Formula for false advertising

PBM Products, LLC v. Mead Johnson Nutrition Co. (E.D. Va. Dec. 1, 2009)

According to PBM Products, the maker of store-brand infant formulas has won a $13.5 million jury verdict against Mead Johnson, though I haven't seen a copy of the jury form. My earlier discussion of the court’s denial of a preliminary injunction is here.

The court also ruled on Mead Johnson’s laches defense. PBM didn’t unreasonably delay acting against Mead Johnson; although scattered statements from the challeged ads had appeared in Mead Johnson’s ads for a couple of years before PBM sued, false advertising claims must assess the ad as a whole. “The 2008 Mailer taken as a whole and in context clearly takes a new approach in tone and message towards store brand infant formula. Mead Johnson consciously decided that its marketing should be more aggressive and risky as it witnessed a decrease in its sales and an increase in store brand sales. The 2008 Mailer and its attack on store brands was the result of that marketing decision.”

Mead Johnson has been enjoined from making false statements about PBM, including specifically “It may be tempting to try a less expensive store brand, but only Enfamil LIPIL is clinically proven to improve brain and eye development,” and “There are plenty of other ways to save on baby expenses without cutting back on nutrition.” Mead Johnson was directed to recall any such ads currently in the “public forum.”

The rare explicitly false statement of sponsorship

Most times, trademark owners' allegations that consumers will be confused about sponsorship or affiliation are just ways to expand the scope of infringement by relaxing the theory of what constitutes confusion. But not always. The attention-grubbing Salahis run something called the Land Rover America's Polo Cup, for which one can buy extra-special Cartier seats. Except that many of the listed sponsors for the 2010 event, including Land Rover and Cartier aren't sponsors. (I get the sense from the story that many of them--possibly all--are embarrassed or embittered, or both, former sponsors. Apparently the Salahis' optional relationship to reality extends to paying suppliers and delivering on promises; also to identifying the amount of money they raised for charity and devoting same to charitable endeavors.)

Panel on the FTC's New Endorsement and Testimonial Guides

Sponsored by the American Bar Association Section of Antitrust Law Committees on Private Advertising Litigation, Consumer Protection, Federal Civil Enforcement and Corporate Counseling.

Moderated by Dana Rosenfeld, Kelley Drye

Stacey Ferguson, Division of Advertising Practices, FTC

(Standard disclaimer: these are her own views.) Today’s the effective date of the Revised Guides. Emphasizes that the Guides themselves don’t provide for fines, though practices inconsistent with the Guides can result in FTC investigation and possible resulting fines. Big rule: deceptiveness of endorsement/testimonial depends on the facts.

An endorsement is anything that consumers are likely to believe reflects speaker’s personal views, whether or not identical with the manufacturer’s, whether or not the speaker reads from a script. Fictional dramatizations and statements by company spokespersons are not endorsements because they’re apparent to the audience.

Endorsements must reflect endorser’s general views and must not contain any express/implied representation that would be misleading if made by the advertiser. Advertisers can be liable for misrepresentations and for failure to disclose material connections, as can endorsers.

Principal changes: requirement of disclosure when advertiser paid for study touted in the ad; deletion of “results not typical” safe harbor; addition of examples of disclosing material connections in social media marketing.

Typicality: An advertisement employing an endorsement reflecting the experience of an individual or a group of consumers on a central or key attribute of the product or service will be interpreted as representing that the endorser’s experience is representative of what consumers will generally achieve with the advertised product in actual, albeit variable, conditions of use.

Net impression of typicality controls, regardless of disclaimer—disclaimers don’t generally work. Advertiser must possess and rely on adequate substantiation—consumer endorsements are not themselves substantiation. Must have substantiation of typicality. 20% is not typical.

If the extreme conditions are fully disclosed in the testimonial, you can use them—a woman who testified to extreme weight loss and explained that she worked out six hours a day and ate only the advertiser’s product plus raw vegetables is disclosing the extremity of her circumstances. The Jared/Subway example—apparent that he was an extreme case who made major lifestyle changes. The advertiser must be able to substantiate that people who follow this extreme case could expect similar results. If the endorsement doesn’t disclose the extreme circumstances, it’s deceptive. If the ad just discloses the woman’s weight loss, have to disclose the results consumers could ordinarily expect, and those disclosures need to be substantiated.

