tag:blogger.com,1999:blog-57642902024-03-28T17:13:16.164-04:00Rebecca Tushnet's 43(B)logFalse advertising and moreUnknownnoreply@blogger.comBlogger6674125tag:blogger.com,1999:blog-5764290.post-79366755868220151612024-03-28T17:12:00.005-04:002024-03-28T17:12:39.956-04:00adult venue's insurer did not successfully exclude ads from ad injury coverage<p>Princeton Excess &
Surplus Lines Ins. Co. v. R.I. Cranston Entertainment Inc.; 2024 WL 1285631, C.A.
No. 21-63-JJM-PAS (D.R.I. Mar. 26, 2024)</p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Defendant, d/b/a
Wonderland, operated an adult entertainment club and was one of the many such
sued by various models for using their images in advertising without their
consent from 2015 to 2019. Princeton insured Wonderland from 2016-2018 (with a
broad exclusion for defamation, invasion of privacy, and various forms of
advertising injury in the second year called the Exhibitions and Related
Marketing Exclusion), and agreed to defend the club but reserved the right to
deny insurance coverage. After settlement negotiations (including Wonderland’s
separate counsel), Wonderland agreed to a judgment for $1.895 million, with a
covenant not to execute and an assignment of rights against Princeton to the
models in lieu of payment. Princeton then sued Wonderland and the models,
seeking a declaratory judgment that it has no obligations under the Consent
Judgment. Defendants counterclaimed for payment and damages for breach of
contract and bad faith. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">If policy terms are
“ambiguous or capable of more than one reasonable meaning, the policy will be
strictly construed in favor of the insured and against the insurer.” <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Princeton argued
that (1) no coverage was available for claims during the 2017 to 18 Policy
Period; (2) Wonderland breached the insurance contract by agreeing to the
Consent Judgment in violation of the cooperation and non-assignment clauses;
and (3) the Consent Judgment was unreasonable, and thus unenforceable, as a
matter of law. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The consent judgment
was a lump sum and, Princeton argued, included uncovered claims; most of the images
fell within the 2017-18 period. The policy excluded personal and advertising injury,
including “publication, in any manner, of material that violates a person’s
right of privacy,” disparagement, use of advertising ideas, and trade dress
infringement, if such activities “arise out of or are part of ‘exhibitions and
related marketing,’ ” which are broadly defined.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The underlying claim
alleged false advertising and false association under the Lanham Act,
misappropriation, violation of the Models’ common-law and statutory privacy
rights, and defamation, “all of which fall squarely under Personal and
Advertising Injury. So the burden falls to Princeton to show that its exclusion
is valid.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The problem was that
the policy and the exclusion were “clearly worded, specific, and directly
contradictory to each other. Under Rhode Island law, policy exclusions must be
unambiguous, and ‘contract provisions subject to more than one interpretation
are construed strictly against the insurer.’” Also, “Rhode Island courts will
not uphold an exclusion that leads to unreasonable results, particularly if
doing so will make another part of the coverage illusory.” The court found that
definition of “Exhibitions and Related Marketing” was so broad as to “preclude
coverage in almost any circumstance.” The Fifth Circuit recently found that,
even if all “advertising injury” was excluded by this exact policy language, “personal
and advertising injury” was an umbrella provision and not illusory because
there was still personal injury coverage. Princeton Excess & Surplus Lines
Ins. Co. v. A.H.D. Houston, Inc., 84 F.4th 274 (5th Cir. 2023); <i>but see </i>Princeton
Express v. DM Ventures USA LLC, 209 F. Supp. 3d 1252, 1258 (S.D. Fla. 2016) (declining
to uphold a “field of entertainment” exclusion on the grounds that it would
exclude “anything listed in (d) through (g) listed under Personal and
Advertising Injuries” and would thus make the Policies illusory as to
advertising coverage). <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The court here
disagreed with the Fifth Circuit. By its plain language, “exhibitions”
encompass almost all forms of production and advertising: “motion pictures,
television programs, commercials, web or internet productions, theatrical
shows, sporting events, music, promotional events, celebrity image or likeness,
literary works and similar productions or work ....” including social media, as
well as material produced “in any medium including videos, phonographic
recordings, tapes, compact discs, DVDs, memory cards, electronic software or
media, books, magazines, social media, webcasts and websites”— “a broad-ranging
definition that contradicts Princeton’s purported coverage” for “advertising”
(defined as “a notice that is broadcast or published to the general public ...
about your goods, products or services”). And the exclusion also withdrew
coverage for all related forms of marketing. Rhode Island doesn’t allow
insurers to make whole sections of a policy illusory. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">It also didn’t save
Princeton that exceptions purportedly restored coverage for advertising related
to Wonderland’s food and liquor services. Princeton argued that these
exceptions preserve coverage for “use of another’s advertising idea or
infringement of copyright, slogan, or trade dress in an advertisement for any
aspect of Wonderland’s business other than exhibitions or marketing for
exhibitions (such as its food or liquor service).” “But the Exhibitions and
Related Marketing Exclusion precludes coverage for any commercial, web
production, or promotional event, regardless of whether the advertisement
relates to a show, a theatrical performance, or purchase of a hamburger. It
would exclude the advertising examples that Princeton cites to make its case.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Thus, Princeton owed
Wonderland a duty to indemnify for advertising injury arising out of
Exhibitions and Related Marketing under the 2017 to 18 Policy. Moreover, there
was no evidence that the consent judgment purported to settle claims outside
the policy period; it was based on Princeton’s denial of claims for that
period, and its plain language suggested that it was limited to that period.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The policy didn’t apply
to “[a]ny punitive damages, exemplary damages, or the multiplied portion of any
award, because of any ‘bodily injury’, ‘property damage’ or ‘personal and
advertising injury’.” But again, there was no evidence that the consent judgment
included these.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Princeton argued
that Wonderland breached the terms of the insurance contract by interfering
with its right to defend and settling the case in violation of the cooperation
and non-assignment clauses. But it was uncontested that Princeton knew about
the Models’ offer and took no steps to preserve its rights over the course of
many months, so it waived any objection to the terms of the settlement. Also,
there was a cooperation clause requiring cooperation in investigation and
settlement; this is a reciprocal obligation, and no reasonable jury could look
at Princeton’s conduct and find that it used “reasonable diligence” to obtain
Wonderland’s cooperation.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Finally, Princeton
waived its right to object based on the non-assignment clause:<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: .5in;"><span style="mso-bidi-font-size: 12.0pt;">We think the insured should be allowed, as soon as the insurer denies
coverage, to protect its interest by negotiating a settlement. The only
valuable asset the insured may have is its cause of action against the insurer
and the insured should be able to assign this right to the injured party to
protect itself from further liability.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Also, “because an
insured’s rights to proceeds vests at the time of loss ... restrictions on the
insured’s right to assign its proceeds are generally rendered void.” <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Was the consent
judgment collusive and unreasonable and thus unenforceable? No, there was no
evidence of misconduct. (Princeton was bound because the judgment fixed
Wonderland’s liability, triggering the duty to indemnify, and Wonderland
properly assigned its claims to the models.) Princeton pointed to statements
made by Wonderland’s manager, who stated that the offer of $10,000 per model
was “crazy” and was upset that Princeton “did not want to fight it.” It argued
that this was incompatible with Wonderland’s decision to settle all claims for
$1.895 million, and that the manager hadn’t read the consent judgment so
Wonderland could not have truthfully stated that it was reasonable. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">“That a party may
have opposed a settlement does not render a settlement fraudulent or collusive.
And a party’s failure to read a contract does not render it unenforceable. A
party may rely on their attorney in drafting settlement documents, and the
attorney can be presumed to speak for them regardless of whether they have read
the documents.” Any concerns about collusion were “further assuaged by the fact
that the judgment was negotiated under the supervision and guidance of a
seasoned Magistrate Judge and that other courts have repeatedly found liability
on similar facts.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">But the complaint included
other policy exclusions that were not yet before the court (exclusions for
knowing falsity and the like), so defendants only got partial summary judgment.
<span style="mso-spacerun: yes;"> </span>They were entitled to summary judgment
on liability for breach of contract (the duty to indemnify), but not on
damages. <o:p></o:p></span></p><div class="blogger-post-footer">http://tushnet.blogspot.com/feeds/posts/default?alt=rss</div>Rebecca Tushnethttp://www.blogger.com/profile/17344226000864611148noreply@blogger.com0tag:blogger.com,1999:blog-5764290.post-70206869023141338192024-03-25T10:00:00.001-04:002024-03-25T10:00:00.140-04:005th Circuit allows image-based tobacco warnings in barest nod to consistency on compelled commercial speech<p>R J Reynolds Tobacco
Co. v. Food & Drug Admin., 2024 WL 1208111, --- F.4th ----, No. 23-40076 (5<sup>th</sup>
Cir. Mar. 21, 2024)</p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The </span><a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4691950"><span style="mso-bidi-font-size: 12.0pt;">sudden shift in the political valence of the
commercial speech doctrine</span></a><span style="mso-bidi-font-size: 12.0pt;">
strikes again! The Fifth Circuit upholds mandatory cigarette warnings as
acceptable compelled commercial speech under <i>Zauderer</i>, reversing the
district court’s 2022 decision. Let’s just say that, five years ago, this would
have struck me as an unlikely result, and in 2020 the decision to file in Texas
would have been much less complicated; even in 2022, I would have expected the
district court to be upheld. (It returns to the district court for an APA
challenge, about which I express no opinion.)<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The Family Smoking
Prevention and Tobacco Control Act requires cigarette packages to include
“color graphics depicting the negative health consequences of smoking to
accompany the [updated] label statements.” These warnings “shall comprise the
top 50 percent of the front and rear panels of the package” of cigarettes and
“at least 20 percent of the area of [any] advertisement ....” A facial
challenge was rejected by the Sixth Circuit in 2012, but the DC Circuit struck
down the FDA’s first attempt on an as-applied challenge. Now it’s the 5<sup>th</sup>
Circuit’s turn. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">In enacting the TCA,
Congress found that “efforts to restrict advertising and marketing of tobacco
products,” including existing mandatory warnings, had “failed adequately to
curb tobacco use by adolescents, [so] comprehensive restrictions on the sale,
promotion, and distribution of such products [were] needed.” The TCA’s
legislative findings included: (1) minors still often see and are exposed to
tobacco product advertising; (2) the “overwhelming majority of Americans who
use tobacco products begin using such products while they are minors and become
addicted to the nicotine in those products before reaching the age of 18” and
(3) “[r]educing the use of tobacco by minors by 50 percent would prevent well
over 10,000,000 of today’s children from becoming regular, daily smokers,
saving over 3,000,000 of them from premature death due to tobacco-induced
disease[s]” and would “result in approximately $75,000,000,000 in savings
attributable to reduced health care costs.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Congress identified
nine new warnings to rotate regularly, which must “comprise the top 50 percent
of the front and rear panels of” each cigarette package and “at least 20
percent of the area of [any] advertisement ....” It further instructed the
Secretary of Health and Human Services to “issue regulations that require color
graphics depicting the negative health consequences of smoking to accompany the
label statements.” And Congress gave the Secretary the authority to “adjust the
type size, text and format of the label statements” for clarity,
conspicuousness, and legibility. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">When the FDA made
its first attempt, the DC Circuit held that the chosen graphics were not
targeted at deception; nor were they providing “‘purely factual and
uncontroversial’ information” because the images “could be misinterpreted by
consumers” and “are primarily intended to evoke an emotional response, or, at
most, shock the viewer into retaining the information in the text warning.” It
therefore applied <i>Central Hudson</i> instead of <i>Zauderer</i> and struck
down the initial rule. Under <i>Central Hudson</i>, the FDA<i> </i>lacked even
“a shred of evidence ... showing that the graphic warnings will ‘directly
advance’ [FDA’s] interest in reducing the number of Americans who smoke.” <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The FDA reasoned
that its new images promoted “the Government’s interest in promoting greater
public understanding of the negative health consequences of cigarette smoking”
and also “dissipat[es] the possibility of consumer confusion or deception,”
thereby advancing the government’s interest in preventing “consumer
misperceptions regarding the risks presented by cigarettes.” <o:p></o:p></span></p>
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi5_HTRI6fL4lHpCbPziKM_IZ_a1rFGy4aGhp5sIoaJuLeXWPgLzgTjUBmgez76pAAjeBMudy5pP6jDJYTlMPtsb-L2rsrQrgLzp6UnaEmtW-K0woS7hQIa7dOJhI5CMJx0nrKEccSNQt2NkFsE8T5sjHB84e4qAejvdo2pe-rYE3d9WHdJFh6BPA/s732/2020%20graphics.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="Warnings with images, such as "smoking cases head and neck cancer" with image of woman with obvious neck swelling" border="0" data-original-height="732" data-original-width="348" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi5_HTRI6fL4lHpCbPziKM_IZ_a1rFGy4aGhp5sIoaJuLeXWPgLzgTjUBmgez76pAAjeBMudy5pP6jDJYTlMPtsb-L2rsrQrgLzp6UnaEmtW-K0woS7hQIa7dOJhI5CMJx0nrKEccSNQt2NkFsE8T5sjHB84e4qAejvdo2pe-rYE3d9WHdJFh6BPA/s16000/2020%20graphics.png" /></a></div><br /><p class="MsoNormal">Plaintiffs here alleged
that each of the Warnings “misrepresent[s] or exaggerate[s] the potential
effects of smoking” and that, “[c]ontrary to FDA’s characterization, the peer
reviewers raised serious, substantive concerns about FDA’s studies” used to
support the selected Warnings.</p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The district court
reasoned that <i>Zauderer </i>did not apply because the imagery was
fundamentally so “prone to ambiguous interpretation” that “it is unclear how a
court would go about determining whether it[ ] ... is ‘accurate’ and ‘factual’
in nature”:<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: .5in;"><span style="mso-bidi-font-size: 12.0pt;">In other words, the court reasoned that no photorealistic image could
ever be purely factual and uncontroversial because different viewers will
ascribe to it different meanings. The inherent ambiguity in any graphic
warning—e.g., that viewers may interpret the heart disease warning to suggest
that open-heart surgery “is the most common treatment for heart disease” or the
best—means that the Warnings cannot be “ ‘purely factual and uncontroversial’
and objectively accurate as required to allow relaxed <i>Zauderer</i> review.”
Further, the court found that the graphic portions of the Warnings fell beyond <i>Zauderer</i>’s
reach because they are inherently “provocative.” <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">And the warnings
weren’t narrowly tailored under <i>Central Hudson</i></span> because the
government hadn’t first tried <span style="mso-bidi-font-size: 12.0pt;">increased
funding for antismoking advertisements, increased government anti-smoking
communications, or “test[ed] the efficacy of ‘smaller or differently placed
warnings.’ ” <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">(Preclusion as to
RJR’s challenge to the constitutionality of the TCA itself would have been
appropriate, but that didn’t resolve the case (there were other plaintiffs), so
the court proceeded to the merits.)<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Key holding: “The
Warnings are both factual and uncontroversial, despite the emotional impact the
graphics may have.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The court—weighing
in on an issue that </span><a href="https://tushnet.blogspot.com/2014/07/cool-story-part-1-dc-circuit-upholds.html"><span style="mso-bidi-font-size: 12.0pt;">divided</span></a><span style="mso-bidi-font-size: 12.0pt;"> the </span><a href="https://tushnet.blogspot.com/2014/07/cool-story-part-2-concurrences.html"><span style="mso-bidi-font-size: 12.0pt;">DC Circuit</span></a><span style="mso-bidi-font-size: 12.0pt;">—concluded that <i>Zauderer </i>is a “carve-out” from, not an
application of, <i>Central Hudson</i>. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Moreover (and not
unrelatedly), <i>Zauderer</i></span> applies to all compelled commercial
speech, not just deception-preventing speech. The Fifth Circuit held in <i>NetChoice</i>
that <span style="mso-bidi-font-size: 12.0pt;">the state’s interest in “enabling
users to make an informed choice regarding whether to use [social media]
Platforms” was sufficient to survive review under <i>Zauderer</i>. Similarly, Chamber
of Commerce of the USA v. SEC, 85 F.4th 760 (5th Cir. 2023), recently held that
“the disclosure of a company’s rationale for a stock buyback was purely factual
and uncontroversial commercial speech” (although it still struck down the SEC’s
action because it was the SEC, I mean because of the APA).<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">First, the warnings
were “purely factual.” What is factual? Well, it’s not an opinion. Moreover,
the government may not demand a private party “undertake contextual analyses,
weighing and balancing many factors ... that depend on community standards,” to
determine the speech it must “parrot.” Book People, Inc. v. Wong, 91 F.4th 318,
340 (5th Cir. 2024). “Factual” needs to involve “information” that is “[c]oncerned
with what is actually the case rather than interpretations of or reactions to
it” and “actually occurring.” (Lots of dictionaries invoked here.) Thus,
“factual” must mean “falsifiable material and inferences fairly drawn from it,
rather than one’s non-falsifiable ‘interpretations[,] ... reactions,’ or
opinions.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Crucially, “factual”
does not mean “true,” because that would make “purely factual information”—the
language of <i>Zauderer</i>—surplusage. (This seems to ignore the idea that
opinions aren’t statutes, but here we are.) Thus, the required warnings would
be factual if they were comprised of “only (a) information supported by facts
and (b) conclusions driven by those facts, and (2) not akin to unfalsifiable
statements of opinion.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Plaintiffs argued
that the new warnings “misleadingly exaggerate smoking risks” and improperly
“focus on conditions that less frequently arise from smoking,” even though the
existing warnings were concededly purely factual. “Consequences supported by
scientific findings, even if exaggerated or non-modal, are still, by
definition, factual.” The factual content of the <i>text</i></span> was
undisputed. <o:p></o:p></p>
<p class="MsoNormal">What about the images? Images can be factual. “<span style="mso-bidi-font-size: 12.0pt;">The addition of images to the textual
warnings makes no difference to the constitutional analysis of factuality.” In
the FDA’s own words: “FDA used a certified medical illustrator to design images
that depicted common visual presentations of the health conditions and/or
showed disease states and symptoms as they are typically experienced, and that
present the health conditions in a realistic and objective format devoid of
non-essential elements.” Each of the images was “a straightforward,
science-based, objectively truthful depiction of the accompanying text,” “no
different from those a medical student might see in a textbook.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Merely because the
images might convey “an ideological or provocative message” does not make them
nonfactual: <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: .5in;"><span style="mso-bidi-font-size: 12.0pt;">A fact does not become “value-laden” merely because the fact drives a
reaction. But even if it did, ideological baggage has no relevance to the first
<i>Zauderer</i> prong. Any number of factual messages are, of course,
ideological. Similarly, emotional response to a statement is irrelevant to its
truth. That someone may have to declare bankruptcy [in order to get debt
relief] is likely to engender strong emotions. But the Court never even
discussed that aspect of the mandatory disclosures [in its case upholding required
disclosures about bankruptcy by certain debt relief providers].<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: .5in;"><span style="mso-bidi-font-size: 12.0pt;">[Footnote] … We offer the following example: “The Nazis committed
genocide.” That is a factual statement. It is also a statement that denounces
the Nazi’s actions and beliefs as morally repugnant. That is an ideological
message. Though the government may not be able to compel Volkswagen to include
that message in its advertising without justification, a court would likely
still review any such attempt under <i>Zauderer</i>. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">[Somebody is
thinking about abortion disclosures.]<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Plus, these images
were “meant to be interpreted literally.” They weren’t “primarily intended to
evoke an emotional response” but instead “to draw attention to the warning and
depict a possible medical consequence of smoking. Thus, at most, the emotional
response of viewers is incidental to their retention of information about the
health risks.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">What about the
argument that the images might be subject to several different interpretations,
and the FDA didn’t test for consumer takeaway? “[W]hen each image is paired
with a fact-based, textual warning, any reasonable viewer interprets the image
in light of the words.” It was error to ignore the words.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Also, the government
need not choose only the most common side-effect or consequence of the disease
or injury discussed in a warning. “People may interpret ‘debt relief agency’ in
many ways, but disclosing that a business is one is still purely factual.” Nor
were cigarette companies required to make difficult contextual judgments
weighing multiple factors to determine the warning, since the FDA did it for
them. <span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">For similar reasons,
the warnings were uncontroversial. <i>NIFLA</i></span> says that abortion is a
controversial topic, making disclosures about abortion controversial; but <i>NetChoice</i>
said that “<span style="mso-bidi-font-size: 12.0pt;">disclosures of social media
censorship decisions” were not controversial. Thus, a factual disclosure is
“controversial” under <i>Zauderer</i> “where the truth of the statement is not
settled or is overwhelmingly disproven or where the inherent nature of the
subject raises a live, contentious political dispute.” Content moderation isn’t
<i>inherently</i></span> contentious, even though it was connected to “<span style="mso-bidi-font-size: 12.0pt;">a live, contentious, political issue.” [Wow,
this might be even dumber than the statements in <i>NetChoice</i></span>
itself. Because it is about content that some people want and some people
don’t, content moderation policy is the definition of inherently<i> </i>contentious—as
abortion is not, even if people living in Texas today think it must be. This is
a fake argument; the real reason—inconsistent with <i>NIFLA</i>’s dicta, which
should be ignored the way all abortion-related First Amendment pronouncements
should be ignored—comes next.]<o:p></o:p></p>
<p class="MsoNormal">There’s no good-faith debate that the warnings aren’t
truthful. <span style="mso-bidi-font-size: 12.0pt;">Thus, they are uncontroversial.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Next, the warnings
must be “reasonably related to the State’s interest” and not “unjustified or
unduly burdensome.” “<i>Zauderer</i> does not require the state to assert an
anti-deception interest.” No court of appeals majority has ever held otherwise,
and the Fifth Circuit has previously referred to valid interests in “promoting
the free flow of commercial information”; we ruled that was “more than enough
to satisfy this prong of <i>Zauderer</i>” and “promoting the ethical integrity
of the legal profession.” “Increasing public understanding of the risks of
smoking, particularly given the ‘long history of deception concerning consumer
health risks in the cigarette industry,’ is a legitimate state interest.” [Now
do the long history of state and private discrimination against nonwhites.]<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The warnings were
not unjustified. Plaintiffs argued that the interest at issue was too amorphous
and that the warnings hadn’t been shown to be effective.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The images served an
informational interest. <i>Zauderer</i></span> itself <span style="mso-bidi-font-size: 12.0pt;">explained that “[t]he use of illustrations or pictures in
advertisements serves important communicative functions: it attracts the
attention of the audience to the advertiser’s message, and it may also serve to
impart information directly.” The FDA even tested their effectiveness in
raising consumer awareness and then refined them based on those results. <o:p></o:p></span></p>
<p class="MsoNormal"><i><span style="mso-bidi-font-size: 12.0pt;">NIFLA</span></i><span style="mso-bidi-font-size: 12.0pt;"> says that a compelled disclosure is
justified only if it will “remedy a harm that is ‘potentially real[,] not
purely hypothetical,’ and ... ‘extend[s] no broader than reasonably necessary.’
” Plaintiffs argued that current Surgeon General’s warnings are sufficient, but
that ignored “significant evidence that consumers do not notice, much less
internalize, the text-only warnings in the status quo. The updated warnings
serve to remedy the harm that buyers might (1) not know about tobacco’s harms
or (2) ignore the existing Surgeon General’s warnings.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">And here the Fifth
Circuit engages in what is all too common in rejecting plaintiffs’ arguments:
it makes up a contradiction that doesn’t exist. This isn’t to say the Fifth
Circuit is wrong about the weighing here, but it’s a bad look to claim logical
flaws that are themselves illogical: “Plaintiffs inconsistently claim that the
disclosure requirements are overly emotional and ideological such that they
become non-factual speech, while also asserting that FDA’s informational
interest does not justify the Warnings because they will not be effective. In
other words, plaintiffs suggest consumers will simultaneously notice and not
notice the warnings.” But of course, consumers could both <i>notice</i></span>
and <i>not be informed or change their behavior because of</i> the warnings. I
notice a ton of stuff to which I am indifferent every day. The underlying
question is whether the government ought to have to show some real likelihood
of changed decisionmaking in order to justify mandatory disclosures, and I have
to admit that I am leaning more towards “yes,” at least for a noticeable
percentage of consumers. In the absence of any need for effectiveness,
disclosure becomes a compromise where regulators/lawmakers tell themselves
they’re protecting consumers while blaming the ones who continue to make “bad”
decisions for the consequences of continued marketing.<o:p></o:p></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Effectiveness:
Plaintiffs argued that the FDA’s studies were flawed, but all that was required
constitutionally was a reasonable relation to a legitimate state interest. “Whether
FDA’s use of the studies survives APA review is a question we consider separately
from our <i>Zauderer</i> review.” This move too sets up the ability to approve
state mandates (not subject to the APA) like in <i>NetChoice</i></span> while
still invalidating anything the Fifth Circuit doesn’t like as a policy matter.<o:p></o:p></p>
<p class="MsoNormal">The warnings were not unduly burdensome, despite their size
and offputting content. Even if they wouldn’t survive <i>Central Hudson</i>
review, that wasn’t enough to invalidate them. The Sixth Circuit already upheld
the required size and the court here wasn’t going to revisit that. “Undue
burden” means that <span style="mso-bidi-font-size: 12.0pt;">“the regulation
cannot impose a burden excessive or disproportionate to the benefits gained.”
