Rogers v. Grimaldi lives on, at least for work content

Of note because the lawsuit was brought at all, suggesting that trademark owners are willing to try to roll back any First Amendment protections for noncommercial speech.

Pepperdine University v. Netflix, Inc., No. 2:25-cv-01429-CV (ADSx), 2025 WL 632983 (C.D. Cal. Feb. 26, 2025)

Pepperdine sued Netflix for Lanham Act trademark infringement, contributory infringement, dilution, false advertising, and coordinate state claims based on Netflix’s Running Point series, which depicts a team known as the Waves. The court denies a TRO because Rogers is still good law, at least for things that aren’t titles.

Pepperdine’s athletic teams have been known as the “Waves” since the University’s founding in 1937, and it has registrations for WAVES marks. 

examples from complaint

Running Point was scheduled for release yesterday. It’s an “original comedic television series” created by Mindy Kaling and Warner Bros. about a “very dysfunctional family” who owns and manages a “high-profile, multi-billion-dollar basketball franchise and arguably the most famous professional team in all of sports, the Los Angeles Waves.” Pepperdine alleged that the fictional Los Angeles Waves team uses the word “WAVES” with a “strikingly similar font” and similar colors. An image in the Running Point trailer allegedly includes a framed jersey with the number “37,” similar to that worn by Pepperdine’s mascot and denoting Pepperdine’s founding year. Pepperdine also alleged that the story depicted in Running Point does not align with Pepperdine’s values.

comparisons from complaint

Jack Daniels cited Mattel, Inc. v. MCA Records, Inc., 296 F.3d 894 (2002) (Barbie Girl) and University of Ala. Bd. of Trustees v. New Life Art, Inc., 683 F.3d 1266 (2012) (sports art), and Louis Vuitton Malletier S. A. v. Warner Bros. Entertainment Inc., 868 F. Supp. 2d 172 (S.D.N.Y. 2012) (use of “Louis Vuitton” to describe luggage in movie) with approval as non-trademark uses.  

Post-Jack Daniels cases have also applied Rogers to non-title uses. Haas Automation, Inc. v. Steiner, No. 24-CV-03682-AB-JC, 2024 WL 4440914 (C.D. Cal. Sept. 25, 2024) (use of mark on book’s front cover, back cover, and on several pages, but mark was “not used to tell the consumer who published the book or the source of the book”; mark told the consumer what the book was about and who the author worked for); JTH Tax LLC d/b/a Liberty Tax v. AMC Networks Inc., 694 F. Supp. 3d 315 (S.D.N.Y. 2023) (use of fictional tax preparation business name in Better Call Saul).

Photos, including on back cover, from Guenther Steiner's book 

Surviving to Drive: A Year Inside Formula 1, recounting his experiences as Team Principal of the Haas F1 Team 

This is distinct from cases like Punchbowl, which involved use in a business name, or Mar Vista Entertainment, LLC v. THQ Nordic AB, No. 2:23-cv-06924-MEMF (SSC), 2024 WL 3468933 (C.D. Cal. July 8, 2024) (rejecting application of Rogers in a dispute between the owner of the rights to the Alone in the Dark videogame franchise, and entities who released a horror film titled Alone in the Dark).

The court found no use of “Waves” or related indicia as source indicator. The “product” at issue was Running Point, the series, and defendants didn’t suggest Pepperdine was the source. The title cards confirmed that Netflix, Warner Bros., and Mindy Kaling are responsible for the series. They didn’t use Waves in the title (sigh), and, there was an express statement that the series is a fictional work, and “[a]ny similarity to any actual persons ... events, firms and institutions or other entities, is coincidental and unintentional.” “Ultimately, on this record, there is no evidence that any viewer would be misled regarding the source of the series.” (That is not a precondition for Rogers applying, though the court treats it as such; any such precondition makes Rogers irrelevant, at least to source confusion.)

complaint's social media "evidence"

The use of Waves was artistically relevant: it “was chosen as a nod to the real-life Lakers, whose team name also alludes to a body of water.” It also evokes the Los Angeles area and the “Southern California ‘vibe,’ associated with beaches, sun, surfing, and waves.” Nor was there any explicit misleadingness about source. “Neither Pepperdine nor the Waves Marks appear in the title cards for the series. There is therefore no implicit, let alone explicit statement that misleads the consumer as to the source of the series.”

Of note, not all is lost for Rogers for titles: Down to Earth Organics, LLC v. Efron, No. 22-CV-06218 (NSR), 2024 WL 1376532 (S.D.N.Y. Mar. 31, 2024), applied Rogers to the use Netflix and Zac Efron of the phrase “Down to Earth” for the documentary series entitled Down to Earth with Zac Efron. That court found that the defendants were “undoubtedly using ‘Down to Earth’ simply to identify the subject matter and tone of the Series.”

5th Circuit discounts confusion caused by overlap in commonly used arbitrary word

Rampart Resources, Inc. v. Rampart/Wurth Holding, Inc., No. 24-30111, 2025 WL 586820 (5^th Cir. Feb. 24, 2025)

District court’s denial of preliminary injunction discussed here. Rampart Resources provides real estate and property management services in Louisiana, Texas, Arkansas, Mississippi, Alabama, West Virginia, and Ohio. Its services relate to right-of-way acquisition, servitudes, real estate brokerage, permitting, and property management—across several industries, including utilities, oil and gas, renewable energy, and public works. It has a 2018 registration for those services for “the stylized wording ‘RAMPART RESOURCES’ to the right of a graphic image of a road going into the horizon, with a road curving off to the right and left of the main road.” “To be clear, Rampart Resources does not have a trademark for the word ‘Rampart’ or ‘Rampart Resources.’”

Rampart/Wurth offers commercial and residential property management services throughout Louisiana, Texas, Mississippi, and Alabama. Its services cover multifamily, single-family, office, retail, and receiver/keeper properties; it uses different logos to refer to Rampart Multifamily Management and Rampart Commercial Management.

Rampart Resources found out about Rampart/Wurth’s recent adoption of that name change in September 2023 when a FedEx driver told its president that “another Rampart” had just opened in Baton Rouge and that she had confused the two businesses.

Rampart Resources received at least seven telephone calls in September and October 2023 from individuals inquiring about rent collection, leasing units, Section 8 housing vouchers, lease payments, and refunding deposits. After being told they must have the wrong number, customers responded, “this is the home office of Rampart, correct?” and “this is the number I got for Rampart.”

On appeal, the standard was abuse of discretion. “As to each element of the district court’s preliminary-injunction analysis ... the district court’s findings of fact are subject to a clearly-erroneous standard of review, while conclusions of law are subject to broad review and will be reversed if incorrect.” Here, the appeal failed on likely success on the merits.

The district court found that the type of mark/mark strength, similarity of products/services, and evidence of actual confusion weighed in favor of likely confusion; similarity of marks, consumer overlap, and degree of care of potential purchasers weighed against; and advertising media/defendant’s intent were neutral.

Rampart Resources argued that mark strength should weigh heavily in its favor, not just slightly as the district court held. Although the mark was arbitrary, and although Rampart Resources had used it for 34 years, Rampart/Wurth provided evidence of widespread use of the key portion (Rampart). This was not clear error.

Mark similarity: “It is visually apparent that all aspects of the marks (font, color, design, etc.) are different except the use of the singular word ‘Rampart.’ The common use of the word ‘Rampart’ does not make the marks similar when considering ‘the total effect of designation.’”

Similarity of services: the district court found only a minor overlap and didn’t weigh it heavily in Rampart Resources’ favor. “The district court correctly concluded that while both parties operate broadly in the real estate industry, there is not substantial overlap between the services offered.”

But, when there isn’t direct competition, “the confusion at issue is one of sponsorship, affiliation, or connection.” The critical question, the court of appeals said, is “whether the consuming public would believe that the natural tendency of [Rampart Resources]” would be “to expand into the [property management industry].” “Here, the district court found that it would be reasonable for a customer of Rampart Resources to believe it was making a foray into property management, since they have offered property management services in the past and represent that they are still capable of doing so.” Weighing this factor in favor of a likelihood of confusion, but only somewhat, not heavily, was plausible based on the record.

