisconsin, and listened to the advocates speaking about their lives, and changed his mind.

Rebecca Tushnet, Professor of Law, Harvard University

Maybe by accident the flip side of Professor Seaver’s talk. My fields are IP and advertising: and what I suggest those fields tell us is that attention can be owned, but when attention is not an object of ownership, it is not regulated. We value ownership of attention but not its other possible characteristics. One thing that means is that we often are unable to measure the thing that we say is ownable. A well-known quote, attributed to retail mogul John Wanamaker, says: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

I also have something of a side note, or a cautionary one: courts often believe things about human cognition that are simply wrong, and it is hard to make them change their minds because they often consider their beliefs about cognition to be common sense. An example from copyright:

In an important copyright case, Judge Learned Hand wrote that “everything registers somewhere in our memories, and no one can tell what may evoke it” – Learned Hand was a great judge but a terrible neuroscientist: as it turns out, we do not process a lot of sensory input that we get, and it is never encoded in memory, not long-term or short-term. But courts still rely on this principle to hold that musicians may have engaged in subconscious copying without knowing about it, and it is very hard to get a court to reject a factual assertion made by Learned Hand.

Lots of similar assertions about how consumers think in TM.

More relevantly to attention in particular, copyright’s fair use test distinguishes between unauthorized uses that are justified and unauthorized uses that use another’s work “merely . . . to get attention or to avoid the drudgery in working up something fresh” which are less likely to be fair—so one of the things the copyright owner owns by default is the right to your attention based on their expression.

Similarly, TM: TM focuses on the ability of a mark to identify the source of a product—a mark is communicative, and a good mark captures attention. The ability to be recognized and noticed is at the core of what a good trademark is! That means that unauthorized attention-getting uses might be infringing. Initial interest confusion is a concept that explicitly relies on the idea that a trademark might get a consumer’s attention and then the seller might sell them something else, and that’s infringing even though no sale is ever completed as the result of confusion. At the same time, we distinguish between initial interest confusion and mere distraction/comparison—it can be legitimate to catch the consumer’s eye by, e.g., comparative advertising.

Likewise, trademark’s protections for truthful uses can be limited if the user uses “too much” of the mark—relies too heavily on its attention-getting power, as courts have ruled in cases like a former Playboy playmate’s website that repeated that she was Playmate of the Year too many times, or a luxury resale website emphasizing Chanel products too heavily in its advertising.

Dilution: making it harder for a mark to stand out/capture your attention—Delta is diluted versus Xerox which is not: no real empirical evidence this does harm to TM owners but the sense of unfairness suffices to get courts to condemn what they see as free riding

Outside of ownership, my fields don’t have ways to think about attentional harms

Advertising law: getting attention is unregulable because only falsifiable claims can be evaluated—even advertising systems that purportedly require factuality don’t generally regulate attention-grabbing in general, especially in the visual or oral realm.

Regulation of sponsorships and endorsements are an example: FTC is focused on metadata disclosure—disclosure that content is sponsored—as well as on whether endorsers make claims that need substantiation. The thought is that audiences can calibrate their attention or the credibility they give to the claims once there’s disclosure—but it’s important to understand the underlying dynamic which is that sponsored content is something that audiences have a harder time tuning out—it’s not like a banner ad that you can just have attentional blindness towards.

Indeed, advertising is often seen as a tax on audiences or the price they pay for other content, even though availability of information is necessary for an efficient market. James Kellner, the chairman and CEO of Turner Broadcasting, stated that people who skip TV commercials are violating their contract with TV companies who provide ad-supported programming. He grudgingly accepted that “there’s a certain amount of tolerance for going to the bathroom.”

Attention is owed—but the givers of attention are not the ones who are in control. That assumption or expectation that advertising is hostile to its audiences’ interests, perhaps perversely, itself gives some credibility to the idea that most attempts to capture audience attention are legitimate—we expect the audiences to be running away, so we also expect the advertisers to be lunging forward to catch the audiences in any way they can.

Emily West, Professor of Communication, UMass

Attention, inattention and convenience: from book Buy Now: How Amazon Branded Convenience and Normalized Monopoly. Inattention allows us to draw attention to things that we find more rewarding; can distract us from consolidation of corporate power. Production of user inattention is strategic and purposeful. If content was the bait for ad-supported media, convenience is the bait in the digital economy for greater platform enclosure of time, spending, attention. Ease at the center of any interaction/exchange; facilitates inattention to multiple steps, research, complexity—a structure of feeling and a logistical form. Decreases discernment and price sensitivity—decisional muscles get flabby. Get out of the habit of going to the store, the news, etc.—these things come to us. Google’s AI answers remove even the need to consider the search results. Offering itself as authoritative source, but it’s a digital ad company and not a library.

Simon: Different visions: Attention & control; attention as an asset or point of conflict; attention as ownership/ownership of attention; attention as convenience. TM law allocates control over attention-getting to make it easier to find stuff. Attention can also be an asset to employers. And to sellers who offer convenience (or maybe your desire not to pay much attention is the asset there).

Seaver: there are boundary objects or trading zones where disciplines meet—but people are often talking about different things (a “suitcase term”). Are these definitions of attention all the same? Attention is a big bag, but that can be appropriate!

West: the temptation is to go to individualized responses—“I just need to be more careful/buy less/pay more attention”—but it’s the mental infrastructure we live with. The firms have 150 psychologists on staff and it’s not a fair fight.

Q: Seaver/Tushnet: Does attention exist or is it just about metrics that we use for owning, controlling people/their behaviors? A proxy for something deeper. Todd/West: podcasting and convenience—podcasts are regularly being used to fill free time, raising the question whether they are really deeper dives. Attentional experience different from that of reading books (we can do other stuff while we listen). Current attention ecosystem: media strategy that has to do with trying to reach the individual or the population that is the most remote from the issue; anyone who actually knows what’s going on is alienated by the way the news promotes the issues, but the goal is not to reach people who understand—instead, it’s to reach the people who know the least.  

West: longform content is just another method of platform enclosure. Amazon/Tiktok equivalents of QVC where you can just watch and click to buy.

RT: TM doctrines prioritize form over substance: TM is a shortcut to compress information about the product/service: you see Coca-Cola and remember the taste and the advertising and the lifestyle. But the TM owner is allowed to change quality/characteristics without notice even though continuity is supposedly the justification for the right. The obligation created by reputation is not reciprocal.

Seaver: Attention is used as a proxy for productivity (the mouse jiggler) or safety (the steering wheel)—the real value is the thing that the attention is attached to, like truth (for media). Historically specific in the modern era, perhaps.

Q: Do you think that attention can justly be owed? RT: I’m attempting to describe how IP thinks about these issues; it depends on the doctrine. Bundle of content and attention—attention might be owed if it were really an efficient market if you were really free to choose it instead of something else. It’s not fair if there’s monopoly control or market distortion.

Seaver: we tend to assume that neuroscience has to be consulted, but if attention is just a word for “people should be able to do things on their own schedules and at their own behest” you don’t need neuroscientists for that. When Trump was elected in 2016, there was a lot of attentional discourse: (1) how could this have happened, we (the polity) weren’t paying attention; (2) everything he does is a distraction (to/for the polity) from something else; (3) he has no attention span. These are three levels of attentional discourse. The polity pays attention by writing things in the papers even though we traditionally assume that writing things in papers leads to the polity paying attention.

West: Advertisers like digital advertising because it can show you the breadcrumbs of how you spent your ad dollars and whether someone clicked—more behavioral.

RT: disagree—that’s only for some types of ads. Coca-Cola doesn’t use behavioral advertising, and there’s lots of ad fraud. And only some types of transparency. Amazon may tell you cost per click, but it doesn’t tell you how you get put on the first page of search results, and it could change how it organizes its site and destroy you at a moment’s notice.

Seaver: note that the jiggler is not super effective resistance; interesting to see the pushback. Doesn’t find it morally objectionable, but defeating the safety device on a car is—but they’re framed the exact same way by their users.

trademark use is easier with a suggestive mark than with a descriptive one

Medical Depot, Inc. v. Med Way US, Inc., --- F.Supp.3d ----, 2025 WL 948334, No. 22-CV-01272 (OEM) (SIL) (E.D.N.Y. Mar. 28, 20

This case focuses on trademark “use.” The parties are medical supply companies who use similar marks—“Med-Aire” and “MEDAIR®”—to brand the medical air mattresses they sell.

Plaintiff, dba Drive, has sold air mattresses using the “Med-Aire” mark since 2007. From 2007 to 2023, Drive’s “Med-Aire” mattresses amassed gross sales of $160 million. “Med-Aire” was used on at least some of Drive’s external packaging for its medical air mattress products intermittently since 2007. Drive used the ™ symbol in connection with its “DRIVE” trademark for its “Med-Aire” mattress products between 2007 and 2020. But it didn’t use the ™ symbol in connection with its “Med-Aire” mark until 2020, two years after Med Way started using its “MEDAIR®” mark. “Med-Aire” appeared on at least certain shipping labels for Drive’s air mattress products, alongside product descriptions in the same font, color, size, location, typeset, and style as the rest of the product descriptions, at least intermittently, since 2007. “Med-Aire” appeared inside and on the cover of a user manual included with at least some “Med-Aire” air mattress systems, and on the face plate of the air pump that accompanied the mattress system, which is sold separately. “Med-Aire” also appeared in at least some of Drive’s catalogs and brochures since “as early as 2007.” Drive also distributed monthly promotional “Med-Aire” product catalogs. And “Med-Aire” was displayed in flyers at retailers of “Med-Aire” products since 2011, at trade shows since 2007, and on websites since at least as early as 2009.

Med Way, meanwhile, displayed MEDAIR on its goods in interstate commerce since at least as early as April 1, 2019. Med Way stamps “MEDAIR®” on its medical air mattresses and pumps. In late 2019, Med Way hired counsel to conduct a trademark clearance search for the term “MEDAIR,” and variations thereof, which did not reveal Drive’s “Med-Aire” mark. It filed a use-based application for “MEDAIR” in connection with “air mattresses with pump, for medical purposes” with a first use date of April 1, 2019; it was registered in 2020.