In <i>NIFLA</i>, the burden was undue because the disclosures were “wholly
disconnected from California’s informational interest”; allowed for no
consideration of “what the facilities say on site or in their advertisements”;
and “cover[ed] a curiously narrow subset of speakers.” But in <i>NetChoice</i>,
decision disclosure/appeal and biannual transparency disclosure couldn’t
possibly burden protected speech, so that was ok, and the SEC’s buyback
disclosures weren’t unduly burdensome because they “neither burden[ ] issuers’
protected speech nor drown[ ] out their message” given that they occurred only
“within the narrow confines of SEC filings.” [Gotta admit, these don’t sound
promising for disclosures that have to be a big part of every package.]<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Here, the benefits
were to alleviate “information asymmetry regarding the harms tobacco causes and
consumers’ suboptimal awareness of and response to those harms,” and reducing
those harms would be a significant benefit. [If it occurs.] <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The claimed harms
were to plaintiffs’ free speech rights and to their finances. But “plaintiffs
can still speak on 80% of their advertisements, and they still control more
than 50% of the total surface area of their cigarette packages.” That allowed “ample
room for manufacturers to distinguish their products from other products” and
not be “drown[ed] out” or deterred from advertising at all. And plaintiffs have
at most a “minimal” interest in withholding useful and factual information;
harm suffered from an infringement on that interest was limited. Thus, the
burdens were not undue in comparison to the benefits. <o:p></o:p></span></p><div class="blogger-post-footer">http://tushnet.blogspot.com/feeds/posts/default?alt=rss</div>Rebecca Tushnethttp://www.blogger.com/profile/17344226000864611148noreply@blogger.com0tag:blogger.com,1999:blog-5764290.post-40742250595393312402024-03-21T11:40:00.001-04:002024-03-21T11:40:16.584-04:00Nominative fair use requires D to prevail on all 3 factors in 9th Circuit, district court concludes<p>Axon Enterprise,
Inc. v. Luxury Home Buyers, LLC, --- F.Supp.3d ----, No.: 2:20-cv-01344-JAD-MDC
(D. Nev. Jan. 16, 2024)</p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The court grants plaintiff's motion for
reconsideration of parts of this case, <a href="https://tushnet.blogspot.com/2023/07/former-distributors-continuing-use-of.html">discussed
previously</a>. Axon alleged that LHB infringed Axon’s “Taser” mark. The court
previously denied summary judgment on nominative fair use, treating it as a
balancing test: LHB needed to use “Taser” to refer to Axon’s product, but used
too much (it was a former distributor), and there were genuine disputes of fact
on whether it did anything else to suggest endorsement. The court granted
reconsideration, now holding that all three prongs weren’t satisfied. Although
what constitutes “too much” varies based on circumstance—an artist may need to
use Barbie’s name and trade dress to make Barbie-themed art—the “no more than
necessary” element needs to be satisfied to allow the defense to foreclose
further consideration of confusion.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Thus, here, LHB used
more of the Taser mark than necessary when it used its distinctive lettering
and logo, and Axon was entitled to summary judgment in its favor on
infringement. However, whether the permanent injunction already entered to “bar
LHB’s use of Axon’s Stylized Taser Mark and Logos on all its websites and
advertising” should be modified raised First Amendment considerations that required
further briefing. (I take it this means that the logic of NFU means that remedies should allow proper NFU rather than flat bans.)<o:p></o:p></span></p><div class="blogger-post-footer">http://tushnet.blogspot.com/feeds/posts/default?alt=rss</div>Rebecca Tushnethttp://www.blogger.com/profile/17344226000864611148noreply@blogger.com0tag:blogger.com,1999:blog-5764290.post-77771037578699081632024-03-21T11:32:00.001-04:002024-03-21T11:32:01.982-04:00D's consumer survey defeats class action about relevance of geographic origin of water for brewing beer<p>Peacock v. Pabst
Brewing Co., LLC, 2024 WL 1160687, No. 2:18-cv-00568 DJC CKD (E.D. Cal. Mar.
18, 2024)</p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Interesting
defense-side use of surveys in this consumer protection case. Peacock alleged
that Pabst violated consumer protection law by marketing “The Original Olympia
Beer” as using naturally filtered, artisan water from Tumwater, Washington (a
suburb of Olympia, Washington) “despite the product being brewed elsewhere in
the country using lower quality water and brewing methods.” The court granted
summary judgment for inability to prove deceptiveness.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Peacock identified,
among other things, Pabst’s “It’s the Water” slogan and the depiction of the
“unique waterfalls from the (now) closed brewery from the Olympia area” on the
Olympia Beer packaging, on its website, and on social media.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">On deceptiveness, Pabst
argued that Peacock didn’t designate any expert witnesses or other evidence to
show how consumers interpreted the label, while Pabst offered an expert opining
on a consumer survey. Peacock responded that the evidence of deceptiveness
included Pabst’s “own testimony about the point and method of showing the label
to consumers in the store on shelves, the ‘historical’ references described by
Defendant’s own witness, and the labelling and marketing of the beer itself.” <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">To prevail under California’s
UCL, the plaintiff must produce evidence that shows “a likelihood of
confounding an appreciable number of reasonably prudent purchasers exercising
ordinary care.” This can be done with “surveys and expert testimony regarding
consumer assumptions and expectations” but these are not always necessary as in
some situations “anecdotal evidence may suffice[.]” But evidence of just “a few
isolated examples of actual deception” is not sufficient. A plaintiff can’t win
just by “describing his or her own personal, alleged misunderstanding or
confusion.” <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Pabst offered two
surveys: one for prior Olympia Beer purchasers to determine their reasons for
purchasing Olympia Beer, and another where respondents were shown one of two
versions of an Olympia Beer can with one version being as it exists now and the
“control” being a version without the “challenged elements” of the label. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Of the 185
respondents to the first survey, no respondent mentioned the water used to brew
Olympia Beer as their reason for first purchasing Olympia Beer. Only 10
respondents (roughly 5% of total respondents) indicated the “geographic origin
of the beer” as part of their reasoning for their first purchase. The results for
subsequent purchasers were similar. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">In the second
survey, only 4, or approximately 2%, of the 202 respondents who were shown the
actual Olympia Beer packaging mentioned “the source or origin of the water used
to brew the beer as a message conveyed by the product’s label.” Two of the 196
respondents in the control group, who were shown the label without the
challenged elements, also “mentioned the source or origin of the water[ ]” thus
indicating that “there [was] no meaningful difference between the test and
control condition ....” (Id.) Similarly, a roughly equal percentage of
respondents from the two groups “mentioned that the Pacific Northwest,
Washington, or Olympia/Olympia Falls was a message conveyed by the label[,]”
and there was only a 3% difference between the control and test groups (62% for
the test group and 59% for the control group) in respondents who thought
“Olympia Beer was brewed with artesian water from Olympia, Washington.” <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Given this evidence,
Pabst met its initial burden of establishing the absence of any genuine issues
of material fact, and Peacock’s evidence wasn’t enough. The evidence from Pabst’s
witnesses about “historical” references indicated that the reasons for the slogan
were historical, but they also testified that they didn’t believe that
consumers considered the source of the water.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Likewise, the actual
content of the label and marketing might be relevant background information “but
it does not create a genuine dispute over whether those elements are likelihood
of those elements to confound an appreciable number of prudent purchasers
exercising ordinary care.” Peacock’s own testimony was relevant, but only anecdotal
and, without anything else, insufficient.<o:p></o:p></span></p><div class="blogger-post-footer">http://tushnet.blogspot.com/feeds/posts/default?alt=rss</div>Rebecca Tushnethttp://www.blogger.com/profile/17344226000864611148noreply@blogger.com0tag:blogger.com,1999:blog-5764290.post-26308515892656103022024-03-21T11:31:00.001-04:002024-03-21T11:31:03.854-04:00Another "buy" button lawsuit over digital licenses continues<p>In re Amazon Prime
Video Litig., 2024 WL 1138906, No. 2:22-cv-00401-RSM (W.D. Wash. Mar. 15, 2024)</p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">This putative class
action alleged that Amazon overcharged and “[d]eceived consumers by
misrepresenting that it was selling them Digital Content when, in fact, it was
really only licensing it to them[.]” Plaintiffs brought claims under
California, New York, and Washington consumer protection law, and common law
claims for unjust enrichment. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Plaintiffs alleged that
Amazon offers cheaper “rent” options for some of its content, but more
expensive “buy” options as well. When consumers “buy” digital content, it’s
stored in a folder called “Video Purchases & Rentals.” <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">But, in fact, Amazon
does not cannot pass title of any of this content to consumers. “If the
licensing agreement for any of the Digital Content is terminated, Amazon has to
pull the Digital Content from not only its site but from all consumers’
purchased folders, ‘which it does without prior warning, and without providing
any type of refund or remuneration to consumers.’”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Amazon argued that
Article III standing was absent because plaintiffs haven’t lost access to their
digital content, and that their claims of overpayment also rested on the mere
threat of future unavailability. The court disagreed: there’s a plausible
difference in value between owning outright versus purchasing a revocable
license.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">“Buy” was also
plausibly deceptive. Amazon argued that “buy” didn’t mean perpetual ownership,
and that it sufficiently disclosed the risk of losing access. Plaintiffs
pointed out that Amazon also allows <i>real</i></span>, non-repossessable purchases
with the “Buy” button for tangible goods.<span style="mso-bidi-font-size: 12.0pt;">
<span style="mso-spacerun: yes;"> </span>Again, the court agreed with plaintiffs:
it was plausible that “buy” could be materially misleading. The court
hypothesized a consumer who paid nearly $40 for <i>Barbie </i>and <i>Oppenheimer</i>,
but whose <i>Barbenheimer </i>(first judicial appearance?) weekend was ruined
because Amazon suddenly lost one license. “Understandably, this consumer ‘might
feel a little miffed [or go nuclear] if she were told that she received exactly
what she paid for.’”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">It was also
plausible that the TOS didn’t sufficiently disclose the restrictions. Though
the “buy” button manifests consent to a contract, “certain terms and policies
could fail to meet statutory standards of clearness and effectiveness.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Washington state
unjust enrichment claims were dismissed, however, because that state only
recognizes the tort where there’s no contract, and there was one here.<o:p></o:p></span></p><div class="blogger-post-footer">http://tushnet.blogspot.com/feeds/posts/default?alt=rss</div>Rebecca Tushnethttp://www.blogger.com/profile/17344226000864611148noreply@blogger.com0tag:blogger.com,1999:blog-5764290.post-63451794829136177862024-03-21T09:00:00.014-04:002024-03-21T09:00:00.133-04:00CFP: Trademark and Unfair Competition Scholarship Roundtable 2024 <p>The Trademark and
Unfair Competition Scholarship Roundtable co-hosted by Harvard, NYU, and the
University of Pennsylvania will take place this year at Harvard. The Roundtable
is designed to be a forum for the discussion of current trademark, false advertising, and right of
publicity scholarship, covering a range of methodologies, topics, and
perspectives. Five to six papers will be chosen for discussion over the course
of the Roundtable, with each paper allocated an entire hour for discussion and
assigned a commentator. </p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The Roundtable will
be held on Friday, October 18, 2024. If there is a critical mass of papers, we
may also extend the Roundtable through Saturday morning, October 19.
Participation at the Roundtable will be limited and invitation-only and we
expect all participants to have read the papers in advance. The Roundtable will
cover the travel and lodging expenses for invited authors.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal">We invite
submissions from academics working on any aspect of trademark, false
advertising, marketing, right of publicity, or related areas of the law.
Priority will be given to those who can attend the entire event and a dinner
the night of Friday, October 18. Submissions must be of full drafts in
Microsoft word format. The deadline for submission is May 15, 2024, and
decisions on participation will be made shortly thereafter, ideally, by June
1st. </p>
<p class="MsoNormal">To submit a draft
paper, please fill out the form here (https://forms.gle/QAfdmH18KmgdZAxp7) and
upload an anonymized version of your draft.
Please note that the maximum file size that may be uploaded is 10MB.
Appendices or other supporting material can be uploaded separately; please do
not submit a CV or cover letter. </p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">For further
information about the Roundtable, please email either: Barton Beebe (NYU):
barton.beebe@nyu.edu; Jennifer Rothman (Penn): rothmj@law.upenn.edu, or Rebecca
Tushnet (Harvard): rtushnet@law.harvard.edu.<o:p></o:p></span></p><div class="blogger-post-footer">http://tushnet.blogspot.com/feeds/posts/default?alt=rss</div>Rebecca Tushnethttp://www.blogger.com/profile/17344226000864611148noreply@blogger.com0tag:blogger.com,1999:blog-5764290.post-62798526623341870512024-03-14T13:37:00.004-04:002024-03-14T13:37:42.243-04:00Earth, Wind & Infringement: TM owner succeeds against overclaiming "reunion" band<p></p><p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Earth, Wind &
Fire IP, LLC v. Substantial Music Group LLC, --- F.Supp.3d ----, 2024 WL
1025265, No. 23-20884-CIV-MORENO (S.D. Fla. Mar. 1, 2024)<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">With the ordinary
multifactor confusion test, courts position themselves as looking for empirics
(even though the thrust of several of the factors is normative). But with nominative
fair use, courts engage in more unfair competition/normative reasoning. When a
court finds that a use went beyond identifying to suggesting a connection, it often
doesn’t use any of the factors that <i>empirically</i></span> we might use to figure
out if that was true. Instead, it generally determines that the defendants did “too
much” based on its own sense of what’s accurate. Here, though, a bit of empirics
creeps in.<o:p></o:p></p>
<p class="MsoNormal">The facts: <span style="mso-bidi-font-size: 12.0pt;">Earth,
Wind & Fire is owned by the sons of Maurice White, founder of the well-known
musical group “Earth, Wind & Fire,” and owns trademark rights in the name.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">“Defendants decided
to form and promote a band, in which Richard Smith would be the guitarist that
would perform the music of Earth Wind & Fire. It is undisputed that Smith
played with the Earth, Wind & Fire for a few years, but the size of his role
during those years is in dispute.” They called the new band, “Earth Wind &
Fire Legacy Reunion” and “The Legacy Reunion of Earth, Wind & Fire.” They
also used plaintiff’s word mark and its “Phoenix” logo mark. After plaintiffs
objected, defendants changed their name to “Legacy Reunion of Earth Wind &
Fire Alumni,” made logo and color changes, and ceased using the “Phoenix” logo.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The court granted
summary judgment on liability to plaintiff.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Nominative fair use:
Earth, Wind & Fire wasn’t readily identifiable without use of its name. What’s
“reasonably necessary” to identify it can differ from case to case. Although
the initial uses seemed clearly more than reasonably necessary, defendants stopped
using Earth, Wind & Fire’s distinctive font, took out the distinctive
“Phoenix” logo, switched the title of its musical shows from “Earth Wind &
Fire Legacy Reunion” to “Legacy Reunion of Earth Wind & Fire Alumni,” and
changed the color scheme. Thus, they satisfied the second element of NFU.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">However, the court put
the burden on defendants to show that they did “nothing that would, in
conjunction with the mark, suggest sponsorship or endorsement by the trademark
holder.” This was a closer call, but the court rejected the defense. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">In the Princess
Diana case, <i>Cairns</i>, the court “found persuasive that the advertisements
for the Princess Diana related products did not claim that they were sponsored
or endorsed by the trademark holder, where other of the defendant’s
celebrity-related products do state that they are ‘authorized’ by a trademark
holder.” By contrast, the silence here was not as meaningful because there
weren’t other “authorized” products. And “Legacy Reunion of Earth Wind &
Fire” lacked “a clear disclaimer or limiting language about who is performing.”
Plus, defendants “combined the advertising with text that discusses the Earth
Wind & Fire’s legacy”: their website said that the band “dominated the 70’s
with their monster grooves and high energy, danceable hits, garnering 20 Grammy
Award nominations and a Hall of Fame Induction along the way.” It further
states that “[t]he style and sounds of the greatest hit recordings by Earth,
Wind & Fire were built by founder Maurice White and the contributions of a
stellar collective of some of the best musicians in the world throughout the
decades.” These ads “draw a close, unmistakable association with Earth, Wind
& Fire to a degree unwarranted by the historical record.” “Regardless of if
Defendants’ musicians were technically sidemen or members, the advertisement
and marketing were still deceptive and misleading as to whether the main (or
most prominently known) members of the band would be performing. The use of the
word ‘alumni’ is not enough to dispel the notion that Defendants’ band is not
sponsored.” This was close, because “some original musicians and members … are
performing, [but] the advertisements are overstating the originality of the
group. Plaintiff shows this through multiple consumer online posts, commenting
with frustration on their expectations based on advertisements verses what they
received.” This isn’t evidence of association in general, like the survey in <i>New
Kids</i>, but rather of a material quality gap—maybe that kind of evidence is
especially relevant.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The court also
rejected acquiescence, estoppel, and laches defenses. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">A couple of points
from the confusion analysis: Third-party use didn’t weaken the mark because
each third-party use identified by defendants included “tribute” somewhere in
the name and most of the websites made clear exactly who was performing. E.g.,
“The Ultimate Earth, Wind & Fire Tribute Band” website includes information
of the performers, which explicitly states that the Saxophonist Curtis Johnson
“[t]oured with the original EARTH, WIND & FIRE BAND.” The “Kalimba – Earth
Wind & Fire tribute” site explicitly stated that the band seeks to
“accurately reproduce the infectious grooves.” Defendants’ name, by contrast,
was “Legacy Reunion of Earth Wind & Fire Alumni,” “which implies not that
they are ‘covering’ or ‘reproducing’ the music but were the original
performers.” Even “The Earth Wind, & Fire Experience featuring The Ray
Howard Band” identified itself as an “experience” and a performance by an
entirely different band.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Similarity of
advertising media: The fact that the parties used separate websites and social
media favored defendants, by showing a distinction between the groups. It just
wasn’t enough. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Bad faith: Not shown,
because just knowing of the prior mark isn’t enough without an intent to misappropriate.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Actual confusion:
emails said things like “I attended the [Earth, Wind & Fire] legacy reunion
in Pensacola, Florida in hopes of seeing Philip Bailey, Verdine White and
others from the original band. Their pictures are on the advertisement,
posters, or whatever. The impression of Reunion would be original band members
from various years. Why is it misleading? The pictures should be removed from
advertisement. The details read friends and family or something like that.” <o:p></o:p></span></p><br /><p></p><div class="blogger-post-footer">http://tushnet.blogspot.com/feeds/posts/default?alt=rss</div>Rebecca Tushnethttp://www.blogger.com/profile/17344226000864611148noreply@blogger.com0tag:blogger.com,1999:blog-5764290.post-70082492085645539512024-03-14T13:36:00.003-04:002024-03-14T13:36:43.614-04:00calling an accepted Rule 68 offer a judgment of infringement could be defamatory<p>Double Diamond
Distribution Ltd. v. Crocs, Inc., 2024 WL 1051951No. 23-cv-01790-PAB-KAS (D. Colo.
Mar. 11, 2024)</p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">I have a
long-running interest in Rule 68 offers of judgment, and this case involves an
interaction with false advertising law! The parties compete in the shoe market.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">In 2006, Crocs sued now-plaintiff
Double Diamond and Dawgs, its affiliate. Trial was scheduled for 2022 (!), but then-defendants
sent offers of judgment to Crocs. Double Diamond’s offer stated: “This offer is
made for the purposes specified in Rule 68 and is not to be construed either as
an admission that Double Diamond is liable in this action or that Crocs has
suffered any damage.” Dawgs’ offer was similar (though it offered $6 million, where
Double Diamond offered $55,000, and contemplated bankruptcy).<span style="mso-spacerun: yes;"> </span>Crocs accepted. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Crocs then issued a
press release, “Crocs secures long sought-after judgment of infringement
against USA Dawgs and Double Diamond Distribution.” The press release announced
<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: .5in;"><span style="mso-bidi-font-size: 12.0pt;">a judgment of infringement against USA Dawgs and Double Diamond
Distribution as a result of both companies’ sales of imitation Crocs shoes. In
conjunction therewith, Crocs also obtained $6 million and $55,000 in damages,
respectively, against the companies.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: .5in;"><span style="mso-bidi-font-size: 12.0pt;">This case is the culmination of years long battles between the parties
after USA Dawgs and Double Diamond Distribution began selling shoes that
infringed Crocs’ patents in 2006. Both USA Dawgs and Double Diamond
Distribution have since conceded the validity of Crocs’ patent rights.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: .5in;"><span style="mso-bidi-font-size: 12.0pt;">“We are fiercely protective of the Crocs brand and our iconic DNA. We
have zero tolerance for infringement of our intellectual property rights or for
anyone who tries to benefit off the investments that we have made in our
brand,” said Daniel Hart, Executive Vice President and Chief Legal & Risk
Officer at Crocs. “This judgment not only reinforces the validity of our patent
rights, it also reinforces our unrelenting determination to take forceful steps
to protect our brand equity.”<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: .5in;"><span style="mso-bidi-font-size: 12.0pt;">This judgment of infringement comes nearly one year to the day after
Crocs filed lawsuits against 21 companies alleging infringement of its
registered trademark rights in its clog designs. … <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The court declined
to dismiss Double Diamond’s resulting defamation claim. This was not a case
where the “gist” was true on the facts alleged. A Rule 68 offer of judgment
does not require an admission of liability, which may be disclaimed. If that
happens, the court’s judgment does not constitute a finding of or an admission
of liability against the defendant. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The statements that
Crocs obtained “a judgment of infringement against USA Dawgs and Double Diamond
Distribution as a result of both companies’ sales of imitation Crocs shoes” and
“[t]his judgment...reinforces the validity of [Crocs’] patent rights” were
plausibly false because the statements would have a “different effect on the
mind of the reader” from that which the Rule 68 offer of judgment would have
produced. And they were plausibly material because the statements would likely
cause reasonable people to think “significantly less favorably” about Double
Diamond than they would if they knew the truth. Unlike the difference between “stalking”
and “harassment,” this was not “a minor, technical error in legal terminology.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Trade libel claims
survived for the same reason.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Lanham Act false
advertising: Crocs argued that the press release was not “commercial
advertising,” because (a) the press release was directed at investors, not the
relevant purchasing public; and (b) Double Diamond never alleged that the press
release promoted Crocs’ shoes to consumers. However, Crocs published the press
release on its website and had the press release published to 440,000 websites,
newsrooms, and direct feeds using PRNewswire. And it stated that Crocs “is a
world leader in innovative casual footwear for women, men, and children,
combining comfort and style with a value that consumers know and love.” This
was enough to plausibly allege commercial advertising, along with the allegation
that Crocs made the statement in order to obtain increased sales and brand
differentiation; the press release repeatedly referred to Crocs’ brand and
products and included the invitation “To learn more about our brands, please
visit www.crocs.com or www.heydudeshoesusa.com or follow @Crocs or
@heydudeshoes on Facebook, Instagram and Twitter.” Because the websites that
posted the press release have a combined viewership of 6 billion people per
month, the allegations were sufficient to show that the statements were “disseminated
sufficiently to the relevant purchasing public.” This also allowed a claim
under the Colorado Consumer Protection Act.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Intentional
interference with contractual relations failed, however, because there was no
identified specific relationship with a third party. <o:p></o:p></span></p><div class="blogger-post-footer">http://tushnet.blogspot.com/feeds/posts/default?alt=rss</div>Rebecca Tushnethttp://www.blogger.com/profile/17344226000864611148noreply@blogger.com0tag:blogger.com,1999:blog-5764290.post-90459224826018215722024-03-08T11:55:00.001-05:002024-03-08T11:55:02.296-05:00reasonable consumers aren't required to know collagen can't be vegan<p>Kandel v. Dr. Dennis
Gross Skincare, LLC, 2024 WL 965621, No. 23-cv-01967 (ER) (S.D.N.Y. Mar. 5,
2024)</p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;"><a href="https://tushnet.blogspot.com/2023/09/court-certifies-ccollagen-class-even-if.html">Similar
California litigation at a later stage</a>. Kandel alleged that Gross Skincare deceptively
labeled and advertised its skincare products as containing collagen when, in
fact, they do not. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">“Collagen is a
protein found exclusively in humans and animals that has been linked to
youthful skin, hair, and nails. It is composed of thousands of amino acids
intertwined in a specific, unique sequence. Without being sequenced this way,
amino acids do not confer the same benefits as collagen.” The products at issue
are uniformly branded with the phrase “C + Collagen.” The list of ingredients
includes “Collagen Amino Acids”; some products also feature the term “collagen
amino acids” in a separate section on the package titled “What It Is”/“What’s
In It For You.” <o:p></o:p></span></p><p class="MsoNormal"><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjObfzpSzYt77bBrsXNRo_xBy7cYmM4iALGe3y2NkXxLD56f4ierzOj46U6BfabojFuOBWMss92aUYERmhlIZJAAkIzeZNBG23ALVYkSfMYKJlzJUAoGBwcfjs_GAeaAhANfVX5fruhs9EI14OUbHSsBNQWW_QxQ_gFhLuE2_T8ZkvcroOQDkC7uw/s940/product%20package.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="739" data-original-width="940" height="504" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjObfzpSzYt77bBrsXNRo_xBy7cYmM4iALGe3y2NkXxLD56f4ierzOj46U6BfabojFuOBWMss92aUYERmhlIZJAAkIzeZNBG23ALVYkSfMYKJlzJUAoGBwcfjs_GAeaAhANfVX5fruhs9EI14OUbHSsBNQWW_QxQ_gFhLuE2_T8ZkvcroOQDkC7uw/w640-h504/product%20package.jpg" width="640" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">one of the packages at issue: C + Collagen Deep Cream</td></tr></tbody></table></p><p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">One side of each package
also contains a small symbol indicating that the product is vegan—making “collagen”
content impossible. Gross Skincare allegedly knows that consumers will pay more
for skincare products that contain collagen and intends for consumers to infer
from the “Collagen” branding that the products do so. <o:p></o:p></span></p><p class="MsoNormal"><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjmJ9Iq0iTSsysi41MUyGJg81_p76N2v26qeJipaBosaKRGvGeFEEFH34RoydxT52RYD8ZLKe79PxK2eokvIHxxSRAWzu-sy241XY0b8Qt63nv0OBQI5RM4D_asGUgUPiPuTExbhiNTcNuoWGfYE8759xTzshSdbmVyoOMJeokGg0tn_fPceScblg/s857/package%20with%20label.bmp" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img alt="C + Collagen package sides with small blue arrow pointing to small vegan symbol at bottom and blue underline of "collagen amino acids" in ingredient list" border="0" data-original-height="857" data-original-width="735" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjmJ9Iq0iTSsysi41MUyGJg81_p76N2v26qeJipaBosaKRGvGeFEEFH34RoydxT52RYD8ZLKe79PxK2eokvIHxxSRAWzu-sy241XY0b8Qt63nv0OBQI5RM4D_asGUgUPiPuTExbhiNTcNuoWGfYE8759xTzshSdbmVyoOMJeokGg0tn_fPceScblg/w548-h640/package%20with%20label.bmp" width="548" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">blue lines/arrows added by court to highlight relevant terms</td></tr></tbody></table></p><p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">NY GBL claims were
sufficiently alleged. Gross Skincare argued that the “C + Collagen” phrase didn’t
imply that the products contain collagen, but instead that the Vitamin C in the
products increases natural production of collagen in the user’s skin. It
claimed that the rest of the package clarified that the products contain
“collagen amino acids” and are vegan. Because of the label “vegan,” it argued, a
reasonable consumer would understand that they do not contain collagen. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">This interpretation of
“C + Collagen” was “certainly less intuitive than Kandel’s.” Even considered as
a whole, the complaint alleged misleadingness. The use of “collagen amino acids”
“likely only reaffirms that collagen is an ingredient” and was itself arguably
confusing; the label did nothing to explain it.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Even if one accepts
Gross Skincare’s definition of “collagen amino acids” as “the building blocks
of collagen,” the court did not assume that a reasonable consumer understands
that collagen is a protein composed of amino acids. So too with “vegan.” Even
if the consumer noticed this small symbol, they’d have to know that collagen
comes exclusively from animals. <span style="mso-spacerun: yes;"> </span>This
certainly couldn’t be assumed on a motion to dismiss.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Breach of warranty
and unjust enrichment claims under New York law, however, failed, as well as
claims on behalf of a nationwide class.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Kandel did have
standing as to four products she didn’t buy but that contained the same alleged
misrepresentations.<o:p></o:p></span></p><div class="blogger-post-footer">http://tushnet.blogspot.com/feeds/posts/default?alt=rss</div>Rebecca Tushnethttp://www.blogger.com/profile/17344226000864611148noreply@blogger.com0tag:blogger.com,1999:blog-5764290.post-4247130120149201302024-03-07T15:29:00.002-05:002024-03-07T15:29:55.645-05:00small competitor lacks standing against big one's nondisparaging advertising<p>HomeLight, Inc. v.
