Is it safe? Uber's media statements about safety are commercial speech

Greater Houston Transportation Company v. Uber Technologies, Inc., --- F.Supp.3d ----, No. 4.14-0941, 2015 WL 9660022 (S.D. Tex. Dec. 18, 2015)

 

[Yes, I know, but I couldn't find a relevant Taxi Driver quote.]

 

Previous opinion discussed earlier in this space. Plaintiffs hold taxicab permits in Houston and San Antonio.  They alleged that Uber falsely advertised the safety of Uber rides compared to taxis, and the superiority of Uber’s background check process compared to that of taxis. “On April 1, 2015, one of Houston’s Uber drivers was arrested for allegedly sexually assaulting a passenger. The Uber driver had passed an Uber background check despite having a criminal record.”  Earlier claims related to statements about insurance have been dismissed, except as relevant to the alleged safety misrepresentations, because the Texas legislature passed a relevant law.

 

Uber argued that the targeted statements were puffery.  The court agreed in part and disagreed in part. Uber said it had the “SAFEST RIDE ON THE ROAD—Going the Distance to Put People First.”  It continued that its promise meant “setting the strictest safety standards possible, then working hard to improve them every day. The specifics vary, depending upon what local governments allow, but within each city we operate, we aim to go above and beyond local requirements to ensure your comfort and security—and what we’re doing in the U.S. is an example of our standards around the world.”  The first slogan was unmeasurable, exaggerated and unreliable puffery.  The “specifics vary” supporting language made clear that the overall safety claim was relative to location, and its “aim to go above and beyond” language was aspirational, not factual.  So too with the statement, “Wherever you are around the world, Uber is committed to connecting you to the safest ride on the road”: given its massive scope, it was clearly unverifiable, exaggerated, and unreliable.  “BACKGROUND CHECKS YOU CAN TRUST” was also a blanket generalization without further explanation, and thus puffery.

 

Plaintiffs also challenged an October 2014 post on Uber’s blog by former Rudolph Giuliani, headlined “UBER SETTING THE STANDARD FOR SAFETY IN RIDESHARING: Posted by Rudolph Giuliani”: “I am pleased to say that in my opinion and that of my safety consulting team at Giuliani Partners and our partners at Guidepost Solutions, Uber is setting the safety standard in the ride-sourcing industry.” The court found this a nonactionable statement of opinion attributed to a third party.  The post also said, “we believe [Uber’s background check process] represents a substantial improvement over the existing safety standards in the personal hire transportation world.” The court deemed it probable that a third party’s opinion would be irrelevant to most people (really? not more relevant because of security expertise?), and anyway opinions aren’t facts, but nonactionable puffery.

 

Uber’s Head of Communications for North America, Lane Kasselman, also made statements on Uber’s website:

 

All Uber ridesharing and livery partners must go through a rigorous background check. The three-step screening we’ve developed across the United States, which includes county, federal and multi-state checks, has set a new standard.... We apply this comprehensive and new industry standard consistently across all Uber products, including uberX.

Screening for safe drivers is just the beginning of our safety efforts. Our process includes prospective and regular checks of drivers’ motor vehicle records to ensure ongoing safe driving. Unlike the taxi industry, our background checking process and standards are consistent across the United States and often more rigorous than what is required to become a taxi driver.

 

By contrast, this statement “was clearly intended to lead and could lead a reasonable consumer to believe that an Uber ride is objectively and measurably safer than a taxi ride.”  The court noted the comparative nature of the statement and deemed “consistent” and “more rigorous” to be objective claims.

 

Plaintiffs also alleged misrepresentations about the “Safe Rides Fee,” a $1 added fee on each ride that Uber claimed “supports continued efforts to ensure the safest possible platform for Uber riders and drivers, including an industry-leading background check process.” The court found that this wasn’t puffery.  By stating that a specific amount of money charged will be going towards Uber maintaining “the safest possible platform,” the statement could lead consumers to believe that Uber was specifically using this fee for safety improvements.  Uber also argued that the Safe Rides Fee statements weren’t ads because they weren’t made for the purpose of influencing consumers to buy Uber’s services: consumers are sent a link to that statement after an Uber ride terminates. But the webpage would have been available to consumers either before or after an Uber ride, just by going to Uber’s site.

 

Uber also made safety-related statements that were repeated by journalists in news reports.  Were these advertising and promotion? The court used Gordon & Breach (not needing to note that “commercial competition” is probably gone after Lexmark, given the competitive relationship between the parties). Uber argued that each of its statements quoted in news articles are “inextricably intertwined with the reporters’ coverage” in each article, citing Boule v. Hutton, 328 F.3d 84 (2d Cir. 2003), which held that statements reported in a magazine weren’t commercial advertising or promotion.  Moreover, Uber argued that its statements weren’t commercial speech because they did more than propose a commercial transaction.

 

Ony, Inc. v. Cornerstone Therapeutics, Inc., 720 F.3d 490 (2d Cir. 2013), found that “publication and dissemination of a scientific study that had the effect of touting a company’s product is noncommercial speech and was thereby immune from the false advertising provisions of the Lanham Act.”  However, Ony treated the statements as potentially commercial; the Fifth Ciruit followed suit in Eastman Chem. Co. v. PlastiPure, Inc., 775 F.3d 230 (5th Cir. 2014), holding that disseminating scientific study results in a marketing campaign is commercial speech.  The Lanham Act thus applied more broadly than Uber claimed.

 

Here, the statements directly reached out to or addressed consumers.  Statements reported in the media included the claim that Uber “want[s] to assure all riders ...”—a direct quote from Uber’s website.  As in Eastman, “[e]ach of Uber’s statements was issued by its corporate spokesperson or on Uber’s own official website as part of a concerted campaign by the company in response to incidents that had been publicized in the media.”  Three were made by Uber’s Head of Communications for North America, one by Uber’s Senior Communications Associate, and one by Uber’s Public Policy representative.  In context, this was commercial speech with a coherent theme, as part of an effort by Uber “to influence consumers to buy defendant’s goods or services....”  The statements formed “a group of internally consistent statements in a manner similar to an advertising campaign,” but using “sophisticated advertising techniques… to transform traditional news media into a method of influencing consumers.”  The court concluded:

 

In the modern age of hybrid advertising and advertising in social media, Courts must remain vigilant in order to separate commercial from non-commercial speech, regardless of the form in which it was disseminated. Uber has previously argued for a paradigm shift regarding its business model: asserting that it should be viewed as a software company, not a transportation company. Likewise, here, the Court finds that Uber’s disputed statements, although released in traditional news media, require a paradigm shift, to evaluate the statements as commercial speech because their predominant purpose is promotional and persuasive. The evolution in business requires us to reevaluate the use of the media as advertising to understand the commercial use and significant business benefits that many companies derive from the media in today’s economy. The comments issued by Uber’s communication executives demonstrate a careful, uniform, and orchestrated message designed to encourage and facilitate the commercial use of its product and service.