Advertising media: “Both parties stated that word of mouth advertising is perhaps their strongest form of advertising…. Although both parties represented they use face-to-face communications and website advertising, the district court is correct that the evidence presented for this digit is scant.” Finding the factor neutral was not an abuse of discretion.

Actual confusion: While swayed purchases are not necessary, “more is required when the confusion did not or cannot sway purchases.”  “[N]ot all confusion counts: evidence of actual confusion must show ‘more than a fleeting mix-up of names’; rather it must show that ‘[t]he confusion was caused by the trademarks employed and it swayed consumer purchases.’ ” Here, seven misdirected phone calls and the FedEx driver’s confusion was not weighty when evaluated in light of “the high volume of business conducted by the parties and the fact that there was no evidence that any of Rampart Resources’ customers had erroneously contacted Rampart/Wurth.” The court of appeals agreed.

Interestingly, the court found it “[m]ost important[]” that

there is no evidence that any of the eight incidents of actual confusion were related to Rampart/Wurth’s logo or conduct. None of Rampart Resources’ anecdotal evidence shows that parties were confused by the trademarks at issue in this case. Rampart Resources does not have a trademark on the word “Rampart.” Our court has rejected strictly anecdotal evidence where “the proponent did not show that ‘a misleading representation by [the defendant], as opposed to some other source, caused a likelihood of confusion.’ ”

[This is a covert way of saying that, if the confusion was caused by the overlap in “Rampart,” too bad for plaintiff—a purely empirical vision of trademark would say that if the confusion was caused by the overlap, then plaintiff’s rights would extend past its registration to other uses. But there is never a purely empirical account of trademark, much as courts often pretend otherwise. Also: How insulted do you think the Fifth Circuit would be to hear that this is a very European way of looking at it?]

Still, it wasn’t abuse of discretion to weigh actual confusion slightly in the plaintiff’s favor, even though the only evidence showed a “fleeting mix-up of names,” and not that any party was “actual[ly] confus[ed] about the origin of the parties’ products.”

There was no clear error in weighing the factors.  The district court found that the dissimilarity of the marks, as well as the sophistication of the clients weighed most heavily against a finding of likelihood of confusion. Given that each digit “may weigh differently from case to case,” that wasn’t clear error.

 

 

 

pandemic education shutdowns allow unjust enrichment, not contract or false advertising claims

Yodice v. Touro College & Univ. Sys., 2025 WL 579957, No. 21cv2026 (DLC) (S.D.N.Y. Feb. 21, 2025)

Yodice sued Touro for reimbursement of tuition and fees he paid during the Spring 2020 semester, when Touro’s campuses were closed due to the COVID-19 pandemic. On remand, the court dismisses some of the claims. Touro has nearly 20,000 students across the United States and three other countries. The Touro system includes an online institution named Touro University Worldwide (TUW), which offers undergraduate and graduate degree programs.

Yodice alleged that TCDM markets various aspects of the on-campus student experience to the public. For example, its dental website says that students begin in the “dental simulation laboratory” and then “treat patients in our modern clinic.” The website also emphasizes the setting of TCDM’s Hudson Valley campus, which “attracts talented students who prefer a suburban lifestyle with easy access to the New York metropolitan area.” The campus’s location, the website explains, “provides students with numerous career, residency, clinical, and internship opportunities.” And various opportunities to work with local institutions “offer a chance for students to put their learning into practice, conduct research, or interact with patients and professionals in preparation for their future careers.”

Obviously, that didn’t happen through 2020. “Yodice left campus sometime in March. He did not have access to any of Touro’s facilities for the rest of the semester, and he was unable to experience the in-person academic, social, and professional interactions he would have had if not for the pandemic. Touro did not refund the tuition or fees paid by Yodice and other students who were unable to participate in in-person instruction or campus life for much of the Spring 2020 semester.”

Yodice alleged breach of contract, unjust enrichment, and consumer protection false advertising claims. The Second Circuit affirmed dismissal of his contract/unjust enrichment claims based on fees he paid, but reversed on tuition, concluding that the plaintiff “plausibly stated a claim for breach of an implied contract to recover tuition.” It likewise remanded for further consideration of the GBL false advertising claims.

The court here dismissed the contract and GBL claims, but allowed unjust enrichment to proceed as to those who paid tuition for the Spring 2020 semester at Yodice’s dental college.

Limiting the claim to that group: Yodice didn’t sufficiently allege that the other Touro schools were similar: “The FAC itself emphasizes the representations by specific Touro schools as to the quality of the on-campus experiences they offered. The only characteristic that the dozens of Touro schools around the world share is affiliation with the same corporate entity. And Yodice provides no reason to think he has anything in common with most of the class he seeks to represent except that they were, like him, students during the pandemic.”

Yodice argued that Touro’s class standing arguments would be properly handled in assessing the adequacy and commonality of the class representative and class pursuant to Rule 23(a), but “the independent requirement of class standing requires a connection between his claims and those of the class he seeks to represent even at the motion to dismiss stage.”

Breach of contract: dismissed because performance was impossible. “There is no dispute that holding in-person classes and other functions, as Yodice alleges was promised, would have been illegal.”

But that did mean that Yodice could proceed with his unjust enrichment claim seeking a prorated refund of the tuition he paid at the beginning of the semester. “To recover under a theory of unjust enrichment under New York law, a litigant must show that (1) the other party was enriched, (2) at that party’s expense, and (3) that it is against equity and good conscience to permit the other party to retain what is sought to be recovered.” He stated a claim by alleging Touro

retained his tuition even after providing a less valuable and less costly service than was expected when the parties entered their relationship. The FAC alleges essentially that the tuition was conferred under a mistake of fact -- that is, that in-person instruction would be possible. It plausibly alleges that Touro spent less money operating TCDM remotely than it would have on a normal, open physical campus. Whether equity and good conscience require a partial refund cannot be decided at this stage, but Yodice has sufficiently alleged that they do.

Unjust enrichment may be available where one party’s duty to perform is unenforceable due to impossibility. In Goldberg v. Pace Univ., 88 F.4th 204 (2d Cir. 2023), a similar unjust enrichment claim failed because an enforceable force majeure provision in the contract limited the defendant’s duties to provide in-person instruction. There, the plaintiff was attempting to circumvent the terms of the parties’ contract by alleging unjust enrichment. But here, the plaintiff has pled that Touro had a contractual duty to provide in-person instruction, but its performance was excused by the doctrine of impossibility. Fault is not necessary for “circumstances [to] create an equitable obligation running from the defendant to the plaintiff.”

GBL: Usually, the GBL is broader than contract law. But there was no false advertising here because no reasonable person would think that Touro had promised to provide in-person instruction regardless of what happened. “Yodice has not plausibly alleged that Touro’s representation of an on-campus experience was deceptive, or that a reasonable consumer would have understood it to mean that in-person instruction would continue even in a pandemic.” In summary, “Sections 34 9 and 350 are far-reaching, but they do not require businesses to append ‘unless impossible’ to the end of every advertisement.” Nor could this be characterized as a materially deceptive omission; there was no allegation that “Touro possessed some piece of material information at the beginning of the Spring 2020 semester unknown to its students that would have affected prospective students’ decision to attend the university.”

disgorging a CEO's salary, then trebling the amount?

Multiple Energy Technologies, LLC v. Casden, 2025 WL 579641, № 2:21-cv-01149-ODW (RAOx) (C.D. Cal. Feb. 21, 2025)

I just posted about courts’ increasing openness to disgorgement. Here, the court trebles an award in a way that seems definitionally disconnected to the amount of defendant’s profits from false advertising—three times his total salary—in ways that seem to me inconsistent with Dewberry. I wonder if a motion for reconsideration is justified.

Plaintiff MET sued an individual, Casden, for false advertising and tortious interference with contractual relations. MET developed a patented bioceramic infrared material; Casden is the co-founder and CEO of Hologenix, which made a competing product. MET sued Hologenix for false advertising, and they settled in 2020. Casden negotiated and signed the Settlement Agreement on behalf of Hologenix. The settlement involved agreed payments and a permanent injunction against Hologenix barring it from “stat[ing] or suggest[ing]” that the Food and Drug Administration (“FDA”) “approved” Celliant or “made a ‘determination’ ” that Celliant promoted any benefits.