Disclosure of connection: when does a consumer become an endorser? When the consumer is sponsored by the advertiser, looked at objectively. Are they acting independently, or are they part of the advertiser’s marketing campaign? Definitely: Explicit understanding; cash payments; additional perks; network marketing programs; network advertising agencies; commissions. It depends: Continuous free merchandise; value of the product or service; links to where the product can be purchased.

Similar concerns with advertorials. Is it editorial or an ad? An ad is a positive statement produced in whole or in part, or otherwise influenced, because of a benefit or expected benefit provided by the advertiser or its agent. Some cases will not be clear.

When in doubt, disclose freebies.

Advertisers should monitor bloggers; other best practices (including frequency of monitoring) remain to be seen. Should guide/train bloggers on appropriate disclosures/claims. Free products should be disclosed because they can be considered compensation on a fact-specific basis. Depends on the value of the product—is it enough to push the consumer towards a positive review? (Cialdini's classic book Influence would say that free alone is enough to change behavior, regardless of value; in fact I recently read a book about that.)

FTC is also concerned with astroturfing. Employee relationship must be disclosed if employee touts on, say, a consumer message board. Advertiser has a responsibility to have policies in place and train employees regarding acceptable practices.

Mark Brian Levine, NAD

Q over elimination of safe harbor: we’ve seen cases with no testing at all, so the advertiser has no idea what the generally expected performance is. Also cases where there are only studies on one ingredient, not studies on the product as sold: how does that work? CelluScience example: study suggested positive results, but not quantifiable and not comparative to other therapies as stated in the ad. NAD found the advertiser couldn’t make percentage or comparative claims via testimonial—result under new FTC guidelines seems likely to be the same.

Another example: Bravina as a social anxiety treatment. Couldn’t make testimonial claims without substantiation, and there was none with respect to public speaking anxiety. Similarly, when weight loss examples were off the scale of the results shown in the advertiser’s study of WeightAway, they couldn’t be used as testimonials even if they were actual results.

Lance Armstrong endorsement for FRS healthy energy supplement: advertiser claimed it was a celebrity endorsement, not a professional Tour de France winner endorsement. NAD found that was unclear; he is a professional cyclist identified as a Tour de France Winner, thus a professional athlete/expert in endurance. What should he do to confirm the supplement’s efficacy? Even if he’s a celebrity, NAD found the ad needed to be changed.

WeKnowDiets: product review website, apparently unbiased, but actually promoting particular products that gave the “editor’s choice” award to the sponsor. This was unacceptable.

Remains to be seen how the new guides will affect NAD—will they prevent advertisers from making such claims in testimonials?

Paul Rand, Zócalo Group, President-Elect, Word of Mouth Marketing Ass’n

Marketers really want best practices for marketers and bloggers. Goal: clear and conspicuous disclosure, “above the fold.” Language must be unambiguous to the targeted consumer.

Marketer responsibilities: educate bloggers on their responsibilities; educate internal corporate audiences to create a culture of compliance; require disclosure from bloggers: “If you choose to review or share this product please be sure to disclose that it was provided to you by the company.” Monitor: remind those who “forget” to disclose; determine a cutoff policy for those who do not comply.

Editorial blogs: make it part of the editorial copy: “I received [] from [] to review this.” Also: a “disclosures and relationships” section on the website for bloggers who do this type of thing. Video sharing sites: relatively straightforward—recommend disclosure as part of the video content, ideally both in dialogue and in video description but at least one. Photo sharing: likely has to be part of the photo description. “I received [X product or service] from [company X] to create this” or “I was paid by [company X] to create this.”

Social media: as part of photo/video description; as part of status update; “disclosures and relationships” section on profile. Similarly, with review sites, disclosure should be part of editorial copy and should also create “disclosures and relationships” section on profile or website.

Twitter: hashtag within tweet, #spon or #paid, plus create a link to “disclosures and relationships” section on profile. (Comment: I wasn’t clear whether this link should appear in the tweet, but I guess not?)

Q: exemption for traditional media like newspapers?

Ferguson: No exemption per se. If audience can tell there’s a relationship, disclosure may not be as necessary. Restaurant critic/book reviewer who’s well-known: audience already knows that person has those relationships; personal websites/blogs make disclosure more of an issue.

Q: What if they aren’t well known? What if they are getting a commission?

Ferguson: it’s not that the reviewer has to be well-known, but that they have to be known as a reviewer, who can be expected to be getting stuff for free. They should have disclosure policies too, but we’re concerned with where it’s not obvious what the status is.