Drive and its affiliates have 67 federally registered trademarks. Drive waited until July 8, 2020, to do a clearance search for the term; having done so, it found MEDAIR and then tried to register Med-Aire for “[m]edical products, namely, therapeutic mattresses” and the like. The PTO ultimately suspended Drive’s application pending disposition of Med Way’s prior-filed application; Drive’s cancellation petition is suspended pending the outcome of this litigation.

The court found that Med-Aire was suggestive because “it requires some imagination and some thought” to understand the kind of goods it refers to; it was obviously medical, but it wasn’t obviously a mattress. This is the wrong standard because it’s only half the question: the appropriate inquiry is, knowing the goods, does it require imagination to connect the goods with the mark? The classic Abercrombie spectrum gets its name from a case in which the court found SAFARI distinctive for some apparel items but not others. Noodles would be descriptive for a restaurant, but arbitrary for a furniture store. Courts often get this wrong, but they shouldn’t. Here, the court was apparently encouraged in its error by both sides.

The court then turned to trademark use. Citing Alexandra J. Roberts, Trademark Failure to Function, 104 IOWA L. REV. 1977 (2019), the court stated: “To merit protection, a trademark must be ‘used in a trademark way,’ meaning that it ‘must appear where consumers expect a trademark to appear, and it must be sufficiently set off from the surrounding text and images to attract notice.’” The court also looked to Jack Daniel’s and the TTAB. A mark “must be used in such a manner that its nature and function [as a trademark] are readily apparent and recognizable without extended analysis or research and certainly without legal opinion.” Scholastic Inc. v. Speirs, 28 F. Supp. 2d 862 (S.D.N.Y. 1998), aff’d, 199 F.3d 1323 (2d Cir. 1999) (cleaned up).

“Common indicators suggesting that a word or phrase might be viewed by the public as a trademark include large font relative to surrounding text, all capital letters or initial capitals, distinctive print style, use of color, and prominent position on a label or in an advertisement. In short, a mark must stand out from the surrounding text.” Advertising expenditures can also be circumstantial evidence, as can sales. (Though you still need to know which part of the sales experience counts as a trademark!)

Conceptual strength also matters.  “For example, where a mark is fanciful, ‘even though [the mark] may be embedded in other text, there is no danger that [the mark] will be interpreted as merely descriptive or informational matter ... As such, its only purpose is to provide a unique identifier to a product that is otherwise identified only by a generic name and technical explanatory, information’” (citing In Re Eli Lilly & Co., 2015 WL 4241138 (T.T.A.B. 2015)).

Using these principles, plaintiff used “Med-Aire” as a trademark. “Med-Aire” “consistently appears as the first word or phrase in product descriptions, uses initial capital letters, appears at the product point of sale listings, appears in advertising and promotional materials, is referred to by consumers as ‘Med-Aire’ in voluminous consumer communications, is suggestive, and products bearing the mark have amassed millions of dollars in sales, all of which supports finding that the mark has been used as a source identifier.”

The court distinguished Jaymo’s Sauces LLC v. Wendy’s Co., 19-CV-01026, 2021 WL 4712685, at *4 (C.D. Ill. Oct. 8, 2021), which held that “S’Awesome” was not an adequate source identifier for sauce in part because of the term’s nonprivileged placement, the sauce label’s emphasis on other (descriptive) terms, and the comparatively small, plain font of “S’Awesome,” as well as marketing materials that featured only “occasional” use of the “S’Awesome” term. Here, Drive used “Med-Aire” as an individual product mark and also used a house mark on its products; that’s fine. “Drive does not emphasize other non-trademarked phrases, images, or terms relative to ‘Med-Aire’ on labels and in promotional materials,” and frequently used “Med-Aire” in promotional materials.

The lack of brand awareness surveys or marketing experts was not dispositive, nor was it dispositive that consumers often refer to “Drive” mattresses or product numbers. Drive also submitted evidence of consumer communications about “Med-Aire” products, demonstrating that consumers did perceive “Med-Aire” as a source identifier.

“Size, location, and other characteristics may be determinative for trademark use for descriptive terms that have acquired secondary meaning,” but were less important for suggestive terms.

With nothing else in serious dispute, Drive had priority and showed likely confusion as well as its entitlement to cancellation of Med Way’s registration.

But its state law unfair competition claim, which required bad faith, failed because Med Way presented evidence that it relied on a trademark clearance search and advice from counsel. There was also no fraud on the PTO.

Med Way’s dilution counterclaim also failed because Drive was the senior user and because Med Way’s mark was not famous.

State law false advertising counterclaims also failed for want of public injury. “Med Way’s evidence consists of a reference to ‘mediocre reviews,’ but many products receive ‘mediocre reviews,’” and anyway there was no showing of how Med Way’s mattress reviews compared.  

The court declined to award disgorgement. There was no finding of extreme difference in quality or bad faith, or even that Med Way benefited from its infringement. Even though Med Way’s principal physically examined Drive mattresses to see what a competitor’s mattresses looked like, “a person could reasonably examine the physical mattress alone—without the point of sale listing, or the user manual, or an advertising flyer—and not encounter the ‘Med-Aire’ mark” based on Drive’s own exhibits. And, though Med Way continued its use after Drive’s objection, Med Way’s CEO and Med Way’s attorneys expressed a genuine belief that although Drive used “Med-Aire,” it was not the senior user of the mark.

Although Drive didn’t delay in protecting its rights or have unclean hands, the balance of the equitable factors weighed against profit disgorgement. Instead, it was entitled to a permanent injunction.

Trademark question of the day

 At a hotel recently, I was presented with this gem: "Staybill," a guide to hotel/local attractions.

Does it matter that PLAYBILL is registered for, inter alia, "making hotel reservations for others"?

whether a product was discontinued doesn't relate to its “nature, characteristics, qualities, or geographic origin"

Memjet Technology Limited v. Vanguard Graphics International, LLC, 2025 WL 976915,  No. 3:23-cv-1810-JES-AHG (S.D. Cal. Apr. 1, 2025)

The parties sell digital inkjet products for use in commercial industries. Plaintiffs alleged that defendants disseminated a communication to approximately twenty businesses in the digital inkjet printing industry stating that “Duraflex print head will no longer be produced by Memjet effective immediately” and that they were “disappointed in Memjet’s decision ...” and will “provide even better options ...” moving forward. This allegedly libeled Memjet by telling its customers that Memjet was discontinuing Duraflex printheads immediately without warning to its customers and suggested that the Duraflex printheads were “substandard, obsolete, and becoming irrelevant within the print industry.” Plaintiffs also alleged that the communication “violated” Memjet’s trademarks by displaying the Duraflex name and logo. Plaintiffs sued for Lanham Act false advertising, trade libel, intentional/negligent interference with prospective economic relations, and California UCL violations.

Defendants successfully sought dismissal of the dismiss the trade libel claim, the UCL claim, and the Lanham Act false advertising claim.California trade libel requires: (1) a false or misleading statement; (2) which specifically refers to the plaintiff’s product or business; and (3) clearly derogates that product or business. Statements about Duraflex being discontinued weren’t clearly derogatory, despite allegations that they prompted “countless” phone calls, emails and in-person inquiries and that one of plaintiffs’ larger OEM providers “indicated that it would significantly reduce its DuraFlex printhead forecast as a result of the Communication.” But ‘[t]he defamatory character of the language must be apparent from the words themselves.’ ”  “[A] statement that the Duraflex printheads are being discontinued effective immediately, even if true, would not necessarily or clearly carry an implication that something was wrong with the product or business. For example, unexpected discontinuation of a product could result from a supply chain issue with a part or from a personal issue with the business owner that has nothing to do with how the business is run or the product’s quality.”

UCL: Only allows injunctive relief/restitution. Plaintiffs’ claim for money spent on corrective advertising wasn’t restitution but damages, and they didn’t seek injunctive relief, so the claim had to go.

Lanham Act: This one I’m dubious about, but the court held that a statement that a product was being discontinued didn’t relate to its “nature, characteristics, qualities, or geographic origin.”

Sybersound Records, Inc. v. UAV Corp., 517 F.3d 1137 (9th Cir. 2008), says that phrase relates to “characteristics of the good itself” and not to false statements regarding their copyright license status. Characteristics of a karaoke recording, for example, include “the original song and artist of the karaoke recording, and the quality of its audio and visual effects.” Whether a product was discontinued was not a characteristic of the good itself. (What about plaintiffs’ services or “commercial activities”? The court dismissed the complaint without leave to amend, because this was their second try.)

Reading list: Margaritha Windisch, Unveiling the Bond Between Artists and Their Work: A Vignette Study

Unveiling the Bond Between Artists and Their Work: A Vignette Study

38 Pages Posted: 12 Feb 2025 Last revised: 19 Feb 2025

Margaritha Windisch

Date Written: January 31, 2025

Abstract

This paper empirically measures the bond between artists and their work. In a pre-registered vignette study, the impact of generative AI (Artificial Intelligence) in the creation process on the relationship between artists and their creations is investigated. The study provides evidence for the personality-rights theory of copyright law, predominant in continental Europe, which emphasizes a close personal bond between creators and their creations. While other theories of copyright law, such as the incentive and the labor theory, have already received much attention from the empirical research community, the personality-based approach to copyright law has been primarily discussed as a mere theoretical concept. To address this knowledge gap, over 200 art students from the five top art schools in Switzerland participated in an online vignette study where they were randomly assigned to go through the creation process of visual artwork using either (i) traditional drawing tools on a canvas, (ii) digital drawing software on a tablet, or (iii) an AI image generator. The results record the degree of the participants' emotional attachment to their artwork and indicate a nuanced relationship between technological tools and the artist's bond to their work. While there is no significant di!erence in emotional attachment between traditional and digital drawing tools, using an AI image generator leads to a statistically significant decrease in the artist's bond to their work and their perception of the work as their own intellectual creation. These findings suggest that the use of generative AI tools to create artwork impacts the extent to which artists can personally express themselves in their artistic endeavors, which has significant implications for policymakers in the fields of copyright law and technology as they navigate the landscape of copyright protection and authorship of AI-generated works. 

