once again, injury requirement defeats a false advertising claimant

Skillz Platform Inc. v. Papaya Gaming, Ltd., 2025 WL 3268799, 24cv1646(DLC) (S.D.N.Y. Nov. 21, 2025)

Previously. Here, Skillz successfully kicks out Papaya’s false advertising counterclaims for lack of injury, showing once again that the statutory presumption of irreparable injury is really, really helpful when the elements of likely success on the merits don’t include injury (trademark) and much less helpful when they do (false advertising).

The parties compete in the real-money skill-based mobile gaming (“RMSB”) market. RMSB platforms match players with other users on games created by third parties and compete to win cash prizes or for game rewards. Skillz most commonly offers head-to-head competition between two players, while Papaya offers multi-player tournaments with larger cash prizes.

Papaya argued that several of Skillz’s claims were false: Skillz advertises “Match with REAL PLAYERS of equal skill,” and its website stated that it “leverages player matching technology to ensure fairness by pairing players of equal skill levels, so beginners only play beginners and experts only play experts.” However, Skillz does not dispute that matchmaking on its platform has included “skill band expansion.” That is, “[a]s the time increases from when a game is initiated, the maximum player rating differential permitted for a competitor to be matched with the initiating player also increases.” It also made other adjustments in matching that arguably don’t conform to the “equal skill levels” claim.

It also advertised “Play real people, NO BOTS, guaranteed!” and similar claims. However, to third-party developers, it instructed: “The bot behavior in your game must be deterministic, meaning that given the exact same set of player inputs and conditions, it must always produce the same bot behavior.”

Finally, Skillz informed its customers that they can withdraw their cash awards “at any time.” But users requesting withdrawals exceeding $5,000 must submit to a “playtest” fraud verification screening.

But none of the details mattered, because the question here was injury. The parties were direct competitors. But without comparative advertising, that wasn’t enough to presume injury. Papaya’s 30(b)(6) witness stated that “[b]ased on my experience, advertisements highlighting the ability to withdraw money easily and quickly are highly effective” and that “Skillz’s statements about withdrawals on its platform” “are likely to and do cause harm to Papaya.” Its damages expert did not opine on harm causation.

This was not enough to avoid summary judgment on injury.

Papaya’s market share in 2021 grew astronomically, while Skillz’s market share declined…. Although there is no requirement that a party experience a decline in revenue or sales in order to suffer an injury under the Lanham Act, Papaya has failed to point to any evidence demonstrating that it suffered harm either to its sales position or to its reputation from the statements by Skillz it challenges in the counterclaim.

The claims by the Rule 30(b)(6) witness were “entirely conclusory.” Also: “The four individuals that Papaya identified during discovery as the only individuals likely to have discoverable information about any harm Papaya suffered have each invoked their Fifth Amendment right against self-incrimination.”

Papaya’s argument that the ads were comparative failed. On one webpage, headed “The Skillz Difference,” Skillz stated that it was “committed to fair competition” and that “every game is evenly matched.” That wasn’t enough to be comparative. Nor was the statement under the same header, “only real people, no unfair bots here,” or other Skillz statements that an increasing number of RMSB games “infiltrated the app stores” and used bots to defraud player, even when Skillz stated “[w]e have never and will never use bots to defraud customers, unlike our competitors.” That post linked to a news segment on bot fraud in the RMSB industry that mentions class action lawsuits against Papaya and AviaGames for their usage of bots to control the outcomes of games. But none of these made “a misleading comparison to a specific competing product.” (Seems like the last one did, but maybe one tweet just isn’t enough.) Where an injury “accrues equally to all competitors” a party must produce evidence of “actual injury and causation” to ensure that the injury is not “speculative.” Skillz never mentioned Papaya itself nor was this a two-player market.

Skillz also won summary judgment on Papaya’s unclean hands defense. While “a jury would be entitled to find that Papaya used bots to compete with human players, including to control the outcome of games, while representing in its advertising that players would be competing against other humans and could win through the exercise of skill,” Papaya didn’t show that Skillz used bots that way. “Players in Skillz’s games lost because other human players out played them, not because they were outscored by a bot.”