US News rankings and false advertising

Via Zach Schrag, Inside Higher Ed reports on what appear to be deliberate misrepresentations by some schools to improve their reports on underlying metrics so as to rise higher in the US News rankings, which have a huge effect on students' decisions. Given that the purpose for which the schools provide the information is essentially advertising, could anyone sue under the Lanham Act? With standing trending the way it is, it's almost a useless question, but there are cases allowing Lanham Act claims against advertisers--not publishers--for providing publishers with information essentially as a sales technique--and cases going the other way as well. (It's also possible to game the US News system with accurate reports by investing in particular ways designed to improve rankings even if students don't benefit, but in general advertising law doesn't care about deliberate design decisions of that sort.)

Some of the conduct discussed in the post might even rise to the level of knowing deception required for liability for noncommercial speech. But then we'd have the issue of whether self-touting speech can constitutionally be punished, if deliberately false, in the absence of any slurs against the competition. In the context of political campaigns, one state Supreme Court has said that punishing deliberately false speech is impermissible in the absence of defamation; would that reasoning apply to colleges' statements about themselves, or is it a special rule for campaigns? Are defamation concerns really absent when the speech is self-promotional? Touting oneself is also necessarily a comparative statement about one's competitors.

Are they made with real Girl Scouts? Cookbook claim fails

Lapine v. Seinfeld, 2009 WL 2902584 (S.D.N.Y.)

Missy Chase Lapine sued Jessica Seinfeld and her publishers for copyright and trademark infringement and related claims, and Jerry Seinfeld for defamation based on statements he’d made after Lapine accused Jessica Seinfeld of infringement. Here's some pieces from Slate on the dispute, from right after Lapine sued. The court granted summary judgment on most of the claims and declined to exercise supplemental jurisdiction over the remaining state law claims (implied contract, misappropriation, and defamation).

Lapine, author of The Sneaky Chef: Simple Strategies for Hiding Healthy Food in Kids’ Favorite Meals, has substantial expertise in cooking. She submitted her book proposal to HarperCollins twice; it was rejected, and published in 2007 by Running Press. It appeared on the NYT best seller list for one week. Roughly half a year later, HarperCollins published Jessica Seinfeld’s Deceptively Delicious: Simple Secrets to Get Your Kids Eating Good Food. Though Seinfeld has extremely limited experience with cooking, and used a chef to help prepare the book’s recipes, the book also reached the top of the NYT best-seller list.

The core similarities between the books: they recommend camouflaging pureed healthy food in children’s favorite meals; they describe their authors’ struggles to get their children to eat healthy food; they have forewards/introductions by doctors; they have lists of various items (food staples and kitchen tools) the reader should have on hand.

The Sneaky Chef has 13 different methods for sneaking healthy food into children, one of which is pureeing; the book has a chapter on Make-Ahead recipes, with a number of purees and juices. Each method has an icon associated with it, which the court says “range from the intuitive (a food processor representing the ‘puree’ method) to symbols that only someone familiar with the text could identify (an artichoke for ‘identify foods kids are likely to enjoy straight up’ and what appears to the Court to be a small child in a pot, for ‘use foods that hide well’). (Comment: the 13 methods seem to be overcounting.)

Deceptively Delicious focuses on pureeing, with some how-tos and information on cooking basic foods: rice, pasta, chicken and beef.

Both books have extensive recipe sections. The Sneaky Chef divides them into five categories (three meals, snacks, and treats), with nutrition highlights under each recipe name, the applicable icon(s), and comments. Ingredients are listed in orange and, for the “sneaky” ones, gray. Color photos illustrate some of the prepared recipes. Deceptively Delicious uses three categories: breakfast, mealtime, and dessert. Each recipe has a drawing of the fruit or vegetable in the puree and lists the fruit or vegetable under the recipe name. There’s usually also a short comment or tip, and sometimes an additional benefit listed (packable, contains no meat). There’s a color photo for almost every recipe, and many recipes include the picture of a member of Seinfeld’s family and his or her comments.

The court granted summary judgment on the copyright infringement claim where no reasonable factfinder could find the works substantially similar. The court determined that it need not decide whether it ought to apply the Boisson v. Banian test requiring an especially discerning observer for thinly protected works, because even under the ordinary observer test defendants were entitled to summary judgment. In either case, courts must assess total concept and feel. Some dissimilarity isn’t fatal to an infringement claim, but the more the dissimilarities predominate, the less likely substantial similarity in overall impact is. Moreover, assessments of substantial similarity must keep in mind the unprotectability of scenes à faire and the like.

Individual recipes aren’t copyrightable, and there are no recipe duplicates in the books, though some do call for similar purees (avocado puree as a chocolate pudding ingredient, and spinach puree as an ingredient in brownies). Moreover, camouflaging vegetables in children’s favorite foods is an uncopyrightable idea. Lapine argued that there was infringement of a protectable compilation because both books give instructions for “making vegetable purees in advance, storing them for future use, and then using them in specially created recipes which include the pre-made purees as ingredients.” The court thought this formulation was so abstract as to be clearly unprotectible idea, even with the addition of process details.

The court then turned to specific alleged similarities. Each cookbook contains, “in the same general order: (1) a cover and title conveying a concept of secretly getting children to eat healthy foods, (2) drawings illustrating that concept on the cover, spine and first page (3) an introduction or forward by a doctor (4) a personal narrative by the author describing her struggle, revelation, recipe testing and effects, (5) a discussion of appliances, (6) a list of essential ingredients, (7) instructions for making the purees in advance and storing them for later use, and (8) a collection of individual recipes using those foods.” As you’d expect, the court didn’t buy it. These similarities result naturally from the medium of expression (cookbook) and subject matter (hiding healthy foods in kid-friendly foods). Numerous other cookbooks include the same or similar elements, and these similarities can especially be expected to appear in two cookbooks based on the same idea, “whether it be vegetarian cooking, grilling, or desserts.” Nor is the arrangement enough to raise a genuine issue on substantial similarity: this order is insufficiently creative to be protected, and many of the similarities are shared by cookbooks as a whole “and the genre of cookbooks addressing encouraging healthy eating in children, in particular.”