Canadian-origin "Truffettes de France" are plausibly misleading

James v. Chocmod USA Inc., 2025 WL 950509, No. 1:22-cv-01435 JLT SKO (E.D. Cal. Mar. 28, 2025)

Plaintiffs sued over defendant’s “Truffettes de France” (trans. “Truffles from France”), which are, despite the name, made in Canada. They brought the usual California claims.

Even if the truffles were not physically different, and if—as defendant argued—it uses the same recipe in France as it does in Canada and doesn’t charge more based on place of manufacture, California law holds that there is a cognizable injury. As the California Supreme Court held in Kwikset:

To some consumers, processes and places of origin matter. … Whether a wine is from a particular locale may matter to the oenophile who values subtle regional differences.

...

For each consumer who relies on the truth and accuracy of a label and is deceived by misrepresentations into making a purchase, the economic harm is the same: the consumer has purchased a product that he or she paid more for than he or she otherwise might have been willing to pay if the product had been labeled accurately. This economic harm—the loss of real dollars from a consumer’s pocket—is the same whether or not a court might objectively view the products as functionally equivalent. … Two wines might to almost any palate taste indistinguishable—but to serious oenophiles, the difference between one year and the next, between grapes from one valley and another nearby, might be sufficient to carry with it real economic differences in how much they would pay.

Chocmod tried to defend by arguing that it had trademark rights in its brand name and thus no reasonable consumer would be deceived, particularly because the back label “explicitly states” that they were made in Canada. Initially, Moore v. Mars Petcare US, Inc., 966 F.3d 1007 (9th Cir. 2020), held:

[B]rand names by themselves can be misleading in the context of the product being marketed. Descriptive brand names require of the consumer “little thought,” which can make consumers susceptible to purchasing because “they won’t have the time or interest to read about [the product] on [the] website or the back of the box.” Thus, a product called “One a Day” gummy vitamins, which required two gummies a day for a full dosage, is explicitly misleading.

The court rejected Chocmod’s argument that “any reasonable consumer should ... be expected to review the packaging to determine the country of origin, if that is something the consumer feels is important.” The front-label representations were plausibly misleading to reasonable consumers, who aren’t required to look beyond the front of the box. Only if reasonable consumers couldn’t think they’d answered their questions with the front of the package—only if they’d “necessarily require more information before reasonably concluding that the label is making a particular representation”—do courts consider the back as potentially resolving an inherent ambiguity.  (Emphasis mine.)

The brand name “Truffettes de France,” or “Truffles from France,” was not ambiguous and would plausibly mislead a reasonable consumer. This was much clearer than ambiguous images or phrases addressed in other cases. Cf. Culver v. Unilever United States, Inc., 2021 WL 2943937 (C.D. Cal. June 14, 2021) (front labels “Paris,” Depuis 1747,” and “Que Maille”; court explicitly distinguished “de Paris”); Eshelby v. L’Oreal USA, Inc., 664 F. Supp. 3d 417 (S.D.N.Y. 2023) (“L’Oreal Paris” on front label could lead reasonable consumers to think that the company originated in Paris, but not that any particular product was); La Barbera v. Ole Mexican Foods Inc., 2023 WL 4162348 (C.D. Cal. May 18, 2023) (“Phrases like ‘The Taste of Mexico!’ are at once true in every meaningful sense and meaningless; the point is that they are different in kind from stating the Products are from Mexico.”).

Here, there was an actual representation about the truffles’ county of origin, which was “so misleading” that a reasonable consumer “need not search elsewhere for the truth.” Chocmod argued that the product name was no different from French onion soup, French fries, Belgian chocolates, Mexican burritos, or Chinese chicken salad. The court was open to the idea that “French truffles” would be insufficient to satisfy the reasonable consumer test. But “from France” was different. The label didn’t make representations about style or recipe, which would be different. Moreover, “the reasonableness of a consumer’s belief that a salad or other perishable item was shipped from another country is incomparable to his relative belief as to a shelf-stable product like chocolate, which was, in fact, shipped from another country—Canada.”

is selling stolen goods trademark infringement?

Tentantable.com, LLC v. Aljibouri, 2025 WL 959656, No. 22-CV-78-LJV (W.D.N.Y. Mar. 31, 2025)

Not sure I’ve seen this before! Is selling stolen goods trademark infringement? No, this court says, and that has to be right.

Plaintiffs sell “various inflatable products such as bounce houses[,] water slides, and...air blowers used to inflate such products,” as well as “party tents, pole tents, [and] banquet tents with associated tables and chairs.” They claim trademark rights in “Zoom Blowers,” “ ‘Pogo’ inflatables,” and “PartyTentsDirect.com.” They also alleged rights in “a black and yellow housing for an air blower.” Their application “for the yellow and black color scheme” is pending at the PTO.

Defendant Mohammed Aljibouri began working at Tentandtable as a “warehouse supervisor” in October 2019. After he quit, they allegedly discovered that had been “entering orders” and “making deliveries” of the plaintiffs’ goods for which they had no record and had not been paid. He also had “stole[n]...property” from the plaintiffs’ warehouse. And even after he left, he made unauthorized orders by signing in as a Tentandtable user.

Defendants sold the plaintiffs’ products, which “bear[ ] the [p]laintiffs’ names and trademarks[,] including Tentandtable.com, Zoom Blowers, Pogo Bounce House[,] and Partytentsdirect.com.” They also allegedly sold yellow and black air blowers that look “similar[ ]” to the plaintiffs’ air blowers.

The RICO claims failed because they were RICO claims.

Trademark infringement as to the allegedly stolen goods: Selling goods that have been altered so that they “do not meet the trademark owner’s quality control standards”—or failing “to observe a restrictive condition on the sale of a product”—and thereby causing “consumer confusion” may be infringing. But “repackaging of goods is not trademark infringement if it does not deceive the public or damage the mark owner’s goodwill.” But the complaint didn’t allege these things. “[T]he mere fact that the defendants sold the plaintiffs’ goods with the plaintiffs’ trademarks without their permission is not enough to state a Lanham Act claim.”

Burton v. Label, LLC, 344 F. Supp. 3d 680 (S.D.N.Y. 2018), rejected similar claims against a former employee, where the allegations were that the former employee had “use[d] his position as a Label salesman to sell items represented to be Label goods by placing orders with Label suppliers” and then keeping the profits for himself. Unlawfully pocketing proceeds that belonged to an employer does not constitute false designation of origin. ML Fashion, LLC v. Nobelle GW, LLC, 2022 WL 313965 (D. Conn. Feb. 2, 2022), likewise rejected Lanham Act claims based on sales of unaltered but allegedly stolen goods. There was no actionable misrepresentation-by-omission that they had the right to sell the goods.

As for the more conventional trade dress claims, they failed too. First, a trade dress plaintiff must “offer ‘a precise expression of the character and scope of the claimed trade dress.’ ” This is vital to assessing protectability, infringement, and the scope of any relief. The court was unconvinced that plaintiffs had provided the requisite articulation here. The complaint focused on the air blowers’ yellow and black “design[ ],” “configuration,” “scheme,” and “appearance.” But they said little more than “yellow and black.” And a “focus on the overall look of a product does not permit a plaintiff to dispense with an articulation of the specific elements which comprise its [trade] dress.” Images attached to the complaint couldn’t relieve plaintiffs of this burden. Still, the Second Circuit has cautioned that “a plaintiff that articulates the components of its trade dress with the requisite precision should not have its claims prematurely dismissed” regardless of whether the trade dress claimed is sufficiently distinctive.

So the court turned to distinctiveness and found it insufficiently pled. (It was also skeptical about conclusory allegations of nonfunctionality.)

Product design trade dress always requires secondary meaning, including the primarily color-based claim here. Plaintiffs did not succeed in the “formidable task” of pleading secondary meaning for product design. The complaint was silent on the first four factors courts consider: (1) advertising expenditures, (2) consumer studies linking the mark to a source, (3) unsolicited media coverage of the product, and (4) sales success. As to (5), attempts to “plagiarize” the mark, plaintiffs alleged copying by defendants, but not by anyone else. “[C]urts have found that when a complaint alleges that only the defendants have violated the plaintiff’s trade dress, this factor weighs against an inference of secondary meaning.” As the court noted, “if allegations of the defendant’s plagiarism were itself enough, this factor always would weigh in favor of finding acquired secondary meaning.” Finally, the length of the mark’s use was pled as being since January 2015, and the complaint didn’t specify that they have used this design “exclusively,” although plaintiffs referred to the design as “unique.” “But even assuming the plaintiffs have sufficiently alleged more than seven years of exclusive use, that would not be enough to state a plausible claim in the absence of any facts relevant to the other factors.”

The court declined to exercise supplemental jurisdiction over remaining claims.

district court misunderstands "fake sale" claims, finds price not to be a "statement"

Nguyen v. Lovesac Co., 2025 WL 950511, No. 2:24-cv-01293-TLN-JDP (E.D. Cal. Mar. 28, 2025)

Weird decision finding that a price isn’t an actionable representation, which—even if true—ignores the difference between a price and a putative former price represented by a strikethrough, which implicates specific provisions of consumer protection law enacted precisely to protect consumers from false and misleading price comparisons. Nguyen alleged that Lovesac inflates its product prices for the sole purpose of marking them at a discounted “sale” price.  Price quotes allegedly include a purported “discount” the customer is receiving on their purchase, which correlates with a “limited time sale” and a fictitious strikethrough reference price accompanied by a purported percentage off. Lovesac allegedly warrants to consumers that their purchase received a certain “% off” of their purchase, resulting in “-$XX” to the initial subtotal.

The court initially found that Nguyen didn’t sufficiently allege which sofa he purchased, though he did allege the price. He didn’t allege any “particular size, fill, material, or any of the other customizable features he purchased.” The complaint also failed to allege, about the investigation purporting to show that the “sales” were not really sales, “what products were tracked, what the prices were on specific dates, whether any individual item prices were identified or tracked, whether the investigation included the specific ‘Sactional’ items Plaintiff purchased, or any other meaningful details about the investigation.”