Shkipin, --- F.Supp.3d ----, 2024 WL 940089 (N.D. Cal. Mar. 5, 2024)</p>
<p class="MsoNormal">Sometimes, courts
are very generous to competitors in presuming Lanham Act standing—as with the recent<a href="https://tushnet.blogspot.com/2024/03/local-ad-company-has-lanham-act.html"> Meta ruling</a>—and sometimes they aren’t. I have yet to detect a real
pattern across facts/circuits, but suggestions welcome.<o:p></o:p></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;"><a href="https://tushnet.blogspot.com/2023/10/proximate-causation-isnt-as-easy-when.html">Previous
ruling</a>.</span> <span style="mso-bidi-font-size: 12.0pt;">Shkipin’s amended
false advertising counterclaim fails again. Although Shkipin alleged commercial
injuries—“network effects and ad revenues, and also … goodwill value associated
with its 100% free services to real estate agents and consumers” but there wasn’t
sufficiently direct causation. None of HomeLight’s statements allegedly
disparaged or even referred to Shkipin’s business. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: .5in;"><span style="mso-bidi-font-size: 12.0pt;">To establish that HomeLight proximately caused HomeOpenly to suffer a
loss of sales, Mr. Shkipin would need to show how deceptive statements about
HomeLight directed at shoppers on HomeLight’s own website necessarily caused
advertisers not to buy ads from HomeOpenly. Even assuming that there is a
direct relationship between the number of shoppers who use or visit HomeOpenly
and its ability to sell ads, and that HomeLight’s deceptive statements resulted
in some reduction in the number of shoppers visiting HomeOpenly’s website, this
connection is too attenuated to establish proximate cause. This is especially
true given the countercomplaint’s other plausible explanation for why online
home shoppers might find HomeLight’s website but not HomeOpenly’s: HomeLight’s
heavy spending on various forms of online and TV advertising that Mr. Shkipin
characterizes as “highly effective.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">These causation
problems also defeated his state UCL claim. The allegedly unlawful/fraudulent
conduct underlying the UCL claim—that HomeLight received illegal kickbacks in
violation of RESPA—wasn’t sufficiently linked to the injuries Shkipin claimed. <o:p></o:p></span></p><div class="blogger-post-footer">http://tushnet.blogspot.com/feeds/posts/default?alt=rss</div>Rebecca Tushnethttp://www.blogger.com/profile/17344226000864611148noreply@blogger.com0tag:blogger.com,1999:blog-5764290.post-68899054793673332342024-03-06T15:46:00.001-05:002024-03-06T15:46:08.517-05:00Second Circuit affirms holding that asterisk/fine print sufficiently clarifies ambiguous claim<p>Montgomery v. Stanley
Black & Decker, Inc., 2024 WL 939151, No. 23-735-cv (2d Cir. Mar. 5, 2024)</p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Plaintiffs sued
defendant (Craftsman) for deceptive business practice claims under both the New
York General Business Law (NYGBL), and the Virginia Consumer Protection Act
(VCPA), as well as asserting warranty and common law claims. They alleged that the
“Peak HP” labeling on the packaging of Craftsman vacuums is misleading because
the vacuums are unable to achieve the advertised horsepower. The District Court
dismissed the complaint because the dagger or asterisk symbol next to the “Peak
HP” label directs the consumer to fine print explaining that “Peak HP” is the
horsepower achieved in laboratory testing, not ordinary use. The court of
appeals affirmed.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Based on the entire
packaging, a reasonable consumer would not be misled because of the fine print
explanation. Plaintiffs didn’t allege the “Peak HP” label was false, and though
their interpretation was one reasonable one, the fine-print meaning was also
reasonable, and the dagger/asterisk “would alert a reasonable consumer to the
fact that certain caveats may apply to the ‘Peak HP’ designation.” Just because
it was in fine print didn’t mean it couldn’t clarify an ambiguous label. There
were no allegations that a consumer couldn’t see it or that its terms were
confusing. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;"><o:p> </o:p></span></p><div class="blogger-post-footer">http://tushnet.blogspot.com/feeds/posts/default?alt=rss</div>Rebecca Tushnethttp://www.blogger.com/profile/17344226000864611148noreply@blogger.com0tag:blogger.com,1999:blog-5764290.post-38274672210873976722024-03-06T15:45:00.001-05:002024-03-06T15:45:19.063-05:00local ad company has Lanham Act standing against Meta for allegedly overstating ad reach<p>Metroplex Communic.,
Inc. v. Meta Platforms, Inc., 2024 WL 940127, No. 22-cv-1455-SMY (S.D. Ill.
Mar. 5, 2024)</p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Metroplex, a local
advertising company, brought a putative class action against Meta for unfair
competition. Although Meta argued that Metroplex was an ad purchaser for two of
its local media properties (a news site and an FM radio station), given that it
has advertised on Facebook dozens of times in the last few years, Metroplex
argued that it was a Meta competitor. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Metroplex alleged
that sells and places digital and targeted advertisements on its local news
website, its “Best of Edwardsville” website, radio advertisements for its FM and
AM radio stations, and print advertisements that are placed in local newspapers
and in the “Best of Edwardsville” magazine. Metroplex also allegedly develops
tools and systems for managing and optimizing advertising campaigns for
businesses.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Meta allegedly drew
buyers away from its local news outlets by (1) using the word “people” in
statements related to advertising on Meta and (2) overestimating the number of
people on Meta’s apps and reachable by ad campaigns, and contends that Meta’s
users were “not actually people,” because some accounts were false and some
people have more than one account. It asserted claims under the Lanham Act and
the Illinois Uniform Deceptive Trade Practices Act.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Metroplex satisfied <i>Lexmark</i>
by alleging that the parties compete directly for the same customers and Meta’s
false or misleading statements were material to advertisement buyers. Lost
sales could be plausibly inferred by these allegations.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">As for stating a
claim, Meta noted that most of the challenged statements weren’t “advertising.”
They were numerical estimates taken from Meta’s SEC filings or provided to
individual advertisers for particular ad campaigns, and generic references to
“people” on informational webpages. But the plaintiff did enough to satisfy Rules
8 and 9(b).<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">A reasonable
consumer could be confused despite Meta’s alleged disclaimers or qualifying
statements in SEC filings or in icons that led to popup windows, given the
allegations of falsity, just as the back label of a product can’t correct false
statements on the front. Given allegations that Meta allegedly inflates
audience estimates and reach metrics and such audience size figures can be over
30% of the actual number, it would be plausible for consumers to be deceived.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The IUDTPA claim
also survived because Metroplex, an Illinois company, alleges it was damaged as
a competitor in the Edwardsville and greater Metro East region in Illinois. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The court also
rejected Meta’s motion to compel arbitration; these claims, asserted in its
capacity as Meta competitor, were outside the scope of the agreement Metroplex
signed to run its Facebook pages. <br />
<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p><div class="blogger-post-footer">http://tushnet.blogspot.com/feeds/posts/default?alt=rss</div>Rebecca Tushnethttp://www.blogger.com/profile/17344226000864611148noreply@blogger.com0tag:blogger.com,1999:blog-5764290.post-60666009016608721582024-03-06T15:32:00.006-05:002024-03-06T15:32:57.438-05:00Bank has Lanham Act standing to assert disparagement claim against former customer (itself a service provider)<p>SouthState Bank,
N.A. v. Qoins Technologies, Inc., --- F.Supp.3d ----, 2024 WL 911075, No.
1:22-CV-5020-MHC (N.D. Ga. Mar. 1, 2024)</p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">“Qoins is a
financial technology company that collects funds from its customers and
disburses payments to designated creditors in order to help its customers pay
off their debts.” Customers inform Qoins of their outstanding debts that they
wish to pay and transfer money to Qoins “on a regular basis to satisfy such
debts over time.” In 2019, Qoins entered into a Master Disbursement Services
Agreement with Atlantic Capital Bank to establish a banking relationship, which
included creating bank accounts that contained customer funds. SouthState is
ACB’s successor in interest. Under the agreement, Qoins was the bank’s customer
(and Qoins customers weren’t). It set up custodial accounts for holding
customer funds—not to be used for operations; an operating account; and a
reserve account. Qoins customers would make deposits to custodial accounts;
Qoins would make payments to creditors and then reconcile deposits and
payments. Qoins agreed to ensure that custodial accounts had sufficient funds
to carry out the payments and to cover any fees related to the transactions,
and to keep records of its transactions and provide accurate information to the
bank. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">In June 2022, “SouthState
documented the mutual agreement” reached by Qoins and SouthState that the
banking relationship between them would terminate, effective July 20, 2022. SouthState
was unable to complete the transition process to a new bank partner (Evolve)
because “ACH requests to SouthState for Qoins’s Customers’ funds [ ] exceeded
the amounts in Qoins’s accounts with SouthState.” Qoins initiated an ACH
request in the amount of $150,000 from the Custodial Accounts to Evolve;
however, because the Custodial Accounts were overdrawn, SouthState denied the
request. SouthState allegedly eventually had to charge off the negative
balances of Qoins’s accounts in an amount in excess of $33,000.” <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">SouthState alleged
that the custodial accounts were improperly “used in multiple instances by
Qoins to fund Qoins’s other accounts at SouthState”; custodial accounts were
frequently funded by the operating account; Qoins’ earnings weren’t sufficient
to maintain operating capital; and funds from the different accounts were commingled.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">In early December
2022, Qoins published an announcement on its website informing customers that
it “recently switched to a new bank partner” in order to “provide additional
services,” but “[u]nfortunately, however, some of our customers have not been
able to migrate their accounts due to ongoing issues with SouthState Bank.” <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The announcement
included a question, “Why can’t I access my money?” and provided the following
answer:<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: .5in;"><span style="mso-bidi-font-size: 12.0pt;">If you never attempted to migrate, or if you received an error message
during the migration process (including a message that says your account is “on
hold”), your funds are still at SouthState Bank. SouthState Bank is unable to
release your funds, so we have been unable to migrate your account or refund
your money. We continue to work with SouthState Bank to resolve this matter
expeditiously. While we have seen some customers reach out to SouthState Bank
directly, customers have had no luck. Some customers have also reached out to
our new bank partner, but they are not in a position to help.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Qoins’s announcement
also provided a link to the FDIC’s Customer Assistance Form and informed any
aggrieved customers that a Qoins representative would assist in helping the
customer file a complaint against SouthState with the FDIC. Qoins also referred
to SouthState in its responses to customer reviews, saying it was responsible
for withholding funds. This was all allegedly false and misleading (given that
Qoins customers were not SouthState customers, they weren’t FDIC insured). “Numerous”
Qoins customers allegedly filed complaints against SouthState “with relevant
federal agencies,” even though SouthState was not responsible to Qoins’s
customers and SouthState did not possess any records of the customers’
interactions with Qoins. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The court mostly denied
Qoins’ motion to dismiss the resulting claims, including breach of contract and
libel.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">False advertising/false
association: SouthState lacked standing to bring a false association claim against
Qoins because there were no allegations of passing off, and in fact Qoins
allegedly identified SouthState as a banking partner. Thus, SouthState didn’t
fall within the zone of interests for false association. [I think what the
court meant was that <i>Lexmark</i>’s<i> </i>zone of interests/proximate cause test
applies to §43(a)(1)(A) claims, as I think it would have to, but that the zone
of interests/proximate cause analysis differs as between false association and
false advertising.]<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">But SouthState did
have standing for a false advertising claim. “Because SouthState is alleging
reputational injuries, no direct competition is required and SouthState has
pleaded with sufficiency that it has standing to sue because the alleged false
representations about SouthState could impact its business reputation.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Were the Qoins
statements made in commercial advertising or promotion? Qoins argued that they
were answers to customer questions and not intended to influence customers away
from SouthState or targeted at SouthState customers. The Eleventh Circuit has
adopted <i>Gordon & Breach</i>’s test (probably as modified by <i>Lexmark</i>).
<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: .5in;"><span style="mso-bidi-font-size: 12.0pt;">Qoins’s argument that the statements were not made to the purchasing
public is unavailing because SouthState has alleged that Qoins made the
representations on its website and in response to customer reviews on online
application stores. Importantly, these representations are alleged to be
public-facing and widely accessible. “[W]hen statements are so broadly
disseminated, they are much more likely to constitute commercial advertising.” <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Drawing all
inferences in SouthState’s favor, “Qoins’s statements were made to pacify
customer concerns and to influence customers to start or continue their
relationship with Qoins. A reasonable inference also can be made that Qoins’s
statements were intended to influence customers to purchase its service,
because such issues were not attributable to the new banking partner.” That
sufficed.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Interestingly, the
court also found that SouthState sufficiently alleged materiality in two
independent ways: (1) allegedly false representations that SouthState continued
to hold customers’ funds concerned “the essential characteristic of its
business as a bank” and (2) because consumers</span> <span style="mso-bidi-font-size: 12.0pt;">allegedly filed complaints against SouthState based on Qoin’s
representations, it was plausible that those representations affected consumer
decisions about SouthState. <o:p></o:p></span></p><div class="blogger-post-footer">http://tushnet.blogspot.com/feeds/posts/default?alt=rss</div>Rebecca Tushnethttp://www.blogger.com/profile/17344226000864611148noreply@blogger.com0tag:blogger.com,1999:blog-5764290.post-50262647595496512172024-03-06T15:32:00.001-05:002024-03-06T15:32:02.760-05:00Two hospitals can both be best, and use purple ads (for now at least)<p>NYU Langone Health
Sys. v. Northwell Health, Inc., 2024 WL 898941, No. 23-CV-5032 (VEC) (S.D.N.Y.
Mar. 1, 2024)</p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">NYU Langone sued
Northwell for trade dress infringement, unfair competition and false
designation of origin, and false advertising under the Lanham Act, as well as
related claims under the New York GBL and New York common law. The core
allegation is that Northwell copied its advertising to trade off the good will
and reputation of NYU Langone. The court dismissed the complaint—the false
advertising claims with prejudice.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The parties are both
nonprofit health systems in New York and advertise to the same market, with NYU
Langone having recently expanded its presence on Long Island, where Northwell
is headquartered. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">NYU, including NYU
Langone and other subsidiaries, has used the color purple in its signage and
branding for over 100 years. NYU Langone’s 2017 style guide suggests the
distinct shade of purple be “prominently feature[d]” with white font and accent
colors like teal and orange, like so:</span></p><p class="MsoNormal"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEitWVAb1iYfKbGzW5GAM6sg2BS6ypwk6IPFaeoiNHRVVV9nH7vVDEjxmasWs9ai8gy94zr06qRgj9Hhja0gXZQBsCACp6Og6FXRcLLD8DFxB5Ja37EVrkTr5Xfx8rK7lmu8I8kJ-2pNU8MnsKZrabPDhUeXWhLAGam6ftOfklYa1WRgqvooZOamSA/s391/nyu1.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="NYU Langone ad with purple background and white sans serif text" border="0" data-original-height="391" data-original-width="267" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEitWVAb1iYfKbGzW5GAM6sg2BS6ypwk6IPFaeoiNHRVVV9nH7vVDEjxmasWs9ai8gy94zr06qRgj9Hhja0gXZQBsCACp6Og6FXRcLLD8DFxB5Ja37EVrkTr5Xfx8rK7lmu8I8kJ-2pNU8MnsKZrabPDhUeXWhLAGam6ftOfklYa1WRgqvooZOamSA/w438-h640/nyu1.jpg" width="438" /></a></div><br /><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgTIxi5BHsbunaA1QMwEusLG3W2x5uT8qM3BGPA57jRj_nJlGjGa5vqPbEDQ6k0Fvv3rhxeQJcCBB-_mVKC5k4ilP1DUjP7q3LRolD4nf7fJDEUNj8LeeLVqJqGGSCCVJ5_RWkjD29_cyAG-iMdvPf2VhUKgJ_gq5sxZBW9CR4fekx3iaasH_b1pw/s285/nyu2.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img alt="another similar ad on a billboard" border="0" data-original-height="285" data-original-width="213" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgTIxi5BHsbunaA1QMwEusLG3W2x5uT8qM3BGPA57jRj_nJlGjGa5vqPbEDQ6k0Fvv3rhxeQJcCBB-_mVKC5k4ilP1DUjP7q3LRolD4nf7fJDEUNj8LeeLVqJqGGSCCVJ5_RWkjD29_cyAG-iMdvPf2VhUKgJ_gq5sxZBW9CR4fekx3iaasH_b1pw/w478-h640/nyu2.jpg" width="478" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"></td></tr></tbody></table><p></p><p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">NYU Langone alleged
the existence of advertising trade dress (e.g., teal and orange) and photos,
... [and the] use of purple, white, and accent color combinations in words and
phrases in the ad headlines.” <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Before 2019,
Northwell advertisements allegedly featured a logo with blue letters and
multicolored arrows on a white background:<o:p></o:p></span></p>
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgN6EjA2C02f2indD73O4_6p7ER_XNXtu1xGMtqGK5kohjrgHQrdoXIb3Loa1Q3SrIKaAUdieMXZ4vhrcDykcIq6R3-KL5FWWwRDFgvgfb-dDLzYgDOkuYBCm8Eu0McrPrVMGqqHsvo9rTkbOxyDde5ISmmIfUhWyBHoMFmaKQmOjjxQjZLfgXtog/s573/northwell1.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="ad with patient picture on top and orange and blue text on white background" border="0" data-original-height="573" data-original-width="366" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgN6EjA2C02f2indD73O4_6p7ER_XNXtu1xGMtqGK5kohjrgHQrdoXIb3Loa1Q3SrIKaAUdieMXZ4vhrcDykcIq6R3-KL5FWWwRDFgvgfb-dDLzYgDOkuYBCm8Eu0McrPrVMGqqHsvo9rTkbOxyDde5ISmmIfUhWyBHoMFmaKQmOjjxQjZLfgXtog/w408-h640/northwell1.jpg" width="408" /></a></div><br /><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgF2E7ZRHGrVp1o9cP7AhSneRJv4iyCUtcvY0QiN87e-h1vHTh0RY7L3nkQuU7HQJewYhZPDjRDclg5EuvDngDzmmg76AaN0pPGHhYug3bh1-TSqUFfM7CUvjtTUZYCEYEmUad3bKHd4hRPcb57a8xVNA2uF0M815edf8XIiCbgcknb6pfy5JUsxw/s518/northwell2.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img alt="teal and white background, white and black text" border="0" data-original-height="518" data-original-width="488" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgF2E7ZRHGrVp1o9cP7AhSneRJv4iyCUtcvY0QiN87e-h1vHTh0RY7L3nkQuU7HQJewYhZPDjRDclg5EuvDngDzmmg76AaN0pPGHhYug3bh1-TSqUFfM7CUvjtTUZYCEYEmUad3bKHd4hRPcb57a8xVNA2uF0M815edf8XIiCbgcknb6pfy5JUsxw/w376-h400/northwell2.jpg" width="376" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"></td></tr></tbody></table><p class="MsoNormal">In 2021, Northwell’s
advertisements allegedly changed and now use white letters and arrows on a
purple background:</p>
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiCklO7UE6lcybiBYQvIfF2Csrjku5rurD3j0IgACsDqg-dYoLlee8BbAVCECf5WDQY-DjzyY-IFemBp5TzOh70RW_Nr5NJbk42k3xAyY3C86mxlwM6GFKFmf2X113jAjYyWOCvvmEzckrr5KiIkUb6QqB8qdgR7ma9OGWSlvnq92O7Hf1qMqPqUQ/s647/northwell%20purple1.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="Northwell ad with purple background and blue and white text" border="0" data-original-height="397" data-original-width="647" height="392" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiCklO7UE6lcybiBYQvIfF2Csrjku5rurD3j0IgACsDqg-dYoLlee8BbAVCECf5WDQY-DjzyY-IFemBp5TzOh70RW_Nr5NJbk42k3xAyY3C86mxlwM6GFKFmf2X113jAjYyWOCvvmEzckrr5KiIkUb6QqB8qdgR7ma9OGWSlvnq92O7Hf1qMqPqUQ/w640-h392/northwell%20purple1.jpg" width="640" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhDxyeWjLeCh0_NrJSYYYKRXUrQgYBYOE8ULQ2ZBErmsePPsEFIW1cbSodTGO0a0blt_sIdTovUgf4kaj3APLrk3iKrYgyEMz4PRemN0HNky7pWt_5eCtc0ELZ7sBXV8yeeOfaHfwX-vexjMwOfzw83wZOD7quc4szZ-wrygXrouOGaW8ym_F3AMw/s646/northwell%20purple2.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="similar ad but some of the background is teal" border="0" data-original-height="364" data-original-width="646" height="360" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhDxyeWjLeCh0_NrJSYYYKRXUrQgYBYOE8ULQ2ZBErmsePPsEFIW1cbSodTGO0a0blt_sIdTovUgf4kaj3APLrk3iKrYgyEMz4PRemN0HNky7pWt_5eCtc0ELZ7sBXV8yeeOfaHfwX-vexjMwOfzw83wZOD7quc4szZ-wrygXrouOGaW8ym_F3AMw/w640-h360/northwell%20purple2.jpg" width="640" /></a></div><br /><p class="MsoNormal">NYU Langone failed
to adequately allege a protectable trade dress. “To state a claim for trade
dress infringement, a plaintiff must first clearly articulate the design or
combination of features that make up the trade dress. The articulation must
provide a ‘precise expression of the character and scope of the claimed trade
dress.’” Clarity and specificity are “imperative because courts cannot ‘shape
narrowly-tailored relief if they do not know what distinctive combination of
ingredients deserves protection.’” Further, “[t]rade dress descriptions with
too many possible combinations are not specific enough to state a claim.”</p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The allegations here
were<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: .5in;"><span style="mso-bidi-font-size: 12.0pt;">confusing and expansive. The Complaint provides a laundry list of
elements, some introduced by “e.g.” and some connected by “or,” that
encompasses such a wide variety of features that it would be difficult for
competitors to know whether their advertisement falls within the trade dress.