Finally, the court found no genuine issue on total look and feel. Lapine’s book “is a dry, rather text-heavy work,” using an informative and lecturing tone and appealing to multiple sources of authority. It has an extensive introduction detailing her personal experience, the role of food in America, the arguments for and against a sneaky approach, and her overall food and parenting philosophies. It doesn’t focus on purees alone, but discusses the health benefits of multiple sneaky methods. Her purees are generally composites made of several ingredients with color-oriented names. It’s primarily colored in black, grey, and shades of brownish-orange; the full-color photos are grouped.

Seinfeld’s book “has a completely different feel and appears to be directed to a different audience,” targeting busy parents with little cooking skill or experience, starting instructions at the most basic level (wash and drain vegetables; here’s how to cook pasta) and including very simple step-by-step instructions. The recipes, which focus primarily on single-ingredient purees, are presented very differently. Seinfeld doesn’t purport to be an expert, and the book lacks the theory/background Lapine presents. It’s bright and cheerful, full of colors and patterns, with color pictures of almost every dish scattered throughout. Seinfeld family members and members of the general public are incorporated into the text with quotes and tips from other mothers about picky eaters, making her work feel less formal and more inclusive: “the reader is one of a community of parents that includes the author.”

Lapine was equally unsuccessful with her trademark claims. Here, the similarity of marks factor alone was dispositive. Both on their own and in context, the original and accused marks were too distinct to support likely confusion. (The marks were basically the cover and name of the books.) The drawings on Lapine’s book were much simpler than those on Seinfeld’s; Seinfeld’s cover figure was drawn more realistically and in street clothes, not the clothes of a chef. They convey the idea of hiding a secret differently, with Seinfeld’s more subtle. Though the subject matter is similar and they’re likely to be displayed near each other, the covers still provide “quite different aesthetic contexts,” Lapine’s using color photos of finished dishes and Seinfeld’s using one drawing of a finished dish and the stages of preparation. “The difference in overall colors, cover layout, patterns and font also reduces any similarity of the appearance of the marks.” And Seinfeld’s celebrity also helps: though her name isn’t a brand name, the fame of “Seinfeld” lessens any likelihood of confusion.

Unsurprisingly, Lapine’s state-law dilution by blurring claim also failed for lack of sufficient similarity.

Lapine also alleged a §43(a)(1)(B) false advertising claim, but, like other courts in the Second Circuit, the court read Dastar to preclude any such claim. A post-Dastar §43(a) violation, the court suggested, would require “repackaging of plaintiff’s material” as the defendant’s own, but failure to attribute a work to its creative source can’t be false advertising any more than it can be trademark infringement. I still think this is a strange overreading of Dastar, but I’m no fan of attribution requirements so I won’t kick much, and here it’s hard to imagine Lapine could show materiality. Anyway, the court adopted earlier language: “a failure to attribute authorship to Plaintiff does not amount to misrepresentation of the nature, characteristics, qualities, or geographic origin of ... [Defendant’s] goods.”

Rocket pop: Pfizer wins Viagra case

Pfizer Inc. v. Sachs, 2009 WL 2876255 (S.D.N.Y.)

Roughly a year ago, Sachs towed a rocket through Manhattan to promote a business, JetAngel.com, that sells outdoor advertising on decommissioned military equipment such as fighter jets and missiles. It said “viva Viagra” in Pfizer’s font on the side. Passersby were interested; Sachs distributed pamphlets about his business to them and let Pfizer know that Sachs would return the following week, with two female models riding the missile and distributing condoms. Pfizer replied with a C&D, and Sachs then exhibited the missle at an adult entertainment exposition in New Jersey with a banner promoting his services. He then “taunted” Pfizer with an email announcing his intention to take the missile on a 13-city tour to distribute condoms with images of the Presidential candidates, and issued a press release describing same.

Pfizer sued for infringement and dilution. The court granted a TRO and a preliminary injunction; now came the summary judgment motion.

Sachs argued that Viagra had become generic. This, unsurprisingly, was a losing argument, though he did submit what the court described as an “ad hoc ‘survey’” of 100 people, which used no experts and got its surveyors “through an ad on Craigslist.” Not enough to overcome the presumption of validity!

After that, likelihood of confusion was easily found. Very strong mark; virtually indistinguishable use, plus display in front of Pfizer’s HQ. Pfizer has also used mobile ads—Viagra-branded racecars and Mobile Health Units.

The parties’ products/services differ, but “consumers are likely to be confused as to whether Defendants are engaged in marketing services for Plaintiff.”

The court also found bad faith because of (1) awareness of Pfizer’s marks, (2) refusal to comply with multiple C&Ds, and (3) failure to seek or rely on advice of counsel. That’s not always bad faith, but this is an unusual situation.

The useless, ridiculous-in-modern-jurisprudence “quality of defendant’s product” factor that the Second Circuit has never got around to killing actually got a workout here, because defendants’ behavior “including advertising in front of adult entertainment establishments and threatening to distribute condoms with images of presidential candidates may be inconsistent with the image Pfizer wishes to project.” (Citing the Dallas Cowboys Cheerleaders case, no less, making clear that this is a dilution concern and not a confusion concern; see below for more.)

As for consumer sophistication, the marks were indistinguishable, and the missile suggests an erect penis and causes an association with an erection-boosting drug. Thus, even a sophisticated consumer might believe this was part of a Pfizer ad campaign. (Again, see below on tarnishment.)

Sachs offered a First Amendment defense, but likely confusion will trump such a defense. He used Pfizer’s marks to bolster his business, advertising his own services. Even if some statement about erectile dysfunction could be “teased” from this use, the Viagra marks were unnecessary to make the point. (Dallas Cowboys again. Of course there’s plenty of Second Circuit precedent not requiring necessity, but only in more expressive contexts.)

Sachs also lost the dilution by tarnishment, and NY state dilution, claim, because Viagra is famous and “it is well settled that ‘a mark is tarnished when its likeness is placed in the context of sexual activity, obscenity, or illegal activity.’” Displaying the missile at an adult entertainment expo, and planning to have two models “riding” the missile and distributing condoms, would thus be tarnishing.