More concerningly, the court rejected Nguyen’s allegations of misleadingness where the product he bought “displayed an original, strike-through price of $7,175.00, representing [a] purported $1,793.75 ‘discount.’ ” The court instead relied on cases holding that “the price of a product can[not] constitute a representation or statement about the product.” Parent v. Millercoors LLC, No. 3:15-cv-1204-GPC-WVG, 2016 WL 3348818 (S.D. Cal. June 16, 2016); Boris v. Wal-Mart Stores, Inc., 35 F. Supp. 3d 1163 (C.D. Cal. 2014). But a “price” is not a juxtaposition with a putative former/regular price—as evidenced by the fact that legislatures around the country bar specifically false advertising relating to “sales.” It’s not the actual selling price that makes the misrepresentation—it’s the struck-through price presented as some sort of ordinary price. But the court missed that distinction: “pricing about the product alone cannot constitute a representation or statement about the product.”

The California Supreme Court, however, has specifically held that a consumer who buys a product in reliance on a false/misleading reference price has suffered an injury. Hinojos v. Kohl’s Corp., 718 F.3d 1098 (9th Cir. 2013) (citing Dhruv Grewal & Larry D. Compeau, Comparative Price Advertising: Informative or Deceptive?, 11 J. PUB. POL’Y & MKTG. 52 (1992) (“By creating an impression of savings, the presence of a higher reference price enhances subjects’ perceived value and willingness to buy the product. . . . [E]mpirical studies indicate that as discount size increases, consumers’ perceptions of value and their willingness to buy the product increase, while their intention to search for a lower price decreases.”)). As the Hinojos court pointed out, the “what a great bargain!” effect is exactly why the California legislature barred the practice.

trademark question of the day

 

"One Wing to Rule Them All" ad from Moby Dick. "Marinated in Moby's secret spices and flame-kissed to perfectoin, these delicious wings have the power to put fellowships at risk!"

advertising game device's legality amidst gambling prosecutions could violate the Lanham Act

TNT Amusements, Inc. v. Torch Electronics, LLC, 2025 WL 947506, No. 4:23-CV-330-JAR (E.D. Mo. Mar. 28, 2025)

The parties compete in the market for “retail amusement devices.” TNT owns and leases out traditional arcade games and similar amusement equipment (e.g., foosball and pool tables, dart boards, pinball machines, juke boxes) to various retailers. Torch leases putatively “no-chance” gaming machines. TNT alleged that Torch operates illegal slot machines and touts them as legal. Here, the Lanham Act false advertising claim survives for a jury, but the RICO claims are tossed out on summary judgment because they’re RICO claims.

I’m going to try to strip down the extensive regulatory background, but gambling is heavily regulated in Missouri. Relevant definitions include:

(4) “Gambling”, a person engages in gambling when he or she stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his or her control or influence, upon an agreement or understanding that he or she will receive something of value in the event of a certain outcome. …

(11) “Slot machine”, a gambling device that as a result of the insertion of a coin or other object operates, either completely automatically or with the aid of some physical act by the player, in such a manner that, depending upon elements of chance, it may eject something of value. A device so constructed or readily adaptable or convertible to such use is no less a slot machine because it is not in working order or because some mechanical act of manipulation or repair is required to accomplish its adaptation, conversion or workability. Nor is it any less a slot machine because apart from its use or adaptability as such it may also sell or deliver something of value on a basis other than chance.

Possession of a gambling device is a Class A misdemeanor. Any building used for unlawful gambling is considered a public nuisance.

Torch’s game machines feature at least five game themes, and each theme offers several play levels. “A game theme is a series of visual images displayed to entertain the player, revealing a combination of winning or losing symbols on each turn. A play level dictates the payment required to play the next turn.”

picture of a "no chance" device

The record showed that the software for a Torch device has a randomly selected starting point for each theme/play level combo. “From any given starting point, for each turn of play, the software cycles through pre-determined and finite sequential pools of 60,000 to 100,000 outcomes, depending on the game theme,” like a counter (but not in numerical order) ticking forward one at a time until it cycles back to the beginning. “There is nothing a player can do to alter the payout amount of a turn before or after the player inserts money.”

Torch devices only take bills, “so, if there is a balance of $0.25 when a player decides to stop playing, there is no way to recover that amount.” Each device has an optional “prize viewer” that allows the player to preview the next payout amount, but only the next payout amount. “So, for example, if a player selects the prize viewer and sees that the next payout amount is $0 and she wants to obtain a better result, she must play through that $0 turn and continue playing. She cannot skip ahead. If she wants to know the payout of the second, third, or any future turn, she must pay for and play through those additional turns.” Using the prize viewer doesn’t change the odds, though “Torch devices are configured to enable the commercial operator to adjust the settings to require a player to pay extra to use the prize viewer.” According to a specialist with the Missouri Gaming Commission, absent the preview feature, Torch machines “essentially play just like a slot machine.”

Torch advertises that the devices are not gambling machines. Until September 2022, its website said:

Torch’s No Chance Game Machines are legal. Torch’s No Chance Game Machines are an innovative non-gambling game machine.

Why are No Chance Game Machines different?

Under Missouri law, a “gambling device” is defined as having three elements: consideration (money in), prize (money out), and chance (unknown outcome).

Torch’s No Chance Games obviously have the elements of “consideration” and “prize”, but have been carefully designed to eliminate the element of “chance” (which Missouri law defines as the material component of a gambling device). If the player does not like the predetermined outcome, they can choose not to play. If they have a balance on the machine, they can redeem their balance at any time.  

The “Prize Viewer” option on NCGs eliminates chance.

In mid-September 2022, Torch revised its website to state only this:

Torch’s No Chance Games are the first of an entirely new entertainment concept; a game in which there is no element of chance.

Importantly, the player may view each and every outcome which may entitle them a prize before playing the game. They may simply touch the “Prize Viewer” button on the game console and view the result of the game before playing. As such, the player can decide if they want to play the game or not based on the pre-determined outcome.

Each Torch device bears a disclaimer:

The Amusement Device to which this disclaimer is attached provides each player of the device with information on the specific outcome of each electronic amusement game offered thereon. The information with respect to each such outcome is provided prior to such player’s participation in any such game. Consequently, this amusement device is designed to provide no contest and no chance in the games offered to its players.

… In Missouri (as in most states), in order to be considered “gambling,” an element of chance or a contest must be present in the activity … As noted above, this amusement device is designed to offer no contest of chance as the outcome is known by players before any amusement game is initiated. Therefore, the activity offered by this device clearly does not meet the definition of “gambling.” As a result, this amusement device does not fit any definition of “gambling device” in the state of Missouri and is not prohibited for use by you. …

Torch "no chance" ad

Its ad flyers make similar claims, as do its oral representations. “As such, Defendants have not taken measures to prevent problem gamblers or gambling addicts from playing Torch devices, nor have they taken measures to prevent children from playing other than instructing customers not to allow it.” Torch doesn’t have a gaming license.

At least 20 locations where defendants operate Torch devices are current or previous customers of TNT. There have been as many as 15,000 Torch devices in Missouri. TNT’s customers have directed TNT to remove at least 19 machines from overlapping locations in order to make room for Torch devices. The Torch games displaced TNT games because they made more money (and revenue is split with retailers).

You will not be surprised to learn that the history of evading gambling regulations is long:  

Over 100 years ago, in City of Moberly v. Deskin, 155 S.W. 842 (Mo. App. 1913), a Missouri appellate court was asked to determine whether a slot-machine-like gum dispenser was a gambling device. The machine had a prize preview feature showing in advance what the player would receive on the next play. The defendant argued that each turn was a separate and independent business transaction and there was no chance involved as the player knew in advance what he would receive for his nickel. The court rejected this theory, finding the defendant’s position “unsound” because the “contrivance” was clearly intended to “allure” the player into continuing in the hope of a better outcome.

Deskin is still good law; Missouri legalized some gambling in 1994 but made no change in its definitions that would abrogate its rule. The parties, other operators, and officials have nonetheless debated the legality of “no-chance” prize viewer games and proposed various legislative changes specifically drafted to encompass machines with a preview feature, but nothing has happened yet. In January 2017, Torch obtained a legal opinion from a Chicago law firm concluding that “no chance” gaming devices were legal under Missouri law, and Torch maintained this position in contacts with prosecutors. After Torch’s owner met with the Phelps County prosecuting attorney, the latter informed local law enforcement that he would not pursue prosecution involving Torch devices. But, around the same time, local officials in Franklin County warned Torch that the Missouri Gaming Commission deemed the devices illegal and the prosecutor would “absolutely consider prosecution regardless of Phelps County opinion.” TNT also secured an advisory opinion from the Missouri Gaming Commission in 2019 that the devices were indeed gambling devices and slot machines notwithstanding the prize viewer feature. Torch’s lawyer acknowledged the Commission’s position but recommended that Torch maintain its public stance that that “MGC has nothing to say about Torch’s games.” In 2023, defendants were denied a business license in Branson based on the Gaming Commission’s position that Torch devices are illegal, and a Platte County prosecutor successfully charged a business with a class E felony for operating “no chance” prize viewer devices in local convenience stores in 2019. Other attempted prosecutions were dismissed or are ongoing, as are fights over seizures of Torch machines as illegal gambling devices. “In their field investigations, Commission representatives observed consumers playing Torch devices like slot machines without using the prize viewers.”

Torch’s challenge to TNT’s standing went nowhere; the parties were direct competitors and there was enough evidence for a jury to conclude that there was a causal connection between Torch’s sales and TNT’s claimed losses. TNT provided evidence of TNT machines that were replaced with Torch devices and its witness also testified that many customers have asked her if TNT offers products similar to Torch games. There were other possible explanations why customers removed TNT devices, such as wanting newer equipment or more profitable devices, but that was a fact question for the jury.