NYU Langone defines its trade dress as follows:<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: .5in;"><span style="mso-bidi-font-size: 12.0pt;">the prominent use of a distinctive purple color, the use of particular
accent colors (e.g., teal and orange) and photos, specific font types, colors
and headline styles (i.e., all cap sans serif white headlines, as well as white
font with certain words and phrases emphasized in the same or similar accent
colors), use of purple, white, and accent color combinations in words and
phrases in the ad headlines, and specific layouts in terms of placement and use
of accent colors, all of which create a distinctive look and feel.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Photos in the complaint
of the alleged trade dress “vividly illustrate how features such as font,
color, and layout vary across ads. Even among ads that are predominantly
purple, the shade of purple varies; some have all cap white writing; some have
all white sentence case writing; and some have a mix of white and other color
writing.”<o:p></o:p></span></p>
<p class="MsoNormal"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiAdm4JXaRsr90aopgtmKc-6fAm3IQFv-8Va2QcTIqRzaX9BUSIU-B-C04jdvtVGV0E33CqoycdbBhYTIRBcQjCkZLFl6ScbDWIt8i8iEKjrKePI48_bjE8KzSeKN1Wjo7KMWKkIRTMp_ZZgUR-hIP6F5WhGAXreds69X4GhFZ7Cx_xBmEmqIdk-g/s639/nyu3.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="subway ad as described by court" border="0" data-original-height="639" data-original-width="547" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiAdm4JXaRsr90aopgtmKc-6fAm3IQFv-8Va2QcTIqRzaX9BUSIU-B-C04jdvtVGV0E33CqoycdbBhYTIRBcQjCkZLFl6ScbDWIt8i8iEKjrKePI48_bjE8KzSeKN1Wjo7KMWKkIRTMp_ZZgUR-hIP6F5WhGAXreds69X4GhFZ7Cx_xBmEmqIdk-g/w548-h640/nyu3.jpg" width="548" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhakwNhg9ON2UMpAnVFM7nySVG-8-fKWww1qJ754X7Xjm4-IeRFIJ7cU0KrLlYOMjdKoPs2lTe68SqlLHRdr4uNRJlk9h4oD_gSCqImYWXpCMlVTtz5YeoB6Ej-FMolZQAynPwrrfyyxSp0qn4OWrOznfC-wa64NGOAzP9MrVfSNW4_cd7GwVQ6lQ/s328/nyu4.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="Facebook ad on purple background with white and orange text" border="0" data-original-height="328" data-original-width="225" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhakwNhg9ON2UMpAnVFM7nySVG-8-fKWww1qJ754X7Xjm4-IeRFIJ7cU0KrLlYOMjdKoPs2lTe68SqlLHRdr4uNRJlk9h4oD_gSCqImYWXpCMlVTtz5YeoB6Ej-FMolZQAynPwrrfyyxSp0qn4OWrOznfC-wa64NGOAzP9MrVfSNW4_cd7GwVQ6lQ/w440-h640/nyu4.jpg" width="440" /></a></div><br /><p></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Other ads had “just
a splash of purple”:<o:p></o:p></span></p>
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjXK9ZqA-SBwGPbrNleH2CWCLlyqWYAgr7jusLu20Nn2tjquw4ub92Og0imHAjY_UBAlR0SasG6oeGxDyuMt5BKJs_RWXYKFC7SdJOEeQvZX_L45j9AmA04PsrNxxJX0yLx9IT7bXVFQBKTB5K0Pp4I9_BaOwap2A8p5XCE2nozbBcNP89CZzWCIg/s258/nyu5.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="Mostly teal background with white text and then some purple at bottom" border="0" data-original-height="242" data-original-width="258" height="600" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjXK9ZqA-SBwGPbrNleH2CWCLlyqWYAgr7jusLu20Nn2tjquw4ub92Og0imHAjY_UBAlR0SasG6oeGxDyuMt5BKJs_RWXYKFC7SdJOEeQvZX_L45j9AmA04PsrNxxJX0yLx9IT7bXVFQBKTB5K0Pp4I9_BaOwap2A8p5XCE2nozbBcNP89CZzWCIg/w640-h600/nyu5.jpg" width="640" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhvyOph3GBFUVw2PbrQmaw123wKHpVkEOAISPDYIrM8taUHT8iAO1s3f3d5ldCrSYRI99tn-QFZPuzP7E6fpV5M7Vterj9rogKaSdkCFLbMUbGDFk9_6pDMFz9TWkaNobr4k29Eowvt5IxCZnbc3VPKqhX3gY-UEksTdyFkaP5QW3jmUsxM49DyxQ/s475/nyu6.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="mostly pink background with white and purple text and purple at bottom" border="0" data-original-height="459" data-original-width="475" height="618" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhvyOph3GBFUVw2PbrQmaw123wKHpVkEOAISPDYIrM8taUHT8iAO1s3f3d5ldCrSYRI99tn-QFZPuzP7E6fpV5M7Vterj9rogKaSdkCFLbMUbGDFk9_6pDMFz9TWkaNobr4k29Eowvt5IxCZnbc3VPKqhX3gY-UEksTdyFkaP5QW3jmUsxM49DyxQ/w640-h618/nyu6.jpg" width="640" /></a></div><p class="MsoNormal">Some ads were split
between photos and text, with the text varying in color and case and with the
split sometimes being vertical and sometimes horizontal:</p>
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiEg4LsDYtc0fFeXwkY0ohx_akQUzW6gPnoRLfbSqdqgusxCPhDs6KQSqrVB-efLcGvFT1csNBosM1Q5M5_mb3JmtsVud0K2_2AG3cVSyxg9N4H8HSXQaZ2By4jbttgc7RpobxY4Ehl659O_Rm90ggbeVZTY5P-p6cT_tfimb_H8aMgNtCgJ56h4g/s427/nyu7.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="photo of basketball players on left, purple background and white/blue text on right" border="0" data-original-height="262" data-original-width="427" height="392" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiEg4LsDYtc0fFeXwkY0ohx_akQUzW6gPnoRLfbSqdqgusxCPhDs6KQSqrVB-efLcGvFT1csNBosM1Q5M5_mb3JmtsVud0K2_2AG3cVSyxg9N4H8HSXQaZ2By4jbttgc7RpobxY4Ehl659O_Rm90ggbeVZTY5P-p6cT_tfimb_H8aMgNtCgJ56h4g/w640-h392/nyu7.jpg" width="640" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjVTeHDSXtW9qa3PRYtAmDOWYoB3Navb5e4-XVxFfH0Aba1OLhU3aSLM5zEREUdl2BcAJaW87cO2uFsfqsa3PbYMASj3aI57w9i7daTuOy4-sBIlIsggW3EGsEtR26_mrAFZzQGPLgSb-3ZN_FOV2mB0LaKLD2T7TRVqxF4FOz7BybGGnyNu5Q1xA/s388/nyu8.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="purple background with white text on top, photo of runner on bottom" border="0" data-original-height="388" data-original-width="298" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjVTeHDSXtW9qa3PRYtAmDOWYoB3Navb5e4-XVxFfH0Aba1OLhU3aSLM5zEREUdl2BcAJaW87cO2uFsfqsa3PbYMASj3aI57w9i7daTuOy4-sBIlIsggW3EGsEtR26_mrAFZzQGPLgSb-3ZN_FOV2mB0LaKLD2T7TRVqxF4FOz7BybGGnyNu5Q1xA/w492-h640/nyu8.jpg" width="492" /></a></div><br /><p class="MsoNormal">The court couldn’t
identify specific fonts, colors, or headline styles that were part of the trade
dress, other than that they were sans serif fonts. “Categories of features”
were insufficient.</p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The current
definition was too general, contained too many “or” connectors and “for
example” phrases, and “overall encompasse[d] too many possible permutations and
combinations to constitute a singular distinct trade dress,” though the court
would allow an amended complaint.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">False advertising: NYU
Langone alleged that a Northwell ad falsely claimed that one of its hospitals
“is NYC’s only hospital in the Nation’s Top 50” and “offer[s] the best care in
Manhattan.” This claim was based on rankings from Healthgrades and included the
Healthgrades logo directly underneath the claim. NYU Langone alleged that
Healthgrades’ rating methodology lacks transparency and relies on inaccurate
and incomplete reporting, and that the claim was false because U.S. News &
World Report ranked NYU Langone “#1 in New York State and in the New York City
Metro area” in its “Best Hospitals Honor Roll.” <o:p></o:p></span></p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEilEVzrl8wHTdjBh7g4wlXbHvUXH3g6NHvxQuaRwcrqB8c8KvpchroqHVC_KcC_dIl5HNh40bq56NcAYeMZFq5lRJbmPR_diNDIt_rfsrtzZlU4mYH9VS1A7fjwfJZekzwXeJG1DF4sYCk5fLONTt4pnZHQAGkuNvb1jmdwssFdY7bqsI11PdNnrA/s412/northwell%20alleged%20false%20ad.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="274" data-original-width="412" height="426" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEilEVzrl8wHTdjBh7g4wlXbHvUXH3g6NHvxQuaRwcrqB8c8KvpchroqHVC_KcC_dIl5HNh40bq56NcAYeMZFq5lRJbmPR_diNDIt_rfsrtzZlU4mYH9VS1A7fjwfJZekzwXeJG1DF4sYCk5fLONTt4pnZHQAGkuNvb1jmdwssFdY7bqsI11PdNnrA/w640-h426/northwell%20alleged%20false%20ad.jpg" width="640" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">ad as described with Healthgrades logo on bottom</td></tr></tbody></table><p class="MsoNormal">The statement that
Lenox Hill is the only NYC hospital in the Nation’s Top 50 wasn’t literally
false because Northwell cited the Healthgrades rating. Questioning Healthgrades’
underlying rating methodology didn’t falsify the claim that Lenox Hill was the
only NYC hospital rated in the Top 50 in that particular list.</p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Nor did NYU Langone
sufficiently allege misleadingness. It was not enough to allege only that “Northwell’s
false or misleading statements actually deceived or have the tendency to
deceive a substantial segment of consumers.” “While proof of confusion is not
necessary at the pleading stage, factual allegations that would allow the Court
plausibly to infer that the advertisement caused confusion are. NYU Langone’s
single conclusory sentence is insufficient.” And “best care in Manhattan” was
puffery.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Under NYGBL § 350,
“a disclaimer or similar clarifying language” can defeat a claim of false
advertising as a matter of law, and the Healthgrades rating did so here. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Amendment would be
futile because no reasonable jury could conclude that consumers were misled or
confused by an add bragging about Lenox Hill’s Healthgrades rating and boasting
that it offers the “best” care in the city. “Consumers are familiar with this
common type of advertising, in which businesses tout that they are the best
according to some newspaper, magazine, blog, Yelp or Google review, poll, or
other rating system.” In fact, NYU Langone does the same:<o:p></o:p></span></p>
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgUADIvAELMbMIEEmVMCiKDrkSSP7lpmBFpMrAT2uTgigt3yKRSPAnX_GQ0Kx1GLW4Q-iMs7CPuPmuZ2ax20XbGnTGLnmEDt_Cn5aKwFmisPF7e9YL4wLgnmw-SuovoWZdp9ADQ7VcKV7LUDYmUQ8I5XZ0cGXq_beaJAIk2UlOnQteQkS5Io8Tgbg/s441/nyu%20number%201.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="NYU Langone ad also claiming to be #1 in outcomes with logos of rating entities" border="0" data-original-height="441" data-original-width="303" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgUADIvAELMbMIEEmVMCiKDrkSSP7lpmBFpMrAT2uTgigt3yKRSPAnX_GQ0Kx1GLW4Q-iMs7CPuPmuZ2ax20XbGnTGLnmEDt_Cn5aKwFmisPF7e9YL4wLgnmw-SuovoWZdp9ADQ7VcKV7LUDYmUQ8I5XZ0cGXq_beaJAIk2UlOnQteQkS5Io8Tgbg/w440-h640/nyu%20number%201.jpg" width="440" /></a></div><br /><p class="MsoNormal">Both of these claims
can be true.</p><div class="blogger-post-footer">http://tushnet.blogspot.com/feeds/posts/default?alt=rss</div>Rebecca Tushnethttp://www.blogger.com/profile/17344226000864611148noreply@blogger.com0tag:blogger.com,1999:blog-5764290.post-89669718835924795592024-03-04T13:50:00.001-05:002024-03-04T13:50:08.708-05:00“it appears difficult for a defendant, innocent or not, to defend himself in a claim for disgorgement of profits"<p><a name="_Hlk160392980">Newborn Bros. Co. v. Albion Engineering Co., No. 12-2999, 2024 WL
887785 (D.N.J. Feb. 29, 2024)</a></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk160392980;"><span style="mso-bidi-font-size: 12.0pt;">Previously, after a bench trial, </span></span><a href="https://tushnet.blogspot.com/2020/09/sellers-private-definition-of-made-in.html"><span style="mso-bookmark: _Hlk160392980;"><span style="mso-bidi-font-size: 12.0pt;">the
court found Albion liable for falsely advertising its caulk dispensing guns as
“Made in the USA.”</span></span></a><span style="mso-bookmark: _Hlk160392980;"><span style="mso-bidi-font-size: 12.0pt;"> Now it’s disgorgement time.<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk160392980;"><span style="mso-bidi-font-size: 12.0pt;">After more evidence, the court found that Albion
adequately supported its unclean-hands defense—that Newborn had also made false
USA origin claims—until early 2007. <o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk160392980;"><span style="mso-bidi-font-size: 12.0pt;">Although this wasn’t a two-player market, the
evidence (including trade organization membership and Albion’s own offers to
distributors) suggested that Newborn and Albion were direct competitors. Many
distributors carry just one vender; many parties who sell private label
products use only one manufacturer. <o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk160392980;"><span style="mso-bidi-font-size: 12.0pt;">Albion saw a strategic advantage in
presenting itself as an American manufacturer, e.g., in a meeting with an
end-user/owner of a caulking company, its director of marketing noted that
Newborn guns were made in China, to which the owner responded “[t]hat’s how we
got into this economic mess,” and the marketing director noted in the contract
management system that “Made in U.S.A. could become even more important during
this economy.” A former Newborn customer switched to Albion based on its claim
of US manufacture. After Albion added hard-to-remove country of origin
markings, Newborn’s sales increased fifty percent.<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk160392980;"><span style="mso-bidi-font-size: 12.0pt;">In fighting disgorgement, Albion pointed to
other factors driving sales. Many Albion caulking guns were priced forty
percent higher or more; Albion argued that this was evidence that the products do
not compete in the marketplace and cited survey data and testimony that
consumers’ American-made preference cannot account for purchases made despite
such cost disparities. <o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk160392980;"><span style="mso-bidi-font-size: 12.0pt;">Because the court had already concluded that disgorgement
was appropriate, it was Newborn’s burden to prove Albion’s sales and Albion’s
burden to prove costs and other deductions from that amount. <o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk160392980;"><span style="mso-bidi-font-size: 12.0pt;">Newborn’s expert calculated Albion’s total
revenue from relevant products to be nearly $32 million, and profits a bit over
$15.5 million, meeting Newborn’s burden. Although “it would be inequitable and
contrary to [the court’s] responsibility under the Lanham Act to disgorge
profits unrelated to Albion’s offending conduct,” the court rejected “any
interpretation that places the burden of proof of the sales attributable to
specific representations or consumer confusion affirmatively on Newborn.” Indeed,
the court cited with approval another court’s statement that “it appears
difficult for a defendant, innocent or not, to defend himself in a claim for
disgorgement of profits.” <o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk160392980;"><span style="mso-bidi-font-size: 12.0pt;">Moreover, this burden shifting <o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-left: .5in;"><span style="mso-bookmark: _Hlk160392980;"><span style="mso-bidi-font-size: 12.0pt;">allows for, and in some instances encourages,
parties to argue past one another to the collective detriment of themselves and
the Court. A plaintiff’s minimal obligation to prove sales and a defendant’s
heavier burden to deduct costs, demonstrate a lack of competition or confusion,
and make other showings to subtract from the sales figure do not naturally
result in apples-to-apples comparisons. <o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk160392980;"><span style="mso-bidi-font-size: 12.0pt;">So, Albion didn’t focus on its costs
associated with its sales, but rather whether the parties’ products competed
and whether there was actual consumer confusion. The court partly agreed: customers
who repurchased after the country of origin marking was corrected showed “a
disregard for country of origin as a deciding factor.”<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk160392980;"><span style="mso-bidi-font-size: 12.0pt;">However, the court declined to rely on
testimony that consumers would only pay a 15% premium for American-made
products (meaning that sales of products with a greater premium weren’t
attributable to the false country of origin claims).<span style="mso-spacerun: yes;"> </span>It was “clear that Albion saw value in
representing itself as an American manufacturer and sought to distinguish
itself from competitors, particularly Newborn, on that basis. Finding for
Albion on this issue would risk, at least in some instances, unjustly giving
Albion the benefit of excluding relevant products based on markups.” Without
definitive evidence quantifying the value of American manufacture, the court
erred on the side of Newborn. The court also included private-label sales,
because it couldn’t find that the private-label sales were unrelated to
American manufacture. <o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk160392980;"><span style="mso-bidi-font-size: 12.0pt;">The court set disgorgement at a bit over $1.6
million plus prejudgment interest. Deterrence couldn’t justify increasing the sum—that
would be a penalty. <o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk160392980;"><span style="mso-bidi-font-size: 12.0pt;">Injunctive relief was also appropriate. Albion
ceased placing markings on the relevant products representing Albion’s
eighty-year history of American manufacture after the lawsuit was filed. It
added a “Made in Taiwan” label to handles, later replaced by a stamp on the
recoil plate. Still, Albion guns stamped or otherwise marked to indicate
American manufacture are presently displayed across the country. One
distributor continued to advertise a relevant product as American made until
October 2023, and there were other scattered similar references online. <o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk160392980;"><span style="mso-bidi-font-size: 12.0pt;">Thus, there was continued irreparable harm. (I
didn’t see discussion of the TMA’s
presumption.)<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk160392980;"><span style="mso-bidi-font-size: 12.0pt;">And legal remedies were inadequate, since
they couldn’t prevent future violations. “The inadequacy of compensation for
past harm is all the more apparent, in the Court’s view, in light of the
continuing misrepresentations and lack of clarity in the market despite
Albion’s assertion that it has engaged in corrective efforts for more than a
decade.” Thus, the balance of equities and the public interest also favored
injunctive relief. <o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk160392980;"><span style="mso-bidi-font-size: 12.0pt;">Albion was ordered to mail a letter and a
copy of the court’s order to each distributor it has sold a caulking gun to
within the past five years requesting that any samples, displays, or other
materials referencing “Phila. PA.” or referring to Albion caulking guns being
“Made in USA” be returned. Albion had to remove from the inventory of its
distributors any B-line guns that bear markings describing Albion’s history as
an American manufacturer and offer to replace any returned materials at its own
cost. It was also required to provide notices to be displayed at each location
at which Albion products are displayed:<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-left: .5in;"><span style="mso-bookmark: _Hlk160392980;"><span style="mso-bidi-font-size: 12.0pt;">A judge of the United States District Court
for the District of New Jersey has ruled that Albion Engineering Corp. has
previously misrepresented that certain products were “Made in USA,” through
product mismarking and statements in advertising, promotional materials,
websites, and to customers. Newborn Brothers Co. Inc. v. Albion Engineering
Co., No. 12-Civ-2999 (NLH).<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-left: .5in;"><span style="mso-bookmark: _Hlk160392980;"><span style="mso-bidi-font-size: 12.0pt;">The Court has ordered Albion to comply with
all applicable country-of-origin marking and disclosure requirements. The Court
has ordered Albion to provide to its distributors copies of this notice so that
they may be displayed at all distributor sales locations.<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk160392980;"><span style="mso-bidi-font-size: 12.0pt;">Yikes!<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk160392980;"><span style="mso-bidi-font-size: 12.0pt;">Also, “until such time that Albion seeks and
receives confirmation from United States Customs and Border Protection as to
the marking requirements of its specific manufacturing processes, the packaging
of each Albion caulking gun with any foreign component shall list each
component of the caulking gun and its country of origin.”<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk160392980;"><span style="mso-bidi-font-size: 12.0pt;"><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p><div class="blogger-post-footer">http://tushnet.blogspot.com/feeds/posts/default?alt=rss</div>Rebecca Tushnethttp://www.blogger.com/profile/17344226000864611148noreply@blogger.com0tag:blogger.com,1999:blog-5764290.post-70792364688020962312024-02-26T14:51:00.008-05:002024-02-26T14:51:56.294-05:00Falsely advertising "ghost guns" as legal in NY is actionable<p>State of N.Y. v. Arm
or Ally, LLC, 2024 WL 756474, No. 22-CV-6124 (JMF) (S.D.N.Y. Feb. 23, 2024)</p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The AG sued sellers
of “unfinished frames and receivers” — also known as “80% lowers” or “receiver
blanks” —designed to evade restrictions on gun sales. The court explains the
allegations:<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: .5in;"><span style="mso-bidi-font-size: 12.0pt;">A “frame” is the core part of a handgun or pistol, and a “receiver” is
the core part of a rifle, shotgun, or other long gun. An “unfinished” frame or
receiver requires an extra step to be rendered usable: usually the drilling of
a few required holes or the filing of excess plastic. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">This step is,
according to one of the defendants, “ridiculously easy” and can be done by an
amateur in under an hour with only basic tools. Some of the defendants make it
even easier by shipping their products in a “jig,” a plastic setting that
enables a customer to easily convert an unfinished frame or receiver into a
firearm. As one defendant said to customers when linking to an instructional
video: “There’s no complicated setup because the jig that came with your slide
keeps everything properly aligned as you make simple cuts with the included
drill bits. Wait, it can’t be that simple? Yes, it is.” <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The completed
products are allegedly functionally and visually indistinguishable from frames
or receivers one could buy at a gun store, but they are effectively untraceable
because manufacturers, distributers, and purchasers generally do not comply
with the registration and serialization requirements applicable to “firearms,”
making them “ghost guns.” Lawmakers in New York City and New York State banned
the sale of unfinished frames and receivers in 2020 and 2022, respectively.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">During the relevant
time period, defendants allegedly marketed and sold unfinished frames and
receivers “directly to consumers without following any of the federal or state
laws and regulations that apply to the sale of guns, and in particular without
conducting a background check, placing a serial number on the gun, or entering
it into a federal database so that it can be traced back to its source if used
in a crime.” Defendants made at least 100,000 shipments to consumers in New
York not registered as federal firearms licensees (FFL), including undercover
agents employed by the State. Defendants who had federal firearms licenses had
access to, but did not use, the National Instant Criminal Background Check
System before selling unfinished frames and receivers to New York consumers,
while some defendants weren’t licensed to sell firearms at all. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The advertising bit:
Defendants allegedly misled New York customers into “believing that unfinished
frames and receivers are legal workarounds to New York’s gun control laws, as
well as federal law.” Defendants’ websites claimed, among other things, that
unfinished frames and receivers could be sold and purchased with “No FFL
Required,” could “be shipped straight to a customer’s home without an FFL,” were
“not subject to the same regulations as any other complete firearm[s],” were
“completely unregistered and legal,” allowed consumers to “build a completely
legal handgun without any ‘government oversight’ ” and to “legally own a
firearm that does not have to be ‘registered,’ ” were “[a]pproved” by the ATF, and
were considered by the government to be mere “pieces of metal and/or plastic
and not guns.” <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Among other claims,
the AG brought NYGBL Sections 349 and 350 claims against them. Defendants
contended that marketing unfinished frames and receivers as “legal” was
protected by the First Amendment. It was not. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">First, the marketing
was commercial speech: “NO FFL Required!” came in the midst of other
advertising language, such as “Various colors available,” and “no RED TAPE ...
NO Registering ... No Transfer fees ... Ships right to your door.” Labeling
unfinished frames and receivers as “ATF Approved” on sales websites or touting “Ban
Reversed on All of Our Products!” next to pictures of unfinished frames and
receivers constituted proposing a commercial transaction. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">I assume because
Sections 349 and 350 don’t themselves make the sales illegal, the court didn’t
point to the part of <i>Central Hudson</i></span> that makes clear that ads for
unlawful products can simply be banned. But that part also says that false or
misleading ads can simply be banned. <o:p></o:p></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">And that was
sufficiently alleged: Defendants allegedly continued to market unfinished
frames and receivers as “legal” to New York consumers even after the State and
New York City banned the sale or possession of ghost guns. The complaint
plausibly alleged that at least some defendants knowingly evaded federal and
state laws. On Halloween Day in 2022, one defendant posted a facetious photo of
one of its products dressed as a “ghost gun,” showing that it understood that
“its unfinished frame and receiver products have only one use — to make
untraceable ghost guns.” Various other defendants allegedly touted the
“untraceable” and “unregistered” nature of ghost guns as a major selling point.
<o:p></o:p></span></p><p class="MsoNormal"><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgdSAbuL5SbF4wi8SG8-2nrxy3j5xyyWYStRCPOI9pAHM5HrWDGFT1FAFpNjahUH55v9wAKLkj4VicwFgkJNyINItpInxZwX4ibVq72ALvh5UQhkZ5DU9MqhCTpPjgKkeEKH5AUEfYV_5opsvIz5WQBsWWp5wQXdwx_EfA8Z3x91WI2T9DpQnzKZw/s710/gov.uscourts.nysd.583322.157.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="544" data-original-width="710" height="490" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgdSAbuL5SbF4wi8SG8-2nrxy3j5xyyWYStRCPOI9pAHM5HrWDGFT1FAFpNjahUH55v9wAKLkj4VicwFgkJNyINItpInxZwX4ibVq72ALvh5UQhkZ5DU9MqhCTpPjgKkeEKH5AUEfYV_5opsvIz5WQBsWWp5wQXdwx_EfA8Z3x91WI2T9DpQnzKZw/w640-h490/gov.uscourts.nysd.583322.157.jpg" width="640" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">a ghost gun--get it?</td></tr></tbody></table><br /></p><p class="MsoNormal">The defendants
mostly argued that their statements were merely “expressions of legal opinion.”