Comment: um, excuse me? How can Viagra be tarnished by being placed in the context of sexual activity, especially when the court’s just concluded that reasonable consumers wouldn’t be surprised to see this as an official Viagra ad? I know the ads always place it in heterosexual married-monogamy land, but shouldn’t this analysis either explicitly admit that, at least as to Viagra, some sex is tarnishing and some isn’t (which does seem to make the First Amendment issue with dilution law more salient) or otherwise deal with the fact that Viagra is a product designed and advertised to help men have more sex?

Sachs won a tiny technical victory: Pfizer lost its motion for summary judgment on its false advertising/deceptive acts and practices claim under NY law because it couldn’t show any actual injury. Small consolation, though, because the court determined that this was an exceptional case allowing an award of attorneys’ fees, given defendants’ bad faith attempt to capitalize on Pfizer’s goodwill. “At the inception of this action, this Court cautioned Sachs that he faced considerable financial jeopardy, including damages and attorney’s fees, if Pfizer was successful,” but he didn’t heed that admonition.

Yahoo!'s use of personal name not confusing as matter of law

Stayart v. Yahoo! Inc., 2009 WL 2840478 (E.D. Wis.)

Beverly Stayart searched her own name and “didn’t like the results.” She got links to “pornographic websites, online pharmacies promoting sexual dysfunction drugs, and an adult-oriented online dating service.” She sued Yahoo! and other defendants, including the operator of AdultFriendFinder, for false endorsement under the Lanham Act and state-law privacy violations. The court dismissed the Lanham Act claim and surrendered jurisdiction over the state law claims.

Stayart lives in Wisconsin and “was previously employed by several major financial institutions in Chicago, attaining the position of Vice President.” She’s involved in animal protection and genealogy research “throughout the world.” This includes an internet presence; her periodic posts on one genealogical website have generated almost 17,000 hits during the past three years. (Okay, I’m sorry, but: on the internet as a whole, that’s tiny. My stats look more impressive than that—if you’ve never seen any others.) And two of her poems appear on two Danish websites (they support the preservation of baby seals).

Stayart alleged that she was the only Beverly/Bev Stayart on the internet, and that she had never engaged in a promiscuous lifestyle, or other overt sexual activities, which are repugnant to her and her community. She alleged that her name had commercial value “because of her humanitarian endeavors, positive and wholesome image, and the popularity of her scholarly posts on the Internet.” The search engine defendants, she alleged, knowingly used her name on false snippets in results by “(1) repeatedly linking Plaintiff to the advertising of Cialis by an online pharmacy; (2) repeatedly linking Plaintiff to six separate websites playing pornographic videos containing computer spy ware; and (3) repeatedly linking Plaintiff to a website captioned ‘Free Streaming Porn--HOTTEST DAILY PORN’ displaying 27 hardcore pornographic photos.” She asked Yahoo! to stop linking her name to these search results. Yahoo! replied: “We do not aim to judge web content for appropriateness or censor materials that we find offensive or inappropriate. Instead, we present information as it is reflected on the Web, allowing you to draw your own informed conclusions about what you see.”

Stayart also alleged that Various (which operates AdultFriendFinder) used her name on a website advertising its service. She typed her name into altavista.com and got, among the results, jewellery-makin-doorway.orge.pl/bev-stayart.html. This went to an “Under Construction” site that stated “Meet AdultFriendFinder members near Janesville [Wisconsin]-- Over 20 Million Members” and displayed “five graphic images of fully or partially nude women,” “accompanied by the age, nickname and city of residence of the women.”

Under Iqbal, though a court must accept all well-pleaded facts as true, the claim must still have facial plausibility. And a plaintiff can plead herself out of court, which was what the court determined had occurred here.

False endorsement means that consumers are likely to be misled about a person’s sponsorship or approval of a product or service.

In order to have prudential standing under the Lanham Act, Stayart needed to allege at least an existing intent to commercialize her identity. This she didn’t do. Though she alleged that her name has commercial value, her complaint is really about distasteful associations. That emotional desire to prevent others from using her name doesn’t create Lanham Act standing. Her correspondence with Yahoo!, attached to the complaint, further indicates that her concerns are with privacy and reputation, defamation and demeaning associations. But the Lanham Act does not create a false light tort claim, absent commercialization.

Stayart relied on Doe v. Friendfinder, which refused to dismiss a false endorsement claim against AdultFriendFinder. But Doe didn’t address prudential standing in its decision.

The court went on to reach an independent ground for dismissal, lack of likely confusion as a matter of law. “[A] commonsense reading of the complaint demonstrates that there could be no likelihood of confusion.” The complaint explicitly disavows any association with pornographic materials, sexual dysfunction drugs, or sexually-oriented dating services. This “contravenes” likelihood of confusion, so Stayart pleaded herself out of court. (Query: before 1999, would Bob Dole have had a claim? He’d never previously been associated with sexual dysfunction drugs, so wouldn’t it have been just as implausible that he’d be a pitchman for them?) “No one who accessed these links could reasonably conclude that Bev Stayart endorsed the products at issue.”

Stayart argued initial interest confusion against AdultFriendFinder. But on the internet, initial interest confusion depends on relatedness of goods and a consumer’s level of care. Given that Stayart’s identity is completely unrelated to AdultFriendFinder’s services, initial confusion won’t facilitate free riding on another mark’s goodwill. Without a meaningful effect on the market, confusion is of little or no consequence under the Lanham Act. “The type of person looking for information about Bev Stayart would not be fooled into using an online adult-oriented dating website.” (I’d add in “to find her” at the end of that; the court might be surprised to find out—just as Stayart might be—the non-Stayart-related interests of the type of people looking for information about Stayart. I’d be willing to bet that even genealogists and animal rescuers sometimes like to meet adult friends!)