What about falsity? Torch made extensive claims that the devices didn’t involve chance and weren’t gambling devices. Were these non-actionable statements of opinion, or potentially falsifiable? Courts sometimes refuse to consider statements about legality to be falsifiable in the absence of a “clear and unambiguous statement” from the regulator. For example, Coastal Abstract Service, Inc. v. First American Title Insurance. Co., 173 F.3d 725 (9th Cir. 1999), held that, “[a]bsent a clear and unambiguous ruling from a court or agency of competent jurisdiction, statements by laypersons that purport to interpret the meaning of a statute or regulation are opinion statements, and not statements of fact.” The court thought the Eighth Circuit would agree, and cited Dental Recycling N. Am., Inc. v. Stoma Ventures, LLC, No. 4:23 CV 670 CDP, 2023 WL 6389071 (E.D. Mo. Oct. 2, 2023) (allowing Lanham Act claim where a defendant represented that its product was compliant with EPA regulations when technically it was not; reasoning that “an opinion by a speaker who lacks a good faith belief in the truth of the statement is actionable”).

Under these circumstances, the evidence was sufficient to go to a jury. The representations on Torch’s website and devices were clearly intended to be “reasonably interpreted as a statement of objective fact” and not merely opinion. And the anti-gambling law requires only “an element of chance.” “[I]t is now undisputed that Torch devices contain random entry points at each play level in each game theme.” There could be as many as three million potential outcomes, reflecting “a material degree of chance such that a jury could find literally false Defendants’ unambiguous representation that ‘chance has absolutely no role.’” The law even says “a slot machine is no less a slot machine when it delivers something of value on a basis other than chance – e.g., large sequential pools.” The court didn’t see a meaningful difference between randomly reshuffling each time and “random-entry-point 100,000-outcome pools yielding three million possibilities.” There was absolutely no reason for the state to intend to regulate one technology and not the other. See Thole v. Westfall, 682 S.W.2d 33, 37 (Mo. App. E.D. 1984) (“In the slot machine games, the objects that appear on the screen are determined by the devices’ electronic circuitry and the player has no control over which combination of objects will appear. Thus, from the player’s point of view, winning is purely a matter of luck, a matter of chance.”). [Exactly!]

In addition, the decidedly mixed and often unfavorable results of Torch devices’ encounters with the law provided context to show “Torch’s actual knowledge that its legal assurances were false, or at least patently misleading.” Unlike cases where no clear guidance existed at the time of the statements, “Defendants have been well aware since 2018 that the Missouri Gaming Commission, state and local law enforcement, numerous county prosecutors, and at least one state circuit court have deemed Torch devices illegal under Missouri law.” The Platte County conviction, for example, was a “clear and unambiguous ruling from a court … of competent jurisdiction” even without appellate review, and the Gaming Commission’s 2019 opinion was “an equally clear declaration by the competent agency. On this record, Defendants cannot credibly claim that their unambiguous representations of legality – asserted as unequivocal fact on the website and on each device – were mere lay opinions lacking the benefit of clarity from a court or agency.”

Even without literal falsity, a jury could readily find misleadingness/deceptiveness, “especially given that law enforcement officials explicitly warned Defendants that their customers would be prosecuted for operating the devices. Torch was so acutely aware of this real risk that it offered to fund customers’ legal defense. This belies good faith and at least creates a triable issue as to Defendants’ knowledge.”

game over for allegations relating to misattributed/distorted consumer complaints

Skillz Platform Inc. v. Papaya Gaming, Ltd., 2025 WL 918411, 24cv1646(DLC) (S.D.N.Y. Mar. 26, 2025)

Previously, the court partially granted Skillz’s motion to dismiss Papaya’s amended counterclaims; Papaya sought leave to file further amended counterclaims, which the court denied.

The parties compete in the market for mobile games that allow users to spend and win money (and in-game prizes). “Users of Papaya’s games typically compete with between five and twenty opponents. … The Skillz platform hosts games, each of which allows gameplay between only two players, created by third-party developers.” Skillz allegedly “engaged in a multipronged campaign to discredit Papaya in the eyes of the public and law enforcement officials regarding Papaya’s use of robots or ‘bots.’”

The challenged conduct included an alleged “false-front organization called 4 Fair Play” that “solicited complaints from consumers about Papaya and other competitors of Skillz.” As alleged:

Skillz forwarded these complaints to state attorneys general. But before doing so, it added stock language to the complaint, which said “I’m a resident of your state and I would like to make you aware of a mobile game that is defrauding consumers like me out of their hard-earned money. I strongly believe the following games use AI or ‘bots’ to scam players by pretending that those are real players.” It then listed the games selected on the complaint form. Skillz did not tell complainants it was adding this language. Most complaints that 4 Fair Play received did not mention bot use, but the stock language, which misleadingly appeared to have been written by the complainant, was added to them anyway. Skillz “spot checked” the complaints that it forwarded to law enforcement, but it otherwise did not vet them to make sure they came from real people.

This Skillz-added material in the forwarded consumer complaints was not alleged in the previous counterclaims.

The 4 Fair Play website also included short quotations purportedly from consumers complaining about Papaya’s games. “These testimonials, each one or two sentences long, were attributed to consumers identified only by initials and state of origin … or by the game they had played.” Skillz itself allegedly drafted some of those testimonials, and they had not come from real consumers. “Other testimonials did come from real consumers but had been edited by Skillz.” The fact that these weren’t real consumers or real quotes was added to the proposed counterclaims.

[Gotta say, if we had a working FTC, this would be the kind of thing that the FTC considers deceptive, though it might well leave the parties to private remedies given their incentives to litigate and the lack of direct sales from the website.]

Finally,

[p]ortraying itself as a “public policy group conducting research,” 4 Fair Play contacted Skillz employees … and offered recipients $300 for participating in interviews meant to “better understand the mobile gaming industry.” An internal guide, which was edited by Skillz executives, encouraged interviewers to ask questions about Papaya’s use of bots. The involvement of Skillz and 4 Fair Play in this scheme was hidden.

Despite NDAs, two former Papaya employees participated in interviews and “disclosed information about when and why bots are used and the coding behind the bots, among other things.” Using this information, Skillz publicly accused Papaya of using bots. It also sued Papaya for false advertising about lack of bots. The proposed counterclaims added an unfair competition claim based on these facts.

The existing surviving counterclaims relate to Papaya’s challenges to Skillz’ advertising that its own platform did not use bots, matched players evenly, and allowed customers to withdraw cash at any time.

The new allegations didn’t change the outcome for Papaya. Misleadingly adding to consumer complaints before sending them to state law enforcement doesn’t violate the Lanham Act because it’s not “commercial advertising or promotion.” It also doesn’t violate NY GBL § 349 because it doesn’t involve consumer-facing representations/consumer-oriented conduct.

That leaves defamation, but falsity requires pleading that the alleged statement is not “substantially true,” meaning that it “could have produced no worse an effect on the mind of a reader than the truth pertinent to the allegation.” But Papaya didn’t allege that “the substantive content of this stock language was false—just that it was misattributed.” Nor did it allege that state authorities ever did anything with these communications or that they became public. There was thus no allegation of harm, “reputational or otherwise.” The statements couldn’t be per se actionable, which requires proof that the statement “impugns the basic integrity or creditworthiness of a business.” But, while “the integrity of Papaya’s business practices and its deception of the public about its historic use of bots to compete with customers in its games of ‘skill’ are at the heart of this case,” Papaya didn’t deny such undisclosed historic use in the proposed amended complaint, and thus wouldn’t be able to prove the falsity of the supposedly defamatory statement at trial. Footnote: “In recent depositions, none of Papaya’s individual deposition witnesses denied the historic use of bots, as they all asserted their Fifth Amendment rights against self-incrimination rather than testifying to any potentially disputed facts.” [Yikes!]

Misattribution of testimonials: Both Lanham Act and GBL claims require materiality, and Papaya didn’t allege that the content of the testimonials (accusing Papaya of using bots or being unfair generally) were false, nor that numerous real consumers were not submitting complaints along these lines. Even if the consumers “(barely) identified by the website –‘J.P. from Florida,’ ‘Bingo Cash Player,’ and the like” didn’t write “the specific words included in the displayed testimonials,” it was not plausible that the misattribution was material and caused injury.  

[N]o reasonable jury could find that anyone’s purchasing decisions would have been affected (or that consumers would be affected in any other meaningful sense) by the fact that a real “J.P. from Florida” did not say the words, “I have genuinely never played a game that is so rigged in my life.” While parties generally “should be given the opportunity to develop their evidence to demonstrate materiality,” the pleadings must set forth some plausible basis for the defendant to ultimately be held liable.

Finally, the interview scheme wasn’t actionable. “The essence of an unfair competition claim under New York law is that the defendant misappropriated the fruit of plaintiff’s labors and expenditures by obtaining access to plaintiff’s business idea either through fraud or deception, or an abuse of a fiduciary or confidential relationship.” Although Skillz allegedly used deceptive means to obtain information about Papaya’s business, there were no allegations that Skillz actually did anything with that information. Yes, Skillz told reporters that Papaya was using bots in its games. But according to the complaint itself, “Skillz was publicly accusing Papaya of using bots well before the interviews took place anyway.” Given that context, “characterizing the accusation that Papaya used bots as a trade secret is a stretch at best.” And even if it was, this conduct wasn’t unfair competition.

 

 

honey producers have statutory standing to challenge Bayer's claims to direct purchasers that herbicides were safe

Coy’s Honey Farm, Inc. v. Bayer Corp., MDL No.:1:18-md-02820-SNLJ, No. 1:21-CV-089-SNLJ, 2025 WL 901264 (E.D. Mo. Mar. 25, 2025)

Coy’s s a beekeeping and honey-producing operation. It alleged that dicamba-based herbicide products, including those produced by defendants, moved away from the targeted dicamba-tolerant plants and damaged non-tolerant vegetation surrounding plaintiff’s beekeeping operation. This allegedly resulted in reduced honey production and loss of bees. The court allows Lanham Act false advertising claims (and others) to proceed. I think the proximate cause question is interesting, but the other claims may have obscured the specific proximate cause question with respect to false advertising, since there was a material issue of fact on proximate causation of damage to the bees/honey.