The question is whether the customer “understood [the statement] merely as an
expression of opinion.” Nat’l Conversion Corp. v. Cedar Bldg. Corp., 23 N.Y.2d
621, 628 (1969) (finding it important that the “tenant’s lawyer was persuaded
not to verify” the truth of the landlords’ statements about the law on account
of the landlords’ authority and the certainty with which they spoke); see also
Lukowsky v. Shalit, 110 A.D.2d 563, 567-68 (1st Dep’t 1985) (“[A]
misrepresentation of law is actionable if the representation is made by an
individual possessing superior knowledge.”). Defendants marketed their
unfinished frames and receivers as “completely” legal “from a position of
superior knowledge as established merchants in the gun industry.”</p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;"><o:p> </o:p></span></p><div class="blogger-post-footer">http://tushnet.blogspot.com/feeds/posts/default?alt=rss</div>Rebecca Tushnethttp://www.blogger.com/profile/17344226000864611148noreply@blogger.com0tag:blogger.com,1999:blog-5764290.post-32432368138691719042024-02-26T14:23:00.004-05:002024-02-26T14:23:37.902-05:00US News rating was mere opinion except as to school that intentionally submitted bad information to it<p>Favell v. Univ. of
Southern Cal., 2024 WL 751006, No. CV 23-3389-GW-MARx (C.D. Cal. Jan. 23, 2024)</p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Plaintiffs alleged
that defendants conspired to inflate the US News ranking of USC Rossier School
of Education by submitting inaccurate or incomplete data to US News and market
the resulting ranking to the public. USC had a business relationship with 2U,
an education technology startup, to develop an online Master of Arts in
Teaching program. This was the first of USC Rossier’s online degree programs
and went live in June 2009; 2U received an undisclosed percentage of the
tuition revenue.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">US News calculates
its education school rankings using eleven criteria, including “student
selectivity,” which accounts for 18% of the school’s total score and is
comprised of three objective sources of admittance data: (1) the school’s
doctoral acceptance rate (6%); (2) mean GRE quantitative scores (6%); and (3)
mean GRE verbal scores (6%). <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">During the relevant
period—through 2021—US News didn’t distinguish between in-person and online programs.
However, USC submitted student selectivity data only for USC Rossier’s highly
selective, in-person Ph.D. program, but not from its less-competitive EdD
program (which was offered online after 2015). From the 2009 rankings to the
2010 rankings, USC Rossier’s reported acceptance rate dropped 40 percentage
points (from 50.7% to 10.5%), and its ranking rose 16 places (from #38 to #22).
US News began publishing a specialty ranking of online master’s degrees in
education in 2013, when USC Rosier’s online Master of Arts in Teaching program
ranked #44. USC didn’t appear on the list after that.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Defendants allegedly
heavily marketed USC Rossier’s rapidly rising ranking to the public to boost
enrollment in the online programs. USC allegedly orchestrated this scheme
through its submission of false/incomplete data, and then advertised the
resulting rankings knowing that they were misleading. 2U allegedly helped “push
the rankings out on a much broader scale,” and knew or should have known that
the rankings were fraudulently procured. For example, 2U engaged in online
advertising to promote USC Rossier’s ranking; it spent more than half of its
revenue on program sales and marketing. USC likewise regularly touted USC
Rossier’s ranking (and that USC Rossier was “top-ranked”) in press releases, on
social media, on the Rossier Website, and in other promotional materials. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Fortunately for 2U,
the court thought it was accused only of puffing. The court considered two kinds
of statements: (1) statements that USC Rossier was “top-ranked,” and (2)
statements which included the specific numerical ranking assigned by US News. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The first category
was “textbook puffery.” A claim that a school is “top-ranked” is both “vague
[and] highly subjective” and lacks “the kind of detailed or specific factual
assertions that are necessary to” test the truth of the claim. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Some ads included a
specific numerical US News ranking. For example, USC published a “News Alert”
on the Rossier Website celebrating the fact that it “ha[d] just been ranked
22nd in U.S. News and World Report’s 2010 edition of America’s Best Graduate
Schools.” On an earlier motion to dismiss, the court had found that this was
potentially actionable because the allegations<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: .5in;"><span style="mso-bidi-font-size: 12.0pt;">do not target US News’ selection or weighing of the objective criteria
which determine the rankings.... Instead, Plaintiffs claim that Defendants
knowingly reported false data to US News. Those underlying data are entirely
falsifiable, and the weight that they were to be assigned by US News was
predetermined. The fact that such data were considered alongside other
subjective considerations to produce a final ranking does not render USC’s
promotion of the allegedly fraudulently obtained ranking non-actionable. As
Plaintiffs note, if the law were otherwise, “any business that submits false
information to get a certification ... could not be held liable because each of
those certifications would have at their core a methodology based on an opinion
as to which data points should be considered.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">2U argued that, since
<i>it</i> didn’t knowingly provide false data, this reasoning didn’t apply to
it. Plaintiffs responded that they still weren’t targeting US News’ choices
about how to rank, only the underlying false data, and that false advertising
is strict liability. The court, I think wrongly, agreed with 2U: to proceed,
plaintiffs needed to allege that 2U knew of that falsity or lacked a good faith
belief in the accuracy of the rankings. And since rankings and ratings are “almost
universally” treated as statements of opinion, “even if [one] could draw any
fact-based inferences from [the] rating, such inferences could not be proven
false because of the inherently subjective nature of [the] ratings calculation”
as long as the party expressing the opinion honestly entertained it and didn’t
have superior knowledge or special information.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Although US News is
the one with the opinion here, a reasonable consumer could construe defendants’
affirmation of that opinion as implying that the defendants “held some good
faith belief in its accuracy (i.e., that it was not fraudulently obtained).”
Plaintiffs plausibly pled lack of good faith as to USC, but not as to 2U;
alleged negligence was insufficient. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Although there’s no
mens rea requirement in California’s consumer protection statutes, that goes to
a separate issue: <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: .5in;"><span style="mso-bidi-font-size: 12.0pt;">Although Plaintiffs are correct that the negligent dissemination of a
false statement of fact would suffice, Plaintiffs do not allege that 2U’s
advertisements were literally false, nor could they. The question here,
therefore, is whether 2U’s advertisements are even actionable in the first
instance – i.e., are they misleading because they imply any false assertions
upon which a reasonable consumer could rely? In most instances involving
statements of opinion, the answer to that question will be “no.” In some cases,
however, a statement of opinion may “reasonably ‘be interpreted ... as an
implied statement’ that the speaker ‘knows facts sufficient to justify him in
forming’ the opinion, or that he at least knows no facts ‘incompatible with
[the] opinion.’ ” If and only if that implied statement is false – and the
speaker does know of undisclosed fact incompatible with the opinion – is the
opinion is misleading. In other words, requiring that Plaintiffs allege
knowledge of the falsity underlying US News’ opinions in not contradicted by
the absence of a mens rea requirement under the statutes ….<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Nor did plaintiffs
successfully plead joint/secondary liability. Liability under the UCL and CLRA
“cannot be predicated on vicarious liability.” It “must be based on [defendant’s]
personal ‘participation in the unlawful practices’ and ‘unbridled control’ over
the practices that are found to violate [the UCL] or [FAL].” In making this
determination, courts have focused on various factors such as whether the
defendant: (1) “issued [its] own advertisements” or merely repeated the
deceptive statements of another, (2) “controlled the language” or “reviewed or
monitored the representations” made by another, or (3) had notice of the
violating conduct.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The service
agreement between the parties wasn’t enough to make 2U liable. Under the
agreement, “USC was required to (1) market the online programs ‘in a manner
comparable to’ the in-person programs; (2) ‘consult with [2U] in the
development of additional Promotional Strategies’; and (3) provide 2U ‘with
access to information pertaining to both classroom-based and online students’
admissions, performance, and post-graduation outcomes.’ ” Although plaintiffs
alleged that 2U bought ads, they didn’t allege that 2U actually issued or
authored any of the advertisements upon which they relied. The mere fact that
under the agreement, USC was required to market the online programs “in a
manner comparable to” the in-person programs and “consult with [2U] in the
development of additional Promotional Strategies” didn’t show that 2U
controlled the statements at issue here. “USC maintained the main Rossier
website” where the allegedly misleading statements were posted, and any
marketing materials 2U made were “subject to USC’s written approval prior to
any use.” <o:p></o:p></span></p><div class="blogger-post-footer">http://tushnet.blogspot.com/feeds/posts/default?alt=rss</div>Rebecca Tushnethttp://www.blogger.com/profile/17344226000864611148noreply@blogger.com0tag:blogger.com,1999:blog-5764290.post-83959979531779618262024-02-24T16:10:00.002-05:002024-02-26T12:06:59.990-05:00TMSR Session 3: Private Actors…and their Machines<p>Introduction: Jeanne
Fromer</p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Private actors
pursue their own interests. Focused on Amazon: free riding on gov’t mechanisms,
particularly TM law, to communicate to gov’t not to regulate it—product liability,
intermediary liability. It’s also cheaper, and Amazon is notoriously cheap.
Affecting TM law (as set forth in new paper with Mark McKenna, which is
excellent). Can enshrine things like notice & takedown in © law, but that
has effects on the ability to assert fair use. When things are happening en
masse at a business, just as in the TM system, w/o individualized attention and
with a different agenda than the law’s, you can see the law’s protective
features be minimized. So big theme: dealing with masses of marks—eBay, domain
names are another example—requires new thinking. You have to be wary of private
actors’ incentives. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">TMs are a proxy for
all sorts of info and goodwill, but there are other things that are proxies for
that and have always been—selling in a certain marketplace or mall gives
information; being the first listing in the Yellow Pages (might be the first
nonsense marks!). But we’re seeing more and different proxies for information
and goodwill; started w/search engines but seems more prominent now. Amazon is
used for more product search than Google. Product reviews: different info is
available. AI modeling is also imagining what consumers want to see. We
consider that TMs have costs as well as benefits; we should think about the
costs as well as benefits of these proxies. TMs may not matter as much with these
other proxies, but they’re also noisy proxies. (This reminds me of a classic
Posner assertion where <a href="https://caselaw.findlaw.com/court/us-7th-circuit/1320512.html">he claimed</a>
that Trisha Waldron’s photograph, or the location of her stores, would give
people information about whether she was Native American.) <span style="mso-spacerun: yes;"> </span>People will game them in all sorts of ways
that dilute their information, whether that’s product review manipulation or
otherwise. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">People trust Amazon,
not the individual “marks” on the site, including their ability to return
products easily; TM’s work is done in the service of Amazon. A variant of
separating the mark from the brand; not seeing it in all categories, and we may
have a world in which some marks—maybe the 1%--are not divided from brands but the
others are. Not that surprising that the luxury marks are not selling on these
platforms and are often fighting them; luxury may require keeping the mark with
the brand. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Human desire for
TMs? We like how they sort us/how we get to identify with them? Even if we live
in a world with other sources of info, maybe we still like TMs. How much of
that is cultural?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Eric Goldman<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;"><a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4381824">SAD scheme</a>
and what it tells us: Efficacy/brittleness of our institutions—the real action
is below the waterline, with implications for everything else we’re doing. Sealed
complaint; ex parte TRO; used to freeze entire accounts and money. TRO is
better than a notice & takedown—you get the seller’s entire account down
and you get all their money; marketplaces are treating them as risk of being
held liable for infringement by that merchant. Gives rights claimants things
they couldn’t get from notice & takedown; will only increase until we fix
it. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Standard notice
doesn’t produce $, but if you can freeze $, they’ll pay you to get it back.
Entire law firms tell rightsowners: let me have the right to enforce and I’ll cut
you a check every month. Luke Combs outsourced his enforcement; he didn’t say
that he was going to stop using the scheme, even though he tried to make the
one person who got attention whole. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">TRO freeze is
usually left in place even after the TRO expires. We can start w/good faith
presumption that the court thinks it’s doing something temporary, but it’s not
given the nature of the TRO and the marketplace. Mistakes are common in the
process and appeals are almost nonexistent. Thus there is little scrutiny and
little pushback.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Main players have
dubious rights—emojis, smileys—already at the border of what TM should protect.
They shouldn’t have the power that marketplaces give them. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Increasingly seeing
competitors using SAD scheme to knock them out during peak sales periods. TROs
harm consumers. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Lessons for
institutional thinking: The law of TM on the streets is very different from
what it looks like in appellate cases. Ex parte: the law is whatever the judge
will sign. Civil procedure critiques—basic joinder, jurisdiction questions
where the rules are clear but are simply not matching what is taking place. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Third-party enumerated
rules are also law on the street. Actual adjudication by services is what the
law “really” is. Google’s TM policy for keyword ads is law for 99% of all TM
disputes out there. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">SAD scheme is
swallowing up the rest of TM law. About 1000 SAD scheme cases are filed in the
past year with 200 defendants each, that’s 200,000 defendants versus about 3000
traditional cases in the past year. It’s 99% of TM law and that will only grow
as long as the scheme continues to work. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">TM is a terrible
subject matter for ex parte proceedings. When the defense doesn’t show up, it’s
too error-prone. It’s like with CPB. Riddled with errors. Adjudicators need to
hear about risks of overenforcement, overclaiming; defenses—he gets emails from
sellers of used or grey market goods snared in a robotic search. The judge isn’t
hearing that they’re not counterfeiters. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Other examples:
design patent, as <a href="https://papers.ssrn.com/sol3/Papers.cfm?abstract_id=4549909">Sarah Burstein
has writte</a>n. Putting pictures side by side often isn’t enough. Trade
secret: its scope is the whole ball game. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Because of the lower
stakes, secretiveness, lack of access to court that Ds have, these cases just
don’t get corrected.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Research project: Go
and look at ex parte proceedings and whether there were subsequent proceedings
and whether the court changed its mind—we could literally identify the error rate.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">This needs to be
fixed, but next steps are not clear. We haven’t found a good way to intervene
in the cases. Even when judges blast specific plaintiffs, they still aren’t
taking the corrective action—they aren’t applying their reasoning to other
cases or other Ds, they aren’t imposing sufficient penalties to deter. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Mary LaFrance<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Focusing on
counterfeits doesn’t address other forms of infringement. Birkenstock &
Nike left Amazon b/c of counterfeit concerns; that was Amazon’s focus. But
private systems have limited ability to process context. High risk of false
positives as well as false negatives. Focusing on counterfeiting doesn’t
protect consumers from other types of non-genuine goods, which exist on Amazon
& eBay—gray goods, expired products, repackaged, mishandled in supply
chain. SHOP SAFE wouldn’t change that b/c it is only about counterfeits. We
know that automated systems designed to flag infringements get lots of false
positives b/c they can’t recognize fair use; may also be false negatives,
though that’s not the focus. There probably aren’t other major complications
than fair use for © screening, though they can also miss licensed uses; but it’s
much harder for TM to determine infringement. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Nongovernmental
mechanisms that work well: <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1755305">Dave
Fagundes on derby girl names</a>, using norms. But the context is really simple:
1 name, 1 skater. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">UDRP: context gets
considered.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">But you need a full
LOC analysis if you really want to ID infringement; instead, automated systems
aim for counterfeits. False positives: probably miss descriptive fair use. Platforms
may not have incentives to help sellers who are wrongly identified get back
online; not willing to face potential contributory liability. Platforms don’t
disclose how many invalid notices they get. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Brands can choose to
“gate” on Amazon with authorization letters, but how does the consumer know the
seller will stick to selling genuine goods? Brick & mortar sellers have more
protections in their supply chains as a rule—relations w/distributors over
time, though there are exceptions with discount retailers. [I don’t think this
is describing the situation of small brick & mortar sellers.] Their
potential liability for counterfeits gives them more incentives to be careful,
whereas ecommerce platforms don’t face that potential now with third party
sellers. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">SHOP SAFE would
impose contributory liability with [RT: impossible to comply with] safe
harbors. Would lead to more false positives. Seller could appeal, but there’s
no requirement that be expeditious. And proof that goods aren’t counterfeit
could be challenging, b/c there’s no way to have Amazon actually inspect the
products; there’s also no requirement that the TM owner cooperate with the
process, so even if the seller provides product codes, the TM owner doesn’t
have to verify them even if they’re accurate. <span style="mso-spacerun: yes;"> </span>SHOP SAFE would also presage a move to require
filtering for © to replace the DMCA.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Stacey Dogan: role
of human agency in private actions in an increasingly AI-driven world. We think
of TMs as informational vessels that allow consumers to make decisions for
themselves based on what they’ve learned either personally or through other
means about the goods bearing the mark. But as we move increasingly to
algorithmically chosen or differentiated tools to be used by third parties to
shape our preferences, that notion of TMs as having info value to humans who
then exercise their agency and make choices go away. Private actors will act in
profit-maximizing ways; TM owners have always done this, and intermediaries
have existed, but when they’re doing all this informational intermediation for
their own economic incentives, that’s very troubling. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Jeremy Sheff: we
have one to one disputes; one to many where a TM owner tries to enforce against
a lot of counterfeiters; then many to many disputes like low quality marks
flooding the system in ways that raise costs for everyone. Crystals and mud
story about this: in many to many, an attractive case for more crystalline,
bright line, formalist rules for cancelling registrations. One to one is more
attractive for standards. One to many: hard to figure out whether to worry more
about over or underenforcement. If we were to try to adapt different rules, we
have to ID what category we’re in, and how someone might be allowed to contest
their categorization. DMCA has a formalist process: if you flip the switch
three times, you end up in federal court. [You’re supposed to do that, but
platform policies don’t work that way—they often don’t restore struck material—and
neither do infringers, who may just reupload without filing a counternotice.]<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Goldman: that
assumes that someone can access court enough to push back.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Sheff: yes. If
everything’s done by platform w/no recourse, there’s no way to reverse that. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Goldman: the rule of
law is in place but is inaccessible.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Sheff: DMCA says
counternotify and you’ll end up in federal court at the end of the day; that
might be too expensive, but that’s the cost of muddy standards. Nothing like
that for TM.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Lemley: Prior rounds
of trolling, something that helped: targeting the lawyers for sanctions or even
state bar work. Are these the sorts of representations a lawyer can ethically make
to a court? State bars don’t have standing requirements and you don’t have to litigate
in the case itself. The appetite for doing it might dry up if there are disciplinary
consequences for lawyers about joinder, jurisdiction, etc. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">RT: On LaFrance’s points
about gray, expired goods, etc: I’m pretty sure TM owners are actually happy to
argue that all those things qualify as counterfeits. I also don’t think used,
grey market, expired/near expired, repackaged goods, mishandled goods are
infringing <i>or</i> counterfeit; the problem if any is that they’re falsely
advertised.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Fagundes wrote follow-up
article suggesting that system was breaking down.</span> R<span style="mso-bidi-font-size: 12.0pt;">evisiting Roller Derby’s Master Roster, in
CREATIVITY WITHOUT LAW (Kate Darling & Adam Perzanowski eds., NYU Press,
2016).<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Marketa Trimble: A
little worried about following up TRO success rates—in the trade show context, should
not compare to online case results. In the trade show context, there’s a lot of
information that preexists, so there is some relationship between the two
parties. Judges are pretty strict on issuing bonds in those cases. And also
there is a robust world of social norms surrounding Ps in these cases—they do
have offline reputation to protect; they’re repeat players. Online plaintiffs
are less constrained to care about their reputation among sellers. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Even in trade show
cases, we were shocked how little the judges knew about the problem of bad TROs.
What helped was meeting judges from other countries, so they weren’t just
hearing from local lawyers about how the world worked. Protective letters in
other countries: ability to alert court in advance about a potential problem
with a case. Might seem burdensome but courts love it (they collect fees for
it).<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Mark McKenna: <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Important to
recognize that the quality of online shopping has gotten really bad.
Enshittification is real. Labeling has gotten much more confusing. Amazon is
also decentering brands because you can’t necessarily trust that you’ll get the
right thing just by ordering it by name. The motivation to respond to
counterfeiting is increasingly understandable even if we have skepticism about
methods. What’s the best way to do that? Schedule A was an invisible problem,
but why is that happening at the same time as platforms are creating dispute
resolution policies? Maybe this is all really about lawyers and not brands. But
it’s worth thinking about which levers are being pulled on brand value/what is
depressing the informational value of TMs.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Linford:
externalization of costs—Amazon just tells you to throw the product away if it’s
not what you ordered. Free shipping makes it easy to start & stay with
Amazon.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">One response is to
get off the platform. We’ve externalized to consumers the cost of protecting
themselves—reading reviews.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Another cost of AI
specifically: energy. Generating one image cost as much as one charge of your
phone. Should that weigh into the fair use analysis? [No, for so many reasons,
including that the alternative to fair use is licensing.]<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Doesn’t handing over
right to sue to lawyers create a problem like for Righthaven in ©? Some sort of
naked licensing/transfer in gross?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Lisa Ramsey: this
might drive us not to grant TMs in inherently valuable terms like LIFEGUARD
for clothing. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Could algorithmic
practices affect what counts as TM use? Brand name, product source
(manufacturer, third party, etc.), description all show up on Amazon. If Amazon
adopted a policy of taking down content only when it appeared in brand name or
product source and not in description, that could affect how courts think about
it too. User names on social media may or may not include trademarks; user bios
give more information. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Bill McGeveran:
Enshittification is about size, size is about antitrust: you can enshittify
when you have market power. Scale has various manifestations.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Burrell: Monopsony is
a better description b/c the economic evidence is that lower market
concentration is necessary to have a monopsony.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">McGeveran: that’s
definitely Wal-Mart. Links to larger conversation about antitrust. You can’t
tell a full story about causes or potential responses without looping in
antitrust concerns.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">There are so many
different harms, including monopsony, that are getting blurred together. Useful
to pull them apart. Having a listing taken down is not the same thing as being
kicked off a platform entirely and losing your reputation accrued on the platform
[and having your account seized including the money]. Some enshittification is
nuisance to consumers, but it’s not the same thing as getting expired medicine
that Amazon wouldn’t replace quickly. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Grinvald: Amazon’s
disregard of supply chain is part of what’s eroding connection between product
and source—signaling to purchaser that it doesn’t matter who the seller is. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Note that shifting
to Target by mail won’t help b/c Target/Wal-Mart has also allowed third-party
sellers to ship from their site. That’s the Amazon effect! <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Discussion of various
attempts to game liability for selling defective products—if Amazon is
advertising, storing the product in its warehouses and shipping it, why should
it matter whether it’s a “third party seller” fulfilled by Amazon?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Mid-Point
Discussants: Lisa Ramsey<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The problem of
anticompetitive takedowns: DMCA, UDRP. Parody accounts: use noncommercial
speech s a bright line, whether as defense or otherwise? If we had bright lines
in the statute, maybe platforms would be more willing to keep speech up when
challenged. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Marketa Trimble<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">UDRP as potential
model for alternative dispute resolution/shaping rules that can be skewed by
private ordering. UDRP is fast, cheap, doesn’t require legal representation.
But also has flaws that we can learn from. Flattened the TM world. Designed for
alphanumerical strings; treats TMs as word marks and ignores other types of
TMs. Ignores classes of goods and services, which is incredible. It also
ignores national law. Drafted w/the assumption that there is something beyond
the written words that can be drawn from to interpret many of its concepts:
what is a TM? Is registration required? What is substantial similarity? What is
fair use? Many things were left unexplained, and there was no choice of law
provision. The idea that you create a new body of law that will on its own
create all this case law and interpretation to fill in the blanks is rather naïve.
Common law takes centuries. So naturally they started w/national law, and given
the dominance of US, Australian, UK panelists, we saw a lot of that influence.
Might work well for the US, but might have problems scaling internationally. The
panels may give victory to one who had a mark anywhere in the world first. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Need appellate process.