Next, a puzzling CDA discussion. The court commented that if Stayart successfully stated a false endorsement claim under the Lanham Act, it would probably fall under the CDA’s intellectual property exclusion. But, it continued, one of the fatal flaws of that claim is that Yahoo! didn’t use Stayart’s name in connection with its own goods or services. It just included snippets from third-party websites and didn’t create the content of which Stayart complained. So the proper analysis is vicarious liability/contributory infringement under the Lanham Act.

Under settled doctrine, Yahoo! can’t be held liable for failing to remove the search results even after Stayart complained. It didn’t control the third-party websites, which fact defeated both contributory and vicarious liability. (That’s a shortcut on contributory liability analysis, but not particularly troubling under the circumstances.) The only way Yahoo! could control the results would be to change its algorithm, which “goes to the heart of Yahoo!’s role as an interactive computer service.” Because ordinary search engines play no part in developing any unlawful searches, “Yahoo! should be entitled to immunity because it acted as an interactive computer service, even though Stayart’s claims are nominal intellectual property claims.” Immunizing Yahoo! doesn’t contravene the CDA’s IP exclusion because Stayart doesn’t have a valid IP claim.

Comment: oh, my. Look, I like CDA immunity generally. But what’s weird here is not the court’s willingness to use CDA reasoning on an IP claim despite the IP exclusion; what’s weird is the court’s failure to notice that IP secondary liability doctrine itself incorporates the tech-promoting rationales underlying the CDA. Well, trademark does much more than copyright, these days—but it’s trademark doctrine that’s at issue here! There’s no need to bring in the CDA! And that last bit—this analysis only applies because Stayart doesn’t have a valid IP claim—makes this whole excursion even more obviously useless.

The court then said that matters were “less clear” with respect to AdultFriendFinder. The site is in some ways interactive, but Stayart’s complaint relates to the banner ad associated with the bev-stayart.html URL. AdultFriendFinder’s role in the creation of the banner ad content was unclear, so the court couldn’t grant it immunity at this stage.

The only claims that remained were state-law claims. Given that the dismissal was on the pleadings, ordinarily a federal court should relinquish jurisdiction, unless it is so obvious how the claims should be decided that the plaintiff should be put out of her misery rather than involving state-court resources. Defendants argued that Wisconsin requires a name to have commercial value in order to maintain a right of publicity claim. But some variations of the appropriation tort, which Wisconsin may recognize, require only commercial use plus bruised feelings. (Doesn’t Yahoo! get out of this even if AdultFriendFinder has to proceed in state court? Under what theory is Yahoo!’s use commercial? If it’s using snippets from other sites, how can it possibly be distinguished from the New York Times using Stayart’s name in a story?)

The distinction between appropriation and the right to publicity (based on commercial damage) is also relevant to CDA immunity. The latter is an IP claim. (Implicit holding: to the extent Stayart is bringing an appropriation claim, Yahoo! is immune.) Plus there’s the Perfect 10 versus Friendfinder split over whether state IP claims are preempted by the CDA. Since this is an unsettled issue of federal law, the court couldn’t conclude that there was an obvious resolution of the state law claims. “Even though the Court already held that Yahoo! was entitled to CDA immunity, the Court cannot say with certainty that a potential right to publicity claim under Wisconsin law is without merit, meaning that the intellectual property exception could save Stayart’s claims.” Also, AdultFriendFinder’s CDA status is unclear, leaving it potentially vulnerable under either a misappropriation or right of publicity claim.

Dispute fueled by inappropriate tests

Star-Brite Distributing, Inc. v. Kop-Coat, Inc., --- F.Supp.2d ----, 2009 WL 2840723 (S.D. Fla.)

Star-Brite’s StarTron competes with Kop-Coat’s Valvtect VEGA; they are ethanol gasoline additives sold to boat owners and marinas to improve boat fuel performance. Star-Brite sued for state and federal false advertising/unfair competition. It won its motion for preliminary injunction against Kop-Coat’s comparative ads.

StarTron was one of the first ethanol additives to the maritime market, gaining a dominant market share and benefiting from the relatively recent federal mandate to switch maritime fuel to 10% ethanol, because such fuel doesn’t burn as efficiently as regular gas. StarTron’s active ingredients are enzymes, while VEGA is a proprietary formulation of chemical additives generally used in the refinery and fuel industry. Valvtect has been in the business of petroleum fuel additives since 1987, and believed that StarTron was inferior. It set out to test Star-Brite’s ad claims on fuel stability, corrosion resistance, water control and prevention of carbon deposit build-up. It used its test results in developing its own product and in comparison ads.

Valvtect used the ASTM D525 test to compare the products’ fuel stability, which is a measure of the shelf life of fuel before it starts to turn into gummy sludge. ASTM D525 is a generally accepted test for gas that needs to be run at temperatures of 212°F, “far in excess of conditions that virtually any boater’s fuel tank would ever experience.” It was not designed to test 10% ethanol based fuels, and the test protocol specifically notes that the data were developed from gas without oxygenates such as ethanol. Enzymes (such as those in StarTron) are more sensitive to high temperatures than traditional chemical additives. Thus, that StarTron may not perform well at 212°F, but still may work well under normal operating marine conditions. In addition, Kop-Coat never ran the D525 tests on 10% ethanol fuels, despite the fact that the products are ethanol fuel additives.

In its ad, Kop-Coat asserted that Valvtect improved stability by 138% while StarTron only improved stability by 4%. Kop-Coat’s fuels expert revealed on cross that more recent tests performed by its independent lab showed stability improvements by StarTron on ethanol fuel of nearly 60%. This is consistent with Star-Brite’s results using the 525 protocol at the same independent lab.

So: even if the 525 protocol is the industry standard for regular gas engines, it’s not right for the marine market, making its use misleading.

There were similar problems with the comparison claiming superiority in “rust,” later amended to “corrosion”: the tests weren’t designed to measure how fuel behaved in standing aqueous conditions, i.e., in the tank, and they weren’t designed to measure what happened in tanks made of aluminum or polyethylene, as marine fuel tanks are. The court found these ads misleading, though not literally false. (Why? This is a false “tests prove” claim, because the tests don’t prove what they say.)