Afterwards, Casden made or approved statements about Celliant that violated the stipulated permanent injunction. And, the day before Hologenix was scheduled to pay $1,400,000 to MET pursuant to the Settlement Agreement, Hologenix filed for Chapter 11 bankruptcy. As a result of the bankruptcy proceedings, MET returned $100,000 it had received from Hologenix. MET then sued Casden for Lanham Act and state law false advertising violations, as well as tortious interference contractual relations. The court found that Casden acted to advance his personal interests when he tortiously interfered with the settlement agreement, thus foreclosing any agency immunity defense. The jury returned an advisory verdict in MET’s favor on its tortious interference cause of action with an award of $1 in nominal damages and a verdict in MET’s favor on its Lanham Act false advertising cause of action, similarly awarding $1 in nominal damages.

The court then awarded MET $2.5 million in damages on the tortious interference claim, and found that, on the Lanham Act claim, MET was entitled to disgorgement of Casden’s profits, treble damages, and attorneys’ fees. “[T]he jury viewed exhibits that reflect the statements Casden authorized or made himself, and they heard testimony from Casden acknowledging his discovery admissions that those statements were not true. This evidence is sufficient such that a reasonable jury could find the statements literally false.”

The court found that Casden’s salary could be disgorged as profits, and that this award could be trebled, because it had the discretion to award up to three times the “financial benefit [Casden] received because of the [false] advertising.” I don’t think that’s true if there’s no uncertainty about the amount of financial benefit received, because trebling the damages just because the deception was willful is a penalty, which disgorgement under the Lanham Act is not supposed to be.

The court determined that Casden’s annual salary of $300,000 since 2019 should be disgorged, because it was undisputed that the only product Hologenix sold was Celliant. And “the deliberate and willful nature of Casden’s conduct warranted trebling the award of Casden’s financial benefit.” The court found that it was not awarding a “penalty” or “windfall.” “Rather, the trebled amount is the amount the Court found to be ‘just, according to the circumstances of the case.’” But if it’s only just because Casden is bad, how is that not a penalty?

MET was also awarded nearly $600,000 in attorneys’ fees.

FDA preclusion doesn't work as often after Pom Wonderful (or Loper Bright?)

Pacira BioSciences, Inc. v. Ventis Pharma, Inc., 2025 WL 576549, No. 2:24-cv-07554-MRA-RAO, (C.D. Cal. Jan. 17, 2025)

Pacira alleged that its competitor (here Ventis) violated the Lanham Act by making claims about its drugs relating to (1) exemption from FDA approval, (2) FDA approval, and (3) comparative superiority, safety, and efficacy.

The FDA doesn’t require preapproval of drugs compounded by registered “outsourcing facilities, aka the “503B exemption.” The exemption requires that the “bulk drug substances” in the compounded drug must be on the FDA’s Drug Shortage List or Clinical Need List.

Pacira makes EXPAREL, an FDA-approved injectable drug product used to manage and reduce post-surgical pain whose active ingredient is bupivacaine. Pacira allegedly uses a a proprietary multivesicular liposome (pMVL) technology and created a new category of drugs known as the “Post-Surgical Non-Opioid Regional Analgesia,” in which EXPAREL is the leading product.

Ventis makes, inter alia, Enduracaine and Endura-KT, which consist of three bulk drug substances: (1) epinephrine, (2) tetracaine, and (3) lidocaine. Enduracaine and Endura-KT have not been approved by the FDA. Below the header “FDA Disclaimer,” Ventis’ website states that under the FDCA, human drug products compounded by an outsourcing facility “are exempt from the following three sections of the [FDCA] section 505 (21 U.S.C. 355).” In an advertisement in Anesthesiology News, Ventis claimed that Endura-KT is “produced following cGMP manufacturing guidelines under 503B outsourcing standards overseen by the FDA.” However, none of the three component bulk drug substances are on the CNL. Lidocaine and epinephrine are on the DSL, but not tetracaine, and it is not approved for use as an injection.

Ventis also allegedly implied FDA approval, as in a white paper on its website describing Endura-KT as an “off-label use version of Enduracaine.” “Off-label use” is allegedly generally recognized as the use of an FDA-approved product for an unapproved use. Ventis advertised in Anesthesiology News that Endura-KT is “made from a combination of currently FDA approved USP products.” But the FDA allegedly does not oversee production of Endura-KT, and it has not approved the use of bulk drug substances as combined in Endura-KT.

Ventis also advertised Enduracaine and Endura-KT as comparable to, and replacements for, EXPAREL. It marketed Endura-KT as “safe and acceptable for use,” advertised that Endura-KT provides an “EXTENDED DURATION” of pain relief and that it is “Quick Onset – Long Lasting,” “Safe,” for “Pediatric Use,” and “Cost Effective.” It advertised that Endura-KT is “clinically significant over other commercially available products.” But Endura-KT has allegedly not been reviewed, been approved, or undergone any clinical trials to confirm its capabilities, efficacy, or safety.

Exemption-based statements: The court rejected defendant’s preclusion argument under Pom Wonderful. Although the Ninth Circuit previously did not allow Lanham Act claims that required significant interpretation of the FDCA, the court here relied more heavily on the general statements in Pom Wonderful (and it’s hard not to imagine that the recent rejection of agency interpretive authority in Loper Bright is having an effect here too). Pom Wonderful characterized the FDCA as “designed primarily to protect the health and safety of the public at large” rather than to prevent false advertising.  The mere fact that “an agency enacted regulations that touch on similar subject matter but do not purport to displace [a] remedy [under the Lanham Act] or even implement the statute that is its source” cannot displace such a “well-established federal remedy.” That is because “[a]n agency may not reorder federal statutory rights without congressional authorization.” (Note that the issue here is not just regulations “touching on” similar subject matter, but actually defining that which is legal to produce and market.)

Anyway, as a result, “courts have adopted a general presumption that Lanham Act claims pertaining to FDCA-regulated products are permissible and, often, desirable.” The Ninth Circuit’s decision in PhotoMedex, Inc. v. Irwin, 601 F.3d 919 (9th Cir. 2010), the court reasoned, did not clearly survive, so it wasn’t necessarily enough for preclusion that “the claim would require litigation of the alleged underlying FDCA violation in a circumstance where the FDA has not itself concluded that there was such a violation.” Regardless, even PhotoMedex said that it didn’t mean that “the Lanham Act can never support private party claims involving FDA approval or clearance of drugs or medical devices.” The Ninth Circuit said that, where an affirmative statement of FDA approval was required to market a product, “a Lanham Act claim could be pursued for injuries suffered by a competitor as a result of a false assertion that approval had been granted.”

Defendant argued that FDA policy allows for the compounding of tetracaine, and thus that allowing this claim to proceed would “clearly interfere” with the FDA’s policy judgment in that regard. It pointed to the FDA’s 2017 “Interim Policy on Compounding Using Bulk Drug Substances Under Section 503(b) of the [FDCA].” As to categories of drugs nominated for inclusion on the CNL, the FDA stated that “at this time [the] FDA does not intend to take action against an outsourcing facility for compounding a drug using a bulk drug substance that does not appear on the [CNL] and that is not used to compound a drug that appears on the [DSL] at the time of compounding, distribution, and dispensing,” provided certain conditions are met.

But that wasn’t enough. An FDA policy of non-enforcement was not equivalent to a finding that the compounding was “exempt.” “Under the plain terms of section 503B, the compounded bulk drug substance must appear on the CNL or DSL to qualify for exemption.” Indeed, the interim guidance “would seem to tacitly acknowledge that the compounding of a Category 1 substance does not yet satisfy the requirements for 503B exemption, only that the agency does not presently consider such conduct an enforcement priority.” And nonenforcement of the FDCA wasn’t relevant, given that the plaintiff “seeks to enforce the Lanham Act, not the FDCA or its regulations.” “If anything, the FDA’s non-enforcement cautions against preclusion of Plaintiff’s Lanham Act claim,” given the FDA’s limited resources. The court pointed to Pom Wonderful’s similar discussion of FDA nonenforcement:

Because the FDA acknowledges that it does not necessarily pursue enforcement measures regarding all objectionable labels, if Lanham Act claims were to be precluded then commercial interests—and indirectly the public at large—could be left with less effective protection in the food and beverage labeling realm than in many other, less regulated industries. It is unlikely that Congress intended the FDCA’s protection of health and safety to result in less policing of misleading food and beverage labels than in competitive markets for other products.