The alternative is court—so how do you treat the UDRP in courts? It’s possible
that courts turn to their own national laws, as we saw in the Barcelona.com
case and others. Filling in the blanks is a big challenge. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Despite all the
changes in the world, there is still a lot of reliance on TMs. [Tide is not a “brand”
in the pumped-up way that some now are; its primary function is to guarantee
and make you feel good <i>about your detergent</i>, not anything else.] <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Note that UK IPO won’t
register a mark in all non Latin characters on the theory that no British
person would be able to understand/remember it—compare to “nonsense marks.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Just as we needed
AirBNB to understand why a hotel is a good idea, Uber to see what taxis are
good for, we may need algorithmic recommendations to see what TMs are good for.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Linford: There’s
been a presumption that Amazon isn’t working right now for buying a brand I
want to buy b/c search results are not reliable. If I put Tide in I don’t necessarily
get Tide out. If I’m uncertain about whether I’ll get Tide and how long the
search will continue to do that, that’s a problem. MTM v. Amazon bothers him: would
like Amazon to do the one thing of telling him “we don’t have MTM.” Danger is
that intervention has problematic downstream effects. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">We are talking about
these brands as if they once had a guarantee—Philip Morris has bought brands
that I may have strong affection for, but I don’t have strong affection for
Philip Morris. We no longer have strong rules against selling marks. But does
that mean we presume too much consistency from brand sellers? If that was
already false, the Amazon problem is less acute/might get us to correct our
priors in the proper direction.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Lemley: MTM is a
Rorschach test to see if people’s attitudes have shifted to see how we’ve been affected
by the techlash. Would it be great if you could automate communicating only and
all correct information at scale? Sure. But if you just give liability for not
doing so, we are likely to do damage, and end up with sites that warn “we don’t
have what you want” followed by a list of things you want. That doesn’t solve
the problem of whether Amazon is reliable. But MTM is a case of Amazon being
perfectly reliable: here are the watches we have available to you, the closest
to what you were looking for. A standard higher than that is trouble.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Enshittification is
not “there’s stuff on Amazon whose provenance I don’t know.” It is that Amazon
got dominant by giving you the products you wanted; once it achieves that
position, it has a strong incentive to sell the space between you and the stuff
you want. Accurately identifying third party alternatives is not a problem, but
making it hard for me to find what I want through the clutter of advertising is
a problem. Amazon makes more profit selling ads than it does selling products,
which is not great. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Dinwoodie: Lush won
against Amazon in the UK, had to label “we don’t have it.” <o:p></o:p></span></p><div class="blogger-post-footer">http://tushnet.blogspot.com/feeds/posts/default?alt=rss</div>Rebecca Tushnethttp://www.blogger.com/profile/17344226000864611148noreply@blogger.com0tag:blogger.com,1999:blog-5764290.post-43597530863788439872024-02-23T19:59:00.005-05:002024-02-23T19:59:45.656-05:00TMSR Session 2: Administrative Agencies and Specialized Courts<p>Introduction: Robert
Burrell</p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">IP Australia exerts
extraordinary control over legislative agenda; if you can persuade IP Au. that something
needs to change, then it can change quite quickly. But the flipside is that it’s
seen in light of what the Office needs to worry about. There have been problems
with defenses; the Office doesn’t have to worry about infringement, so nothing
changes. But to deal with different holidays in different states, emergency
legislation was passed within weeks so the Office would know how to count
deadlines. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Volume of decisions
by hearing officers: registrability decisions have first mover advantage. They
ought to be able to exert significant control over case law: courts should be slow
to depart from existing practice. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Limited oversight:
fed court worried about undermining confidence in specialized tribunals.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Office can also
react if not happy w/court decisions. What matters is what the TMEP says the
court said, which isn’t always the same as what the court said; sometimes says “the
court can’t have meant that.” <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">IP Australia also
regulates patent & TM attorneys through professional standards board
domination. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Academic research:
you have to demonstrate you’re bringing in grants; a great way to increase the
chance of that is an industry partner; the best funded, most active one of
those in TM is IP Australia, so that controls the focus of research. Recently
appointed first in-house economist; has now metastasized. IP Austl. doesn’t
know what to do with all of its money (it’s self-funding), so we have the
Wallace & Grommit World IP Exhibition, with Grommit chasing off copycats.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Most important
countervailing factor: competence. Leading case on distinctiveness, where
Australian High Court lowered the distinctiveness bar—until it reached the high
court, it was being litigated by a construction partner. In fairness to the
high court, none of the evidence you’d have expected to have in about the
importance of “Italian” when you are selling coffee was before the court, so it’s
not as surprising they did something done. So in litigation, no one says “the
Office has done this 20 times before.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Mark Lemley<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Agencies in TM law: PTO
is sort of a black box b/c ignored TM so long on the policy side. It would never
occur to anyone to put a TM person at the head of the PTO; it’s a tiny
percentage of their policy work. The good news is that there is an opportunity
to do policy work not tainted by existing capture. If and when that changes,
INTA will show up. A broader/systemic problem is the problem of scope: we see
this in patent side when Office tries to intervene. The business of the PTO is
granting patents/TM. They have a lot of experience w/distinctiveness and
functionality, as well as failure to function. But they have virtually no
experience, except in TTAB, with other side of the equation, remedies, 1A
limitations, etc. When they bump up against those in cases like Tam they do a
lot of running in place w/o useful guidance. Even if you could navigate around
capture, the scope one is harder b/c it’s systemic; you can’t give them deep
knowledge on the infringement side. One of the risks of looking at only one
side is that you can’t actually grant a “narrow” registration. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">TTAB is better
suited, b/c at least get microcosm of LOC cases b/c of competing TM claimants.
Though they aren’t in the same position to do agency rulemaking and also suffer
from Fed Circuit gatekeeping, which has its own rule for LOC—twenty other
factors that no other circuit pays attention to; the Fed Cir refuses to follow
SCOTUS on functionality while other circuits comply. It’s a tough process to
get SCOTUS to fix.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">And of course,
agency deference is going away this year. Benefit of being able to point to
those rules seems much less.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Two other
decisionmakers in practice making lots more decisions: The UDRP panels in
cybersquatting. There were a lot of benefits: quick, cheap, but also out of
control. Could learn to facilitate simple cases more cheaply; most people who
have legit defenses can’t afford to assert them in court. A system that gave an
opportunity to do that outside the normal court system might have some
benefits, but UDRP offers cautionary tale about structuring that. Who gets to
decide where cases go is important.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Fromer/McKenna paper
on Amazon’s TM system: that’s not a positive story; they identify a number of
problems. But consider potential positives: Fromer/McKenna show that, b/c you
need a registered mark to participate in the system, there are a lot more
people registering marks than they used to be, especially small businesses. This
has risks/problems of clutter and depletion, but it doesn’t have to be a
problem b/c you’ve got to have the same mark—except that we don’t look at
images, which is a huge problem—but Amazon only cares about identical marks. Thus,
<a href="https://harvardlawreview.org/print/vol-134/fanciful-failures-keeping-nonsense-marks-off-the-trademark-register/">registering
nonsense words</a>. They function for the Amazon system but not in the minds of
consumers. That can have problems, but a whole bunch of marks that are
extraordinarily narrow/cast no shadow and are only going to be applied against
identical copying doesn’t necessarily create a terrible system, especially
under conditions of congestion. Replacing human mnemonics with a system that
uniquely identifies a good & where it’s from & can connect it to rankings
might be good! But caveat that it’s not clear that Amazon has that system. We
might see a separation of TM function of TMs and the brand loyalty function of
handbags. We’ve been struggling w/the growth of the brand in TM context,
distorting source identification function; Amazon could help us break that
linkage. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Jeremy Sheff<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">2 years of expungement:
what’s been happening? Director’s initiated 33 expungements; 8 proceeded to
final disposition of expungement (1 partial, 7 full). 771 petitions for
expungements; only 122 have gotten to institution stage which involves an
Office Action. 74 have had an outcome: 32 partial cancellation, 42 full
cancellation. In 80 cases Office decides not to go forward for insufficient
evidence of expungement, though they then proceed with their own action
including evidence dug up by Examiner. So PTO may be cleaning up after
petitioners. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Filing bases for
director-initiated: 15 44(e), 14 1(a), 4 66(a). Non-director: 381 1(a), 233
66(a), 149 44(e).<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">16b reexamination of
use: 1134 director-initiated, 954 third-party initiated. 304 director-initiated
proceeded to full cancellation, 4 partial. (Question to explore: is the large
number of these connected to post-registration audit?) Non-director initiated,
92 were not instituted, 140 instituted; 19 partial cancellation and 57 full
cancellation. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">With three million
active registrations, we might be trying to empty the ocean with a teaspoon.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Post-registration
audit percentages have very different numbers; they choose about 5000
registrations/year and about half end up deleting goods/services. So a random
pull has a 50% chance of finding lack of use on something. For 44(e) and 66(a),
about 2/3 of those audited delete goods/services, whereas it’s 45% for 1(a). That’s
of registrations w/a response. Total cancellations (3883 of 29022 audited) may
be for nonresponse.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">What to make of
this? Shoveling sand against the tide, b/c we have ¾ million-1 million new
applications/year. It’s not just the ocean, but the iceberg melting into the
ocean, which means that bad actors flooding the system w/new applications to
gain advantage in private systems, we’re dealing with that process with a
bespoke, artisanal examination process. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">If we’re running out
of TMs, that’s a fixed stock that could go away. The examiner cohort is a flow
resource, not a stock; they can get congested. We could increase the price!
Raise registration and renewal fees; make it more difficult to get a
registration for Amazon, which might lower the burden on the system. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">In response to
question: we don’t charge by number of goods listed in a class, only by class,
but listing more goods does increase the chance of auditing.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Nobody who’s been
audited would have selected goods/services on basis of concern over auditing
(in response to Burrell’s question about whether that increases the incentives
to use broader generic terms to describe goods/services).<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Fighting a forest
fire with a water pistol won’t work.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Dinwoodie: could be
useful if actually internalized—if it happens to repeat filers. Could also add
penalties. [There are costs for deleting goods, but they’re small fees.] Could make
a penalty fee.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Burrell: the problem
is that it runs against the story “you’ll hurt SMEs!” Self-filer makes
mistakes, poor self-filer.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Dinwoodie: could you
do it more granularly?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Burrell: not sure
that’s possible to avoid the innocent SME.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">RT: <a href="https://openyls.law.yale.edu/handle/20.500.13051/1088">Carol Rose was
right all along</a>. Property registries are themselves a common that can be
overused. And her insights in that article might suggest something about what
comes next, after the TMA’s tiny tweak that clearly won’t be enough. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Expertise issue—FTC
just issued a rule on impersonation; only heard from INTA and the like, and
apparently doesn’t know anything about TM doctrines or how far INTA thinks “impersonation”
extends. Calling scholars to submit comments as FTC considers <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/r207000_impersonation_snprm.pdf">supplemental
notice of proposed rulemaking:</a> whether to impose “means and
instrumentalities” liability on third parties like OpenAI and whether to extend
its new rules to pretending to be an individual, whether a real person <i>or a
completely made up one</i>—that is, the FTC might make it an unfair trade
practice to use an alias. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">URS as extension of
UDRP: faster, a little cheaper, more out of control.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Fromer: definitely
true that TM is swamped by patent at PTO—hard to get attention on TM issues,
and internally it’s created a very sleepy culture in the TM office. You might
get a dynamo like the people who self-started the audit program, and more of
that would be great, but it doesn’t emerge very often. Circular: the reason
patent swamps TM is patent brings in more money, so there’s a very rational
explanation. But it doesn’t have to be that way. It would be great for the PTO
to charge Coca-Cola more than a few hundred dollars to renew. Money brings
attention. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">FTC is a place that
could do more TM and might be interested [they already have opinions on ©] and
need education on non-patent IP. TM examiners used to be specialized b/c it
didn’t seem fair that some units were clearing applications faster b/c of the
different demands of the different areas; that would be hard to undo, but
technical devices really are different from beverages. Think about
reinstituting specialization.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Amazon [like the
Trademark Clearinghouse for new gTLDs] does not distinguish in the kinds of
goods for which a mark is registered, so you can use your registration far more
expansively than the PTO designed it.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Ramsey: one
suggestion is to require a specimen of use for each listed good, not just one
good in each class. Also, PTO should bring audit results to Congress’s
attention for further action. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Treat classes commonly
used for expressive uses differently—clothing, mugs versus technical equipment.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Lemley: suggests
maybe the existence of the opposition process changes things. Someone is
immediately looking at your work with a critical eye—that never happens with a
patent. But doesn’t know what examiners’ involvement with that is. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Dinwoodie: intensive
review for productivity on the TM side. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Farley: past
practice was collaborative, knowledge sharing. Remote work has changed that.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Silbey: the
incentives are bad: they’re supposed to issue TMs. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Lemley: system is
set up to push you in a particular direction. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Silbey: what if the
expectation was that some number of applicants should not get TMs?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Sheff: there’s other
stuff we haven’t talked about that are interventions: Domestic residence
requirement has done a lot of work. 150 cases in which Office identified people
who filed 100 applications/week and issued order to show cause and ultimately
sanctioned by forbidding them from filing more; resulted in 19,000 applications
from those applicants. TMA seems to have led to a decrease of 100,000/year.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Burrell: If we were
serious about this, we would have to think about automation/scale. Austl. doesn’t
even revoke TMs when a company is deregistered—why not do more information
sharing? So that if the mark were to be transferred as an asset, some work would
have to be done.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Sheff: linking
systems costs a lot!<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Burrell: That’s what
increased fees are for.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Silbey: expertise
can be about narrowing a claim rather than not issuing a TM at all.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Dinwoodie: that’s already
a distinctive feature of the US system, which does it more than anyone else. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Burrell: US
examiners are better than anyone else in the world at narrowing nonsense, even
if that’s a low bar.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Silbey: you need
expertise to do it really well, though. And it’s harder if you have less time
per application. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Study showed that if
there’s a 6 month decision rule, decisions issued in the last 5 days of that
period are more likely to be overturned on appeal.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">McGeveran: narrowing
someone, or rejecting them, isn’t as fatal here as it is in other
jurisdictions.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Mid-Point
Discussants: Jake Linford<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">If registration doesn’t
matter to TM pathologies, then fixing examination won’t matter. There’s some
evidence of heterogeneity among examiners. Hydraulic pressure: Tam & Brunetti
put pressure on TM office; they don’t want to grant disparaging/scandalous—failure
to function steps in. Not clear whether that was top down or bottom up
response, but examiners can find ways to deal w/at least some pressure, and
TTAB is willing to support this exercise of discretion. Brunetti doesn’t get
FUCK registered on f2f grounds. Student note criticizing f2f as
standardless/needs concretization—make it more like aesthetic functionality and
double down on competition. But do examiners think through what we would call
speech-related concerns? You could say f2f has or includes speech concerns.
Though you do see PTO explicitly invoking speech concerns in defense of its
rule in Elster. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">You could increase
the cost of renewal over time, as Posner suggested for ©, but we might not want
that for policy reasons. You could increase fees, but that might exacerbate the
problem of seeing applicants as the customers. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Fraud on the PTO as
an option? The Fed Cir cracked down on that; we could go back to that. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">INTA was concerned
that TTAB wasn’t publishing enough of its opinions; would that give better
guidance? Only 6% of TTAB opinions are published; 40% of signed opinions of
courts of appeals. <span style="mso-spacerun: yes;"> </span>[It would only
increase the scatter plot.]<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">We complain about
costs of TM litigation but don’t like the Copyright Small Claims board; INTA
represents Ps and Ds but only very sophisticated ones, united in their
sophistication; could we think about a small dispute procedure? [Isn’t that one
view of registration?]<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Stacey Dogan<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Where to go?
Structural competence versus personnel-based competence. Appellate courts are
supposed to have a broader eye to the interests at stake than just the parties;
we want them to be equipped to define legal rules that achieve balance in the
law. This aspiration for them requires competence, expertise, capacity to
engage in a flexible normative project that can respond to new questions and
situations. When that competence is absent, either b/c of structural
constraints or institutional failure, that’s disorienting, b/c where do you
look for correction?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">SCOTUS failures don’t
seem structural; not unrelated to the larger legal ecosystem. The PTO is inherently
limited. The courts will have to play a significant role in defining the shape
of TM rights. The nuggets of constraint the Court gives us seem plucked from the
ether, without context or explanation. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">We’re not going to
solve the personnel issues in the near term. Strategies in the short term: we’re
left with what we have, and find ways to work w/in doctrine like RT suggested.
In months since Jack Daniel’s, the caselaw is not giving lots of hope. The precise
uses that the majority takes for granted—titles of expressive works—are being
treated as source-indicating by the lower courts. There’s an opportunity to
work on lower courts, both trial and appeals, on giving more texture and
principle and normative content to the LOC factors. We’ve seen courts do this
in some contexts. Use in the internet, we saw courts willing to limit factors in
particular cases; could do that with expressive works as well in a way that’s
less “doctrinal” or test-based. Allows for some level of instruction and
consistency in cases of certain types, like use in expressive ways. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Movement lawyering?
In communication with affected constituencies, working at defining more clearly
the problems we’re trying to solve. Identify the greatest threats and capture a
theme. We have to accept the lack of traction we get describing TM harms and
make it more saleable. Look to antimonopoly movement in antitrust space. It’s a
long term project. Using rhetoric + empirical evidence about the costs of
concentration. Speak to the public. Partner with law & political economy
folks; make it into a larger project about the economy. Project: what is public
interest TM law?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Leah Grinvald<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">CBP: engaged in
development of and enforcement of TM law w/o any judicial oversight. Others
have noted a shift of the costs of private enforcement to public/government. TM
holders can record with CBP, and is used when scanning shipments that come in
through ports. Invites TM owners to provide training materials for their
officers; even have a powerpoint format for them. Invites TM holders to come to
offices, bring samples to train the officers (swag). <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">They ask TM owners
to ID counterfeits. Their main focus is on detaining and seizing counterfeit
goods; they say they’re protecting the public from counterfeits, whether
handbags or otherwise, as a safety issue. They’ll send the TM owner photos
unless they pay a bond for samples. Regardless of how TM owner verifies it’s
counterfeit, they take the TM owner’s word for it. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Importer has 7 days
to respond if they have a valid reason for importing; if not, the products are
seized and mostly destroyed, but there are provisions for donations (despite
safety concerns) if they need the product—by auction, to nonprofits, or if gov’t
needs them. TM has to be removable from product and product must not pose harm,
though how they know that is a good question if the reason for seizure is to
avoid harm. Anecdata: mostly the products are destroyed. [Some may go home
w/the agents.]<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">They can also seize goods
with copying or simulating marks, not just counterfeits. The regs don’t give
guidance on what that is; the importer has 30 days under this provision to show
either that they have good reason or that they can remove the TM. There’s
nothing in the regulation that restricts officers to detain only products
within the registered class, despite the fact that marks are supposed to be
registered per class. Backdoor dilution claim w/o need to prove fame or any kind
of association.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">All of these
decisions are done at the level of the officer working hand in hand w/the TM
owner; officers aren’t trained in law; there isn’t anything like an internal
appeals process—importers rarely go to court b/c they are mostly small
businesses. No consequences for mistakes to the TM owner or the officer; just
release the goods!<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Dinwoodie: US
complained to WTO about China not destroying goods; shouldn’t we be doing better?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Grinvald: not the
first time we’ve been hypocrites; the regulation allowing it is still on the
books.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Burrell: this system
is being exported through the world because of the USTO, and it’s now in Australia.
Timeframes are so tight; even if SME wants to challenge, must find a law firm
that is willing to work around the clock, which is massively expensive. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">McKenna: they won’t
even tell you what they’ve seized. They have an internal appeal process that’s
a joke. The TM owner gives them an image; they call the TM owner and ask (w/o a
picture) if they should seize the products and the TM owner says yes. You have to
sue the gov’t to get them back and there is no remedy against the gov’t. With
LKQ, a whole bunch of the seized parts were covered by a design patent license,
but they said “too bad, it’s TM.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Dogan: you can get
substantive law right and still get wrong outcomes if you get the incentives
wrong, and these stories might be helpful in getting the harms out to the
public. Are there stories about seizures of useful spare parts/works that the
public would be outraged about? Is there a way to make that come more alive? <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Should we have
conflicts rules that limit what TM owners can give agents?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Lemley: confront the
rhetorical power of the anti free riding impulse.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Why does this system
work at all? How do they know what’s mapped to relevant goods/services? Has
anyone figured out whether it’s a random walk, mostly circumstances where they
were alerted to a problem, what percentage of goods subject to seizure end up
being seized, etc.?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Another form of
seizure popped up ten years ago: internet domain name seizures. CBP is using
the analogy to seizure of goods to seize domain names. They’re quite clearly at
the behest of particular TM/© owners. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Grinvald: definitely
an audit basis: they randomly open packages and check them against a list.
Latest stats are from 2021; Hong Kong and China are top countries inspected.
They also absolutely encourage anyone to submit tips. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Silbey: seems like a
story similar to Mass. Anticounterfeiting law where industry was policing in
front of stadium on behalf of NFL and just arresting T-shirt sellers. It’s an
MO, not only at the CPB—officers and industry leaders work together. What are
the narratives one might mobilize? Abuse of enforcement systems, collusion. Patent
troll narrative was effective. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Lemley: but TM
bullying stories don’t seem to move the needle in the same way.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Silbey: Eldred
turned out to be a mistake; could not convince the Court there was a problem.
Worry about SCOTUS and TM in the same way: the story we have to tell is not one
they are willing to hear. Empirics, costs, and efficiency don’t matter. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Lemley: yes, the Justices
clearly think people wouldn’t be confused, but VIP must nonetheless lose. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Silbey: might as
well have said “traditional contours of TM” in VIP; so what can we learn from
the patent trolling story?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">RT: Better story:
Emojis? Schedule A defendants?</span> <span style="mso-bidi-font-size: 12.0pt;">[Thinking
about Lawrence Block’s Batman’s Helpers. Police corruption]<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Just a <a href="https://tushnet.blogspot.com/2017/03/opinion-in-my-suit-against-ice.html">reminder</a>
of my <a href="https://tushnet.blogspot.com/2017/08/a-few-more-ice-tidbits-courtesy-of-foia.html">FOIA</a>
<a href="https://tushnet.blogspot.com/2017/07/documents-from-my-ice-suit.html">lawsuit</a>
<a href="https://tushnet.blogspot.com/2017/07/another-thought-on-ices-statements.html">against</a>
<a href="https://tushnet.blogspot.com/2017/07/nfl-is-advising-ice-to-seize-obvious.html">CBP</a>.
Happy to share the underlying responses with anyone doing research in the area.
</span><span style="font-size: 11.0pt;"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Linford: bonding
mechanisms? Schedule A story that got traction was the country music fan
selling Luke Combs stuff. This person’s side hustle was sympathetic. But is an
anti-merchandising right view popular in the US? That’s an empirical question. How
many errors are enough before people stop saying “errors happen”? The procedural
problem is less persuasive the lower you think the error rate is. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Goldman: we don’t
know the error rate b/c it’s not researchable, and it’s not researchable b/c
they’re not following the procedures.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Burrell: where’s the
evidence that we need reliable data to persuade people? We need anecdata that
is powerful: the government took my stuff! <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Dinwoodie: When the
RIAA sued a grandmother and a teenager, they looked really bad.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Linford: but the two
cases that made the court of appeals, the RIAA won.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">RT: but what does it
mean to win? They aren’t doing it any more and they didn’t collect the money.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">McGeveran: people
see themselves as branders now. They identify with the “brand” idea. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Lemley: here’s what
TM owners think you can’t do on Tik Tok: making fun of a brand; wearing branded
clothes w/o permission—that might be a way to flip the narrative. As the world
separates TM from brand, we should think about what it means to separate those
doctrinally—would help us have narrower scope for TM law but also free us to
rethink what a “branding right” would look like independent of confusion over
sales of products. Not sure it would be based on confusion! A lot of bogus confusion
survey stuff would not be important. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Originally dilution
was an alternative cause of action in the states; you couldn’t bring both
claims. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Burrell: IKEA case
in Europe: “IKEA plan” used to describe anti-immigrant plan; court is
considering whether there is “due cause.” Most likely will cut & paste from
their copyright decision saying that satire & parody are ok and send it back
to the Belgian court. In working out whether a parody implicated free speech
rights, Belgium is entitled to take into account its equality guarantee, so being
political speech wasn’t super protective. <o:p></o:p></span></p><div class="blogger-post-footer">http://tushnet.blogspot.com/feeds/posts/default?alt=rss</div>Rebecca Tushnethttp://www.blogger.com/profile/17344226000864611148noreply@blogger.com0tag:blogger.com,1999:blog-5764290.post-4431019751773205002024-02-23T16:43:00.002-05:002024-02-23T16:44:08.915-05:0015th Trademark Scholars’ Roundtable: Session 1: Congress and the Courts (including the role of the Supreme Court)<p>Introduction:
Rebecca Tushnet</p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">What might we derive
from things the Court has said about trademark of late? <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The purpose of
trademark is consumer protection; source-identification is the most relevant
consideration but not the entirety of TM law.<span style="mso-spacerun: yes;">
</span>[see also Booking: once source identification is shown, all other issues
are dealt with as limitations on rights/incorporated into the confusion test.]<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Maybe to this we can
add in Dastar. Source/origin and control over quality is the core of TM and has
special relevance when trying to figure out what rights the plaintiff is claiming
to own; sponsorship/affiliation is of lesser importance, albeit still relevant;
sponsorship/affiliation might be better handled under 43, which could have stronger
guardrails; consider Lexmark as a case about 43(a), which the Court says it is,
and not about 43(a)(1)(B) only. In that case we have a zone of interests test
and a proximate cause test—adding in a harm requirement at least for claims that
sound in 43(a). That could also address some of the Article III standing issues
I’ve been encouraging people to raise. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Compare what’s said
about source/TM use in Abitron; use in commerce as a separate requirement after
Abitron: bona fide is going to give us some trouble but not necessarily a lot
since it is explicitly contrasted with not reserving rights, so it could also
help identify non-source identifying uses.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">I was particularly
interested in doing a deep dive on the idea that the Court thought that both <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=961470">Dogan &
Lemley</a> and<a href="https://www.repository.law.indiana.edu/facpub/361/"> Dinwoodie & Janis</a> were right, when most of us understood the
two articles to be debating with each other.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Dogan & Lemley: This
article, especially the passage cited by the court, seems to envision a
“trademark use” requirement less as an affirmative test for infringement, and
more to exempt non infringing uses from liability for an absence of use.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Dinwoodie and Janis
taken out of context? They argue that trademark uses are more likely to
infringe, and non-trademark-uses are less likely to infringe, but that using
this dichotomy as an “approximate” in the interest of efficiency is outweighed
by complications that render individual cases (specifically in the example of
keyword purchases) distinct. But if Rogers survives, that’s what it does. Meanwhile,
valuable speech that is source-indicating gets some variant of the regular LOC
test. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The ridiculous
approach to dilution: because one statutory provision says use as a mark, the
neighboring one that doesn’t use that language must also have that concept: As
Graeme Dinwoodie said to me, even if you don’t agree that expressio unis should
mean that the noncommercial use exception doesn’t have a use as a mark
requirement, you should still easily recognize that the 2006 revision of
dilution was designed to expand the defenses, not contract them. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">What if we could
read that part of the opinion in ways that were less awful?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Use expressio unis
to get at the fact that the noncommercial use holding is limited to situations
where the challenged use is “used as a mark for a commercial product”; the term
noncommercial use can reasonably include uses as a mark for political
speech—Robert Kennedy, Jr., is using his father’s famous name to promote
himself politically (also highlighting the importance of small differences when
it comes to speech in the political realm). Things can be source identifiers, without
being commercial source identifiers (United We Stand): confusion but not
dilution actionable<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Jack Daniel’s didn’t
purport to decide the full scope of the “noncommercial” exclusion. It held:<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">On the [Ninth
Circuit’s] view, the “use of a mark may be ‘noncommercial’ even if used to sell
a product.” However wide the scope of the “noncommercial use” exclusion, it
cannot include, as the Ninth Circuit thought, every parody or humorous
commentary.” However, the Court concludes: “Today's opinion is narrow. We do
not decide … how far the ‘noncommercial use’ exclusion goes. … On dilution, we
hold only that the noncommercial exclusion does not shield parody or other
commentary when its use of a mark is similarly source-identifying.” (Reference
is to the use of Bad Spaniels as a mark for dog toys). Given that the Supreme
Court has also cautioned not to read its decisions as if they were statutes,
it’s arguable that use for political speech should fall into the noncommercial
use exception, which courts have generally read as covering “noncommercial
speech” as that’s defined by the First Amendment.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">What about the use
other than as a mark limit in the parody/commentary exception itself? Is there
any hope there for parodists? Other scenarios: Howard University Alumni
Association should be understood as NFU outside the scope of dilution, as long
as it’s a truthful representation—it’s not using Howard as a mark but rather
the unitary mark Howard University Alumni Association; the exclusion doesn’t,
like other parts of the statute, refer to uses “comprising” the famous mark. There
is something intuitive about the idea that someone who names their organization
“Americans Against Trump” is not “using” the famous trademark “Trump” “as a
designation of source” for their own goods or services—they are instead using
the phrase as a whole to express opposition to Trump, which is the opposite of
using “Trump” as a source identifier.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Mark McKenna: TM is a
creature of common-law courts and we don’t live in that world any more. SCt
used to do private law dispute resolution: Kellogg, Mishawaka, Singer—it’s
treating it as a tort. Scatter plot: common law reasoning doesn’t look to deduce
from a statement of a rule down; you build a rule by accretion over time and
each case is a data point. The line you draw never captures all the lines;
sometimes you see multiple lines emerge and then you can evaluate why. But law
doesn’t develop top-down in this model. For the most part, that’s how we built
TM and unfair competition. <br />
SCOTUS is now a constitutional court, not one that resolves individual cases,
and that’s now apparent in all these cases. Politics of how SCt Justices are
chosen now matters too: they aren’t picked for being good at law generally, but
for views on hot-button issues. Most have never really been lawyers. They were
movement/administration/academics. They’re not doing ordinary judging. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">But when we have a
statute with the common law model baked in—tells you very little about what it
means to violate the rights at issue—the Justices now have a very different
idea of what they’re doing, and they think they’re doing textualism even when
the statute is misfitted to that, they don’t have the toolkit to do the common
law reasoning. Romag is a clear example: there’s a complicated history, and
figuring out how to think about it in light of TM’s evolution over time is
hard. But the Court says: we found this one case! 1881 DCt of Alabama. The idea
that finding one case in common-law reasoning matters is ridiculous. How can
you even engage the conversation when it’s a trump card to say “that can’t be
the rule b/c I found one case that says something else.” You can also see it in
Tam & Brunetti—little interest in how TM works, the relationship b/t
registration and enforcement, even though that’s central to the Lanham Act. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Also JDI and
Abitron, where the Court grabs a bumper sticker: focuses on one term in the law.