Q: What about sites that allow you to review the product on the advertiser’s site? Consumer buys product and writes: this is the greatest ever, it cured my skin disorder. Is the advertiser who puts up the site responsible for the content?

Ferguson: Not entirely resolved. If it’s a statement on behalf of the company, the company would be responsible. But if the consumer is making her statement on her own, but it’s on the company’s site, that’s a gray area. The CDA would exempt the person who owns the website from responsibility for content on the site. But if the advertiser knows the representation isn’t substantiated, the advertiser should be wary of keeping the statement on the site.

Q: question when the claim involves qualitative results—“helped my skin”—how do you figure out what substantiation is?

Levine: Issue is mismatch between testing and claims. Visual testing where people observed a difference would work.

Q: but typicality—what disclaimer would you use for what an average person would expect when it comes to a qualitative claim?

Levine: presumably you have some support—was the test a visual test where X number of people evaluated their skin, or scientists evaluated their skin? Were pictures taken? All those things would factor in.

Q: in the past you wouldn’t have needed to substantiate qualitative claims to show typicality—you wouldn’t have needed to know what the generally expected results were because you could just say “results not typical.”

Rosenfeld: you need to do testing; if you can’t, then you need to make claims that go to subjective views, not performance/efficacy claims.

Levine: that’s no different from how we’ve always handled claims.

Ferguson: Agrees.

Q: we market to our own members who pay for membership, not to the general public; we don’t pay our members to endorse our stuff but we do use their quotes in marketing our services/those of our advertisers. What do I need to think about?

Ferguson: Do members understand the relationship?

A: One member may use a product from another member and give a testimonial.

Ferguson: if there is an understanding of the practice that everyone is receiving a product to try and giving a review, then that should be clear, but a disclosure can’t hurt.

Q: On disclosing the sponsorship of studies: do you have to disclose even if you don’t say who ran the study at all? That is, even if you don’t use a name that might suggest that it was run by an independent lab, do you still have to disclose you paid for it?

Ferguson: yes, she believes that’s the rule. FTC is coming out with FAQs on these issues that should help.

Q: Flabbergasted by answer about consumers who post a review on the company’s own website. In the QVC case under the old guides, the FTC pushed the view that an unsolicited call to a live TV show can make the advertiser responsible; why would it be different if the consumer posted on the company’s website?

Ferguson: we’ve been grappling with this internally. You don’t want to mislead consumers or give the appearance that the company endorses what the consumer says. The company can control what’s on the website, more than it can control who calls in. An issue for the FAQ.

Q: on monitoring. How long do we need to monitor?

Ferguson: we don’t have concrete guidelines on that. If you have in place a policy that checks in 3-6 months after the product, that would go a long way towards showing the company is being proactive.

Q: Some products have a much shorter lifecycle than others—policing burden might differ.

Ferguson: that could be a factor to consider.

I had to leave for class at that point, but it was a useful discussion.

New article: Fighting Freestyle

Rebecca Tushnet, Fighting Freestyle: The First Amendment, Fairness, and Corporate Reputation, 51 B.C. L. Rev. 1457 (2009)

Abstract:

There are three distinct groups who might want to engage in speech about commercial entities or to constrain those commercial entities from making particular claims of their own. Competitors may sue each other for false advertising, consumers may sue businesses, and government regulators may impose requirements on what businesses must and may not say. In this context, this Article will evaluate a facially persuasive but ultimately misguided claim about corporate speech: that because consumers regularly get to say nasty things about corporations under the lax standards governing defamation of public figures, corporations must be free to make factual claims subject only to defamation-type restrictions on intentionally false statements. The premise that this would further equality ignores the overall structure of advertising law, in which consumers cannot be equated to advertisers, competitors are already on equal footing with one another, and the government as regulator is not supposed to be on equal footing with anyone.

Political Real Person Fiction (RPF)

RPF doesn't pose the same legal challenges as fan fiction (one reading: the commercial sanctity of texts is more important to the people who have the power to make law than the integrity of humans), but it also generates unease about propriety, property, publicity, et cetera. New York Magazine is running a contest for modern political RPF, to go with its publication of seven RPF stories by well-known writers. I sense an opportunity for the Yuletide Rare Fandom writers; I'd point to a couple of good Jon Stewart stories, but the archive is closed until Dec. 25.