“This reasoning applies with added importance in the context of drug marketing.”

Plus, an FDA interim policy may “touch on similar subject matter” as a Lanham Act claim, but it “do[es] not purport to displace that remedy[.]” Nor is it even an “agency regulation[ ] with the force of law that purport[s] to bar other legal remedies.” The Interim Policy clearly states, “FDA’s guidance documents do not establish legally enforceable responsibilities. Instead, guidances describe the Agency’s current thinking on a topic and should be viewed only as recommendations.” Thus, this is not “a case where a lawsuit is undermining an agency judgment.”

As the First Circuit said in Azurity Pharmaceuticals, Inc. v. Edge Pharma, LLC, 45 F.4th 479 (1st Cir. 2022), involving similar statements, “the parties have identified no FDA regulation that governs the statements that outsourcing facilities may make in advertising—let alone a regulation that would risk subjecting [the defendant] to inconsistent obligations ....” Here, “[i]n claiming 503B exemption specifically, Ventis is representing that it complies with the statutory requirements. Even under PhotoMedex, determining the falsity of such statements does not ‘require litigation of the alleged underlying FDCA violation.’”

Was the statement non-actionable opinion?  The general rule is 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. Statements of opinion are not generally actionable under the Lanham Act.” But that didn’t make “exempt” a statement of opinion:

In advertising that its product is exempt from FDA approval under section 503B, Defendant is not interpreting the FDCA and related regulations. Given the unambiguous text of section 503B, “there is no interpretation necessary to determine” the conditions for establishing exemption under section 503B. Section 503B “plainly” provides that the bulk drug substances in the compounded drug must appear on either the CNL or DSL. By purportedly invoking 503B exemption, Defendant represents that it has satisfied these criteria. Yet, as Azurity observed, “one of these lists does not yet even exist, while there is no dispute that [Plaintiff] has plausibly alleged that the other list does not include the bulk drug substance in question.”

The FDA’s interim policy doesn’t purport to mean that section 503B “does not impose the condition that it plainly imposes with respect to the use of ‘bulk drug substances.’ ” Anyway, the opinion versus fact distinction was for a factfinder. (Both of these things can’t be true.)

Turning to allegedly approval-based statements, like “produced following cGMP manufacturing guidelines under 503B outsourcing standards overseen by the FDA,” “made from a combination of currently FDA approved USP products,” and “off-label use version of Enduracaine,” defendant argued that there was no false statement or implication of FDA approval.

Mylan Laboratories, Inc. v. Matkari, 7 F3d 1130 (4th Cir. 1993), rejected a theory that “the very act of placing a drug on the market, with standard package inserts often used for FDA-approved drugs, somehow implies (falsely) that the drug had been ‘properly approved by the FDA.’ ” Several district courts have relied on Mylan to hold more broadly that “[f]alse advertising claims based on allegations of implied governmental approval have not been allowed, for ‘the law does not impute representations of government approval ... in the absence of explicit claims.’ ” Here, though, the court found that plaintiff plausibly alleged that defendant’s description of Endura-KT as an “off-label” use of Enduracaine falsely implied that Enduracaine is FDA approved. It didn’t evaluate the other statements one way or another.

Comparison-based statements: Ventis allegedly falsely advertised its products as “superior to liposomal bupivacaine products like EXPAREL” and that its products are “equivalent or are otherwise substitutable.” An infographic on the site purported to summarize the findings of two studies, and stated in a footer that “[t]he preponderance of evidence fails to support the routine use of liposomal over plain bupivacaine.”

Defendant argued that this was nonactionable scientific opinion, under Pacira BioSciences, Inc. v. Am. Soc’y of Anesthesiologists, Inc., 63 F.4th 240 (3d Cir. 2023), which held that the studies summarized in the infographic were nonactionable opinion. But that conclusion didn’t insulate the infographic. First, unconvincingly, the court said that the Third Circuit was only dealing with trade libel, not Lanham Act claims. Second, the Third Circuit relied the context in which the statements were made: “a peer-reviewed journal for anesthesiology specialists.” But the infographic wasn’t an academic article, and the footer statement wasn’t attributed to either study. In publishing the infographic on its website, the defendant “los[t] the benefits that scholarly articles and scientific debate typically enjoy.”

What about “EXTENDED DURATION,” “Quick Onset,” “Long Lasting,” “Safe,” and “Cost Effective,” and “safe and acceptable for use”? Are they fact or puffery? Finally, the defendant won an argument: these were “generic adjectives without any specific, objectively verifiable measure.”

As to alleged comparative superiority/ “generic or substitutable” statements, plaintiff didn’t specifically identify where and when Ventis made those statements in advertising or promotion. A general statement that “Medications can only be ordered by healthcare providers when it is determined the product is clinically significant over other commercially available product” wasn’t specific to either EXPAREL or Endura-KT, and thus couldn’t form the basis of a claim.

Remedy creep: SCt seems to endorse more disgorgement

Dewberry Group, Inc. v. Dewberry Engineers Inc., No. 23–900 (Feb. 26, 2025)

We’ve gone very fast from most lower courts saying that willfulness was required for Lanham Act disgorgement/profits awards, to the Court saying that it wasn’t required but was still a factor, to “maybe disgorgement is standard.” I’d be happier with the common-law evolution if the Court admitted it was engaged in common-law rule development. Also, it’s true that the Court is writing in the context of willful infringement, but I doubt plaintiffs’ lawyers will limit themselves to quoting it in that situation.

The first line of Justice Kagan’s opinion for the Court: “A prevailing plaintiff in a trademark infringement suit is often entitled to an award of the ‘defendant’s profits’” (emphasis added). In concurrence, Justice Sotomayor similarly says: “Congress enacted the Lanham Act … to ensure ‘trademarks [w]ould receive nationally the greatest protection that can be given them.’ Disgorgement awards play a leading role in that regime, and the text of the Act forecloses any claim that Congress looked favorably on easy evasion” (emphasis added).

Also of note—the Court declines to decide whether/when the award of profits from one entity can be increased by profits from related entities based on the Lanham Act language: “If the court shall find that the amount of the recovery based on profits is either inadequate or excessive[,] the court may in its discretion enter judgment for such sum as the court shall find to be just, according to the circumstances.” I agree with the idea that this adjustment can reflect the “defendant’s true financial gain.” That’s the only interpretation that can also implement the statutory command that the award is not supposed to be a penalty. Nonetheless you often see courts adjusting upwards for what are essentially penal reasons—punishing bad behavior.

distinguishing false establishment claims from lack of substantiation claims

Kurin, Inc. v. ICU Medical, Inc., 2024 WL 5416672, No. 8:24-cv-00564-FWS-ADS (C.D. Cal. Nov. 8, 2024)

The parties compete in the market for medical devices aimed at addressing blood culture contamination (BCC) in hospitals. BCC is both medically and financially costly. Kurin makes the Kurin Lock, while defendants make a series of syringes, collectively VI Syringes. Both allegedly operate similarly, by passively sidelining the initial 0.15mL of blood, which can contain contaminants from the patient’s own skin. However, defendants allegedly overclaimed their advantages in violation of the Lanham Act and coordinate state law.

First, the court found that early summary judgment was not appropriate given the need for some discovery. Defendants cited their own studies in support of their motion, and discovery was appropriate about those studies, as well as other factual claims made by defendants.

The court found that many of the challenged statements were insufficiently pled to be false advertising, though it granted leave to amend.

First, defendants claimed the VI Syringe “[i]mprov[es] sample quality by removing over 99.9% of contaminates.” They allegedly refer to a “Toxikon Clinical Lab Invitro Testing Diversion study” in support. It was not enough to allege, “[o]n information and belief,” that the Toxikon Study does not support the 99.9% Statement, because that was merely a lack of substantiation claim that private parties are not allowed to make. Kurin alleged that defendants’ “in-house study claims diversion of 94%, 97.2% and 98.6% of contaminants,” making the 99.9% claim literally false, but the court found that insufficient. Kurin needed to allege something like its own testing disproving the claim.