Likewise, the test Valvtect used for water control was designed for aviation fuels, which doesn’t have ethanol. And its claim that StarTron was 50% less effective was based on small differences in parts per million that were both statistically insignificant and below the level that would trigger a problem—that is, water content is generally well below a risky level and both parties’ products make it even lower. So the 50% claim was again misleading but not literally false. (This type of case, by the way, is why I dislike the rigid false/misleading doctrine.)

And finally: all gas products tend to leave carbon deposits in engines, potentially causing problems. Refiners typically treat gas with chemicals to control these deposits, though usually with the minimum amount required by the EPA. VEGA uses more of the approved additives than required, and StarTron hasn’t disclosed whether it uses any of the EPA-approved additives. Valvtect’s initial ad invoked the EPA as well as BMW, Chrysler, Ford & GM (involved in establishing the tests for EPA approval) in a way that misleadingly suggested these parties’ approval of Valvtect. The revised ad, which suggests that Valvtect meets ASTM and EPA standards and “keeps injectors & carburetors clean,” was not misleading or false in this respect, according to the court.

Two key Star-Brite employees testified that numerous retailers and customers had asked “on a daily basis” about Valvtect’s claims. Everyone from large national merchandise managers to regional retailers to individual boat owners asked whether these claims were true. Valvtect’s president conceded that the ads were designed to influence boaters to switch. The court found both materiality and likely deception. (Note here that this is neither survey evidence nor direct testimony from deceived consumers; nor does the court find intent to deceive, as opposed to intent to influence. So the court finds misleadingness, but treats it—from the rigid doctrinal perspective that is honored more in the breach than the observance—more like falsity.)

Somewhat oddly, the court said that because this was a “tests prove” case, Star-Brite had an “additional burden” to show that the tests didn’t establish the proposition for which they were cited. Other courts have called this a lighter burden, because the plaintiff need not falsify the underlying proposition but only show that the cited tests don’t support it. Pedantically, I’d say the burden is always the same: show that something material in the ad is false (the materiality of the claim “tests prove” being assumed, because scientific evidence is more credible than bald assertion). Anyway, Star-Brite met its burden on the first three claims. Even though the tests Valvtect used might have been appropriate in the general petroleum industry, they weren’t fit for their purpose here, comparing to an enzyme-based product in the maritime fuel market.

The court then repeated the misleading, not false, assessment, then said that Star-Brite’s testimony established deception. (You can shove this into the “evidence of deception” category if you accept that when we say “deception” we really mean “reception of a false message.” The consumers who contacted Star-Brite received the misleading claims, but weren’t sure whether to believe them. In general, reception is all we require false advertising plaintiffs to show, among other things because a false advertiser shouldn’t get a pass on polluting the ad environment further just because consumers know that they can’t believe everything they read.)

The other preliminary injunction factors naturally favored Star-Brite as well.

Side note: when Hamlet talks about a custom honored more in the breach than in the observance, he means that it is more honorable to breach the “custom” than to observe it. That’s how I mean it too, though there’s a good argument to be made that the past decade has seen as much evasion of the false/misleading dichotomy as adherence to it, via the epicycles added by puffery and falsity by necessary implication.

Flickr changes DMCA policy to preserve metadata

And, vitally, comments on materials that have been taken down, according to the NYT. This is full DMCA compliance, just a different way of treating what's left behind. YouTube, are you listening?

This is how Hollywood wants user-generated content to look

Locked down, crippled, and difficult.

Red and green lights for traffic false advertising claims

American Traffic Solutions, Inc. v. Redflex Traffic Systems, Inc., 2009 WL 2714017 (D. Ariz.)

The parties compete to sell and operate traffic enforcement cameras. Redflex won two contracts from the Arizona Department of Public Safety in 2007 and 2008 for speed enforcement. The radar units used in speed photo enforcement devices must be FCC-authorized, and mobile units may also be certified by the International Association of Chiefs of Police. Redflex conceded that, for a time, its units were not FCC-authorized or IACP-certified.

ATS sued Redflex for false advertising and related claims; Redflex moved to dismiss the Lanham Act claims based on statements in its DPS bid proposals and one of its principal’s statement that “using uncertified radar units was an honest mistake.”

The court found that ATS had adequately alleged that false statements were present in the bid proposals, which stated that Redflex would provide “IACP approved speed enforcement solutions,” and use “full IACP certified speed measurement devices.”

Redflex also argued that Lanham Act claims couldn’t be based on pictures of equipment in the bids because the pictures didn’t make any statements, but the court disagreed. A Lanham Act claim can be based on any “word, term, name, symbol, or device.” Ontological neutrality rears its head in the false advertising context! Anyway, Lanham Act claims can be based on implied falsity, and the pictures may have implied to DPS that these would be the actual products they’d receive. (You think? I might even go with necessary implication, though there’s still a question of materiality.) Redflex argued that the bids didn’t represent the specific equipment they’d use because they were bidding to provide a service, not a product, and thus the actual equipment used was immaterial. But even though DPS wasn’t buying the units, it may have wanted to ensure that the devices used for its programs were IACP-certified and complied with relevant regulations.

Redflex did better with Karen Finley’s statement to a newspaper that “using uncertified radar units was an ‘honest mistake.’” Unfortunately, the court did not rely on the most sensible argument—that this wasn’t a statement in commercial advertising or promotion—but instead held that there was no misleading description of Redflex’s products. This, after quoting the prohibition on misstatements covering “commercial activities.” As trade libel law has long recognized, statements about the honesty of a business can be false and material to consumers, and Lanham Act courts have specifically used the “commercial activities” language to cover this type of statement.

The court went on to say that “[w]hether using uncertified products was an ‘honest mistake,’ is not a representation of fact upon which consumer reliance would be induced.” This is both inconsistent with my sense (bolstered by my reading in marketing literature) that consumers do care about whether mistakes are honest, negligent, or intentional and also at least contestable enough to be inappropriate for a motion to dismiss. The case it cited spoke of needing “specific rather than general assertions” to found a Lanham Act claim, but “honest mistake” is plenty specific given the context. Bottom line: would a reasonable consumer care about whether its supplier knowingly misrepresented its equipment certifications and only fixed the problem when it was caught or just made an honest mistake that was quickly corrected? Right result, very wrong reason.