Bonus: the Medievalist defending historical RPF, part of a conversation going on about contemporary novels.

Slate on achieving substantial similarity without copying

This is a really interesting story about how two crossword puzzles could end up looking extremely similar without copying, through the interaction of a similar idea and the scenes a faire of crossword construction. A little reminder that almost all genres are more complicated and convention-bound than they might look to an outsider.

Here's author Matt Gaffney's grid:

Here's the predecessor's (Mike Shenk):

Why are those long entries nearly identical, placed in the same way, and with nearly the same black-space pattern? As Gaffney notes, the crossword community is small enough that people are likely to detect copying--and he heard from a number of people about the similarities here. The explanation begins with the popularity of themed puzzles:

[M]y raven puzzle isn't an isolated case—crossword constructors duplicate one another's themes and grids all the time. The all-time most overused theme might be this list of breakfast foods each beginning with a European adjectival: ENGLISH MUFFIN, FRENCH TOAST, DANISH PASTRY, and SPANISH OMELET. (These puzzles are invariably titled "Continental Breakfast.") Another one that I'd rather lose an eye than see again: ERNEST HEMINGWAY, THE SUN ALSO RISES, and A FAREWELL TO ARMS, all conveniently 15 letters long.

Gaffney argues that four factors explain the similarities here:

Why was the theme exactly alike? There are perhaps two-dozen types of crossword themes, and puzzlers like me have done them all repeatedly. One popular example is adding or subtracting a letter to well-known phrases to get humorous new nonsense phrases. (A puzzle titled "C-Minus" might include the entries ORLANDO MAGI and ASH FOR CLUNKERS.) Embedding a word (like RAVEN) in longer entries is another popular convention. Since we're all essentially hunting the same wordplay quarry, it makes sense that two crossword constructors would hit upon the same bright idea. Unfortunately, Shenk beat me to the punch on this one.

Why were the theme entries almost exactly the same? Within those couple of dozen theme types, constructors look for specific criteria when selecting their theme words. This leads into a finer point of crossword design: When embedding a keyword in longer entries, it's considered elegant to break up that word as many different ways as possible.

... In the case of the RAVEN puzzles, Mike Shenk and I were both looking for lots of keyword-splitting variation. We each found four different splits: RAVE/N (BRAVE NEW WORLD), RAVEN (CONTRAVENE, INTRAVENOUS DRIP), RA/VEN (COBRA VENOM), and R/AVEN (VENTNOR/ST. CLAIR AVENUE). ...

Why were the theme entries in the exact same places in the grid? Primarily because American crosswords exhibit something called "180-degree rotational symmetry." In other words, if you turn the grid upside down, the pattern of black squares will look the same as it does right-side up. This requires puzzle designers to offset each theme entry with a same-length entry, a constraint that largely locks in the shape of your grid once you've got your longer clues down. ...

This constraint explains further why both Shenk and I chose our five entries: The 10-13-15-13-10 pattern is beautifully symmetrical. An otherwise good nine-letter entry like film director WES CRAVEN (extra points since he's a horror director and this is a creepily themed puzzle) was unfortunately left on the cutting-room floor. I simply couldn't find another nine-letter entry to offset it.

Why, then, were the five entries placed the same? INTRAVENOUS DRIP, as the only 15-letter entry, had to go in the center. Putting the 10-letter entries in the third and 13^th rows was also a no-brainer: nine-, 10-, and 11-letter entries fit nicely on the third and 13^th rows of a standard 15-by-15 grid, as they allow the top two rows to be broken into chunks of four-, four-, and five-letter words. (More on this later.) A 13-letter entry doesn't fit in row three—it would require awkward clusters of black squares—so it's relegated to the center of the grid.

Why did Shenk and I both place CONTRAVENE on top and COBRA VENOM on the bottom? ... People tend to solve crosswords from the top to the bottom, so we both chose to lead off with the dullish CONTRAVENE (a semi-boring word that semi-boringly embeds the keyword completely inside) and finish with the awesome COBRA VENOM (snakes are very cool creatures, plus the keyword is divided in an unexpected way). ...

Why is the black-square pattern so similar? Because a series of crossword rules makes it likely. American crosswords disallow two-letter words, meaning a 15-by-15 grid is likely to be filled with many three-, four-, and five-letter entries. This is especially true of grids with five theme entries, on the highish end for a 15-by-15 grid. ...