FDA Clearance: Kurin alleged that defendants falsely and misleadingly claimed that the FDA cleared their 99.9% Statement when its VI Syringe brochure referred to “Vascular Integrity FDA 510(k) documentation on file.” Kurin alleged that defendants falsely and misleadingly marketed the VI Syringe as if it were another, pre-existing medical device, the Brannon PortSyringe, so as to impute the latter’s Class II device FDA clearance to the former, even though the Brannon PortSyringe was for a two-step approach to collecting blood through a catheter for lab tests, not for blood cultures in hospitals.

The court found that this claim was precluded by the FDCA. It applied the 9^th Circuit’s PhotoMedex rule, which is pre-Pom Wonderful but probably consistent with it. A “central issue” in PhotoMedex was whether the defendant could impute a 510(k) clearance from one device to another and whether the 510K documentation was enough for the defendant to claim the device was “FDA Approved.” “Under the 510(k) process, if the Class II device is deemed “substantially equivalent” to a pre-existing device with prior clearance, ‘it can be marketed without further regulatory analysis.’ ” Thus, whether there was falsity here depended in part on what the FDA thinks, making it inappropriate for a Lanham Act claim.

False claims that the VI Syringe was patented: Ok to be brought under the Lanham Act since 35 U.S.C § 292’s prohibition on false marking isn’t exclusive, but not sufficiently alleged for purposes of Rule 9(b).

Claims about the VI “Microbial Diversion study,” allegedly performed in conditions that are inconsistent with routine blood culture collection which violate industry protocols for conducting performance studies. Thus, Kurin alleged, the study failed to account for four key points of contamination, in violation of industry standards. This was a classic establishment claim challenge, and sufficiently pled. (Note that, because competitors can bring California state law claims and have the Lanham Act standards applied to those claims in pari materia, a competitor-v-competitor case is the one place where you routinely get Lanham Act concepts like explicit/implicit falsity and establishment claims treated as features of state consumer protection law.) Defendants argued that their study was fine, but the court expressed “concern about evaluating the ‘persuasiveness’ of studies at the motion to dismiss stage.” And a Lanham Act plaintiff can plead literal falsity of product testing by “demonstrate[ing] that such tests ‘are not sufficiently reliable to permit one to conclude with reasonable certainty that they established’ the claim made.” Allegations that defendants’ study was not peer reviewed, did not account for the industry-standard four points of contamination, and that the sample size was too small to support their claims, sufficed to plead that the VI Study was scientifically unreliable.

Likewise, advertising that the VI Syringes “Help Reduce Risk of False Positives” by helping to reduce central line-associated bloodstream Infection (CLABSI) via the VI Syringe’s design to “avoid breaks in the aseptic technique required in multi-step line procedures that may contribute to CLABSI rates” was sufficiently pled to be a false establishment claim, for similar reasons. In the context of an establishment claim, falsity can be alleged by alleging that the claim is “unsupported by clinical data, peer-reviewed data or FDA clearance.” The establishment claim—tests prove—is itself falsifiable, distinguishing this from a bare lack of substantiation claim.

Kurin also alleged that “Defendants mislead clinicians payors, and others in the medical community” by claiming “that the VI Syringe includes a field that is free from bacteria or otherwise free from contamination.” The allegations here weren’t precise enough under Rule 9(b).

Finally, Kurin alleged that defendants’ claim that the VI Syringes “Help Reduce Hemolysis” was deceptive. Defendants’ “hemolysis study” concluded that the VI Syringe is “non-Hemolytic” based on ASTM F756 guidelines while using a sample size of three samples. It was not enough to allege that this sample size “is simply insufficient” to reach such a conclusion. “To prove that an advertisement claim based on product testing is literally false, a plaintiff must do more than show that the tests supporting the challenged claim are unpersuasive.” That’s just lack of substantiation. (I think this should be fixable—surely it’s possible to plead that scientists would not consider three samples to constitute a reliable study, and this is exactly the kind of claim that reasonable consumers would expect to be backed up with scientific evidence.) But the court thought that Kurin “has not alleged potentially fundamental flaws in the methodology, as it did for the VI Study.” (Why isn’t a sample size of three a fundamental methodological flaw? Wouldn’t a sample size of one be a fundamental methodological flaw? Now we’re in factual argument territory.)

reminder: Harvard/Yale/Stanford Junior Faculty Forum, June 2-3, 2025 submissions due soon

 Request for Submissions

Harvard/Stanford/Yale Junior Faculty Forum

June 2-3, 2025, Harvard Law School

Harvard, Stanford, and Yale Law Schools are soliciting submissions for the 2025 Harvard/Stanford/Yale Junior Faculty Forum, to be held at Harvard Law School on June 2-3, 2025. Twelve to twenty junior scholars (with one to seven years in teaching) will be chosen, through a double-blind selection process, to present their work at the Forum. A senior scholar will comment on each paper. The audience will include the participating junior faculty, senior faculty from the host institutions, and invited guests. The goal of the Forum is to promote in-depth discussion about particular papers and more general reflections on broader methodological issues, as well as to foster a stronger sense of community among American legal scholars, particularly by strengthening ties between new and veteran professors.

TOPICS: Each year the Forum invites submissions on selected topics in public and private law, legal theory, and law and humanities topics, alternating loosely between public law and humanities subjects in one year, and private law and dispute resolution in the next. For the upcoming 2025 meeting, the topics will cover these areas of the law:

Administrative Law

Antidiscrimination Law and Theory

Constitutional Law—theoretical foundations

Constitutional Law—historical foundations

Criminal Law

Critical Legal Studies

Environmental Law

Family Law

Jurisprudence and Philosophy

Law and Humanities

Legislation and Statutory Interpretation

Public International Law

Workplace Law and Social Welfare Policy

A jury of accomplished scholars will choose the papers to be presented. There is no publication commitment. Harvard Law School will pay presenters’ travel expenses, though international flights may be only partially reimbursed.

QUALIFICATIONS: Authors who teach law in the U.S. in a tenured or tenure-track position as of the submission deadline (February 28, 2025) and have not been teaching at either of those ranks for a total of more than seven years are eligible to submit their work. American citizens or permanent residents teaching abroad are also eligible provided that they have held a faculty position or the equivalent, including positions comparable to junior faculty positions in research institutions, for less than seven years and that they earned their last degree after 2015. We accept jointly authored submissions, but each of the coauthors must be individually eligible to participate in the Forum. Papers that will be published prior to the Forum are not eligible. There is no limit on the number of submissions by any individual author. Faculty from Harvard, Stanford, and Yale Law Schools are not eligible.

PAPER SUBMISSION PROCEDURE: Electronic submissions should be sent to Rebecca Tushnet at rtushnet@law.harvard.edu with the subject line “Junior Faculty Forum.” The deadline for submissions is February 28, 2025. Remove all references to the author(s) in the paper. Please include in the text of the email your name, the title of your paper, your contact email and address through June 2025, and under which topic your paper falls. Each paper may only be considered under one topic. Any questions about the submission procedure should be directed to Rebecca Tushnet.

FURTHER INFORMATION: Inquiries concerning the Forum should be sent to Christine Jolls (christine.jolls@yale.edu) or Yair Listokin (yair.listokin@yale.edu) at Yale Law School, Rebecca Tushnet (rtushnet@law.harvard.edu) at Harvard Law School, or Norman Spaulding (nspaulding@stanford.law.edu) at Stanford Law School.

Christine Jolls

Yair Listokin

Rebecca Tushnet

Norman Spaulding

game spat expands beyond false advertising to TM and (c)

Skillz Platform Inc. v. Papaya Gaming, Ltd., 2025 WL 438387, 24cv1646(DLC) (S.D.N.Y. Feb. 7, 2025)

Previous discussion. Skillz sued its competitor Papaya, alleging false advertising under federal and state law. Papaya counterclaimed for the same causes of action and added trademark and copyright infringement as well as defamation and civil conspiracy claims. Here, the court partially granted Skillz’s motion to dismiss the counterclaims, and severed Papaya’s trademark and copyright counterclaims.