The Lanham Act claim is based on defendants’ alleged false representations that their dicamba products were safe for the type of use that allegedly let them to volatize and spread to surrounding areas after being applied to the intended target of soybean and cotton fields. Misled purchasers then used the dicamba as directed, which “allegedly resulted in the destruction of a great deal of plant habitat for the honeybees, and, in turn, caused the bees to produce less honey. Thence, plaintiff profited less.” There was a fact issue on whether that had happened.

But was there Lanham Act standing? Lexmark held that a plaintiff must “allege an injury to a commercial interest in reputation or sales proximately caused by the defendant’s misrepresentations.” That is, a Lanham Act plaintiff must be a commercial actor suffering commercial injuries instead of being a “consumer who is hoodwinked into purchasing a disappointing product.” “Here, there is no question that plaintiff is a commercial actor, and plaintiff has alleged a loss in sales due to defendants’ misrepresentations.” The “due to” is doing a lot of work there—I’m open to the argument that the honey producers are at least as distant from the false advertising as the landlord of a business that suffers damage from false advertising. But proximate cause is, of course, a legal rather than factual conclusion.

National Republican Senatorial Committee loses ROP/Lanham Act/UCL claims against alleged "Scam PAC"

National Republican Senatorial Committee v. Red Senate, 2025 WL 819711, No. 8:24-cv-02301-JVS-KES (C.D. Cal. Jan. 14, 2025)

NRSC sued Red State, alleging that it was exploiting Senator Rick Scott’s “name, image, and likeness without his consent to deceive and scam potential donors...” Red State is a Super PAC, which may accept “unlimited contributions” from nearly any domestic source “so long as it does not coordinate its public communications with any federal candidate.” But NRSC alleged that it was a scam, misleading donors “into believing that their contributions will support a particular candidate or cause, when in reality the Scam PAC plows that cash into endless fundraising that ultimately funds little more than the salaries of its officers and its preferred vendors, who profit handsomely.”

NRSC alleged that, according to FEC disclosures, Red Senate raised over $2.6 million in the 2019-2020 election cycle and spent over $1.1 million in total disbursements during the cycle, including over $1 million in operating expenses. The 2021-2022 election cycle had similar numbers, and, at the time the complaint was filed, Red Senate had raised over $300,000 in the current election cycle, and spent over $500,000, with approximately $450,000 going towards operating expenses. Thus, NRSC alleged, Red Senate merely compensates vendors and keeps any leftover cash, harming the candidates “they purport to be supporting” in the process.

Red Senate allegedly allocates the bulk of its spending to Wavecrest or Google Ads. According to the Google Ads Transparency Center, Red Senate has paid between $35,000 to $40,000 for Google ads mentioning Senator Scott, which were shown between 70,000 to 80,000 times throughout the United States. The advertisements specifically state: “Red Senate for Rick Scott - Keep Florida Red in 2024,” and “Red Senate for Rick Scott - Take Back Our Senate in 2024.” Red Senate also reported making independent expenditures in the 2024 Florida Senate race; however, as of October 2, 2024, none of the reported expenditures expressly advocated for Senator Scott or his opponent. Rather, “the reported expenditures served to raise funds for Red Senate while using Rick Scott’s name and likeness.”

Senator Scott allegedly assigned his rights to NRSC, and, “as the only national party committee solely purposed to supporting Republican senate candidates,” NRSC claims to have an independent interest in stopping false advertising and false personification of Republican candidates. NRSC sued for California statutory and common law right of publicity violations, Lanham Act false advertising, and unfair competition under California’s UCL.

The court took judicial notice of the existence of disclaimers on Red Senate’s website, though not their accuracy, and did the same for the content of FEC reports filed by Red Senate. And it took judicial notice of the “fact that there has been significant news media coverage of Senator Rick Scott, his 2025 campaign for re-election to the United States Senate, and his opponent Debbie Mucarsel-Powell.”

Initially, NRSC’s statement that Senator Scott’s assignment was exclusive was sufficient to establish standing to assert his claims as an initial matter. But did Scott have statutory Lanham Act standing? He needed to allege an “injury to a commercial interest in reputation or sales.” NRSC argued that the parties competed in “the political-fundraising marketplace,” meaning that “potentially millions of dollars were diverted from his campaign.” But the complaint didn’t so allege; its only allegations focused on the deception of donors. But the court granted leave to amend. (Seems like “commercial advertising or promotion” is going to be an insuperable barrier here.)

California’s UCL requires “the plaintiff to be the one ‘who has suffered injury in fact and has lost money or property as a result of the unfair competition.’ ” Consequently, “an injured [party’s] assignment of rights cannot confer standing on an uninjured assignee.” NRSC’s allegation of its own interest in stopping false advertising and false personification of Republican candidates was not enough to satisfy this burden; again, there was leave to amend.

As for the California claims, they were subject to anti-SLAPP analysis. NRSC argued that its complaint “challenges Red Senate’s deceptive conduct in fundraising—not the message it conveys in its ads,” so that the lawsuit did not “arise from” any statements that Red Senate made “in relation to political campaigns.” Instead, it arose from its post-speech conduct—its spending allocation. (I thought political spending was speech.) The court was unpersuaded by these arguments. “First, it is well settled that the anti-SLAPP statute applies to conduct in furtherance of the right to free speech, in addition to the protected speech itself. Second, even if the lawsuit as a whole challenges Red Senate’s disbursement of funds, the right of publicity claims specifically target Red Senate’s use of Senator Scott’s name in Google ads.” The speech was itself allegedly wrongful, not merely evidence of a wrongful act (fundraising misconduct). “[H]ad Red Senate never used Senator Scott’s name in its Google advertisements, NRSC would have no right to publicity claims.”

Thus, the burden shifted to NRSC to demonstrate a probability of prevailing on the merits of its claims. For a common law cause of action for commercial misappropriation, a plaintiff must prove: “(1) the defendant’s use of the plaintiff’s identity; (2) the appropriation of plaintiff’s name or likeness to defendant’s advantage, commercially or otherwise; (3) lack of consent; and (4) resulting injury.” The statutory cause of action requires commercial misappropriation.

Red Senate argued that its speech was related to a political campaign, a matter of public interest, and that NRSC couldn’t prove that Scott’s image was used “exclusively” for commercial gain. NRSC’s argument that Red Senate’s speech was unprotected because it was fraudulent lacked sufficient evidence. The exception for political speech isn’t limited to specific types of political campaigns; nor does the “underlying purpose of one’s dissemination of a political message” determine whether an exception applies. Motion to strike granted, with leave to amend. (How could there be a successful amendment, especially for the statutory cause of action?)

Reading List: morality and trademarks in South Asia

Zehra Jafri, One Sari, Three Different Ways to Drape It: Trademarks, Religion, Language, and Morality in Post-Colonial India, Pakistan, and Bangladesh, 40 UCLA Pacific Basin Law Journal 127 (2023)

 Abstract:

Pakistan, India, and Bangladesh were all established on a sense of wanting to be a majority in a nation where they were once “othered,” be it by the British, Hindu majority, or Urdu-speaking majority. As a result, religious independence and mother-tongue/linguistic independence are highly valued in these countries, and are the context by which the morality of trademarks within the borders of these countries are assessed. Notions of free speech traditions and political ideologies that also color traditions are discussed, as they also run abreast trademark law. Although these three countries once emerged from one land, they carry differences as distinct and rich as the cultural and religious historical tensions that define them. Each sought to create a space where their cultural and religious identities were represented fairly. As thus, it is no surprise that religion is such an important consideration that it was codified into each country’s trademark law. 

This paper aims to illustrate what each country deems as running afoul to notions of morality and religious susceptibilities, and how that may have changed over time with politics and other social factors. The factors that may have influenced these definitions is assessed in depth by country, with homage to the political structures and free speech traditions within which they are nested. A framework of what would and what wouldn’t qualify as a registrable trademark under the morality bar is posited through an analysis of government guidelines on registering trademarks, case law, and a comparative analysis of certain marks that were treated one way under one country’s standard but could be treated differently under different standards from other countries.

 

Some interesting passages (footnotes omitted):

[U]nder Section 9(2)(c) [of Indian trademark law], a mark is prohibited for registration as a trademark if it contains or comprises of any matter likely to hurt the religious susceptibilities of any class or section of the citizens of India. The Draft Manual further explicitly acknowledges that it is a common trade practice in India to use names and pictures of religious deities or symbols as trademarks. Accordingly such use is not regarded per se as offending religious sentiments of any class or section of public. However, such use in relation to certain goods may offend the religious sentiments of the people. For example, the use of the names or device of deities or religious heads on footwear will be considered distasteful and will be open to objection. Similarly, use of Hindu Gods on beef or meat products or use of names of Muslim saints on pork products would offend the religious feeling of respective sections of the public and may attract objection under this section. … The Draft Manual goes on to list illustrative examples. The use of religious symbols (like OM) or names (e.g., Jesus) as trademarks is likely to undermine/offend religious value and sentiments. Names of gods or goddesses which are also used as personal names may be considered as personal names for registration purpose, unless accompanied by the device of such god or goddess.

 

… Not included in the explicit list of unauthorized religious names in the trademark guidance are Islamic marks. All of the explicitly prohibited religious deities and figures are Hindu, Jain, and Sikh. By including only Hindu, Sikh, and Jain names in the official guidance of prohibited marks, India may also project a certain vision of Indian identity in line with the “pseudo-secularism” and Hindutva ideology espoused by Modi and the BJP, which has its roots from the religious tension harbored from the partition between India and Pakistan.

 

The author notes that marks containing “Allah” are, however, apparently routinely refused.

asterisk alone makes front of package claims ambiguous

Wong v. Iovate Health Sciences U.S.A. Inc., 2025 WL 821451, No. 2:24-cv-00901-DAD-CKD

(E.D. Cal. Mar. 14, 2025)

Is an asterisk on the front of a package a get-out-of-jail-free card for false advertising? If the disclosure doesn’t flatly contradict the claim, at least, maybe it is. (I would think that evidence of what reasonable consumers thought they might learn from the asterisk is quite relevant for that—if they didn’t realize they needed to consult the qualification, then they could still be deceived—but that’s not what this court holds, even though there are allegations that other marketplace participants advertise differently and less deceptively.)

front and back panels from complaint

Wong bought “100% Mass Gainer,” a dietary supplement in the form of a protein powder, which stated that the supplement provided 60 grams of protein per serving. But, without adding milk, the supplement contained only 44 grams of protein per serving rather than 60 grams. The rest of the product line also has fewer grams of protein in a serving than what is stated on the front label of the packaging because they all require the consumer to add some quantity of milk. “Other protein powders not produced by defendant have packaging that prominently advertises the amount of protein contained within a serving of the powder, but only include the protein content from the powder itself.”