Gaffney then asked a third crossword-maker who hadn't seen either grid to construct a RAVEN-themed crossword. The result was not quite as strikingly similar, but there was still an overlap of four long clues and a similar, though mirror-imaged, layout of black space. Gaffney concludes that, in a form like the crossword, events of this sort are inevitable, though you'll still be able to distinguish copying from shared inspiration: "even puzzles with common themes won't be identical—the shorter words (the 'fill,' in crossword terminology) will certainly be different, as will the clues. Crosswords are like snowflakes, you see—even the ones that look a lot alike are still unique."

Crisis pregnancy centers and disclosure

Baltimore just passed a measure requiring crisis pregnancy centers to disclose that they do not “provide or make referral for abortion or birth-control services.” The rationale is that numerous women have been deceived about these things. I’ve been thinking a lot about required disclosures, and given the factual predicate, this strikes me as readily justified, even assuming for the sake of argument that the centers are engaged in noncommercial speech. Here’s Henry Waxman’s study on the topic of deceptive and false information at crisis pregnancy centers, and here’s NARAL’s.

It’s interesting, but unsurprising, to see the Maryland Right to Life legislative director characterize this measure as “condemn[ing]” crisis pregnancy centers: “‘Baltimore City has just said, “We recognize you do great work, but politically we're going to regulate you anyway.”’” Apparently they fear the accumulation of other regulations, which is at a minimum a position rich in irony. Are they worried that the council will specify the appropriate width of doorways or prescribe particular lawn care regimens? Opponents say that what’s sauce for the goose is sauce for the gander (see above re: irony), arguing that Planned Parenthood should also be required to post … something—I wasn’t clear on just what, given that Planned Parenthood provides comprehensive reproductive health services. Compared to various disclosure regulations on abortion providers requiring them to inform women that abortion is dangerous, I think an important difference is that no one disputes the factual predicate of the disclosure here.

My earlier discussion of bait-and-switch by crisis pregnancy centers is here.

The other legal side of Leopold & Loeb

Edward J. Larson, Murder Will Out: Rethinking the Right of Publicity through One Classic Case

A really interesting story about the right-of-publicity fallout from the Leopold and Loeb case, providing a dramatic demonstration of the speech-suppressive effect of the right of publicity:

Levin described the chilling effect of the action on writers and publishers:

Nathan Leopold’s lawsuit seemed to spark a whole series of astounding cases. The descendants of Al Capone filed a multimillion-dollar claim for invasion of privacy against a television station that had broadcast a portrayal of the gangster’s life. Then came the case of the wife of the killer of Rasputin, who was suing a television network that had shown a dramatization of the event.

Suddenly an unease spread among writers and publishers, indeed all through the communications industry. If such cases were valid, an enormous source of material would be barred. A form of censorship threatened that was not only terrifying in a commercial sense, but that could in fact close off a perennial wellspring of art . …

The case was much more than a harassment. If any award at all should be made, it could establish an enormously restrictive precedent.

Levin’s fears were realized when the trial court largely accepted a broad no-commercial-use standard in granting Leopold’s motion for summary judgment on liability in 1964, Compulsion, which had sold over a million copies, went out of print; the movie producer withheld royalties; copies of the play were difficult to obtain.

…. Compulsion reappeared in print only after the 1964 judgment was reversed in a ruling that Levin called “a landmark decision in liberating writers and publishers from a growing threat.” (footnotes omitted)

The author’s proposal for a right of publicity limited to ads and endorsements glosses over the complications of an endorsement standard, but I liked the story a lot.

Staying Lanham Act case for NAD not expedient

Expedia, Inc. v. Priceline.com Inc., No. 2:09-cv-00712-RSL (W.D. Wash. Nov. 23, 2009)

Expedia sued Priceline over allegedly misleading ads. It had previously filed a complaint with NAD, but NAD’s procedures meant that the filing of a lawsuit triggered the closing of the investigation, even though the investigation was complete and NAD “believed it would be beneficial to share with the parties the analysis it would have conducted had procedural considerations not required an administrative closing.” This analysis would apparently have been generally favorable to Priceline, and NAD suggested that it would reformat its statement as a decision on the merits if the court “remand[ed]” the matter to NAD or otherwise declined to reach the merits.