 

In addition, on a motion to dismiss, the court accepted that the statements were “disseminated sufficiently to the relevant purchasing public,” the final element of “advertising or promotion.”

 

Puffery: The statement of Uber’s Senior Communications Associate read:

 

What I can tell you is that Uber takes passenger safety very seriously. We work every day to connect riders with the safest rides on the road and go above and beyond local requirements in every city we operate. Uber only partners with drivers who pass an industry-leading screening that includes a criminal background check at the county, federal and multistate level going back as far as the law allows. We also conduct ongoing reviews of drivers’ motor vehicle records during their time as an Uber partner.

For more information on what makes Uber the safest rides on the road, please see our website ...

 

This statement contained specific, measurable and concrete factual assertions that could be falsified: a factfinder could determine whether Uber used the screening described and conducted ongoing reviews of records.  Similarly, another statement claiming “Our driver partner background checks are more thorough than those of taxi [sic] in most cities and include county, state and federal screens going back seven years” was falsifiable: it mentioned specific procedures and made an explicit comparison to taxis.  Moreover, the context made its seem more fact-like: it was released to news media because of the public interest in Uber’s safety, meaning that “it would be more likely to be viewed as objective and verifiable information by the public.”  Similar statements, “We’re confident that every ride on the Uber platform is safer than a taxi,” and “We’re confident that every ride on Uber is safer than a taxi,” were also potentially quantifiable, despite the “we’re confident” intro.  “[S]tatements as to the comparative safety of a product are specific and measurable, and thus frequently considered actionable.”

 

Uber’s public policy representative also said: “Uber works with Hirease to conduct stringent background checks going back seven years, which all drivers must undergo and clear to partner with Uber. This driver [who killed a child] had a clean background check when he became an Uber partner.” These were objectively verifiable statements on which consumers could rely.  Similarly, responding to news that an Uber driver in Chicago had been previously convicted of a felony but had not been screened out by Uber’s background check process, Uber wrote: “[W]e have already taken steps to prevent this from happening again, by expanding our background check process to set new industry-leading standards ... We are sincerely sorry for this error, and want to assure all riders that we are taking the necessary steps to fix it and build the safest option for consumers.”  The first part was factual, while the second part was mere puffery.

 

For the same reasons, Texas common law unfair competition claims survived.

 

Uber’s related motion for summary judgment on the surviving claims failed.  Plaintiffs argued literal falsity and introduced expert testimony and official reports creating genuine issues of material fact on falsity/misleadingness.  For example, plaintiffs’ background check expert, the former Deputy Director of the Department of Homeland Security, Alonzo Pena, affirmed that background checks employing fingerprinting are inherently superior to background checks that do not employ fingerprinting. “[N]o statement of relative safety or of the superiority of Uber’s background checks could be true if a trier of fact found that Uber employs fundamentally inferior background check and safety practices.”  Likewise, an official Houston report suggested that Uber’s background check process fails to search across all states and counties, and leaves large gaps where criminal background information would not be detected, including Delaware, Massachusetts, South Dakota and Wyoming.

 

The court also didn’t rule on materiality; literal falsity would allow a jury to find materiality without further evidence, and also I can’t imagine that comparative safety is immaterial to consumers even if communicated implicitly.

 

Uber, inexplicably, disputed whether its advertised goods or services “travelled in interstate commerce.”  There was no disputed fact issue on the interstate nexus here. Uber “use(s) smartphones, mobile communications, credit card processing transactions, bank to bank payments, and transfers of funds to receive payments from customers and provide payments to their employees and/or drivers.” Uber’s challenged statements were published on the internet, reaching across state lines to a national and international audience.  Uber’s own interstate background checking process showed that its business involves interstate commerce, not to mention its interstate and international operations.  (Well, that’s at least $400 of lawyer time wasted.)

 

Injury: injury to plaintiffs could be presumed from a false or misleading comparative ad.

 

The court also refused to dismiss plaintiffs’ request for permanent injunctive relief.  Irreparable injury could be presumed from a showing of likely confusion, so that relief remained on the table.  (This will be cited by many a plaintiff!)

Chobani ad campaign draws Lanham Act suits

The NYT has a story here.  Interestingly, the campaign is similar to some others I've seen condemned by the NAD and even the FTC in the context of "green" claims, by focusing on the use of chlorine etc. in producing some of the ingredients in competitors' yogurt.  If the chemicals aren't present in the yogurt itself, or aren't present in amounts significant enough to affect health, then Chobani could have a problem. 

My other district court decision is a loss: LV loses parody bag case

Louis Vuitton Malletier, S.A. v. My Other Bag , Inc., No. 14-CV-3419 (S.D.N.Y. Jan. 8, 2016)

 

The Hon. Jesse Furman again demonstrates his good sense.  My Other Bag sells canvas tote bags with the text “My Other Bag . . .” on one side and drawings meant to evoke iconic handbags by luxury designers, such as Louis Vuitton, Chanel, and Fendi, on the other.  The court identified the totes, and the company name, as “a play on the classic ‘my other car . . .’ novelty bumper stickers, which can be seen on inexpensive, beat up cars across the country informing passersby — with tongue firmly in cheek — that the driver’s ‘other car’ is a Mercedes (or some other luxury car brand).”  These bumper stickers riff on expectations about car drivers and luxury cars, and MOB’s totes were “just as obviously a joke.” 

 

LV can’t take a joke, and sued for dilution, trademark infringement, and copyright infringement.  The court granted summary judgment.  MOB’s bags have drawings of various bags on them; the ones at issue here “use simplified colors, graphic lines, and patterns that resemble Louis Vuitton’s famous Toile Monogram, Monogram Multicolore, and Damier designs, but replace the interlocking ‘LV’ and ‘Louis Vuitton’ with an interlocking ‘MOB’ or ‘My Other Bag.’”  MOB says its products are “[e]co-friendly, sustainable tote bags playfully parodying the designer bags we love, but practical enough for everyday life,” and they sell for $30 and $44.  Its marketing touts the idea that high-priced designer bags are inappropriate for dirty gym clothes or groceries, but its casual canvas totes are fine for that: “[T]his luncheon worthy designer bag doesn’t fit in at the gym, BUT My Other Bag . . . DOES . . . .”

 

Dilution: An introductory note: the court says, based on statements in other cases, that the NY and federal analyses are basically the same, although NY does not require fame.  Under both laws, analysis “‘must ultimately focus on whether an association, arising from the similarity between the subject marks, impairs the distinctiveness of the famous mark’— that is, the ability of the famous mark to serve as a unique identifier.”  However, it is hard to reconcile those statements with Deere v. MTD, which very clearly would have been a defense victory under federal law given the federal exclusions.  (I have seen suggestions to the contrary but I don’t find them credible; even Hyundai-style analysis wouldn’t condemn the ad in Deere.)  Deere, of course, predated the FTDA and the TDRA, so the Deere court was not in a position to consider the initial or revised exclusions to federal dilution. 