Not diluting so much as congealing

The most noticeable thing for me about this ad, featured in the NYT story on NYC's new anti-obesity campaign, was the familiar (registered) shape of the soda bottle from which the fat is pouring. Will Coca-Cola complain, or take its lumps? (Sorry.)

FTC and Trudeau split decision

Federal Trade Commission v. Trudeau, 2009 WL 2615822 (7th Cir.)

In a mixed ruling, the court of appeals upheld a contempt finding against Trudeau, the infomercial marketer, but remanded on the issue of sanctions. As the court stated, “For over a decade, Trudeau has promoted countless ‘cures’ for a host of human woes that he claims the government and corporations have kept hidden from the American public. Cancer, AIDS, severe pain, hair loss, slow reading, poor memory, debt, obesity--you name it, Trudeau has a ‘cure’ for it.” An FTC consent decree ultimately banned Trudeau from appearing in infomercials for any products, except for books, provided that he did not “misrepresent the content of the book.”

The FTC claimed that Trudeau’s infomercial for The Weight Loss Cure “They” Don’t Want You To Know About misled consumers “by describing a weight loss program that was ‘easy,’ ‘simple,’ and able to be completed at home, when in fact it was anything but. The program requires a diet of only 500 calories per day, injections of a prescription hormone not approved for weight loss, and dozens of dietary and lifestyle restrictions.” Though Trudeau claimed that the diet would enable consumers to eat anything they wanted, the diet in the book actually requires strict limits for the rest of the dieter’s life. The district court agreed with the FTC and ordered Trudeau to pay $37.6 million and banned him from appearing in any infomercials, even for books, for three years.

Trudeau has a history of misrepresentations, in which he persisted after multiple FTC actions, which was why the consent decree was so broad.

Trudeau argued that he was merely quoting from the book, which describes the diet as “easy to do,” and also states that dieters in the final phase can eat “anything you want, as much as you want, as often as you want.” But cherry-picking phrases didn’t accurately portray the overall content, and the consent order prohibited misrepresented misrepresenting content. Among many other things, the diet couldn’t, as advertised, be completed at home because of a requirement that dieters inject themselves with hGC (human choronic gonadotropin), a prescription medication not approved for dieting, and though he claimed “nothing is restricted” the diet had 50 restrictions, including eating only organic food and avoiding fast food/chain restaurants.

The FTC requested reimbursement for consumers, or at least disgorgement of profits from the books, and additional deterrent measures against future contempt. Trudeau disputed that consumers suffered any harm, and that anyway he should only be required to disgorge the money he received for appearing in the infomercials. Conveniently, that sum was zero because he’d sold his rights and agreed to do the infomercials for free, receiving only royalties from retail sales, which he argued couldn’t be tied to the infomercials “despite the big, gold sticker on the cover of the book which reads, ‘AS SEEN ON TV.’”

The district court found the FTC’s top figure too Draconian, but was far less impressed with Trudeau’s arguments. It ordered him to pay over $37.6 million and, given his prior willingness to flout court orders, determined that only a complete ban on infomercials for three years would achieve compliance.

The court of appeals upheld the contempt finding because there was no abuse of discretion. The requirements for contempt: clear and convincing evidence of significant violation of an express and unequivocal command of a court order. Cherry-picking phrases that actually appear in the book can still misrepresent its content. (See also: To Serve Man.) The consent decree wouldn’t be very much use if it merely prohibited misquotation. “Content” refers to substance—“essential meaning.” “When people buy books, they purchase the author’s ideas, as expressed through an amalgamation of many individual statements. They don’t purchase select quotes …. So it’s possible to accurately recount specific statements in isolation but still completely misrepresent the ‘content’ of the book by allowing consumers to infer that the quotations are indicative of the content, when in fact they are not.” And that’s just what Trudeau did:

[I]n the infomercials, Trudeau fails to mention a single aspect of his weight loss protocol. He never talks about the 500-calorie-per-day limitation, the colonics (or water enemas), the organ cleanses, the 100% organic diet (which the book even acknowledges is “next to impossible”), or any of the other dietary or lifestyle restrictions that the book says dieters “must” adhere to. … [D]ieters are left with either convincing their doctor to prescribe hCG off-label or traveling to a foreign country, as Trudeau did, to get the drug. But only after the infomercial viewer spends the money to buy the book does he or she learn any of this.

The court further noted that hCG risks serious adverse reactions, and that the infomercial says that no exercise is required while the book says it’s highly recommended, even during the phase where the dieter is supposed to be eating 500 calories a day.

Trudeau argued that “easy” was mere subjective opinion. In many circumstances, the court acknowledged, “easy” would be mere puffing. But bragging about the relative ease of a product is not per se puffery. Puffery’s safe harbor depends on lack of materiality: the fact that no reasonable person would rely on it. “Given the large number of weight loss programs on the market, we think a reasonable person would rely on statements about the relative ease of the program being marketed.” Subjective, comparative terms can still deceive. A program of drugs and a restricted and rigorous diet is not “easy” compared to any number of other available weight loss programs. Moreover, the puffery argument missed the point, which was about the overall message of the infomercials and not single quotes.

“Through a repetitive mosaic of vague, glowing statements, Trudeau creates an image of a safe, simple, inexpensive way to shed pounds without exercise or dietary restrictions.” But that’s not what’s in the book. He never mentions hCG injections, instead touting a “miracle all-natural substance” that is “easy to get”—“you can get it anywhere”—and that is the “[s]afest, most effective way to lose weight on Planet Earth.” The court was particularly troubled by the safety claims given the serious possible side effects, and of course hCG can “hardly [be picked up] at the corner store.” Worse, Trudeau reinforces the “easy” message with comments such as “this substance, combined with a few other little things in the protocol, triggers the hypothalamus gland” (emphasis added). Comment: I find it interesting that the court recognizes, however glancingly, that consumers can reasonably rely on vague and flattering statements, which is not something that puffery doctrine is willing to admit even though it's patently true.