Contrary to a couple of SDNY cases (NAD’s home court, as it were), the court declined to stay the case in favor of a NAD resolution. A stay would require some advantage in efficiency or fairness for the alternative procedure. Priceline argued that a NAD decision could simplify the case and/or promote settlement, and that remand to NAD would prevent “procedural gamesmanship” of the sort in which Expedia engaged here. The court disagreed. The court and the parties already have the benefit of NAD’s expert view, which it offered (albeit not in decisional form) when it administratively closed the investigation. And it wasn’t clear that a final NAD decision would be admissible anyway. “Nor is it this Court’s role to safeguard the relevance and effectiveness of an industry’s self-regulatory body. If NAD’s rules allow a challenger to ‘opt out’ of the NAD process by filing a duplicative court action, the obvious remedy would be to amend the rules if the industry agrees that this is not an optimal use of the parties’ or the organization’s time and resources.”

Further, the court refused to dismiss the Lanham Act and common law false advertising claims, because they were sufficiently well-pleaded at this stage. Expedia alleged that Priceline’s ads mislead consumers into believing that they can save 50% on any hotel reservation made through Priceline when in fact those savings are available, if at all, only with the “name your own price” service. Priceline argued that a requested ban on comparative advertising was inappropriate under the Lanham Act, but even if such relief was unavailable that didn’t require dismissal of the complaint. Further, Priceline contended that the Lanham Act claim failed as a matter of law because there is no affirmative duty to disclose; the absence of a statement isn’t a false representation. But, of course, what one actually puts in the ad can be false or misleading if not appropriately qualified/accompanied by disclosures, depending on the claims at issue. Expedia alleged that the ads at issue blurred the distinction between Priceline’s fixed-price and blind-bidding services, creating a false impression that Expedia’s fixed-price services were more expensive than Priceline’s. Though it’s not clear that Expedia can ultimately prevail on its demand for disclosure of the differences between Priceline’s fixed-price and “name your own price” services, or that the alleged comparative inference can reasonably be drawn from the ads, that’s not the standard on a motion to dismiss. The complaint alleged that Priceline’s ads falsely claim that consumers can save 50% by using Priceline’s fixed-price service compared to Expedia’s. That stated a cause of action.

Fighting confusion with keywords

Going Rouge, the unflattering version of the Sarah Palin story, is apparently causing enough confusion with Palin's Going Rogue that the latter's publisher is buying keyword ads on Going Rouge (though I didn't get them as of a couple of minutes ago--not sure what that means given the increasing personalization of search; see also results from Google Suggest). What that says about the American standard of spelling I'm not sure.

The level of confusion recounted is intense:

Colin Robinson, co-publisher of [Going Rouge], told Page Six: "We have been contacted by numerous media outlets across the country asking for interviews with Sarah Palin, or companies offering security for her while on tour.

"One Web site not only thought we were Ms. Palin's publishers but called the book 'Going Rough.'

"We've noticed that someone, presumably HarperCollins, has been buying ads on Google redirecting people looking for 'Going Rouge' to 'Going Rogue,' which seems very unsporting of them."

Victims of the "Rogue"/"Rouge" saga include CNN's Political Ticker, which quoted Obama adviser David Axelrod saying he'd be borrowing Obama campaign manager David Plouffe's copy of "Going Rouge."

USA Today's section The Oval wrongly posted the cover of "Going Rouge" with a review of Palin's book. It has since corrected the confusion with the statement: "Erratum: An earlier posting featured the photo of a different Sarah Palin book. The Oval regrets the error." Last week, Fox News Channel apologized for showing the cover of the takedown book while discussing Palin's memoir.

Robinson added: "We are sure that many people who mistakenly bought our book will have been pleasantly surprised. You learn more about the real Palin in our version."

So far, HarperCollins has not made any public legal threats. Even with this kind of confusion--and even with Robinson's arguably unwise statements--it may make more sense to fight this in the marketplace than to file a lawsuit that would undoubtedly play as censorial.

Schering doesn't justify reconsideration in Whirlpool steam case

LG Electronics vs. Whirlpool Corp. (N.D. Ill. Nov. 23, 2009)

Earlier discussion here. Thanks to Ron Rothstein of Winston & Strawn for alerting me that the district court just denied Whirlpool’s motion for reconsideration and request to certify issues to the court of appeals.

Whirlpool argued that the court should reconsider its ruling refusing to grant summary judgment on LG’s literal falsity claim because “steam” has more than one meaning and thus can’t be literally false, and because falsity by necessary implication can’t apply when Whirlpool’s ads are susceptible of more than one interpretation.