 

Takeaway: Even in New York, with perhaps the most developed history of state-law dilution claims, courts interpret state and federal dilution law as similarly as possible.  I don’t think this is just a matter of not wanting to do two different analyses/judicial economy.  Since we don’t have any idea what dilution is, courts are understandably leery of trying to implement two different strained definitions.  I do wonder what this implies for future Deere-type cases brought under NY and federal law—arguably, given Deere’s scope, this is one of them, given that it involves competitor’s alteration of the mark. If the reasoning for keeping the analysis the same is that federal dilution law has the same justification as state dilution law (query why one requires fame and the other doesn’t, then), then even later federal law can shed light on the proper interpretation of state law, I suppose, meaning that Deere should come out differently today.  (Also, to the extent that state law tries to make non-false/misleading comparative advertising unlawful, I think it’s unconstitutional, also meaning that Deere should come out differently.)

 

OK, so LV’s theory is dilution by blurring.  MOB argued that federal law requires “use as a mark” for a dilution claim, and McCarthy agrees, but the court didn’t need to reach that issue because MOB won anyway.  First, federal law excludes fair use “other than as a designation of source for the person’s own goods or services,” including “identifying and parodying, criticizing, or commenting upon the famous mark owner or the goods or services of the famous mark owner.”  Parody is “a simple form of entertainment conveyed by juxtaposing the irreverent representation of the trademark with the idealized image created by the mark’s owner,” conveying the contradictory messages that it is and isn’t the original.

 

As a matter of law, MOB’s bags were fair use.  They communicated a lack of connection to the original producer with a joke about how this bag wasn’t a Louis Vuitton bag.  Combined with the “stylized, almost cartoonish renderings” of LV bags on the totes, the joke created “significant distance between MOB’s inexpensive workhorse totes and the expensive handbags they are meant to evoke.  LV’s exclusive image was, at least in part, the brunt of the joke—LV’s bags are treated revently to communicate status, while MOB’s totes are utilitarian.

 

LV argued that the bags weren’t really a parody, and that the company’s CEO stated that she never intended to disparage LV.  As in Hyundai, any humor was, according to LV, just part of a larger social commentary.  McCarthy doesn’t like Hyundai, and neither does Judge Furman, because the Hyundai court failed to notice the distinction between association and dilution.  But in any event, Hyundai is distinguishable: “it is self-evident that MOB did mean to say something about Louis Vuitton specifically.”  LV’s handbags are integral to the joke; that the joke is also about society’s obsession with status is not disqualifying.

 

Tommy Hilfiger Licensing, Inc. v. Nature Labs, LLC, 221 F. Supp. 2d 410 (S.D.N.Y. 2002), was a better guide.  That case blessed a pet perfume called Tommy Holedigger, which resembled a Tommy Hilfiger fragrance in name, scent, and packaging.  Though the defendant’s general partner had difficulty expressing the parodic content of his communicative message, parodies do convey a message; “[t]he message may be simply that business and product images need not always be taken too seriously; a trademark parody reminds us that we are free to laugh at the images and associations linked with the mark.” 

 

LV relied on Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 604 F.2d 200 (2d Cir. 1979), to argue that the totes couldn’t be be a parody because they didn’t need to use Louis Vuitton’s trademarks for the parody to make sense.  (The court doesn’t address the otherwise outdated/deprecated status of Dallas Cowboys Cheerleaders; wonder what effect the analysis in In re Tam would have here?)  True, MOB could use any well-known luxury handbag brand to make its points.  But, while you can talk about sex in athletics without talking about the Cowboys Cheerleaders, the tote bags here wouldn’t make any sense if they just depicted a generic handbag: “my other bag . . . is some other bag.”  At least when a parody must evoke one of a finite set to make its point, the parodist can choose; otherwise it could be excluded from all under LV’s rationale.

 

LV also argued that there couldn’t be fair use because MOB used LV’s trademarks “as a designation of source for [MOB’s] own goods.” Given the overall design of the tote bags—identical, stylized text on one side, different caricatures on the other—and the fact that the bags used a range of luxury brands, the court disagreed.  LV’s marks were the target of the joke, not the designation of source.  LV cited MOB’s CEO’s deposition where she was asked whether she agreed that the LV pictures with their markings “are depictions . . . you use in order for people to understand that the product comes from you, My Other Bag.”  She responded affirmatively: “People know that the product . . . our tote bags with those depictions come from My Other Bag.”  But that’s not an admission of use of LV’s marks to identify the source of MOB’s bags.  In context, when counsel was attempting to establish likely confusion, her sole point was that consumers weren’t likely to be confused.

 

Even if MOB were using LV’s marks as a designation of source, MOB would still win summary judgment, because association caused by parody strengthens the uniqueness of a famous mark, rather than blurring it.  Association is necessary to, but not sufficient for, blurring.  The statute explicitly requires a likelihood that the association “impairs the distinctiveness of the famous mark.”  Haute Diggity Dog persuasively explains why parody is unlikely to do so—parody requires the distinctiveness of the famous mark to be maintained.  The mimicry involved in parody is very different from hypothetical “Louis Vuitton aspirin tablets.”

 

Trademark infringement: also a loser, for many of the same reasons.  The strength of LV’s marks, in a parody context, made confusion less likely, so the strength factor favored MOB or at most was neutral.  Similarity also didn’t favor LV given the presence of joke signals in the cartoonish image, the text, and the workhorse style of the canvas bag.  Proximity of the products/bridging the gap favored MOB because LV isn’t going to make cheap canvas bags, though it does make “casual” and canvas bags. Its handbags cost hundreds or thousands of dollars, and were sold exclusively in LV’s stores and on its website.  MOB’s totes are cheaper and sold elsewhere—“in no meaningful sense ‘competitive’ with Louis Vuitton’s designer handbags.” 

 

Nor was there evidence of actual confusion.  LV pointed to a handful of descriptions of the MOB bags as “LV” bags.  Even taking those literally, a handful wasn’t enough to show likely confusion, given the fact that the bags had been on the market for several years.  But there was no reason to take them literally, since the speakers were plainly using “LV” as a shorthand to describe the designs evoking LV bags: they showed that consumers were getting the joke.

 

MOB’s intent to parody wasn’t bad faith.  Its benefit from using the marks arose from the humorous association, not from confusion.  The sad-sack 2d Circuit “quality” factor, which should really just be put out of its misery, also didn’t favor LV, because LV didn’t show that the lower quality of MOB totes risked tarnishing its mark, nor were the totes of the same quality as LV bags and thus more likely to cause confusion.  Consumer sophistication/degree of care favored MOB because of the substantial price of LV bags, and because “MOB’s gimmick would be obvious to even its most unsophisticated customers, as one whole side of the tote bag is blank except for the words ‘My Other Bag . . . .’”  The obviousness of the joke would protect even a minimally prudent consumer.