Citing both Dogan/Lemley and Dinwoodie/Janis is a good example: those articles
don’t say the same thing.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">What is to be done?
SCt should get out of business of doing IP, but it’s too late. Even from 20
years ago, it’s a big change—Wal-Mart, Traffix, and Dastar were trying to
resolve hard questions and details of doctrine that affect how things work on
the ground. The 20 thousand foot view of today is a very big difference. They’d
look for some little snippet of text in the Lanham Act; Scalia was a textualist
but he could read a law in its entirety. The way we’ve trained a generation of
judges to think about law is so different and the suppositions about how law
gets done baked into the Lanham Act don’t work any more. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Christine Haight
Farley. The Interamerican Convention enters the chat! That’s a missing link
that helps explain why so much is unstated in the Act. Rogers had been trying
to pass a law, and he didn’t think Congress could enact substantive rights; he
was given the opportunity to write a self-executing treaty that was written
like a statute, for civil law countries. When the Lanham Act passed, he was
convinced it incorporated that already in section 44. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The accident that is
43(a) is also part of this story. It was meant to have a bounded agenda; only
in legislative history, when witnesses noticed section 44, they suggested that
43(a) was more appropriate for unfair competition. Rogers would have been floored
by what came of it. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Congress delegates
to INTA, AIPLA, ABA the role of drafting, and that goes all the way back to
Rogers. How did TM use get into an exception to an exception? It was supposed
to be a limitation on the dilution right, but INTA said it should move and Congress
was none the wiser about the effects. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Codifying 43(a)—but without
codifying LOC, spectrum of distinctiveness, etc.—b/c the TM bar sensed a risk
of loss, of limitation. No one in the TM bar has an interest in cleaning up
things like that, but it means nonexperts don’t get much guidance.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Also helps explain 1962
expansion of confusion; 1988 constructive use; dilution; ACPA. From 1988 on,
Congress is doing substantive law, and special-interest revisions like the
Anti-Monopoly revision. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">What about the
courts? The Court seems to think TM law is working really well. There might be
little problems but overall it’s a well-oiled machine. It doesn’t see what
dramatic changes have occurred in TM law (or that they’re a problem). Only when
it’s really doing private law can it see a plaintiff’s overreach. Doesn’t have
a sense of the policy landscape. Breyer, Ginsburg, Scalia had more of that
sense; Justices now focused on different landscapes. Elster might be a way to
get some of that landscape back. Gorsuch is interested in history of old Acts
and TM Office doing public policy that’s a little broader than source/origin
confusion. [Although he seems wrong on the facts about what they were doing.]<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The working
relationship of Congress/SCOTUS provides an opportunity to hide the ball about
change, especially in 43(a): Congress says “all we’re doing is codifying common
law” and Court says “all we’re doing is applying what Congress wrote.” But
somehow there’s a big change between Sears/Compco and Taco Cabana. Sears/Compco
said there was a right to copy things in the public domain; how did that go
away?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Dinwoodie: Non TM use
is an important variable—something that affects scope of protection not outer
boundaries, and that worries him less b/c it’s not a dispositive binary
variable. But now you have to analyze it like that (which you see badly in the
post-JDI cases); if you fall outside out of the line, the consequence is just
in the test/scope of the right. You can see that where we have use as a mark in
other tests—KP Permanent—courts have started to use the three elements more as
a spectrum—how descriptive is this? We might be getting to the stage in the
evolution where TM or non-TM use is a relevant variable, which is consistent
w/both articles. Agree that source/affiliation is one way to draw the line, but
that is itself not an easy line to draw—standing behind is not an easy line,
but as a variable it is less worrisome. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Rescuecom: is it
overruled? Only if you believe they’ll stick with their statement about the definition
of “use in commerce.” Which he doesn’t; the opinion applies that reasoning to
32 and 43(a) both. Nobody thought that through—it was a bumper sticker, as
McKenna says. Rescuecom will survive a bit longer. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">[I think you could
say that when you claim to have a “mark” subject to 43(a), you use the relevant
definition, but when you’re asserting some other claim under 43(a), you don’t
have to do so.]<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">They seem to think
the multifactor test is mandated by the statute, but it’s not, so maybe it’s
the statute + some principles drawn from private law? Once you go top-down, it’s
hard to figure out what other nonstatutory stuff will be in play.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Do we have faith in
judicial innovation? RT’s approach is a bit more top-down but we’ve had some success
with bottom-up—do you still make the point that the 1962 legislation was trying
to do something specific or do you give up? Do you still point out that Congress
endorsed Rogers in 2020? Or do you accept the corroded structure and do something
else?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Jeremy Sheff: Not
just judges trained this way now but how lawyers are trained, the materials
they have, and the way they are trained to use those materials technologies.
The clerks who wrote Wal-Mart were the first generation to get unfettered
access to Westlaw. Before, you pulled a treatise off the shelf who’d been
written by someone who read all the cases and condensed them to explain what
they mean and which the most important ones were. JDI, which cites articles
with “TM Use” in the title, is now the model—that’s how lawyers work now, dealing
with huge volumes of materials that they can’t wholly assimilate. The scale is
different; the human reviewing cases and synthesizing them is not the model
now. We’re encouraged to look for the snippet that matches our claim and no
further. This issue is not going to go away.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Similar with
registration agencies—a firehose coming at them. Better algorithmic detection/AI
won’t necessarily be a better way to deal with that. We should think about how
we could train lawyers to be better at this. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Mark Lemley: This
isn’t a TM problem. This is a law problem. The Court, across a wide variety of
doctrines, isn’t just replacing common law with statutes even when statutes
were written with common law in mind. It has embarked on a project of abolishing
equity. Not clear why, but definitely doing it, e.g. in Romag. There’s one
basic rule of disgorgement: you need to be a bad actor. But the Court doesn’t
look at it that way. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Yesterday’s ©
arguments are the same. Ten years ago they abolished laches, creating a
nightmare of 40-year-old claims. Yesterday’s argument was whether the discovery
rule applied to the 3-year damages rule; several Justices across the ideological
spectrum asked “why should there be a discovery rule in general?” Equity
existing alongside the statute is being taken outside the law. Not clear what
to do, but you can’t solve it in TM because it’s not a TM problem.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Dinwoodie: maybe it’s
worse in TM, b/c you don’t have political commitments at least telling you what
will happen. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Lemley: yes, part of
the issue is you’ll see a random walk. They weren’t particularly interested in
helping TM owners get more $, but they were interested in identifying a couple
of words in the statute. Star Athletica is the same way; in the absence of a
precommitment around constitutional issues, it’s weird. When the statute was written
will make a huge difference too, b/c Congress has responded by writing statutes
like the tax code. The earlier statutes will be interpreted in weird ways, see
Warhol, b/c they were written against a backdrop that we now pretend no longer
exists. Is the solution a European style detailed regime? Don’t love that in TM
but that is the obvious response.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Jake Linford:
Thinking about Rogers, JDI, and Dastar: is there a throughline about the line
b/t © and TM? Maybe JDI is suggesting subtextually that there’s a place for
Rogers, and what we mean is works that could qualify for ©. [But the VIP bottle
clearly could!] It’s about maintaining lines and Rogers then helps maintain the
lines. If that’s right, we use expression as another form of heuristic, like
use in commerce/use as a mark. The danger is distortions of the parody/satire
line in ©.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Standing makes him
nervous b/c of privacy. The SCt uses standing to take power and ability to get
relief away from plaintiffs it doesn’t like. TransUnion is a big example;
Congress didn’t satisfy Court’s wisdom about who should get relief. Would be
surprised, given Tam/Brunetti/JDI/Elster trajectory, if Court said we think TM
plaintiffs generally ought to be denied relief based on our gnomic
understanding of standing. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">What you’re seeing
is cross-licensing/branding. A move among many of us as scholars to say there
should be space for artistic uses, and if we see a lot of Nike collabs and make
statements about who it wants to collaborate w/or not, perhaps that sends
signals that matter to consumers, and if we want to reflect how consumers
interact w/markets, that might lead to rights expansion. Maybe
sponsorship/affiliation reflects what brands are doing and how consumers think.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">We’re trying to return
to a “pure” state of common law: source confusion, double identity. Not sure
that’s a better world, but regardless the mechanisms we’re using aren’t fit for
purpose, like the First Amendment or standing b/c we think they’re more
essentialized and the Court might listen to us about precommitments like that
instead of TM policy. Perhaps you can get that, but do we lose something in masking
the policy intuition behind a technical tool to get us there.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">On Sheff’s point: if
you trust the treatise writers, then great. If you don’t, does the search
engine help? Maybe, maybe not.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">RT: On ©. The bottle
is ©able.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">On standing: Agrees
about prediction that it won’t be much help, but: What is law for? If it’s not
for making reasoned distinctions, then it’s nothing. And there’s some value in
explaining the inconsistency and challenging the TM harm stories; some judges
even listen. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">On sponsorship/affiliation:
courts don’t inquire into how it’s done, though. If we listened to what brands actually
do and what consumers actually see, they see Nike x Common, the dual branding
is all over it. But brands don’t signal a collab by having the red wax seal on
one bottle of liquor appear on another bottle with no other sign of
collaboration. They put it all over! Courts actually ask whether consumers
would, e.g., expect a movie company to do cross-branding with a software
security company, but they don’t ask, is this how consumers are accustomed to
seeing collaborations identified? <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Jeanne Fromer:
participated in drafting sessions for TMA with Farley & Beebe—were able to
advocate for some changes. Allow PTO to unilaterally cancel marks. Another
issue: the SG’s office is critical. They often come up with strategies to win
that don’t make sense in the larger context of the body of law at issue.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Dinwoodie: SG takes
positions they think the Court will listen to, and that methodology bleeds over
into other things/methods. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Fromer: hard to know
the chicken from the egg.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">McKenna: The SG’s
JDI brief made egregious legal errors, hope they’re not going there.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">In teaching, try to teach
students where the rules came from, and maybe that’s what we need to be doing
more of. The rules don’t drop out of the sky but evolve. Another big difference
along with legal research is that the TM bar used to be small; now the money is
good so lawyers not really trained as TM lawyers are litigating these cases;
generalists that pick & choose things—you hear that in the arguments. The
SG wouldn’t have put in a brief in older TM cases; the Court asks the SG b/c it’s
now thinking of itself as a constitutional court. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Dinwoodie: judge
discussed how he would have benefited from learning more about functionality
from parties; he looked at the dictionary definition. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Ramsey: standing and
1A seem to have a relationship in examining government’s interest and harm/causation
stories. Jennifer Rothman has written a paper about history of protecting names
of presidents, etc.; may be source of Gorsuch’s interest. So scholarship about
history may be important.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Robert Burrell: Australian
trend—lot of $ coming in to TM, and so nonexpert lawyers are coming in and
litigating, often to damaging effect. See less in UK w/specialist bar and
specialist judges. How do we as a community flag “here there be dragons” or at
least “there are other cases that have considered these issues”? We can do it
in part by embarrassing judges when they get it really badly wrong, but how we
persuade other members of the legal community that they might want to find some
things out before giving it a go is a question. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Farley: Court loses
forest for trees in these cases, and then sees only a cartoon forest. Could we be
painting more accurate pictures of the forest in these cases so they see where
a case sits and what the impacts will be? Scholars used to write short “forest”
pieces, and one of the ways the world has changed is that law reviews like you
to solve a problem/make a recommendation, but there’s room to speak for the
trees.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Mid-Point
Discussants: Jessica Silbey<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Compare what’s going
on in patent & © specifically: feels better about TM cases than about
patent and © generally speaking, which is worth thinking about. The only © case
that went well recently was PRO v. Georgia, but © was bad before—Eldred, Golan,
Tasini. We did have some thoughtful TM decisions—Qualitex, Traffix, even Two
Pesos, Moseley might have been a mistake but got fixed by Congress. But still
evidence of hubris: armchair consumer psychology in Wal-Mart etc. Nostalgia isn’t
accurate as to cases like KP Permanent, which were doing policy too. So how
does the Court do IP more broadly? <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Methodological
shift: deciding cases on administrative agencies, jury questions. It will be busy
making claims about separation of powers, role of jury in rights/property
claims; the idea that won’t have effects on statutory schemes like TM is ludicrous.
It will affect the TTAB. The cross-disciplinary effects of its methodological decisionmaking
are profound. So what the court says v. what it does: SEC v. Jarkesey—it’s
going to say that the ALJ cases that sound like common law should be brought in
court before a jury. What is the role of the jury in TM? We can talk about
courts’ power, but will it throw everything to the jury? Full of its own
self-worth as judges being gatekeepers. Judicial supremacy: this Court is all
about its own power, so it will say juries are important, but really it is
creating more gateways for it to decide cases. Where is factfinding required?
Distinctiveness, abandonment, etc. Where’s the influence that advocates might
be able to exert on the divide b/t law and facts? <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Appellate courts:
there will be tension b/t Fed Cir and regional circuits. As Fed Cir decides IP
cases v. 2d/9<sup>th</sup>, will we see different kinds of SCt decisions w/r/t
Fed Cir? Insiders versus outsiders: con law phenomenon is spreading.
Opportunity to figure out who those insiders are, including the SG.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Helping TM to be its
best self, whatever that might be. <span style="mso-spacerun: yes;"> </span>Provocation:
TM restatement! Less controversial than ©; who gets to decide gap-filling
questions and what justifies them being the decisionmakers? The development of
the common law in TM is its own force, and that calls out for the idea of competing
treatises, which a Restatement could be. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Bill McGeveran<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Who is a good
guardian of public interest in things like speech and competition? A common law
approach assumes judges will guard the public interest. A delegating structure
assumes that admin agencies will do so. More specific statutes now are Congress
reacting to those responses and trying to embed a view of the public interest
into the statute itself. The Lanham Act is clearly a product of common law, but
Congress passed plenty of other statutes in the 50s, 60s, and 70s. Where is the
public interest being guarded in those statutes? Antitrust is another capacious
common law statute, but there’s been enormous normative struggle—Chicago School
monopoly definition of monopolization, and then countermovement. Big, dominant,
coherent approaches to the public interest permeate antitrust lawmaking. Also,
FTC and DOJ really matter. SEC is similar: the regulator really matters. The
text of the statute doesn’t cover all the regulations, where the public interest
is guarded. Privacy/consumer protection: FTC has jerry-rigged a guardianship of
the public interest; California also passed a specific law with a specific
agency (which Eric Goldman loves). There’s an understanding of where the public
interest is supposed to reside.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">What about IP? The
statutes have been amended to make them more and more specific; © and patent
have had comprehensive rewrites since they were created in the common-law era.
But they all have this issue: where is the public interest in a common-law structure
implemented by the statute? It’s supposed to be the courts, b/c the statute
doesn’t embody the specifics. But there aren’t a lot of other old-fashioned
statutes with gap-filling common law that are operating anymore. The
registration process has some of that, but registration isn’t the primary or
only mover here. Nobody has their hand on the tiller. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">RT: [Point about
sending everything to the jury: it’s easy to say that won’t happen, because
there aren’t enough courts and juries, but another possibility is that the
system really won’t work/we’ll get decisional paralysis: Indian judicial system
has seized up—in practice, you just don’t have rights. Will businesses be ok
with this? Compare responses to mass arbitration—they do have incentives to
change the law when the law stops working for them.]<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">McKenna: there’s a
big difference between wholesale judgments about what’s on the whole more
likely than not—Wal-Mart and the other classification cases—we make those
wholesale judgments b/c of the countervailing concerns like competition; very
different from the Court’s current approach, which is that everything is retail
and has to be decided using concepts that won’t be filled in by the Court. Very
different concept of institutional actors. Generalization is itself valuable,
but that feels like it was abandoned. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Registration’s
getting more important, so maybe the PTO will be more of a guardian of the public
interest, b/c Amazon has forced that role on them.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Sheff: Not sure the
allocation is the core problem; we’re interested in the outcomes/the system and
it’s not clear that who has decisionmaking authority is controlling that.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Dinwoodie: dissent
in Samara in 2d Circuit: don’t let juries decide how competitive the economy is
going to be. Worry about juries—think about who’s in the best position to do the
weighing/it’s easier to control the judge’s interpretation of the law. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Surveys: A growing
skepticism of surveys? Sotomayor’s concurrence; others may well be on board. In
the rest of the world, common law in particular, there has been pretty
significant trend against the use of surveys. Maybe that’s one of the issues
where the way you develop facts and prove facts may affect outcomes. JDI survey
did a lot of damage in that case. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Linford: we don’t
have instructions for TM cases in most circuits; that is a leverage point. Court-assigned
experts as in Germany? <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Silbey: public
interest location: in © different industries have forced amendments over time;
that’s somewhat policed the different stakeholder interests. What is the
equivalent in TM for that kind of industry diversity that could create wedge
issues? LKQ/repair parts/must-match for trade dress. Off-ramps are hard to
convince Court of when they think that courts are the best places for deciding
these questions and they do it well. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Where are the lines
the Court is drawing that take it out of fact questions?
Commercial/noncommercial? What other things are available doctrinally? 1A is
clearly a line; property rights is another line. We’ll see more takings cases.
Note that Feist, a huge © case, turned on Stevens being mad at telecom
companies. O’Connor wanted to deny cert, then wrote the unanimous majority.
Interesting to see the case file in Wal-Mart. Where did Scalia get those ideas
about the balance of the system?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Dinwoodie: public
interest considerations factoring into the analysis can be a means of constitutional
avoidance, but the Court seems unwilling to do that—forces it to the nuclear
options.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Farley: In JDI,
examples were effective: Blatt said the survey should be relied on because we
don’t want judges deciding these questions because judges don’t understand anything
about whether panties are related to teen girl magazines. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Do plaintiffs waive
jury trials? [PI/SJ is probably most important.]<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Lemley: sometimes it’s
because all you want is an injunction/a PI resolves the case. If it’s a
disputed factual question it’s not appropriate for PI, because who knows what a
jury would say? That framing, if you can fit it into PI jurisprudence, which
the Court is messing up as it abolishes equity, could serve as a bulwark not in
speech cases—where you do want to lower costs—but in other cases where the D
might otherwise just be shut down.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Farley: INTA says its
objective is to protect the public through the use of TMs/avoiding deception. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Eric Goldman: the
platforms could be a countervailing force. But they can’t. They’re sidelined by
the techlash. Google fought for keyword advertising but couldn’t win that
today.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Burrell: Judges are
pretty good about “this shouldn’t get monopoly protection in the first place,”
and that might be the 90s cases. But once they’ve decided “Jack Daniel’s is a
trademark” they get much worse at the scope of the right. Could be a shift in
the types of cases. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Dinwoodie: British judicial
enforcement of TMs until 1994 was much more balanced view of range of interests
at stake in TM: often former TM barristers that wrote/enforced law. They had
represented clients on both sides. More sensitive to balance. We’ve lost that. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Ramsey: worked on
INTA’s model TM guidance; really interesting—a lot of them were fine with
speech-protective limits for registration and enforcement. Put into the
language of functionality “any feature that adds substantial non-source-ID’ing
value” but someone on the board of INTA didn’t like it and so it came out.
Compromise is possible, but can be derailed by 1-2 people w/a lot of influence.
Restatement model might be better to avoid those roadblocks. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Failure to function
as a guardrail for the public interest, not just for speech but for cases like
Lettuce Turnip the Beet. But we need some clarity about when secondary meaning should
be enough to overcome failure to function, as with Nike/Automotive Gold, and
when it shouldn’t be, as with DRIVE SAFELY. [Maybe part of the answer is
preexisting meaning: there will always inevitably be non-TM meaning for “DRIVE
SAFELY” but not for Nike/the BMW icon, and the <i>ratio </i>of TM to non-TM
meaning, or the ability of TM meaning to drive non-TM meaning out of the
market, might matter.]<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Linford: Dastar as
response to Court’s recognition of Eldred/Golan being extreme—strongest statement
that © can’t be perpetual is found in Dastar, not a © case.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">McKenna: it’s true that
the SCt cases we describe as more sophisticated are about policing what counts
as a mark, but it’s never taken a straightup infringement case as the massive
expansion of what counts as infringement occured. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">There was a
settlement over validity v. infringement doctrines but TM use puts that in a
blender. We’ve committed to a system where everything is in the scope of TM rather
than using public interest to set boundaries for protection, and that makes it
hard to figure out how to use the public interest in the retail inquiry.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Dogan: consider
differences between arbiter of public interest and advocate for public
interest. INTA represents a consistent value, whereas on the other side there
are different interests and different ways in which expansive TM rights
threaten values we care about. There are clusters of interest groups for
competition, and for speech, in uncoordinated ways. Think about whether there’s
any way to coordinate and make more coherent this set of values threatened by
expansive TM rights. Courts and Congress respond to what they perceive as
broader cultural norms—SOPA/PIPA; to some extent in courts protecting Sony VCR.
How to make values salient to broader public? Economic costs, speech costs,
etc.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Farley: one
challenge is people don’t know when they will become interested. Small
businesses face particular challenges. No representatives of small business in
dilution hearings. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Leah Chan Grinvald:
right to repair as one of these, fighting for 15 years. <o:p></o:p></span></p><div class="blogger-post-footer">http://tushnet.blogspot.com/feeds/posts/default?alt=rss</div>Rebecca Tushnethttp://www.blogger.com/profile/17344226000864611148noreply@blogger.com0tag:blogger.com,1999:blog-5764290.post-56348353440133239572024-02-23T12:08:00.003-05:002024-02-23T12:08:55.932-05:00ex-employee's Glassdoor post wasn't commercial advertising or promotion<p>Schabacker v. Ferens,
2024 WL 710632, No. 22-3778 (E.D. Pa. Feb. 21, 2024)</p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">ECRI and its CEO
sued Ferens, a former ECRI employee, for various things including defamation, IIED,
violations of trade secret law, and Lanham Act false advertising. ECRI provides
healthcare products and services; Ferens was a former high-level ECRI employee
who served as Area Vice President until his 2021 termination. His severance
agreement required him, among other things, to “refrain from disparaging,
criticizing, impugning, damaging, or assailing the reputation of ECRI and its
employees and officers,” in exchange for twenty weeks of severance pay. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">One month after executing
the agreement, Ferens allegedly posted a review on Glassdoor.com, a job and
recruiting website where current and former employees anonymously review
companies: “Cons -- CEO is now being accused of sexual harassment. This guy is
a train wreck that has destroyed the culture in the 3 years he has been here.