Even assuming that part of the pitch was mere puffery, the infomercials are “loaded” with other patently false statements, such at the “at home”/“you don’t have to go to a clinic” claims. The book instructs that the injections have to be under a doctor’s supervision and that a licensed colon therapist must perform all colonics. Dieters would at least have to go to the doctor’s office.

Likewise, the “nothing is restricted claim” is false. The book does say that, but its very next statement—omitted from the infomercials—is “The only caveat is only eat 100% organic food.” And there’s more in the book: “No food produced by publicly traded companies. No fast food or food served in regional or national chain restaurants. No corn syrup. No artificial sweeteners. No trans fats. No MSG. No food prepared in a microwave. No farm-raised fish.” (Most nonfarmers would probably lose weight were they able to follow those rules—because they’d be starving. Also, what's up with publicly traded companies? Private holdings are less fattening?)

The quotations were deceptive, misleadingly incomplete. Without more details, consumers “are led to believe that Trudeau’s statements are more than just his beliefs; they appear as objective facts.” Plus, Trudeau also outright lied. For example, in one infomercial, he claimed that the regime described in the book was “not a diet, not an exercise program, not portion control, not calorie counting, ... no crazy potions, powder or pills....” But not a word was true. Among the book’s “MUST”s: “eat only 100% organic food, walk an hour a day, eat six meals per day, eat only 500 calories per day for up to 45 days, drink organic raw apple vinegar cider, and take probiotics, krill oil, Vitamin E, digestive enzymes, and Acetyl-L Carnitine.”

Trudeau did much worse than Lane-Labs in arguing that he diligently tried to adhere to the decree. He argued that the infomercials were no different from previous Natural Cures infomercials, to which the FTC had not objected and thus implicitly blessed, and also complained that the FTC never warned him before filing its contempt complaint, even though it had seen the infomercial 8 months earlier. The FTC’s lack of objection to Natural Cures infomercials was largely irrelevant, certainly not enough to trigger estoppel against the government. Trudeau’s reasonable reliance on his experience with Natural Cures ended when he began making false statements about Weight Loss Cures.

The 8-month delay between first airing and the contempt petition was also unimportant. The FTC knew about the infomercials by January 2007 but only got its copy of the book in March, perhaps because the book hadn’t yet been published when the infomercials started running. The enforcement division concluded its review in July, and then it took a couple of months for the bureaucracy to autorize the contempt action. That’s not prolonged and inexcusable, as required for laches against the government. And despite Trudeau’s careful framing of the issue, there was no evidence he provided the FTC with a manuscript or some other means to speed up the review process, nor that he stopped airing the infomercial after the contempt petition was filed.

The amount of the sanction had to be remanded, though. The final $37.6 million figure might ultimately be correct, but the district court didn’t provide enough information about how it was calculated, whether it will be returned to consumers, and what will happen to money left over after restitution. The court of appeals did reject Trudeau’s arguments that he was entitled to greater procedural protections, such as jury trial and a beyond-a-reasonable-doubt standard, for setting the award, because a compensatory award—such as the one the district court said it was making—is civil contempt, not criminal contempt. But this distinction makes it important to ensure that the award is in fact compensatory, thus the remand for improved detail.

Likewise, to ensure compensation, the court order should specify that the FTC “must use the funds to reimburse book purchasers.” Trudeau should be forced to put the money in escrow or in the court’s registry and allow the FTC to access and disperse those funds to reimburse consumers and to cover the costs of reimbursement. The court did reject Trudeau’s argument that any order should require excess money to be returned to Trudeau. Civil contempt sanctions can be based on unjust enrichment, even if that exceeds victims’ losses. But the court expressed no opinion on whether a return-to-contemnor provision would be appropriate.

Finally, the court agreed that the three-year ban on infomercial appearances was erroneous because it failed to give Trudeau an opportunity to purge his contempt by complying with the underlying order not to misrepresent his books. Civil contempt must either compensate those harmed by the contemnor’s violation or coerce the contemnor to stop the violation. Other sanctions are criminal and require criminal process. The infomercial ban is not compensatory, so it needs to be coercive, which the court found a closer question. Trudeau can’t produce deceptive infomercials if he can’t produce infomercials at all. But there must be an opportunity to purge the contempt, allowing the contemnor to perform some affirmative complying act. Here, Trudeau could have some sort of conversion experience about what “They” want you to know and he’d still be barred from infomercials.

The FTC argued that the infomercial ban was simply a modification of the earlier consent order, but the court never explicitly granted the FTC’s motion to modify, and treated the ban like a contempt sanction. If a modification was at issue, then the parties needed the opportunity to debate it. The district court, on remand, could modify the consent order, fashion a coercive remedy, or even impose a criminal sanction, provided it follows the proper procedures for its choice. (Hard to see how the contempt at issue in an infomercial ban could be purged—what would affirmative act could Trudeau take?)

(Side notes: (1) The distinctive, casual but professional 7^th Circuit style is on display here in Judge Tinder’s opinion. I wish it would spread further. (2) “Contemnor” is such a great word. We’ve even had a Contemnor-in-Chief now.)

FTC loses substantiation case because of good faith

FTC v. Lane-Labs USA, Inc. (D.N.J. Aug. 11, 2009)

Liability under the Lanham Act and the FTC Act is strict. What about liability under a FTC consent order requiring the advertiser to have scientifically reliable substantiation for its claims? Here, the district court found no violation of the consent order on what seem to me to be overstated grounds.

Lane-Labs made claims for a calcium product and a male fertility enhancer. Of particular note, among the representative claims for the calcium product were that AdvaCAL has been “clinically shown to be three times more absorbable than other calciums”; it’s “absorbed three times better than typical calcium carbonate/coral calcium supplements”; and it’s the “only” calcium that can increase bone mineral density. The FTC’s expert had previously been employed by Lane-Labs. The study he conducted compared absorbability of calcium between AdvaCAL and Citracal, another supplement. His study concluded that while AdvaCAL was absorbable, it was inferior to Citracal by 20%. The district court thought that he had unreasonable standards for what counted as scientific substantiation, but did not in any way criticize the results of this study.