Papaya alleged: its multiplayer games allow users to deposit money and earn real cash prizes, along with in-game currency. “In a game, users typically compete with between five and twenty opponents for the highest score. Using an algorithm, Papaya arranges games by matching users of similar skill, as measured by each player’s performance in prior games.” Skillz operates a competing mobile gaming platform that hosts games created by third-party developers. “Skillz’s games involve only head-to-head gameplay, as opposed to games involving more than two players.”

Skillz allegedly markets its games as being uniquely fair and trustworthy with a badge indicating it is “Committed to Fair Play” and a claim that it will “[m]atch [users] with real players of equal skill” in its games. Skillz promotes its promise to “NEVER EVER employ bots” and “guarantee that every match you engage in is a true reflection of your skill level.” A 2024 “letter to our community” stated that the company was “committed to rooting out and eradicating cheaters, bad players, and bots,” and that its games would include “No unfair bots, not ever.” The letter said that Skillz used a “proprietary technology to ensure fair matching,” so that users could be “sure the competition is real, and so are your chances of winning.”

However, Papaya alleged, Skillz used and allowed the use of bots in its games, and it has unevenly matched players. Skillz “clarified that it uses bots only in certain non-cash games and in games where two human players compete asynchronously. In addition to permitting the use of bots on its platform, former Skillz employees say that the company sometimes manipulates the outcomes of games by unevenly matching players.”

Papaya alleged harms because some players’ experience with Skillz’s games  allegedly leads them to believe that all mobile gaming is rigged and stop using other games, like Papaya’s. Players also allegedly confuse the two platforms and attribute the unfairness of Skillz’s games to Papaya. “And if not for Skillz’s claims about the fairness of its games, some players may have played Papaya’s games instead of Skillz’s.” [This last theory seems like the only one where proximate cause logic favors Papaya.]

Papaya also alleged that Skillz claims that they can withdraw cash that they win on its platform “at any time.” “But some players have complained online and in reviews of Skillz’s platform that they were unable to withdraw money from their accounts when they attempted to do so. In some cases, players were unable to access their winnings because their accounts had been banned from the platform.”

Papaya alleged that Skillz smeared competitors “first, by creating an organization that accuses Skillz’s competitors of using bots in its games, and, second, by planting and disseminating an article that stated Papaya had admitted to using bots in its games.” This allegedly tarnished Papaya’s reputation and that of the mobile gaming industry generally.

The alleged “false front” website “Fair Play for Mobile Games” allegedly “encouraged and facilitated visitors’ filing of complaints about mobile gaming companies, other than Skillz and including Papaya, with state attorneys general.” It had a homepage banner “showing a counter that purported to display an increasing number of complaints filed with state law enforcement about Papaya and two other companies. That counter did not display an accurate number of complaints; in fact, each time a visitor arrived at the website, it would display the same number. The number would appear to increase every few seconds.” It also displayed a pie chart purporting to show the relative number of complaints relating to various games offered by Papaya and other companies, stating: “Bingo Cash and Solitaire Cash by Papaya Games have received the highest complaints so far followed by Solitaire Cash from Avia Games.” The figures allegedly didn’t reflect in real time any actual database of complaints being continuously updated, and there were similar problems with a map purporting to show the number of complaints submitted from each state. 

screenshot from alleged astroturf website

Papaya also alleged that Skillz had engaged in copyright and trademark infringement by copying specific games.

Lanham Act and GBL § 349: The court found that Papaya stated counterclaims as to claims arising from Skillz’s statements about its own products, but not to the extent that Papaya alleged violations based on Skillz’s claims about its competitors. That is, false advertising was sufficiently pled as to statements that games on Skillz’s platforms did not use bots, matched players evenly, and allowed users to withdraw funds at any time. The complaint plausibly alleged that these were material claims, “evidenced in part by customer reviews implying that Skillz’s users participated in its games because they thought they would be fairly matched against a human.”

Applying Rule 8, Papaya adequately alleged that Skillz used bots or unevenly matched players. It cited “Skillz documentation that refers to the use of bots” and “language used internally at Skillz, which, construed in the light most favorable to Papaya, could suggest that Skillz was manipulating the outcomes of games by unevenly matching players.” Skillz argued that bot usage in a narrow set of circumstances, such as in training games, was immaterial to consumers. But that was a factual question, and it wasn’t clear how limited the bot use allegedly was.

Withdraw cash at any time: Skillz argued that this wasn’t false in context, including Skillz’s website having an article called “why does it take 4-6 weeks to get my withdrawal.” While, “under certain circumstances, the presence of a disclaimer or similar clarifying language may defeat a claim of deception,” on a motion to dismiss the court would only consider a disclaimer located near the challenged language and “so clear that no reasonable addressee could believe the plaintiffs’ allegations of being misled.” Here, Skillz allegedly made the challenged claims in video advertisements and on another page of its website, not on the same page.

Statements about competitors: Papaya failed to sufficiently allege falsity. The allegations “are essentially that the website’s graphics caused consumers to be confused.” For example, the complaint counter allegedly “created a false sense of specificity and legitimacy,” but that didn’t mean that it was unambiguous or that it necessarily implied a constantly updated connection to a live database. Likewise, the claims that other companies are “scams” or “fraudulent” “do not necessarily and ambiguously imply a false message, because those words are not susceptible to a single clear, widely agreed-upon definition.”

Papaya failed to “plead sufficient facts to support a finding that consumers were confused or misled,” as is necessary to challenge “a statement that is not literally false.” The conclusory allegation that “a reasonable consumer ... would have been deceived” was insufficient. Papaya argued that the 4FairPlay website involved Skillz’s hiding its involvement to “give the impression” that 4FairPlay was unbiased, the “design” of the website suggesting its impartiality, and the website’s omission of Skillz as an option for the subject of complaints. “But these accusations do not identify ‘any description of fact,’ or statement about a product or service.” (Really? The question in a misleadingness case is what message consumers received, not whether it was said in words; and omissions generally do count! This is at least in tension with other cases finding that fake reviews/claims of independence were plausibly deceptive, something the FTC surely thinks.)

Papaya also failed to plead defamation. To show falsity, a defamation complaint “must plead facts that, if proven, would establish that the defendant’s statements were not substantially true.” “A statement is substantially true if the statement would not have a different effect on the mind of the reader from that which the pleaded truth would have produced.” And the counterclaim didn’t plead that the complaint counter, pie graph, and map were not substantially true. There was, for example, no allegation that multiple consumers had not complained about Papaya, or that the complaints about Papaya were not increasing over time.

Even if the counter gave the false impression of being connected to a live database, “the thrust of its presentation” was to urge viewers to “join a growing list of complainants.” Other statements about “fraudulent games” and “scams” were mere opinions. “Various other alleged aspects of the website, such as the solicitation of complaints against Papaya but not against Skillz, likewise are not factual statements.”

Papaya also alleged that Skillz defamed it by creating and sharing an article whose headline stated that Papaya “Admits Bot Use.” This was protected by New York’s fair and true report privilege. A statement is “a fair and true report if it is substantially accurate, that is if, despite minor inaccuracies, it does not produce a different effect on a reader than would a report containing the precise truth.” The complaint indicated that the article was about this litigation: a judicial proceeding. And the challenged headline was “substantially true” inasmuch as, at a conference, Papaya’s counsel stated that “at the pleading stage, we have not denied the use of bots” and that Papaya’s games “as currently constituted do not use bots.” Papaya’s brief stated: “Papaya does not represent that its games never include computerized opponents” and “Papaya has not denied or refuted that it deployed bots.”

Even if the Bonus.com headline may have been more accurate in saying that Papaya “has not denied or refuted that it deployed bots,” defamation does law does not require maximal accuracy, and Papaya does not plausibly allege that such a characterization would have a different effect on readers than that of what the headline actually said. Particularly in a headline -- an especially “condensed report of events,” -- New York law does not require the level of precision that Papaya’s arguments imply.