 

LV hypothesized post-sale confusion among observers who saw only one side of the bag and didn’t notice the replacement of LV with MOB in the logo.  But the Second Circuit generally treats post-sale confusion as actionable only in the context of “knockoffs.”  Plus, “no reasonable observer is likely to infer from the cartoon-like bag-within-the-bag design and the juxtaposition of MOB’s basic, canvas tote with the exclusive, luxury status of Louis Vuitton that Louis Vuitton sponsors or otherwise approves of MOB’s tote bags.”  Furthermore, likely confusion isn’t assessed using “a hypothetical scenario that is most likely to result in confusion.” The overall impression of reasonable consumers is key, and the overall impression/context certainly includes both sides of the bag.

 

Copyright infringement: Nope, this couldn’t substitute for trademark.  Transformative uses can be commercial, and usually copy popular, expressive works.  MOB used a reasonable amount in relation to its aim.  “Finally, although MOB’s totes are, in an abstract sense, in the same market as Louis Vuitton’s handbags, its totes do not ‘serve[] as a market replacement for’ Louis Vuitton’s bags in a way that would make ‘it likely that cognizable market harm to [Louis Vuitton] will occur.’”

Can a "no-haggle" offer include negotiation? maybe not

Dependable Sales & Service, Inc. v. Truecar, Inc., No. 15-cv-1742, 2016 WL 79992 (S.D.N.Y. Jan. 6, 2016)

 

Plaintiffs, 162 auto dealerships, sued TrueCar for false advertising under state and federal law.  TrueCar’s website tells prospective car buyers search that it has more than 9,000 affiliated auto dealerships nationwide and that more than 500,000 customers have purchased vehicles from “TrueCar Certified Dealers.”   Dealers’ identities are revealed only after consumers enter their names and contact information, at which point dealers contact consumers to solicit them. “As a result, instead of taking the ‘haggling’ out of car sales – as TrueCar advertises – TrueCar’s business model facilitates and encourages haggling.”  Consumers allegedly may ultimately pay prices higher than those offered through the TrueCar website.  Likewise, consumers may download a “Guaranteed Savings Certificate,” which allegedly doesn’t accurately reflect the eventual price TrueCar customers pay.

 

The court granted in part and denied in part TrueCar’s motion to dismiss based on lack of falsity.  First, TrueCar argued that its ads promising a haggle-free, negotiation-free buying experience weren’t false.  Example claims: “There’s zero negotiation ....,” “You get a negotiation free guaranteed savings and hassle free buying experience,” and “Because I used TrueCar there was no haggling about the price.”  However, plaintiffs alleged that TrueCar instead facilitates dealership solicitations to consumers, the purpose of which is to “haggle” and negotiate over the vehicle purchase.

 

TrueCar argued that “TrueCar’s user experience does not involve negotiation,” and that “the customer is immediately entitled to the Guaranteed Savings with the click of a mouse,” as “a lump-sum discount.”  This was a factual issue that couldn’t be resolved on a motion to dismiss. Nor could any effects of TrueCar’s website disclaimer be assessed.  The disclaimer stated:

  

Guaranteed Savings represents the amount that a TrueCar Certified Dealer selected by you guarantees that you will save off the Manufacturers’ Suggested Retail Price (’MSRP’) on any in-stock vehicle that is the same make, model, and trim as your Ideal Vehicle. The Guaranteed Savings is based on a vehicle without factory or dealer installed options and includes generally available manufacturer incentives. ... Each dealer sets its own pricing. Your actual purchase price is negotiated between you and the dealer.”

 

“While a disclaimer may be so plain, clear and conspicuous as to bar a claim as a matter of law, this is not such a case.”  There was a factual question whether “[t]he few words of disclaimer are lost when the ads are considered as a whole” or were effective.

 

Nor could the court determine at this time that the claims were puffery.  TrueCar argued that “haggling” was an opinion-based concept.  But there were conflicting definitions, which the court couldn’t resolve on the pleadings.  TrueCar cited one definition of haggle as to “bargain in a petty, quibbling, and naggingly quarrelsome manner,” while plaintiffs’ definition was “to talk or argue with someone especially in order to agree on a price.” The complaint plausibly alleged that lay consumers understood “no haggle” to mean that the given price is the actual price, and that no negotiation is required.  (What does the presence of CarMax in the market mean for consumer expectations?)

 

Other supporting allegations also made the puffery defense inapposite at this stage: TrueCar made other claims such as “No Negotiation,” “No Surprises,” “No hidden costs or surprise fees. Ever.,” “the negotiation-free car buying and selling mobile marketplace,” “we provide true up front pricing information and a network of trusted dealers that guarantee savings without negotiation,” “it’s negotiation free guaranteed savings and a hassle free buying experience,” and “the negotiation-free car-buying platform.” TrueCar didn’t explain how these statements concerning negotiation were mere puffery.

 

However, the court dismissed claims going to alleged “bait and switch” tactics.  Plaintiffs alleged that the ads led consumers to think they could get a specific car at a guaranteed price. But not all TrueCar-affiliated dealers who contact consumers have the desired make and model in their inventory, and instead offered different vehicles, amounting to bait and switch.  But the complaint didn’t specifically identify the false statements that supported a bait and switch claim.

 

TrueCar’s ads also allegedly misled consumers into believing that they could learn a vehicle’s “factory invoice” price through TrueCar, and that they would be able to buy a vehicle for less than the amount originally paid by the dealer. However, the advertised “factory invoice” price allegedly didn’t reflect rebates, incentives and other discounts that the manufacturer provided to the dealer. One ad, for example, had a graph identifying a “TrueCar Price” of $24,450, an “Average Paid” figure of $25,386, a “Factory Invoice” price of $25,970 and a Manufacturers’ Suggested Retail Price of $26,445. The accompanying text, “Information is Power,” said, “As a data company, we study millions of purchase transactions every year. ... Within minutes, you can get upfront pricing information from TrueCar Certified Dealers and know how those prices compare to the current market.”

 

TrueCar argued that any reasonable consumer would believe that dealerships profit from their auto sales. But plaintiffs didn’t claim that TrueCar failed to disclose that fact; they alleged that the “factory invoice” price cited in advertisements was misleadingly high and misled consumers about the extent of their purported savings.  TrueCar also cited a webpage describing factory invoices for the Toyota Corolla, which said that the factory invoice “does not include discounts, dealer incentives, or holdbacks ....” On a motion to dismiss, the court couldn’t resolve whether this definition cured any misleading ad.  Finally, TrueCar argued that the graph wasn’t misleading “because TrueCar users on occasion will pay less than the factory invoice price.” Not on a motion to dismiss they don’t.