There’s a disclaimer that the protein content assumes the addition of milk, “though those disclaimers and the associated asterisk symbols appear in small font on the front of the packaging.” [NB: I think only the asterisks appear on the front, according to the rest of the opinion and to the images.] On the back, “the protein content is reduced below the advertised amount appearing on the front of the packaging when the powders are mixed with water instead.” Wong brought the usual California statutory claims.

The court dismissed claims for injunctive relief, but not equitable relief under the FAL and UCL. The court accepted the idea that the pleading standard for seeking equitable relief is “minimal.” “[I]f a plaintiff pleads that she lacks an adequate legal remedy, Sonner will rarely (if ever) require more this early in the case.” Wong alleged that equitable relief is more “prompt and certain and in other ways efficient” than an award of damages, given that “equitable restitution can justify an award of greater relief than damages and is governed by a different standard of proof that allows the award of restitution even if a plaintiff cannot adduce evidence to support an award of damages.” That was enough.

Still, a reasonable consumer would not have been deceived, despite the large font size representation of the products’ protein content. The asterisk itself made the protein claim “ambiguous” to a reasonable consumer, which ambiguity could then be cleared up by reading the back label. “Even before reading the back label, the presence of an asterisk alone puts a consumer on notice that there are qualifications or caveats ….” This strikes me as a license to cheat.

discovery rule applies to false "reference price" allegations at outlet stores

Clark v. Eddie Bauer LLC, --- F.Supp.3d ----, 2025 WL 814924, No. 2:20-cv-01106-RAJ (W.D. Wash. Mar. 12, 2025)

A good choice for publication given that the opinion addresses (and rejects) some arguments I haven't seen before. Clark sued Eddie Bauer under Oregon’s Unlawful Trade Practices Act for using purportedly false and misleading tagged list prices, aka reference prices, on the garments sold at Eddie Bauer’s outlet stores. A previous district court decision found the claim time-barred, even though Eddie Bauer’s policy change of using the phrase “comparable value” on its sales tags for garments as opposed to a reference price based on the garment’s claimed fictitious full retail price violated the UTPA, “as Eddie Bauer must provide the origin of any such reference price.” On appeal, the Ninth Circuit certified a question to the Oregon Supreme Court: whether a consumer suffers an ascertainable loss under the UTPA when the consumer purchased a product that she would not have purchased at that price but for a violation of the UTPA if the violation arises “from a representation about the product’s price, comparative price, or price history, but not about the character or quality of the product itself.” That court said yes, recognizing Clark’s “purchase price theory,” holding that “when a person acts in response to the deception by spending money that the person would not otherwise have spent, the person has been injured to the extent of the purchase price as a result of that deception.” Clark v. Eddie Bauer, LLC, 532 P.3d 880 (2023).

The Ninth Circuit subsequently accepted Clark’s standing and ruled that she could seek injunctive relief against Eddie Bauer’s ongoing falsely discounted prices, despite the new use of the term “comparable value.” It also held that monetary damages for past harms was not an adequate legal remedy for Clark’s future harm and granted Clark leave to amend her complaint is appropriate so she can explain the circumstances associated with her discovery of Eddie Bauer’s advertising scheme. The amended complaint described Clark’s “unearthing of the advertising scheme in 2020 after finding the law firm’s website describing Eddie Bauer’s unlawful practices.” (In a footnote, the court declined Eddie Bauer’s invitation to impute counsel’s knowledge of the scheme to Clark herself.)

The court agreed that, for purposes of a motion to dismiss, Clark had pled that the discovery rule applied to toll her claim. Oregon’s UTPA provides that a party must commence a lawsuit “within one year after the discovery of the unlawful method, act, or practice.” The statute of limitations begins to run when the plaintiff “knows or should have known of the allegedly unlawful conduct.” And it is an objective standard: “how a reasonable person of ordinary prudence would have acted in the same or a similar situation.”

In Oregon, a plaintiff must have had sufficient knowledge to “excite attention and put a party upon his guard or call for an inquiry notice.” In addition, “it must also appear that a reasonably diligent inquiry would disclose the fraud.” “Application of the discovery rule presents a factual question for determination by a jury unless the only conclusion that a jury could reach is that the plaintiff knew or should have known the critical facts at a specified time and did not file suit within the requisite time thereafter.”

Eddie Bauer argued that Clark knew or should have known of her case well over one year before she sued in July 2020 because “her experience using the products that she bought ... provided enough information for her to conclude before July 2019 that she had been misled as to the value of the items she purchased.” They also posit that when she bought the items, she knew the reference prices, and she “apparently used the products sufficiently to gauge their quality and value.”

The court found this to be nonsense: As Clark argued, “[t]he only way for a person to know that Eddie Bauer’s advertised discounts were false is for the person to know Eddie Bauer’s true historical selling prices for the products he or she purchased.” “The Court struggles to find a correlation between a consumer wearing an item of clothing and the same consumer somehow knowing the item’s regular selling price or worth merely because she wears it.” It is not the case that, “when a reasonable consumer wears an item, she learns facts that trigger suspicion of a discrepancy between a garment’s ticketed price and its regular selling price.”

Nor did it appear from the face of the complaint that Clark had a duty to conduct an investigation. She had no obligation to uncover a pricing scheme “by talking to her fellow consumers, to whom she has no relation.” Nor did the court accept that she could simply have asked Eddie Bauer for price information:

First, Plaintiff had no idea Eddie Bauer was engaging in an unfair trade practice at the time. Second, there is no evidence to show that its employees would know or have access to this information. These two considerations also do not factor in the employee’s state of mind, as an employee might be suspicious of such questions and feel obligated to protect her employer.

A person sometimes cannot discover a false advertising scheme “because, by design, its very nature is hidden and impossible for an ordinary consumer to discover.”

What about the argument that “Comparable Value” in an outlet context isn’t deceptive? It was plausibly reasonable for consumers to interpret that to mean “Eddie Bauer’s price for the identical item.” “Under Oregon’s UTPA, Eddie Bauer has an obligation to provide the origin of a reference price. It has not done so.”

As for standing to seek injunctive relief, the Ninth Circuit explained that Clark “will be harmed if, in the future, she is left to guess as to whether Eddie Bauer is providing a legitimate sale or not, and whether products are actually worth the amount that Eddie Bauer is representing.”

false claims of buying and "rebranding" a festival lead to disclosure/correction remedies

Nantucket Wine & Food Festival, LLC v. Gordon Companies, Inc., --- F.Supp.3d ----, No. 24-11640-LTS, 2024 WL 5442374 (D. Mass. Dec. 12, 2024)

Wild facts here.

Plaintiff NWF runs an annual, multi-day event on Nantucket called the Nantucket Wine & Food Festival “The Festival has been held annually—with the exception of a hiatus during the COVID-19 pandemic—since its founding as the Nantucket Wine Festival in 1997.” Recently, it’s been held over the course of five days encompassing the weekend in May between Mother’s Day and Memorial Day. NWF solicits “Luminaries”—experts and high-level presenters—and “Invitees”—other exhibitors, wineries, distributors, importers, and sponsors. The remaining attendees are “Guests,” who either purchase tickets to the various events or are invited by, for example, a sponsor. NWF works on the Festival year-round, with ticket sales typically commencing in November. Nancy Bean, with a partner, owns the rights to the Festival and is one of two permanent staffers; she’s the majority owner.

David Gordon is the president and chief executive officer of the Gordon Companies, a regional liquor-and-wine retail-and-distribution business based in Waltham, Massachusetts. He approached Bean about potentially investing in NWF in 2021. Discussions continued over two years, and Gordon provided logistical, financial, and other assistance to Bean. “Principally, Gordon furnished Bean with an attorney, defendant Todd Goldberg, who had previously done work for the Gordon Companies, to help Bean buy out her original partner,” a transaction completed in 2022, though a small percentage is still owned by a third party. The Gordon Companies also extended to NWF a loan of approximately $55,000, and Gordon gained access to financial and other sensitive information relating to NWF.

NWF and the White Elephant resort agreed that White Elephant would be the exclusive “Host Hotel” of the 2024 Festival, reserving to NWF the exclusive rights to its name and logo. But, as the 2024 Festival approached, Bean broke off negotiations for a Gordon Companies investment in NWF. Gordon and Bean executed a release agreeing that NWF’s $55,000 debt to the Gordon Companies would be paid off via sponsorship rights at the 2024 Festival. The Festival occurred as planned, and Bean posted on NWF’s website a save-the-date for the 2025 Festival, marking the same weekend, May 14 to May 18, 2025, as well as a similar Instagram post.

Then, mid-June, 2024, the Gordon Companies issued statements announcing the Gordon Companies’ plans for the 2025 Nantucket Food and Wine Experience. An email announcement sent to “a cultivated list of industry professionals, including wine vendors, chefs and restaurant owners” stated, in relevant part: “The Gordon Companies is thrilled to announce that we have partnered with White Elephant Resorts to present the newly branded Nantucket Food And Wine Experience. Under new guidance, this rebranded event will take place on Nantucket from Wednesday, May 14th through Sunday, May 18, 2025. This extraordinary celebration will offer a revitalized experience featuring the world’s top vineyards, distilleries, and culinary minds.”

Another email went to the Gordon Companies’ customer list: “The Gordon Companies Purchases Nantucket Food and Wine Experience.” It read in relevant part: “The Gordon Companies have partnered with the iconic White Elephant Resorts to present the newly branded Nantucket Food And Wine Experience. Under this new partnership, one of the nation’s longest-running food and wine events will take place on Nantucket from Wednesday, May 14th through Sunday, May 18, 2025.”