Trademark: Papaya plausibly alleged confusion with its logo marks, but not with its word marks. Skillz argued that the word marks -- “BINGO CASH,” “21 CASH,” and “SOLITAIRE CASH” -- lacked secondary meaning. It was enough at this stage to allege “longstanding, continuous use of the names and logos, which represent popular games that have been downloaded many times,” as to the logo marks, but not as to the word marks.  

[For the copyright claims, there doesn’t seem to be a lot there that isn’t scenes a faire for a game, but it might be important to look at other games in the market.]

Game 1 logos

quick research suggests that "daub" is a standard term for a bingo function

logos for game 2

logos for game 3

The marks were descriptive, thus requiring secondary meaning to protect.  The logo marks’ registrations on the Principal Register plus the other allegations were enough at this stage. But Papaya’s supplemental trademark registration for the word marks “disclaims use of any particular font style, size, or color in connection with the words.” The counterclaim didn’t explain how the word marks are presented to consumers or other facts “to support a claim that the word marks, by themselves, have become identifiers of the source of the games.”

Papaya plausibly alleged confusion of the logos.

There is clearly substantial similarity between the marks, as the logos use many of the same words, colors, and symbols and position these components similarly with respect to each other. The parties’ products are in close competition and are offered in essentially the same market. And a factfinder could find that the similarities of the logos, and Skillz’s likely knowledge of them as a close competitor, imply a degree of bad faith.

Skillz also counterclaimed that Skillz infringed copyrighted elements of Papaya’s game BINGO CASH. “The parties appear to agree that elements common to bingo-style games are not protectible, but they disagree about whether substantial similarity between other elements exists in the two games.” Various elements supported a plausible claim:

Those elements include a similarly colored and shaped “Bingo” button, similarly named and described bonus options (“Wild Daub”, “Daub any number”), similar shapes and colors used for certain bingo squares, and similarly colored and shaped icons similarly arranged above the bingo board. A motion to dismiss is not the appropriate vehicle to determine whether these elements are inherent parts of the unprotectible concept of bingo, or that they “necessarily result” from choosing to create a bingo game.

But severance was appropriate because copyright and trademark were very different claims, with new counterclaim defendants, and discovery here on false advertising had been ongoing.

J&J's talc subsidiary can bring trade libel but not Lanham Act claims against testifying experts

LLT Management LLC v. Emory, No. 4:24-cv-75, 2025 WL 438100 (E.D. Va. Feb. 7, 2025)

The defendants “published an article in a scientific journal, asserting that they had identified 75 people, additional to 33 in an earlier study, who had malignant mesothelioma but no known exposure to asbestos except through cosmetic talc.” LLT, J&J’s talc subsidiary, alleged that the statement was false. It allegedly identified six of the anonymous study subjects and alleged that the defendants, through their expert witness work, knew those subjects had been exposed to asbestos through other means. LLT alleged that defendants’ “real goal was to create a body of scientific literature to appease the plaintiffs’ bar, who hired the defendants as expert witnesses in tort cases against LLT.” After the defendants published their article, sales of J&J’s talc-based baby powder allegedly declined due to misinformation about the product’s safety—including in the defendants’ article.

This lawsuit represents yet another disturbing development in the “sue your critics” space and highlights the need for a federal anti-SLAPP regime. Here, the court dismisses the fraud claim on statute of limitations grounds and the Lanham Act claim because of a mismatch between the “commercial advertising and promotion” alleged and the falsity alleged, but allows injurious falsehood/product disparagement claims to proceed.

Trade libel: The court predicted that Virginia would consider this an “injury to property” tort claim with a five-year limitations period. LLT sued within that period, and was thus not barred by the statute of limitations.

Fraud: Virginia has a two-year statute of limitations for civil fraud claims. The court declined to give any weight to LLT’s conclusory allegation that it “could not have known of the [defendants’] fraud until recently.” LLT pled that it discovered the defendants’ fraud by “match[ing] ... the [a]rticle’s subjects to [ ] litigation plaintiff[s]” with “documented alternative exposures to asbestos” that were known to the defendants because of the defendants’ roles as expert witnesses in the subjects’ “underlying tort cases.” Of those six subjects, five were plaintiffs in lawsuits against LLT. Thus, there were no facts in the complaint giving rise “to a reasonable inference that LLT required any additional information, outside of what it already possessed because of its role in earlier litigation, in order to match the alleged study subjects to the testimony of the expert witnesses in their respective trials or to spot the non-talc asbestos exposures the experts identified in each case. And if the matching process itself took years, LLT should have said that, but it did not. Thus, it appears on the face of the Complaint that the study subjects’ alleged non-talc asbestos exposures were discoverable, given the exercise of due diligence, at the time the study was published.”

What about defendants’ alleged concealment of the truth? That allegation was not enough to make out a plausible claim that the defendants’ concealment tolled the statute of limitations. Tolling requires plausible allegations that “the defendant undertook an affirmative act designed or intended ... to obstruct the plaintiff’s right to file [the] action.” LLT alleged: (1) “statements reaffirming the false statements in the [a]rticle,”; (2) “refus[al] to disclose the identity of the 75 subjects of the [a]rticle,” for example refusing to testify about their identities in depositions and stating they didn’t retain documentation of those identities; and (3) “omit[ing] from their publication that their statements regarding the lack of alternative exposures were false and that they knew they were false.” That last wasn’t an affirmative act. Even assuming that (1) and (2) could be affirmative acts, such acts must actually “have the effect of debarring or deterring the plaintiff from his action.” But defendants weren’t alleged to have ever changed their claims that all 75 subjects were new, that none of the 75 study participants had known non-talc asbestos exposure, or to have revealed the study subjects’ identities. “But LLT was able to bring its fraud claim anyway. That makes it facially implausible that the defendants’ repetition of the alleged falsehood or nondisclosure of the study subjects’ names ‘had the effect’ of deterring filing of the claim.”

False advertising: potential laches problems, though defendants didn’t show prejudice (shouldn’t the burden be on LLT to plead around it where laches is pled on the face of the complaint?). But that didn’t matter because of the bigger problem requiring dismissal.

LLT plausibly alleged two categories of harm: (1) lost “sales volume and profits,” and (2) costs incurred to “respond to, defend against, and otherwise counteract the [defendants] false statements.”  Even though the article was distributed in a publication “whose audience is doctors, not consumers,” LLT plausibly alleged that the defendants’ intended and actual audience was the plaintiffs’ bar, rather than the scientific community. While actions by the plaintiffs’ bar allegedly contributed to consumer behavior, they were plausibly not “independent” of the defendants’ conduct, and thus didn’t defeat traceability. Nor did preexisting negative publicity for talc break the causal chain. “[T]he Court cannot assume that negative publicity had already influenced 100% of Johnson & Johnson’s customers before the article came out.” And LLT plausibly pled increased litigation costs as a result, since some people might have been motivated to sue by the article. Additionally, “[e]very time LLT has to defend against an expert witness who relies on the defendants’ allegedly false statements in litigation, it costs money LLT would not otherwise have to spend. That too is a fairly traceable injury.” [I have to wonder about the cognizability of that—seems like a collateral attack on the underlying tort litigation. If the expert’s testimony is allowed despite LLT’s objections, should LLT be allowed to sue over it?]

Likewise, the complaint plausibly alleged “a commercial interest in reputation or sales.”  What about proximate causation? Lexmark says that “a plaintiff suing under § 1125(a) ordinarily must show economic or reputational injury flowing directly from the deception wrought by the defendant’s advertising.” “[T]hat occurs when deception of consumers causes them to withhold trade from the plaintiff.” LLT plausibly alleged that defendants led consumers to believe that “cosmetic talc should be considered a probable cause of mesothelioma.” Although one prior study came to the same conclusion as the defendants’ article, “it is at least plausible that the earlier article was not an ‘independent’ case of consumer decisionmaking regarding Johnson & Johnson’s products, since LLT alleges the two publications were designed in concert, to create the impression that a ‘body of literature’ supported the defendants’ claims.” And “the defendants’ article did not merely cement the link to cancer in general—it purported to tie cosmetic talc to “mesothelioma,” which the defendants admit had not been the focus of earlier publicity around the dangers of Johnson & Johnson’s baby powder.”