The court dismissed a few more claims, one about financing—the ads allegedly led consumers to believe that TrueCar would calculate the financing terms of a vehicle purchase, including monthly payments. TrueCar’s website contains a feature that calculates an “Estimated Loan Payment” for the particular car selected by the consumer, but it displays financing terms that “are not available to all consumers.” But the express “Estimated” showed that TrueCar wasn’t offering actual financing terms.  (But if they aren’t “estimates” of what someone with bad credit would pay, why is “estimated” nonfalse?)

 

The court also dismissed claims based on statements about transparency, such as “you can trust that everything is upfront and out in the open. No hidden costs or surprise fees.” Plaintiffs alleged that TrueCar conceals costs and fees, because dealerships affiliated with TrueCar paid TrueCar for every car sold, and those fees are inevitably passed to consumers. That didn’t plausibly allege that claims of no hidden costs/surprise fees were false.  A fee that’s included in a price quoted to a consumer isn’t hidden or surprising.

 

Finally, plaintiffs alleged that TrueCar’s ads were false because they indicated that consumers would receive the full discount advertised by TrueCar.  But some rebates were only available to certain customers, such as loyalty rebates or rebates offered to recent college graduates or members of the military. The complaint alleged that some TrueCar customers expressed confusion after receiving the impression that they would be eligible for all rebates advertised by TrueCar. Again, the complaint didn’t sufficiently identify the relevant ads to put TrueCar on notice of the claims against it.

 

Finally, the court refused to dismiss the claims for failure to allege injury.  TrueCar argued that, even if consumers were misled, they knew the truth before they bought their cars.  If a consumer tried a non-matching car and decided to buy it, the deception would have dissipated.  The court rejected this argument as going to the merits.  It is also legally irrelevant, I think.  I’ll let the Supreme Court explain:

 

We find an especially strong similarity between the present case and those cases in which a seller induces the public to purchase an arguably good product by misrepresenting his line of business, by concealing the fact that the product is reprocessed, or by misappropriating another's trademark. In each the seller has used a misrepresentation to break down what he regards to be an annoying or irrational habit of the buying public—the preference for particular manufacturers or known brands regardless of a product's actual qualities, the prejudice against reprocessed goods, and the desire for verification of a product claim. In each case the seller reasons that when the habit is broken the buyer will be satisfied with the performance of the product he receives. Yet, a misrepresentation has been used to break the habit and, as was stated in Algoma Lumber, a misrepresentation for such an end is not permitted.

Seen on the streets of NYC

Photo by Mark Lemley:

Does it matter whether Winebook sells both wine and books?

AALS panel on the scope of IP rights

Intellectual Property – Interpreting the Scope of IP Rights

Moderator: Zahr Said, University of Washington School of Law

 

Margaret-Jane Radin, The University of Michigan Law School: Patent scope. The problem of describing innovation (thing in the world) in words. Philosophical problem of extensive lineage; judges often don’t know it’s a problem.  Related: problem of big picture economic efficiency. If that’s what we want, what are patent rationales?  Incentivizing/ex post—coordination of future innovation, signaling market.  Recent discussions about notice: notice to public & competitors is important, but patent claims are in words and thus tempting analogy b/t notice in words and fences is flawed.  Longstanding puzzle; can’t be solved with analogies or advice to be clearer in claim drafting. 

 

Costs/Benefit balance of large rights may change over time, and that flexibility may be a good idea.  Dilemma b/t calibrating rights properly and trying to make rights clear, and both are parts of the efficiency calculation.  Some judges gravitate intuitively to one pole or the other.  Even with philosophy the dilemma would still be there.

 

Philips v. AWH: Fed. Cir. en banc.  Interpretation focused on entire text: claim, specification, and prosecution history.  They arrive at unified guideline, but interpretive guidelines are only useful for notice if they generate more predictable outcomes, and it didn’t.  Judges don’t all get the same result—the majority agreed on the interpretive standard, but disagreed on the mandated result in this particular case.  Suppose something was indescribable at the time of the patent, but not at the time of the litigation—is it covered in the patent?  Can be.  But who is doing the describing?  Usually the attorney, not the inventor. But that’s an issue the SCt doesn’t go near; we don’t want anyone to think that drafters are co-inventors.  Festo introduced the word of describability, but older cases often understood the idea of emergent inventions for which language develops later.  The idea of the essential nature of the invention persists; a survival of central claiming, which is supposedly gone.

 

Mark A. Lemley, Stanford Law School: co-authored paper with Mark McKenna.  We generally divide IP into validity doctrines, infringement doctrines, defenses.  Result: We apply different rules at different times and sometimes different actors: judge, jury, PTO.  Fact that we’ve divided IP into different pieces creates the “nose of wax” problem: you say at T1 that a patent is really broad when it benefits you to do so and at T2 that it is really narrow when it benefits you.  It produces bad result because courts don’t at any time take account of the scope of an IP right.  We ask “is this IP right invalid b/c it’s too broad” and “is the thing D is doing sufficiently similar to what P is doing” but generally not in an integrated proceeding “is the thing D is doing that P is doing the thing that can be controlled under this right?” 

 

Part of this: (1)  we generally allow fragmented infringement.  We can point to some sub-piece of product or book that’s sufficiently similar.  (2) We’ve also expanded subject matter to cover things that are supposed to be protectable only in part—utilitarian articles for ©; product configuration for TM.  But (3) jury has taken on increasing role in resolving IP disputes. Often delegate legal decisions about proper scope of right to the jury in the guise of fact questions about similarity, and often with no guidance to the jury about that.

 

Example: design patents now allowed to cover prior art and functional aspects. We used to look at prior art, design patent, and accused infringer together, but now we’ve separated them.  Said functionality is extremely narrow; limited/narrowed prior art. But then allow the patents upheld under these standards to go to jury under ordinary observer standard.  That’s fine if the thing that makes the thing that makes it sufficiently similar is the thing we want to protect. But if the thing that makes it sufficiently similar is prior art or functional, that’s bad.  Most recent example: Apple/Samsung design patent case, where the key similarities are also in prior art, but jury doesn’t see them at the same time.  Same problem occurs in trade dress cases—Reynolds v. Handifoil case.  They are different in many respects, but court finds striking similarity: both boxes say heavy duty, nonstick, Made in USA, and list square footage in the box. Those are similarities, but not similarities in what the law is supposed to protect.

 

© has similar problems, even though it at least purports to filter out unprotectable elements.  Right now we filter for actual copying, but allow jury to load them back in to determine whether copying is so great as to be unlawful, even though that risks jury relying on those unprotectable elements.  “I need somebody to love” as lyric whose reappearance is enough to go to the jury in Bieber case; also infects jury in Blurred Lines case where jury hears songs even though it’s supposed to focus on the musical work and ignore intentional but unprotectable stylistic similarities in performance.