The Gordon Companies also sent a press release to at least fifteen media outlets, including the Boston Globe, Boston Common Magazine, Wine Spectator, and Forbes: “The Gordon Companies Partner with The White Elephant to Present a Newly Branded Nantucket Food & Wine Experience.” A subhead read: “One of the nation’s longest running food and wine events returns to Nantucket on May 14–18, 2025.” Relevant bits included:

The Gordon Companies ... and White Elephant Resorts are thrilled to announce their partnership for a newly branded Nantucket Food & Wine Experience in 2025.... David Gordon, CEO of The Gordon Companies, notes, “We are excited to introduce the newly rebranded Nantucket Food & Wine Experience to the loyal guests who have enjoyed this celebratory time on the island for many years.” … Khaled Hashem, President of White Elephant Resorts, adds, “We are honored that our harborside hotel will continue to serve as the official host for this dynamic partnership with The Gordon Companies. We look forward to carrying on the tradition of providing food and wine excellence for locals and visitors alike on beautiful Nantucket.”

A similar press release went to industry media outlets such as BevNet/Nosh, Wine Industry Advisor, Kane’s Beverage News Daily, Beverage Dynamics, and Wine Business: “Prominent New England Wine and Spirits Retailer Purchases Nantucket Food & Wine Experience.” Its subhead was: “Gordon’s Fine Wine Acquires Ownership Stake in One of the Nation’s Longest-Running Food and Wine Events.” In relevant part, it said:

The Gordon Companies … have acquired the ownership rights to the Nantucket Food & Wine Experience (previously known as the Nantucket Wine & Food Festival), one of the longest running food and wine events in the U.S. The rebranded event … will take place on the island from Wednesday, May 14 through Sunday, May 18, 2025 …. “This longstanding event is an important part of Nantucket’s rich history, not to mention a significant annual driver of tourism and local pride,” says David Gordon, CEO of The Gordon Companies. “We’re excited to introduce the newly rebranded Nantucket Food & Wine Experience, and we’re especially honored to be one of the only fine wine and spirits retailers in the country to own and present a festival of this size and prominence.”

Both Gordon and White Elephant had issues with Bean—the former believing that Bean would never bring him on as a co-owner as he’d hoped, the latter because of Bean’s “organization and planning and time management.” Thus, they’d planned a new event for a couple of months, including nantucketfoodandwine.com. The person who sold them that domain name offered Gordon a list of domains including the word “festival” or “fest,” but Gordon replied, “[w]e need to use experience not festival (for now).”

After the four statements went out, Gordon quickly realized that there was a bit of a problem, and emailed “[t]he subject of our email that went out said Purchases Nantucket Food and Wine, if we can I’d like to stick with ‘The Gordon Companies Partner with The White Elephant to Present a Newly Branded Nantucket Food & Wine Experience.” Meanwhile, Bean’s contemporaneous reaction was: “I am inundated with texts and calls—everyone thinks I sold NWF to him for $$$$$$$.” NWF also received “frantic inquiries from Boston Common Magazine regarding the sale and their astonishment of it given they had just been with us on-site and were in the midst of writing all of our post-festival acclaims and reviews and pieces.”

The next day, the Gordon Companies sent out a clarification to its industry email (“Gordons has not purchased any festival. We have partnered with the White Elephant in a multiyear deal to produce a new event. In no way are we affiliated with any other event or festival on Nantucket. Sorry for any confusion this may have caused.”) and contacted industry publications to remove from the Industry Release the statement that the Experience had been “previously known as the Nantucket Wine & Food Festival.” But they didn’t send out corrective emails to the other recipients of the statements. Even after Gordon’s instruction not to use the word “purchase,” he responded to “[c]ongratulations to your purchase of the Nantucket Food and Wine Festival” without a correction.

Amy Baxter, Licensing Administrator at the Nantucket Police Department, met with Gordon and subsequently emailed a third party about “a change in ownership and management of the Wine Fest.” She then emailed Gordon: “[j]ust to confirm I should not be expecting Nancy to come at us to try and secure that weekend since you have a contract with White Elephant correct? I know that to be the case and I will be general in my answer but just reconfirming.” She then told a reporter from a local newspaper, “I do not anticipate competing festivals.”

Three days after the initial announcement, and two days after first contact from NWF’s lawyer, the Gordon Companies sent a correction to its customer list: “Gordon’s has not purchased, acquired, or rebranded the previously existing Nantucket Food & Wine Festival which has been operated by a still operating entity which is not affiliated with The Gordon Companies in any way. The Nantucket Food and Wine Experience is also not affiliated with the Nantucket Food & Wine Festival.” The Gordon parties succeeded in getting several industry publications to remove the parenthetical stating that the Experience was “previously known as the Nantucket Wine & Food Festival,” but didn’t send corrections to the general media release.

“In response to questions from several chefs regarding whether a sale had happened, Bean emailed all chefs who had participated in the 2024 Festival clarifying the situation and asking for their support.” She also contacted sommeliers, wine importers, and other constituents. The Boston Globe, the Newport Buzz, and the Nantucket Current all ran articles about the Festival and the Experience with quotes by Bean. Nonetheless, Bean testified, “many people remain under the impression that I either tried to sell the genuine festival or will sell the genuine festival” because they “find it hard to believe someone would lie so blatantly about purchasing a company unless there had been some agreement that I reneged or that belatedly fell apart.”

The Nantucket Select Board received applications from both sides for events during the same time and announced that tickets for these events should not be sold until the applications had been evaluated; the applications were pending as of the court’s decision.

Right before the PI hearing, plaintiffs dismissed White Elephant from the case, and White Elephant agreed that it wouldn’t host an event with the Gordon parties on the relevant weekend for the next two years. The Gordon Parties represented that they were in the process of withdrawing the permit applications they had filed to the Nantucket Select Board. So the Experience wasn’t going to happen in 2025, at least not on Nantucket. Thus, plaintiffs narrowed their request for preliminary relief, but still wanted defendants to be enjoined from disparagement and to be required to make corrective disclosures including a statement that their earlier statements were “false.” They also wanted prominent links on defendants’ websites to NWF’s own site. The court granted the corrective disclosure and website remedies, but not a general prohibition against disparagement.

The court relied on Massachusetts General Laws Chapter 93A and did not analyze the claims as Lanham Act false advertising. Chapter 93A grants a private right of action to any business harmed by another business’s “unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.”

The court found that defendants’ statements constituted commercial disparagement, which requires proof that a defendant: (1) published a false statement to a person other than the plaintiff; (2) “of and concerning” the plaintiff’s products or services; (3) with knowledge of the statement’s falsity or with reckless disregard of its truth or falsity; (4) where pecuniary harm to the plaintiff’s interests was intended or foreseeable; and (5) such publication resulted in special damages in the form of pecuniary loss.

The court found that at least three of the widely disseminated messages were false, implying that that the Gordon Companies had purchased and the long-running Festival and was “rebranding” it as the Experience. (Although this probably counts as falsity by necessary implication, relying on 93A avoids any need to nitpick about explicitly false v. implicitly false claims under the Lanham Act, since state laws generally don’t have the same doctrinal distinctions.) The statements were plainly of and concerning plaintiffs, and they were made with knowledge/recklessness as to their falsity.

Harm intended or foreseeable: “Stating that a competitor no longer operates independently could foreseeably cause that competitor to lose business.” “[W]here a false statement has been ‘widely disseminated,’ and it would be impossible to identify particular customers who chose not to purchase a plaintiff’s goods or services,” a plaintiff can show special damages “by circumstantial evidence showing that the loss [of the market] has in fact occurred, and eliminating other causes.” That was also sufficiently shown with evidence of confusion, including among the Nantucket town government, preventing plaintiffs from selling tickets to the 2025 Festival starting in November, as they normally would.

Plaintiffs also showed irreparable harm to their goodwill and reputation. “By its very nature injury to goodwill and reputation is not easily measured or fully compensable in damages. Accordingly, this kind of harm is often held to be irreparable.”

The existing corrective efforts were inadequate: they “did not admit or explain the falsity of the original statement.” Indeed, the court found their language obfuscatory, with the potential to leave readers believing that the NWF no longer existed: “Gordon’s has not purchased, acquired, or rebranded the previously existing Nantucket Food & Wine Festival which has been operated by a still operating entity which is not affiliated with The Gordon Companies in any way.” Plus, “while the original Customer Email went out as its own message, the corrections went out in small print above ads for the Gordon Companies.”

Defendants argued that confusion had already dissipated due to plaintiffs’ efforts.  “However, just because some locals and insiders now know that the Gordon Parties did not purchase the Festival, that does not mean that all confusion has dissipated. Many Festival devotees may still find it difficult to trust Bean, as she has avowed. Other, more casual participants may not be so plugged in and so may, having seen one of the Gordon Parties’ statements, still believe the Festival is no more.”

Still, plaintiffs couldn’t identify any actionable, false statements made by the Gordon Parties after July 1. Thus, the court denied their requires for an injunction against “false disparaging statements about either of the Plaintiffs, the ownership of the Nantucket Wine & Food Festival, or its operations.”

However, additional corrective disclosures, including prominent placement on defendant’s nantucketfoodandwine.com website with links to plaintiffs’ site, were justified. The disclosure is not the kind of thing you want to have to send out:

Pursuant to an Order of the U.S. District Court …, the Gordon Companies hereby discloses that, in June of this year, the Gordon Companies sent out false press releases and emails stating that Gordon Companies had acquired and rebranded the Nantucket Wine & Food Festival under new management. There was never any acquisition, rebranding, or new management of the Nantucket Wine & Food Festival. The Gordon Companies is not planning any festival for May 2025. The long-running Nantucket Wine & Food Festival continues to operate. As previously announced by the Nantucket Wine & Food Festival, the annual tradition will continue May 14 – 18, 2025, under the leadership of its longtime Executive Director Nancy Bean. For more information, please visit www.nantucketwinefestival.com.

Defendants had to post the disclosure in large bold font on the home page of the website at nantucketfoodandwine.com and foodandwinenantucket.com, with no other text or links on the page, but with the reference to www.nantucketwinefestival.com at the end of the disclosure hyperlinked.