Sales stink. People are leaving.” Ferens posted anonymously but then
acknowledged that he made the post and voluntarily took it down four days
later. This was the only conduct relevant to the Lanham Act claim.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The Glassdoor review
was not “commercial advertising or promotion.” The post wasn’t an ad, didn’t
promote a product, and wasn’t part of a proposed commercial transaction. “Reviews
and ratings are not usually considered to be commercial speech actionable under
the Lanham Act.” (The post could still be defamatory, though; whether it was
substantially true was disputed because a jury could decide that a salesperson’s
contemplation of filing suit/enlisting an attorney to negotiate severance etc. over
behavior that caused her discomfort made “accused” true, or not.)<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;"><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p><div class="blogger-post-footer">http://tushnet.blogspot.com/feeds/posts/default?alt=rss</div>Rebecca Tushnethttp://www.blogger.com/profile/17344226000864611148noreply@blogger.com0tag:blogger.com,1999:blog-5764290.post-22042970103528480912024-02-22T13:19:00.000-05:002024-02-22T13:19:00.139-05:00Switching tomato varieties but keeping nearly exact labels may be misleading<p>Valiente v. Simpson
Imports, Ltd., No. 23-cv-02214-AMO (N.D. Cal. Feb. 20, 2024)</p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">According to the
complaint, San Marzano tomatoes “originate[] from the town of San Marzano sul
Sarno, near Naples, Italy.” San Marzano tomatoes “bear a special designation:
D.O.P. (Denominazione d’Origine Protetta, ‘Protected Designation of Origin’).” San
Marzano tomatoes grown in the United States do not have the D.O.P. designation
but are labeled “San Marzano style” or “San Marzano” without the D.O.P
designation. San Marzano tomatoes are thicker than Roma tomatoes with fewer
seeds and a stronger, sweeter, less acidic taste. They are thus “perfectly
suited for making sauces” and “are widely considered the best tomato in the
world for the task.” “[C]hefs and home cooks alike seek out canned San Marzano
tomatoes and are willing to pay for them.” Indeed, San Marzano tomatoes
“command double or triple the asking price of regular canned Roma tomatoes or
generic tomatoes.” <o:p></o:p></span></p><p class="MsoNormal"><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi5983djKol2CokX3FQlsntPqCc7dwyWFq7HcCTk7SQlvzxx-y386jwuqG2bGz5_tdUVWFF0DaS-ZiDgRZ-wT9B_84hEquLCJZJEiHb123Ujo3uDkFKmgOZWDe53UdSid34WePc-x_4MRD5ho55QXMsT_BjM_ewlCbmUhJHInuuVWsAepVfxygfBQ/s369/price%20chart.png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="245" data-original-width="369" height="424" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi5983djKol2CokX3FQlsntPqCc7dwyWFq7HcCTk7SQlvzxx-y386jwuqG2bGz5_tdUVWFF0DaS-ZiDgRZ-wT9B_84hEquLCJZJEiHb123Ujo3uDkFKmgOZWDe53UdSid34WePc-x_4MRD5ho55QXMsT_BjM_ewlCbmUhJHInuuVWsAepVfxygfBQ/w640-h424/price%20chart.png" width="640" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">sample price chart showing SMT selling at San Marzano prices</td></tr></tbody></table><br /></p><p class="MsoNormal">Simpson used to sell
San Marzano tomatoes under a label similar to its current label.</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiBndbHqbhQYdqfwv7rSdEyZ4kotwHtE_MqH5Xwiopet3Y_wtriCyMfV_QNYyyj8WzsIehAo0kzPs8HsFSE9kKREFxqNoJSKF_KripRPWtFb6XNYJvCt914qkyih8mrJEVSenf4pdZAWXWic_Ca8B2JVAZJXVE_b247XplG608Aad7e7uDDpyY04g/s242/san%20marzano.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="242" data-original-width="187" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiBndbHqbhQYdqfwv7rSdEyZ4kotwHtE_MqH5Xwiopet3Y_wtriCyMfV_QNYyyj8WzsIehAo0kzPs8HsFSE9kKREFxqNoJSKF_KripRPWtFb6XNYJvCt914qkyih8mrJEVSenf4pdZAWXWic_Ca8B2JVAZJXVE_b247XplG608Aad7e7uDDpyY04g/w495-h640/san%20marzano.jpg" width="495" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Old label showing "San Marzano" on top of elongated, pointed tomatoes</td></tr></tbody></table><p class="MsoNormal">But now it
sells a variety of Roma tomato products under the “San Merican Tomato” or “SMT”
brand.</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgI8cmVadTFurDCLpmJZsVSvQh7i6Guomu-GWRh5G7Zrzcavk08x9e8lUt4ce73Ce2j7WXrIQK5GO7_b2VRQ7S87t_9nxvaKnKABagRMh94fRgwPaMHFNEBh8nmoI_yj56ClHciWoC_YcMSbFcL0m4J-RtXukoEG6pR420rQB5ptoafSB6GoFL9YQ/s344/current%20label.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="343" data-original-width="344" height="638" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgI8cmVadTFurDCLpmJZsVSvQh7i6Guomu-GWRh5G7Zrzcavk08x9e8lUt4ce73Ce2j7WXrIQK5GO7_b2VRQ7S87t_9nxvaKnKABagRMh94fRgwPaMHFNEBh8nmoI_yj56ClHciWoC_YcMSbFcL0m4J-RtXukoEG6pR420rQB5ptoafSB6GoFL9YQ/w640-h638/current%20label.jpg" width="640" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">same image, now with SMT on the tomato</td></tr></tbody></table><p class="MsoNormal">On the label, embedded within the
letters corresponding to Simpson’s brand is text: “San” for “S,” “erican” is
nested within the letter “M,” and “omato” appears under “T.” The complaint alleges
that the text is “so comically miniscule that it is almost impossible to see
with the naked eye.” The label also features illustrations of a San Marzano
tomato (longer and more pointed than a Roma tomato). The complaint alleged
that, with inconsequential differences, all of Simpson’s tomato products,
including boxed tomatoes, canned tomatoes, tomato sauces, and tomato pastes,
“are all packaged with the same visually distinct and eye-catching label.”</p>
<p class="MsoNormal">Valiente brought<a href="https://tushnet.blogspot.com/2022/05/the-usual-california-claims.html"> the usual California claims.</a><o:p></o:p></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">She had standing as
to products she didn’t purchase that were substantially similar to those she
did, with uniform misrepresentations, as alleged here. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Nor did the FDCA
preempt Valiente’s claims. Although Simpson characterized Valiente’s claims as
imposing a disclosure requirement that the FDCA does not contain, i.e., a
requirement that Simpson specify the tomato varietal the consumer is purchasing,
Valiente’s claim was based on the additional content on the product label—the
illustration of a San Marzano tomato, the letters “SMT,” and the text “San
Merican tomato”—none of which federal regulation requires. However, this did
mean that Valiente couldn’t bring deception-by-omission (failure to use the
Roma label) claims.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Plausibility: yes, it
was plausible that reasonable consumers would be fooled.<span style="mso-spacerun: yes;"> </span>Maybe “the illustration is subject to
artistic interpretation” and the label makes clear that “SMT” stands for San
Merican tomato. But it was plausible that reasonable consumers would interpret
the illustration and the letters SMT as Valiente did, and miss the imbedded
“San Merican tomato” text. “The price of Simpson’s tomatoes further contributes
to the plausibility of a consumer’s expectation that Simpson’s tomatoes are San
Marzano tomatoes. A 28 ounce can of Simpson’s whole peeled tomatoes sells for
$5.99, the same price as a 28 ounce can of a D.O.P. product by another seller –
a price which incorporates a premium San Marzano tomatoes command.” (The court allowed
amendment which counsel represented would include more specifics, including
that if she had seen San Merican she would have interpreted it as “US-grown San
Marzano,” which additional allegations would also suffice for a fraud claim.) The
limited changes to the old label – adding “SMT” and illegible text stating “San
Merican Tomato” – “support a strong inference that Simpson intended to make as
few changes as possible to its product label to keep consumers under the
impression that its Roma tomato products were the same as the San Marzano
tomatoes it previously sold.” <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Express warranty
claims also survived, but not claims for injunctive relief. Simpson further
argued that Valiente couldn’t pursue any equitable claims because she had an
adequate remedy at law. But at the pleading stage, it was enough to allege that
she “may lack an adequate remedy at law” if the amount of damages recoverable
is less than the price premium she paid for Simpson’s tomatoes. She also alleged
that “[r]estitution and/or injunctive relief may also be more certain, prompt,
and efficient than other legal remedies . . . .” The court accepted these
arguments at this stage (citing, <i>inter alia</i>, Murphy v. Olly Pub. Benefit
Corp., 651 F. Supp. 3d 1111, 1129 (N.D. Cal. 2023) (declining to dismiss the
request for equitable relief where the plaintiffs alleged that legal remedies
were not as certain as equitable remedies because, for example, a full refund
would require a showing that the product at issue had no market value but no
such showing was required for restitution).<o:p></o:p></span></p><div class="blogger-post-footer">http://tushnet.blogspot.com/feeds/posts/default?alt=rss</div>Rebecca Tushnethttp://www.blogger.com/profile/17344226000864611148noreply@blogger.com0tag:blogger.com,1999:blog-5764290.post-41671385844358960592024-02-21T07:00:00.002-05:002024-02-21T07:00:17.312-05:00Descriptive mark Bike+ w/minimal marketing fails to show reverse confusion<p></p><p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">World Champ Tech LLC
v. Peloton Interactive, Inc., 2024 WL 665181, No. 21-cv-03202-LB (N.D. Cal.
Feb. 16, 2024)<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">WCT offers a
mobile-fitness app called “Bike+” and owns a trademark registration for that
name. It sued Peloton for trademark infringement and other claims after the
defendant launched a new line of interactive stationary bicycles under the name
“Peloton Bike+.” The court grants summary judgment on lack of likely confusion.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">WCT’s app was first
released in 2014 for the iPhone and Pebble watch as a metric-tracking cycling
app that was designed to “track speed, distance, altitude, and grade.” It also
“allowed users to capture photos or video along a ride, activate interval
timers during a ride, and post details to Facebook, Twitter, or other services.”
Downloads declined after a 2015 peak. WCT became convinced it needed a new
direction and focused on developing an app for the Apple Watch. Facebook
advertising for the 2014 app continued until 2016 or 2019 and remained
available for download; even though the Pebble Watch was discontinued in late
2016, WCT’s principal testified that “there remains a loyal following among the
Pebble Watch community.” But the app was not updated after 2016 and was removed
from WCT’s website. There’s no data on how many bike rides have been tracked on
the app and WCT’s principal didn’t know from personal use how functional the
app was. Also, by the end of 2016, WCT hadn’t paid taxes since 2015 and its
certificate of incorporation was therefore suspended.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">WCT’s principal
testified that he continued developing a new version of the Bike+ app from 2017
until 2020, writing “over 2.4 million lines of code,” or about 1,500 lines per
day. He sought to use Apple’s machine learning to create an “on-device coaching
system” featuring “fatigue detection.” He “spent substantial amounts of time
coding and testing this innovation and applying for a patent ... that has been
since implemented in the Bike+ app.” He started collecting real-world test data
in August 2018. Around June 2019, he was nearing completion of a new app, but
Apple announced a new Apple Watch operating system, requiring a change in development.
He again neared completion by late 2019, but in early 2020 Apple released another
toolset, which “would at least theoretically permit World Champ Tech to alter
its distribution model to provide for an in app coaching feature for which
subscription fees could be charged.” Then “the COVID pandemic struck, impacting
development productivity.” In mid-July 2020, Apple released a new operating
system that introduced a bug; in September, he reported this bug to Apple. After
an inquiry, Apple confirmed in December 2020 that the bug was fixed. He
completed final testing and submitted the new Bike+ app to Apple for review in
late December. The new app then launched in January 2021.<o:p></o:p></span></p><p class="MsoNormal"><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgm0vEfl-fkMSir2uT-8-lr3qW-xSn7-DQh-gL0wpWcshHW3P2dWOrVbwL2j7j9jHtlI57OQxAxA-Ple2SgjannbbmYJV3WDHu_Z1krdWNg-I0Fz3Zcrm2mnmIbXiaMIUbZ4HRGXK59hbJw79n8bpn4FQ8QtT3Mpk4n7a7L7DP-HYU_oglUSHJGzA/s585/bike%20more%20app%20logo.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="190" data-original-width="585" height="208" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgm0vEfl-fkMSir2uT-8-lr3qW-xSn7-DQh-gL0wpWcshHW3P2dWOrVbwL2j7j9jHtlI57OQxAxA-Ple2SgjannbbmYJV3WDHu_Z1krdWNg-I0Fz3Zcrm2mnmIbXiaMIUbZ4HRGXK59hbJw79n8bpn4FQ8QtT3Mpk4n7a7L7DP-HYU_oglUSHJGzA/w640-h208/bike%20more%20app%20logo.jpg" width="640" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">initial Bike+ app with [bike more] in name and b+ in icon</td></tr></tbody></table><br /><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjo_hk0G0JKip_DwetQ0cqTyDOq4tJS4UEPCpRljA9YEFAGiJrryZZLHVSlNOuDKCFtPK9-wau-HEWVFP136Eb1W8OZMGTOhSM-9QX6mu3KAZ8jHhNuSVjGgV5cinPIuB9Te4viXvJJnAcO6-q4CqKAS4MLb9VrrIAwaciB8suG-jhH5nSxQ6cjJw/s465/2020%20logo.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="231" data-original-width="465" height="318" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjo_hk0G0JKip_DwetQ0cqTyDOq4tJS4UEPCpRljA9YEFAGiJrryZZLHVSlNOuDKCFtPK9-wau-HEWVFP136Eb1W8OZMGTOhSM-9QX6mu3KAZ8jHhNuSVjGgV5cinPIuB9Te4viXvJJnAcO6-q4CqKAS4MLb9VrrIAwaciB8suG-jhH5nSxQ6cjJw/w640-h318/2020%20logo.jpg" width="640" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">2021 Bike+ name with logo and "Bike" in icon</td></tr></tbody></table><br /></p><p class="MsoNormal">Like the 2014 app,
the 2021 app is for metric tracking while cycling. Unlike the 2014 app, the
2021 app does not include “[bike more]” in its screen name, leaving only
“Bike+,” and the app logo says “Bike” rather than “b+.” WCT’s principal testified
that the 2021 app is functional for both indoor and outdoor bike rides.
Although it has subscription coaching features, he was “not positive” that the
coaching features have ever worked since the 2021 app’s launch. He wasn’t aware
of any in-app sales since the launch. He posted about the app on social media
but didn’t encourage others to do so; he didn’t have a written business or
marketing plan before launch, and he did not create investor presentations,
solicit investors, or raise capital. He paid for one press release, sometime
after the app’s “soft launch.”</p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">WCT’s Bike+ mark
started as an ITU application on November 23, 2013 for “Downloadable mobile
applications for recording and managing cycling activities.” The PTO cited a
prior filing for a “BIKEMORE” mark for bicycles, and WCT responded by
distinguishing between its software and the prior applicant’s bicycles,
pointing out that “[b]icycles are physical objects.” It also argued that
because consumers who download an app first go through a selection process that
takes several minutes, they are not likely to be confused.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Peloton’s core brand
is Peloton. In 2020, it announced a “second, higher-end version” of its
(indoor) connected bike and treadmill products. The premium models were given a
plus sign in their name: “Peloton Bike+” and “Peloton Tread+.” The Peloton
Bike+ “offers features not found on the original bike, including a larger,
rotating screen” and “a resistance knob that automatically adjusts to the
instructor’s recommendations.” It also offers integration with Apple Watches
for metric tracking. The Peloton Bike+ costs up to $1,050 more than the
original bike. Peloton chose to add the plus sign “because it is a simple term
that consumers understand to signify a product line extension with added
features. Numerous leading brands, such as Apple (Apple TV+) and Disney
(Disney+), had already adopted ‘+’ for their line expansions.” Thus, the plus
sign “can easily be implemented across product lines to indicate a
‘better/best’ product array.” <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">“All of Peloton’s
marketing materials that mention the term ‘Bike+’ are also branded with the
[Peloton] mark.” <o:p></o:p></span></p><p class="MsoNormal"><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqvYxvia6UO2jWFhVms4YtzERaE6Q1gAdGjqwf0VLV4Iyeu6vVYPy1zIpkOix9eccMmQl8Ipx6UxYhHHMUMesBmTtbj9cweAR32Efe4viipancDBe82R3luI4v5ewhbsrfldLBs20ZOx3wd7bCcjsy0zWUBMPGzmNXKXXZV02T3opfZZt7meq0PQ/s369/peloton%20logo.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="98" data-original-width="369" height="170" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqvYxvia6UO2jWFhVms4YtzERaE6Q1gAdGjqwf0VLV4Iyeu6vVYPy1zIpkOix9eccMmQl8Ipx6UxYhHHMUMesBmTtbj9cweAR32Efe4viipancDBe82R3luI4v5ewhbsrfldLBs20ZOx3wd7bCcjsy0zWUBMPGzmNXKXXZV02T3opfZZt7meq0PQ/w640-h170/peloton%20logo.jpg" width="640" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Peloton Bike+ logo</td></tr></tbody></table></p><p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">In December 2020,
WCT renewed its registration and filed a declaration of incontestability,
claiming an air-temperature-measurement feature even though at that time, it
was “highly likely, perhaps certain, that the temperature feature did not
work.” In 2021, WCT produced new videos <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">“for use in
marketing and customer support in connection with” its 2021 app. In April 2021,
it “took steps to design and develop a new website for use at the domain name
worldchamptech.com, prepare content for such website (including writing blog
posts that were later posted to the website on May 3 and 4, 2021), and transfer
it to a new hosting service.” WCT sued in April 2021.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">This is a reverse
confusion case. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Peloton initially
argued that the 2021 app wasn’t a bona fide commercial use, and thus should be
excluded from the confusion analysis. But “[a] single sale, or non-sales
activities alone, may suffice to merit trademark protection upon review of the
totality of the circumstances.” “Here, the plaintiff’s 2021 app was in
continuous (if slow paced) development before and after the launch of the
Peloton Bike+.” And it was “in a sense an update to the plaintiff’s existing
use in commerce (its 2014 Bike+ app).” Sure, this was “arguably … less than
robust: for example, there have been no in-app sales, the app’s distinguishing
“coaching” feature may not be functional, marketing has been limited, and the
app was last updated in January 2022.” But a jury could find bona fide use. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">In reverse-confusion
cases, a plaintiff “with a commercially weak mark is more likely to prevail
than a plaintiff with a stronger mark, and this is particularly true when the
plaintiff’s weaker mark is pitted against a defendant with a far stronger
mark.” The Bike+ mark was registered without proof of secondary meaning, creating
a presumption of inherent distinctiveness/suggestiveness. Nonetheless, this was
the “rare” case where the defendant satisfied its burden of showing
descriptiveness. “No imagination is needed to understand from the ‘Bike+’ mark
and its context in the marketplace that the plaintiff’s product is an app for
enhancing biking.” The mark was further weakened by the presence of similar
marks for similar apps in the major app stores: nine other apps in the Apple
App Store and the Google Play Store using variants of “Plus” or “+” along with
“Bike.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Still, “the
important question in a reverse confusion case is whether the junior mark is so
commercially strong as to overtake the senior mark.” But must there be <i>some </i>commercial
reputation to overtake? The court concluded that the Ninth Circuit “compares
the senior mark’s conceptual strength to the junior mark’s commercial strength.”
But it also “assumed that the plaintiff’s mark’s commercial strength must meet
some minimum bar.” There wasn’t much here. The court concluded that this factor
favored Peloton. [The better view, admittedly confused by the Ninth Circuit, is
that reverse confusion requires <i>conceptual </i>strength in the plaintiff’s
mark—a “mark” with neither conceptual nor marketplace strength may not even be
a mark, and two parties using descriptive terms are unlikely to cause forward
or reverse confusion.]<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Product/service
relatedness: The products were “complementary: the defendant offers a
metric-tracking app to accompany its bike, and the plaintiff’s app can be used
with indoor stationary bikes.” Favored WCT. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Mark similarity: Peloton’s
use of its house mark was significant, but not as helpful for a reverse
confusion claim, so this factor also favored WCT.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Actual confusion: none,
despite market coexistence since September 2020; favored Peloton.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Marketing channels:
favored Peloton, which sells its Bike+ product “exclusively through [its]
showrooms and website[ ] and through [Dick]’s Sporting Goods’ stores and
website.” WCT hasn’t done much marketing, and the fact that both parties
advertise online, including in the App Store and search engines, was “unremarkable
under the precedent.” Significantly favored Peloton.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Type of goods and
the degree of care likely to be exercised by the purchaser, determined in a
reverse confusion case with reference to the alleged senior user’s customers
only. Buyers exercise greater care when choosing products related to fitness
and health. Favored Peloton<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Intent: In a reverse
confusion case, “Intent could also be shown by evidence that, for example, the
defendant knew of the mark, should have known of the mark, intended to copy the
plaintiff, failed to conduct a reasonably adequate trademark search, or
otherwise culpably disregarded the risk of reverse confusion.” Peloton’s
in-house counsel knew of the plaintiff’s mark before the defendant’s Bike+
product launch and obtained an opinion from outside counsel on the subject at
that time. “But especially given that “Bike+” is a descriptive mark, the
defendant’s choice of a product name that likewise describes its product
mitigates the significance of the intent factor.” Neutral/slightly favored WCT.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">Likelihood of
expansion: Not relevant, even though Peloton considered developing an app store
for its fitness equipment and has applied for trademark registrations related
to mobile app features.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The important
strength factor favored Peloton, while the other important factors, relatedness
of goods/mark similarity, favored WCT. Summary judgment was a close call, but given
the absence of confusion evidence, lack of overlapping marketing, and degree of
consumer care, it was warranted in this specific context, where WCT’s app was
mostly dormant at the time of the Peloton launch. “[C]rucially, the Bike+ mark
is descriptive and is joined in the marketplace by equivalent app names and
variants on that composite mark. Not surprisingly, despite several years of
coexistence, no evidence of actual confusion was submitted.” Adding the 2021
app didn’t help, because its key feature may not be functional, it has achieved
no in-app sales, and the plaintiff made almost no meaningful marketing efforts.
“[I]f there is so little to overtake, reverse confusion must be unlikely.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;">The Ninth Circuit
recently said that “[w]hether [the senior mark is] descriptive or suggestive,
the important question in a reverse confusion case is whether the junior mark
is so commercially strong as to overtake the senior mark.” But it also
indicated that, in this court’s words, “if the plaintiff’s mark is descriptive
rather than distinctive, the analysis can be different. That point is
consistent with rejecting a reverse-confusion claim that lacks sufficient mark
strength and supporting marketing efforts.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt;"><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p><br /><p></p><div class="blogger-post-footer">http://tushnet.blogspot.com/feeds/posts/default?alt=rss</div>Rebecca Tushnethttp://www.blogger.com/profile/17344226000864611148noreply@blogger.com0tag:blogger.com,1999:blog-5764290.post-26045416309625845722024-02-20T15:42:00.006-05:002024-02-20T15:42:38.963-05:00CFP: trademark, competition, or antitrust law <p> I received a request to disseminate this CFP from the Jerzy Wiszniewski Foundation.</p><p>Works in any of the following fields may be entered in the competition:</p><p>Օ Trademark law</p><p>Օ Competition law</p><p>Օ Antitrust law.</p><p>The work may be a master’s thesis, doctoral or post-doctoral dissertation, monograph, or other work of a scholarly nature.</p><p>Requirements for submissions:</p><p>Օ Published (or defended) no earlier than 11 April 2019</p><p>Օ Accompanied by at least two written reviews by a person holding a doctorate or more advanced title, or a member of the judiciary or prosecution service</p><p>Օ No less than 100 pages</p><p>Օ Written in English or Polish.</p><p>Detailed information and the rules for the competition are found at the foundation’s website:</p><p>wiszniewski-foundation.org</p><p>The author(s) of the best work in the competition will be awarded a cash prize of USD 20,000.</p><p>Submissions should be addressed to: contact@wiszniewski-foundation.org</p><div class="blogger-post-footer">http://tushnet.blogspot.com/feeds/posts/default?alt=rss</div>Rebecca Tushnethttp://www.blogger.com/profile/17344226000864611148noreply@blogger.com0tag:blogger.com,1999:blog-5764290.post-8330305088625255892024-02-20T07:58:00.002-05:002024-02-20T07:58:37.836-05:00New piece: A Hobgoblin Comes for Internet Regulation<p><a href="https://verfassungsblog.de/a-hobgoblin-comes-for-internet-regulation/"> My contribution</a> to <a data-wpel-link="internal" href="https://verfassungsblog.de/category/debates/from-the-dmca-to-the-dsa-a-transatlantic-dialogue-on-online-platform-regulation-and-copyright-debates/" style="background-color: white; box-sizing: border-box; font-family: "PT Sans"; font-size: 15px; font-weight: 700; letter-spacing: -0.3px; text-decoration-line: none; transition-duration: 0.2s; transition-property: color, background-color, border-color; transition-timing-function: linear;">From the DMCA to the DSA—A Transatlantic Dialogue on Online Platform Regulation and Copyright</a>.</p><div class="blogger-post-footer">http://tushnet.blogspot.com/feeds/posts/default?alt=rss</div>Rebecca Tushnethttp://www.blogger.com/profile/17344226000864611148noreply@blogger.com0