 

Court plays blackjack: IP owners want to get as much as possible, but if they claim too much the right may be invalidated.  This is good for gaming, but not good for IP, where we really want to get scope right.  Markman has problems, but it’s good b/c it makes parties go into a room and come up with a scope—what the patent covers and what it doesn’t—and that limits the nose of wax problem. We could do more explicit scope proceedings.  That would cause the court to focus on what we should be thinking about when we think about IP: how much protection does the law intend to provide, and are you seeking more than that?

 

Eva E. Subotnik, St. John’s University School of Law: Derivative works: what are they?  For a time, appellate courts have avoided interpretations bearing on scope that ask for anything quantitative, as opposed to qualitative.  A sea of discarded tests.  Examine the roadkill to see the path we’re on.  (I have questions about this metaphor.)

 

How much of the plagiarist’s work the plagiarist didn’t pirate: that would have suggested a brick by brick method.

 

Feist: Downplays both sweat and binary copied/not copied distinction in favor of a more general approach.  Feist decides validity but is still relevant; QP was about scope, and also case sent the tone that clear-cut metrics were out and qualitative metrics were in.

 

Similar issues about what’s required for a derivative work.  Gracen: 7^th Cir. required sufficiently gross difference b/t derivative and underlying work to render the derivative work protectable to avoid entangling subsequent artists in problems.  “Gross” signals a quantitative method. But more recently, in Schrock, the 7^th Circuit capitulated and said it would apply a unitary standard.  Now we look for sufficient nontrivial expressive variation to make it distinguishable from the underlying work in some meaningful way. Reaffirms qualitative analysis.  Puts a lot of pressure on infringement analysis to ensure the scope of rights in underlying work isn’t unduly curtailed.

 

Fair use: Cambridge U. Press v. Georgia: DCt used a rule of thumb about amount used: 10% or one chapter where book had more than ten chapters was presumptively fair use.  Could wrongly signal to authors that use of more than 10% would always be protected, but that wasn’t the 11^th Circuit’s problem—held that improper even as a starting point, b/c case by case/work by work approach was required under Campbell.  Cariou v. Prince also downplayed quantitative approach/intention of artist and said transformativeness had to be judged by reasonable observer. But the basis for remand of remaining 5 works was incredibly murky and provided no guidance to judge.

 

We’re seeing some pushback in quantitative thinking about scope.  Garcia v. Google en banc: Fleeting performance on film, which would bear on filmmakers’ © scope.  En banc majority referred multiple times to brevity of performance, but also referred to smallness of claims in its policy analysis—cast of thousands would become © of thousands.  Cariou also did refer to intent in terms of Prince’s “drastically different approach,” and also did remand on 5 works which did seem to be influenced by how much he “took” and didn’t change.  7^th Circuit’s retreat from transformativeness in Kienitz also may represent a retreat from qualitative considerations. 

 

This retreat is a good thing: more transparent.  [Not sure the decided cases bear out this transparency.  E.g., the Georgia State district court approach was much more predictable as a rule.  The Garcia approach is unpredictable if considered as a rule about amount rather than as a rule about performers versus filmmakers.  Cariou is, as Subotnik rightly notes, “murky” in its rationale for drawing a line between different prints (a) at all and (b) where it does.  And Kienitz, ugh.]

 

Amy M. Adler, New York University School of Law: Why transformativeness has proved so disastrous in the realm of contemporary art, even though hailed as a savior elsewhere. Requires a court to adjudicate new meaning/purpose, which is a failed enterprise.  Three different ways to find meaning: intent; aesthetics; the “reasonable” viewer—each is deeply problematic in assumptions about contemporary art, b/c the assumptions are rejected by contemporary art itself.  Copying is now a basic tool of art.

 

Against intent: freeing art from the artist.  Prince (for whom she consulted) was a perfect case where an artist disclaimed any intent to transform the work.  Intent rose in importance out of the Koons cases; Jeff Koons learned how to testify in a way that courts liked about his intent to offer “new insights.”  Intent is bad, among other things, because of the difficulty of describing images in words—familiar in First Amendment, cultural theory.  WJT Mitchell: “Whatever images are, ideas are something else.”  Richard Serra, Tilted Arc case—one reason he lost was his inability to describe the meaning of the work in a digestible way.  Courts like words b/c it’s familiar, old-fashioned, romantic idea of art.  SCt cited Jackson Pollock as artist—but we understand the work as an outpouring of the artist’s soul in a moment of expression, but that’s an old-fashioned way of thinking about the relationship b/t intent and meaning. Many artists reject it.  Andy Warhol, asked about meaning: “Why don’t you ask my assistant Gerry some questions? He did a lot of my paintings.”  Embracing artist’s lack of control over his own meaning.  Technology may have co-authorship.

 

It’s very hard to figure out intent given that authorship is quite multiple: documentary as example.  Famous image won Pulitzer Prize of naked girl on fire from napalm; it was cropped carefully from the image he actually took (cutting off a photographer whose presence in the frame raised uncomfortable questions).  Photographer didn’t know this was a key photo; an unnamed editor picked it out of the roll of film and cropped it.  He still doesn’t know why this image was picked.  Picking images is now a key skill in our digital culture.  Shepard Fairey: say what you like, but he knew what image to steal.

 

Also has similar arguments against aesthetics and against the reasonable observer in the broader paper.  Has begun to believe in Kienitz: look strictly at the market, which would be more protective of contemporary art.  [The racial and gender politics of this move trouble me, given who is more likely to get recognized as an artist by the market.]

 

Kevin Emerson Collins, Washington University in St. Louis School of Law: Patent scope should be both/and not either/or: scope is a philosophical issue, and understanding that can allow us to attune patent scope to the world of commerce.

 

Philosophy of language: what is meaning of “meaning”? Distinction between denotational meaning/reference and “sense.”  Meaning found within word-to-world relationships is denotational/referential meaning.  Look at all the things referred to when we say “dog” and the word “dog.”  Ideational meaning/sense: words gain meaning through another mechanism, the concept of the mind in anyone who understands the expression. Meaning is found in word-to-word relationships (dogs have four legs, sense of smell, member of class mammals). You don’t actually have to connect words to things in the world to get meaning.  Identification requires a two-step process: determine meaning of descriptive language, then determine whether the thing in the world meets that description.

 

Everyday usage: these meanings are interdependent; don’t need to clarify. But that’s not true in claim construction.  In patent we fix meaning on a particular date: as PHOSITA would understand it on the date of filing (or invention, there’s confusion).  This is an artifice that doesn’t exist in everyday meaning.  So are we fixing the denotational or ideational meaning?  That affects the ability of later-arising tech to fit in.  To fix denotational meaning, you’d idnetify the set of possible objects/actions that PHOSITA can imagine on that date; then if new tech arose, it wouldn’t be within the set; that would change the “meaning” of the fixed-time term.  But if we choose ideational meaning, you stabilize the network of linguistic constructs. You don’t have to fix the set of things to which the words refer—ideational meaning remains rigidly fixed as scope of things in the world expands.