To succeed on a motion for reconsideration without new evidence, Whirlpool needed to show a manifest error of law or fact, which it didn’t do. Whirlpool didn’t present sufficient evidence at the summary judgment stage to show that it met one of the definitions of steam, and it didn’t cite any controlling caselaw that an ad using a term with more than one meaning can’t be literally false. (There are cases in which an ad directed at a lay audience uses a term that also has a different highly technical meaning, or vice versa—in such cases a court should be willing to find literal falsity; perhaps this is a variant of falsity by necessary implication.) Instead, questions of fact remain about the literal meaning of “steam” in the context of the ad; other decisions from within the Seventh Circuit have also taken the position that literal falsity is a fact issue.

As for Whirlpool’s objection to falsity by necessary implication, the court first found that Whirlpool had waived objection to this theory by not addressing it earlier. (It’s my totally unscientific impression that courts in the Seventh Circuit are super-aggressive about waiver.) Even without the waiver, Whirlpool didn’t meet the standards for a motion to reconsideration. Though the Seventh Circuit hasn’t explicitly adopted falsity by necessary implication, it hasn’t repudiated the doctrine either.

Finally, and most notably, the district court rejected the argument that Schering-Plough served as a game-changer. Unsurprisingly, Whirlpool focused on the language that “[a] ‘literal’ falsehood is bald-faced, egregious, undeniable, over the top.” But, contrary to Whirlpool’s argument that an ad “cannot be literally false unless it is an [un]ambiguous, bald-faced lie,” Schering-Plough never addressed ambiguity, nor did it take up falsity by necessary implication. (Comment: Phew! I had hoped that sense would prevail, and this is a good early sign that Schering-Plough can be read consistently with the main line of Lanham Act cases, which do not require bad intent or some sort of super-falsity.)

The district court also rejected Whirlpool’s request, in the alternative, for certification of these issues to the court of appeals.

NYT trend story on false advertising claims

"Companies that were once content to fight in grocery-store aisles and on television commercials are now choosing a different route — filing lawsuits and other formal grievances challenging their competitors’ claims." Related video.

Pleading false advertising after Iqbal

Tseng v. Marukai Corp. U.S.A., 2009 WL 3841933 (C.D. Cal.)

Tseng alleged patent infringement and false advertising, but didn’t include the level of detail required after Iqbal and Twombly. Reciting the elements of a cause of action isn’t enough, so allegations that defendants sold goods that infringed plaintiff’s patent were insufficient. Likewise, the allegation that “defendants falsely advertised their infringing goods as genuine and authorized products by imprinting the Patent In Suit's patent number” was insufficient, because false advertising is a legal conclusion that requires allegation of underlying facts. Tseng needed to offer facts indicating what kind of advertising defendants engaged in, what they said, and why it was false. Dismissed, with leave to amend.

Hope my girlfriend don't mind it

Consider the following songs:

Stacy’s Dad, after Stacy’s Mom.

I Kissed a Girl, sung by Ivri Lider. (Bonus Smallville video with Clark Kent as the POV character, on the same theme.)

“I Kissed a Boy,” sung by a female singer with the gendered nouns and pronouns reversed. (What does it say about our culture that this is the one I couldn’t find?)

I Kissed a Boy, same lyrics, sung by a male singer. (Bonus Cobra Starship I Kissed a Boy with substantially changed lyrics.)

Which, if any, are transformative and why?

What is the relevance of the fact that it is, as far as I can tell, universally accepted that, under 17 U.S.C. §115, it is unobjectionable to flip gendered nouns and pronouns (among other things, making Alanis Morissette the Queen of Pain, but you knew that already)? Section 115 provides that a compulsory license “includes the privilege of making a musical arrangement of the work to the extent necessary to conform it to the style or manner of interpretation of the performance involved, but the arrangement shall not change the basic melody or fundamental character of the work.” Apparently, one’s sexual or romantic partners are part of one’s style or manner of interpretation, but the gender of the person described by the lyrics isn’t fundamental to the character of a work—an interesting result.

Project Runway does IP

One designer, told she couldn't use images of Coney Island because they were "trademarked" (my guess is that this was a copyright problem, but ok), ended up with a dress printed with Reasons to Love New York, which were taken from New York Magazine. Though a world away conceptually from Jeff Foxworthy's You Might be a Redneck If... jokes, the principles from that case might apply to this one.