What about commercial advertising or promotion? The complaint plausibly alleged that the defendants made their statements “in order to influence their own customers—plaintiffs’ attorneys—to hire them to provide expert opinions in tort litigation.” Here, the court stretches—it doesn’t go through the caselaw on identifying commercial advertising or promotion, but instead says that the “impli[cations]” of the article suffice to make it plausibly advertising: “something like ‘we will testify that we have identified 75 more people with mesothelioma who have no known asbestos exposure except to talc.’” That seems to be in tension with most of the false advertising cases about scientific studies as such, where for-profit companies subsidized studies that would allegedly promote their own products. Still, the court understood this as a limiting principle: the statements were only actionable to the extent that they were about the defendants’ own litigation services.

[This workaround has logical flaws of its own: “commercial advertising and promotion” is not an element of statutory standing, as the court assumes, but a separate requirement. If an advertiser, in the course of ordinary advertising for a noncompeting product, randomly falsely disparaged an innocent unrelated product, I think Lexmark would allow that claim. The statutory standing issue is whether the advertising proximately caused the harm, not whether the harm came from the part of the message that most directly served the advertiser’s interests. That’s one reason why we should police the definition of “commercial advertising or promotion” and not treat scientific articles as such in most cases.]

Anyway, doing it the court’s way: LLT had statutory standing to bring its Lanham Act claim only if the defendants’ statements “are construed to be about the defendants’ own litigation services.” But the complaint failed to allege that those statements—that they’d testify for plaintiffs—were false.

Injurious falsehood/product disparagement/trade libel: under New Jersey law, a plaintiff must allege (1) publication (2) with malice (3) of a false statement of fact (4) about the plaintiff’s product or property (5) that causes special damages. Publication and malice were adequately pled, the latter by alleging that defendants were informed in litigation about individual study subjects’ non-talc asbestos exposures or had access to the same information LLT used to demonstrate the alleged falsity of the defendants’ statements.

The court found that the statements at issue were statements of fact, not nonactionable opinion. They were clearly not figurative speech or rhetorical hyperbole, like name-calling, “which cannot reasonably be understood to be meant literally.” They were verifiable “because a factfinder can determine, based on proof at trial, whether any of the 75 study subjects had non-talc asbestos exposures that were ‘known’ to the defendants at the time they published the article, and whether any of the 75 subjects were common to the defendants’ study and the earlier study.” “While the Court takes seriously the ‘risk [of] chilling the natural development of scientific research and discourse’ that can arise from critiquing scientific opinions as though they were verifiable facts, it also has a duty to make all reasonable inferences in favor of the non-moving party at this stage of the litigation.” Thus, a jury “could verify the statements by deciding whether the defendants subjectively knew about non-talc asbestos exposures among the study subjects” and whether the subjects of their study were “additional” to the subjects in the previous study.

Moreover, “statements are not protected solely because they appear in a peer-reviewed journal.” “What matters is whether the facts are adduced through a scientific method, or whether they exist independent of the scientific process.” Defendants’ statements were plausibly construed as assertions about their own knowledge of the study subjects’ medical histories. “Those facts pre-existed the scientific process the article describes—in fact, they were discovered through litigation, not through any scientific method.”

And this was a claim about LLT’s product even without specific references to J&J, because LLT plausibly alleged that Johnson & Johnson’s talc-based products were “the leading brands among a discrete and limited number of cosmetic talc products in the market” and “maintained well over a majority of the market share for talc powder products in the United States.” Thus, “a consumer who learned of the defendants’ statements would understand the defendants to be calling into question the safety of Johnson & Johnson’s products.” The court expressed some interest in the argument that the allegedly false statements were “about the study, not about the talc-based products the study targets—that is, in saying they had 75 new subjects with no known non-talc asbestos exposure, the defendants were merely describing their data set, not commenting on the safety of any talc-based product.” But “it is reasonable at this stage to construe the allegedly false statements not as statements about the defendants’ method or assumptions, but as conveying the thrust of the whole publication—which is squarely about the safety of talc-based products like Johnson & Johnson’s.”

Special damages: The complaint didn’t identify specific customers Johnson & Johnson lost as a result of the defendants’ statements. But special damages are not extra-specific damages; they are simply “the loss of something having economic or pecuniary value.” It was enough to plead “loss of sales and customers” and “irreparable harm to its commercial reputation and goodwill.” [Lots of courts disagree about this, but I haven’t dived into the Virginia cases enough to see if Virginia is special.]

LinkedIn connection supports right of publicity claim for otherwise generic word

Joel E. Cape, PLC v. Cape Law PC, --- F.Supp.3d ----, 2024 WL 4839370, NO. 5:24-CV-5104 (W.D. Ark. Nov. 20, 2024)

The right of publicity claim in this case seems to hang on a LinkedIn connection. Joel Cape opened his law firm in 2013 under the trade name “Law Firm of Joel E. Cape, PLC,” but shifted in 2016 to “Cape Law Firm, PLC.”

In mid-2022, “Cape Law PC” incorporated in Arizona and launched an interactive online platform using the marks “CAPE” and “CAPE LAW.” “Despite various marks and online statements claiming that CLP is a law firm, … it is [allegedly] actually a legal referral service that matches customers in need of legal services to attorneys that CLP contracts with.”

By January 2023,

Joel Cape began receiving phone calls and emails at his firm from frustrated and confused customers who believed they had hired him to be their attorney when, really, they had signed up with CLP. … The most common complaints Joel Cape received from customers of CLP were: (a) the customer’s credit card had been charged without authorization; (b) the customer paid a fee and received no legal services; (c) CLP failed to appear in court or provide correct dates for court appearances; (d) the customer had a poor case outcome, such as dismissal; and (e) CLP failed to communicate or update the customer.

Joel Cape pled that his firm received over 1,000 calls from confused CLP customers, expressing frustration, seeking refunds, or attempting to cancel the monthly payments. Also,

CLP customers have expressed their dissatisfaction by posting google reviews intended for CLP on Plaintiff’s business’s listing with comments such as “this is a scam do not give them your credit card info,” “[t]hese people are not lawyers,” and “DO NOT hire them.” Disgruntled customers have also filed complaints against Plaintiffs with the Better Business Bureau, attributing CLP’s actions to Joel Cape and his law firm.

Joel Cape pled non-consumer confusion too: “When CLP has sent demand letters, some of the responses have been sent back to Joel Cape and his firm. Additionally, corporate recruiters and employment agencies have contacted Joel Cape when attempting to respond to CLP’s job postings.” Allegedly, “[p]art of the problem is that CLP’s website makes it difficult to find the name of an actual attorney that works for them. CLP does not provide accurate contact information for its attorneys to its customers or recipients of demand letters, leaving such parties to contact Joel Cape and his firm in error.”

CLP allegedly launched a Google advertising campaign using the mark “CAPE LAW FIRM.” And its LinkedIn page lists Joel Cape as an employee—“a mistaken association that CLP has failed to correct.”

The court found that Joel Cape successfully pled false advertising, despite some problems with proximate causation: “for 12(b)(6) purposes, the Court finds it plausible that the alleged reputational injury flows directly from CLP’s alleged deception that caused consumers to withhold trade from Joel Cape Entitities.”

Right of publicity: Cape seems like a generic word that wouldn’t itself violate the right of publicity even if there were a successful trademark/false advertising claim. Here, the LinkedIn page was key: “the Court finds it is plausible that CLP associated its page with that of Joel Cape, thereby using his ‘readily identifiable’ name and likeness for purposes of advertising and soliciting business.” Although CLP argued that such associations on Linkedln are within the individual’s control, not the affiliated organization’s, and submitted outside evidence of Linkedln’s functionality in support, that was not appropriate on a motion to dismiss. “The Linkedln affiliation provides the identifying context that might otherwise be lacking had CLP only used the generic word ‘cape,’ with no other connection to Joel Cape.”

Finally, the court dismissed Joel Cape’s negligence claim. The court declined to find that CLP owed a duty of care to the firm to not use its mark in a confusingly similar manner for purposes of negligence law. “[T]his Court does not see how § 1125(a)(1)(A) imposes a duty of care in the context of negligence.”