 

Courts usually use ideational meaning, but they switch to denotational form time to time, when they believe that the after developed tech shouldn’t infringe.  Should this be a policy lever for the courts?  He thinks yes, at least if it’s explicit.

 

Temporal paradox: enablement requires full scope of claim to be enabled by specification as of th etime of filing. But Merges argues that meaning that determines infringement isn’t fixed until time of infringement. Fully enabled claims thus grow in literal scope over time.  Thus claim meaning isn’t fixed at time of filing. Difficulties: Creates instability, lack of ex ante notice.  Contra black letter law of claim construction.   If we understand ideational/denotational meaning, we can resolve this paradox more simply. Enablement requires disclosure commensurate w/denotational meaning as of time of filing, but we allow ideational meaning to control infringement. Claims remain fully enabled even as they grow b/c denotational meaning didn’t change over time.

 

Said: what’s the expert’s role in these various approaches?  If it’s a policy lever as Collins says, who determines that?

 

Adler notes dramatic difference in what expert would think of contemporary art and what ordinary viewer would think.  Two images that are visually identical have dramatically different meaning according to art experts, but “reasonable” viewer might be different (reasonable compared to what?).  How much do we want to defer to standards of the art world?  Issues of elitism—over and underinclusiveness.  People who aren’t famous: how do we deal with them?  But she prefers experts b/c art world is pretty unreasonable.

 

Lemley: didn’t recognize in either description by Collins the way he makes meaning—if he sees a new animal, he uses an expansive or relational view closer to denotational meaning—does this look enough like what I know to be a dog?  Central claiming-ish: how far is this from lodestar? Rather than is it within the universe of things that are already known in some ways to be dogs.

 

Collins: There is discussion about whether the set is determined by prototypes or full descriptions. But it’s unclear what we do with prototype/archetype theory of meaning when we’re trying to fix meaning. The only way to do that is to figure out what the criteria were that we were using at that time to identify members of the category.  (Which may be a complex probabalistic assessment where high conformance with some criteria can be enough even when other criteria are not satisfied, e.g., what is a “game”?)

 

Lemley: or give up on the idea of fixing meaning.

 

Lemley expresses concern that under Adler’s market standard, the winners win and the losers lose—if I want to win, I’d better be recognized in the art market before I get sued.

 

Adler: the art market is brand-driven.  Lemley won’t sell b/c he’s Lemley, not Prince.  [I think that’s his point.]

 

Lemley: if filtration a la Altai were applied across the board instead of just to computer programs, the world would be a much better place.

 

Fred Yen: Isn’t the decision to look at the market value of a work an aesthetic decision?  And in any event, don’t market participants have to use aesthetic concepts to set a market value on the work, so we’re just going back to their aesthetic theories?  [I agree.]

 

Adler: the intertwining of economics and aesthetics is a definitional feature of the current art market.  That’s a very deep issue; probably right.

Transformative work of the day, comics edition

Icons Unmasked, Alex Solis.  I particularly like the historicization of the various animated figures.

Failure to show harm dooms many claims based on negative press release

Synygy, Inc. v. ZS Associates, Inc., --- F.Supp.3d ----, 2015 WL 5818510, No. 10-4274 (E.D. Pa. July 30, 2015)

 

Wow, this one’s been going on for a while.  Note that evidence of damages is key to the traditional, non-commercial-speech bounded torts, but not to the Lanham Act false advertising claim.

 

Synygy and ZS compete in the marketplace for incentive compensation or “IC” services. In 2007, Synygy sued ZS, and in 2009 it amended the complaint, adding, among other things, a theory of copyright infringement.  Synygy also issued a press release.  The CEO, in an email to marketing staff, explained that “[t]he goal ... is to get our prospects and clients to have pity on us and to believe that we are right and ZS is wrong.” The press release was titled “Synygy Files Suit Against ZS Associates for Copyright Infringement and Misappropriation of Intellectual Property,” and it went on in that vein. A quote from the CEO said, “The lawsuit we filed today contends that ZS knowingly copied our software and other confidential information with the intent to use our intellectual property in direct competition with us. Our position is that ZS continues to use our software and other confidential information, causing us to lose substantial revenue, profit, and company valuation, while they profit from its use.” The Synygy press release was republished on websites such as Reuters, Yahoo Finance and Intellectual Property Today.

 

ZS issued its own press release saying that Syzygy’s allegations had no merit.  The press release cost ZS $5100 from a PR firm.  ZS argued that it had to reassure a client about its software, creating “a certain amount of discomfort with the client that we had to resolve.”  ZS “had to include language in its contract that specified that in the event that the Javelin software became unavailable that [ZS] would still have other systems as backup systems available.”  ZS’s revenue from work for this client increased after this event.  Likewise, ZS had to reassure another “concerned” client and direct it to ZS’s press release.  However, ZS did enter into contracts with that client.

 

ZS argued that the press release was defamatory, commercially disparaging, and in violation of the Lanham Act. An expert witness, Dr. Richard Gering, concluded that “ZS suffered economic damages in the form of internal costs of ZS’ personnel and fees paid to [the PR firm]” of $76,753, for damage control.

 

Defmation: Although the court previously found that “there is sufficient evidence of copying to require that Synygy’s copyright claim with respect to the incentive compensation report scorecards be submitted to a jury,” that didn’t mean that it was true that, as accused in the press release, ZS “knowingly and improperly copied and misappropriated components of Synygy’s sales compensation software and other intellectual property.”

 

However, ZS didn’t show damages.  Starting with defamation per se: “Statements by a defendant imputing to the plaintiff ... conduct incompatible with the plaintiff’s business constitute slander per se.” With such statements, Pennsylvania law holds that “only general damages, i.e., proof that one’s reputation was actually affected by defamation or that one suffered personal humiliation, or both, must be proven; special damages, i.e., out-of-pocket expenses borne by the plaintiff due to the defamation, need not be proven.”  Pennsylvania ordinarily doesn’t allow presumed damages even in cases of defamation per se, unless actual malice is shown.  (The court noted that it didn’t think that corporations should be eligible to claim defamation per se.  Synygy, Inc. v. Scott–Levin, Inc., 51 F.Supp.2d 570, 581 (E.D. Pa.1999) (“A corporation ... cannot be embarrassed or humiliated. A corporation’s analogue to humiliation would be damage to reputation—an injury that should translate into a pecuniary loss. If a corporation cannot point to loss of revenues or profits, for what are we compensating it? Should the law allow corporations to avoid showing special harm by taking advantage of an exception so clearly created to protect individuals? The rule of defamation per se as it applies to corporations has outrun its reason.”), aff’d sub nom. Synygy, Inc. v. Scott–Levin, 229 F.3d 1139 (3d Cir. 2000)).