The court found that the case was a battle of the experts, and credited defendants’ (current) experts over the FTC’s. The FTC’s calcium expert agreed that AdvaCal was a good source of calcium, and its fertility expert opined only that the active ingredient was not proven (also that it might be risky and that he therefore wouldn’t use it). Neither testified, the court concluded, that the products generated a health risk.

The court considered that Lane-Labs did what it was supposed to do: sought expert advice before relying on scientific articles, rather than making claims out of thin air. The court was concerned that laypeople should not have to do more than can reasonably be expected. This seems to be a new standard. So if a company is headed by a layperson, it can make broader and less reliable claims than Pharmacia can? The underlying idea, that one ought to be able to rely on peer-reviewed studies, is not at all crazy, but the court doesn’t seem very concerned about advertisers’ self-serving bias when they decide which evidence to rely on and which to discount, despite what happened in this very case.

The court concluded that various misstatements conceded by Lane-Labs had “slipped through the cracks,” but overall “the impression created by Defendants’ advertisements is that both supplements are good products that will most likely help the people who take them.” I didn’t realize that general impressions were all that was evaluated. The court was satisfied that the products were “good” and “could have the results advertised.”

The court was also concerned that Lane-Labs had, in compliance with the consent order, submitted its marketing materials to the FTC for years and only a few years ago gotten notified of the FTC’s intent to seek monetary penalties. “[T]o tell Defendants that their efforts were not good enough years after not advising them of any compliance issues is disengenuous and is highly relevant to the inquiry into whether Defendants should have done something different in the first instance.” The court, however, claimed not to be relying on a laches theory in rejecting the FTC’s claims. Still, because Lane-Labs obtained scientific evidence that experts said could be relied upon and were never told otherwise, it would be “fundamentally unfair” to find them in violation of the consent order now.

What I find especially interesting is that there is no suggestion in the opinion that there was a whit of evidence supporting the false comparative claims, and defendants had a study in hand concluding that their product was inferior. By the court’s own logic, that was the best evidence they had, and they should not have been making comparative claims even if they hoped that the evidence before them was wrong.

Recent reading: piracy as creativity

One of the most interesting pieces I've read in a while: Lawrence Liang, Piracy, Creativity and Infrastructure: Rethinking Access to Culture

Liang argues that Western low-protectionists haven't fully appreciated the relationship between piracy, access, and creation, and that while proponents of remix culture have too readily condemned pure copying, the Access to Knowledge folks have focused their discourse too much on medicines and medicinal (educational) knowledge, rather than access to sources of pleasure, which are also part of human rights. He writes:

One way in which the ‘copyright infringer’ is rescued from the accusation of being an illegal pirate is through an act of redemption, for instance by showing that their acts of infringement actually result in an increase in creativity, and this is often done through doctrines such as the idea of transformative authorship. But then what happens to entire realm of non transformative authorship or the ‘Asian piracy’ which does not necessarily transform but merely reproduces ceaselessly using cheap technologies? How do we read this account of the public domain? While one can understand that Lessig would have to be careful about the ways in which he pitches a reform of copyright law within the context of the US, it is also a little difficult not to miss the linkages in [his condemnation of commercial Asian piracy] to older accounts of illegality in which Asia, where many of accounts of the urban experience in Asia and Latin America have been narrated in terms of its preponderant criminality and illegality. This for instance is particularly true, not merely in the context of the colonial imagination, but also in the ways that cities and everyday life in Asia is understood. While the US has always narrated itself through the tropes of constitutionalism and the rule of law, the crisis arrives, when all of a sudden, the very language of criminality and illegality that accounts for much of the world arrives home in the form of the criminalization of students downloading music… .

[C]onventional criticisms of piracy are premised on narrow ideas of creativity, because of their exclusive focus on the question of authorship and content to the exclusion of infrastructure.. . .

Liang reminds us that creation comes in stages, as Julie Cohen has done: future authors depend on access to a landscape of creative works even if they do not directly and immediately transform those works:

There is currently a lot of excitement about the contemporary art scene in China, and indeed it seems to be the flavor of the month in the global art circles. There are thousands of people who are lining up to join art schools, and one of the Chinese curators had this to say “When you can buy a Tarkovsky film for a dollar, you will obviously produce many more artists”.

The existence of contemporary art and other forms of cultural production are always predicated on the material conditions of the life of its practitioners.. . .

And he ends with a fabulous call to recognize pleasure as a need worthy of recognition for all people:

[O]ne of the problems of piracy seems to lie in the fact that it is associated more with the world of pleasure and desire than ‘pure needs’. In this segment, I will attempt to examine the intersection between the world of desire, subjectivity and the experience of piracy.

Let me begin with an interesting story, which is a typical example of interventions in the field of the digital divide. An NGO in Bangalore that works in the field of Information and Communication Technologies for Development (ICT4D) was conducting a workshop on accessing the internet for the information needs of rural women trainers. The facilitator guided the women through the basics of the internet, on accessing information relevant to their work ranging from rural credit to women’s health. The training was highly appreciated, and all the women volunteers seemed to be enjoying themselves fiddling with the computer and exploring the internet. At the end of the training, when the NGO started cleaning up the computers including the history and the cached copies, they were a little aghast to find that most of the women volunteers had been surfing pornography, and a range of pornography at that. So while the trainers were holding forth eloquently about the real information needs of the poor, the poor were quite happy to access their real information needs.

Being good in business is the most fascinating kind of art

Meatwater.

Scariest headline I've seen in a while.

In the future, everyone will monetize their 15 minutes. Google, what happened to "don't be evil"? Is this the world you really want to live in?

Best Twilight-related merchandise ever.

NSFW. It's a sex toy; it sparkles. Some of the promo text:

The Vamp [has] a deathly pale flesh tone reminiscent of the new moon's glow. ... Don't be surprised if this toy seduces you, its long sleek shaft and deliciously ridged head calling to you in the twilight. ...

Don't let this eclipse pass into the breaking dawn, place your order today.

Dilution? What mark is being used? Is this really any different from the Twilight-related merchandise on Etsy?