 

Actual malice requires at least reckless disregard for the truth, meaning that Synygy either “in fact entertained serious doubts as to truth of” the Synygy press release, or had a “high degree of awareness of ... probable falsity.” “[O]bjective circumstantial evidence” may be sufficient to show actual malice. There was insufficient evidence of actual malice here.  The CEO testified that he didn’t know how long it had taken to write the software macros, despite having been quoted in the Synygy press release as saying that Synygy’s software was the result of “many years” of investment in product development.  Though he didn’t have personal knowledge of the development time, that wasn’t evidence that he knew that his statement that ZS continued to use misappropriated software was false or entertained serious doubts as to its truth.  At most, his testimony could show negligence.  Nor did emails showing a desire to portray Synygy as a victim show malice—personal spite, ill will, and intention to injure are not “actual malice,” a term of art.  The CEO wrote that the “goal is to get our prospects and clients to have pity on us and to believe that we are right and ZS is wrong”; that his “goal [was] to create a public battle and put all companies on notice that ZS cannot be trusted”; and that “I want Synygy to be perceived in the press as the ‘good guy’ which has been wronged by the ‘bad guy.’ I would want our current clients to empathize with us and our former clients to be concerned that they might be dragged into the legal mess.”  Given the record, these emails were just as plausibly expressing the CEO’s firmly held belief that ZS had in fact wronged Synygy.

 

Given the unavailability of presumed damages, there wasn’t enough evidence of general damages, defined as “proof that one’s reputation was actually affected by the slander, or that [the plaintiff] suffered personal humiliation, or both.”  Such damage must be measured by the perception of others, not that of the plaintiff itself, because reputation “is the estimation in which one’s character is held by his neighbors or associates.”  Although ZS presented evidence that the Synygy press release prompted inquiries from customers, it didn’t provide testimony from any employee of those customers, or from any third party who “altered its opinion of ZS as a result of the Synygy press release.”  Even assuming that ZS employees’ testimony was not hearsay, that wasn’t enough.  Although the testimony showed that the Synygy press release prompted “many more discussions” between ZS and identified customers, ultimately relations continued and grew.  ZS didn’t identify any cancelled sales or sales process from the press release.  No reasonable jury could conclude that the Synygy press release had the requisite reputational effect.

 

Even if ZS could show general damages through this evidence, it wouldn’t suffice to show special damages, which are dollar-denominated losses.  ZS couldn’t satisfy its burden by relying solely on evidence of remediation costs, as its expert calculated.  Such costs might be recoverable once liability for defamation was established, but couldn’t be used to establish defamation. “[S]pecial harm must result from the conduct of a person other than the defamer or the one defamed and must be legally caused by the defamation.” If ZS’s own expenditures were enough, any internal response to an allegedly defamatory publication would satisfy the standard.

 

This conclusion also defeated the cause of action for commercial disparagement, which requires “pecuniary loss.” Mitigation costs aren’t sufficient, “because unless other pecuniary loss was occasioned by the [press release]], the ‘rehabilitation’ was not reasonably necessary.”

 

As for the Lanham Act claim, it was possible that the press release was literally false.  If ZS proved literal falsity at trial, it would be entitled to a presumption of actual deception presumption and appropriate injunctive relief.  But monetary damages require proof of actual deception, even in literal falsity cases; individualized loss of sales need not be shown, but some customer reliance must be.  That usually requires a consumer survey, which wasn’t present here.  Nor was any other appropriate evidence.  ZS’s principal testified that the director of sales operations of a pharma company showed him a copy of the Syzygy press release and asked for assurances that ZS could provide the relevant work in the event the accused software became unavailable.  But this was inadmissible hearsay [not state of mind evidence?].  In any event, that wasn’t evidence of a tendency to cause a substantial portion of consumers to believe that ZS copied the software.  (Not clear to me that substantial portion is the right measure once we’ve established literal falsity and are just looking for damages—if some number of consumers are affected, wouldn’t that be enough, especially in a smaller market?  But that doesn’t matter here, since it seems that the assurances were duly provided.)

Plaque buildup: Rosa Parks foundation loses publicity case

Rosa & Raymond Parks Institute for Self Development v. Target Corp., No. 15-10880 (11th Cir. Jan. 4, 2016)

 

[Long description of Rosa Parks’ role in the Montgomery Bus Boycott and iconic status for the civil rights movement omitted, as well as details about the targeted biographies—the critical praise for them, their educational value for children, the star status of those who starred in the biopic, etc.]  The striking features of this case: (1) Somebody thought it made sense to sue Target for violating the right of publicity by selling biographical books, movies, and a plaque with an inspirational quote on it.  (2) There is simply no analysis of the proper boundaries of the right of publicity, because how could there be?  All we know is that Michigan common law, guided by the Michigan Constitution (interpreted in pari materia with the First Amendment for these purposes), grants a qualified privilege to speech about matters of public interest, and Rosa Parks is of public interest.

 

The only work that merits detailed description, because books and movies are just different, is a “collage-styled plaque that included, among other items, a picture of Parks, alongside Dr. Martin Luther King, Jr.”  The plaque’s title was “Civil Rights.” Besides Parks’s photograph and a statement of the years that she lived, the plaque included the word, “CHANGE”; a photograph and diagram of the bus where Parks “threw down the Civil Rights Movement gauntlet”; and a picture of Parks’ later-awarded Congressional Gold Medal.  The statement, “People always say that I didn’t give up my seat because I was tired, but that isn’t true. I was not tired physically. . . [.] I was not old . . . [.] I was forty two. No, the only tired I was, was tired of giving in,” was overlaid over the picture of Parks and Dr. King. 

 

The court explains that a “professional artist,” Stephanie Workman Marrott, designed the plaque to “tell[] a story about civil rights in America . . . [to] describe important aspects of American history and convey a message about those events.” She stated that her decision to “include[] the name and image of Rosa Parks, as well as an image of the Montgomery bus and the word ‘CHANGE,’ was in order to tell the story of Rosa Parks and the civil rights movement in a way that would convey an inspirational message about standing up for what you believe is right and what you believe in.”

 

The biographies were all “bona fide works of non-fiction discussing Parks and her role in the Civil Rights Movement,” and there was also a fictionalized biography “meant to introduce children to the importance of Parks,” also concerning a matter of public interest. Likewise, the plaque contained images, dates, and statements “related to Parks and the Civil Rights Movement, in an effort to convey a message concerning Parks, her courage, and the results of her strength.”

Plaintiff didn’t make any argument about why the qualified privilege wouldn’t apply to these works:

 

The use of Rosa Parks’s name and likeness in the books, movie, and plaque is necessary to chronicling and discussing the history of the Civil Rights Movement—matters quintessentially embraced and protected by Michigan’s qualified privilege. Indeed, it is difficult to conceive of a discussion of the Civil Rights Movement without reference to Parks and her role in it. And Michigan law does not make discussion of these topics of public concern contingent on paying a fee.

 

We need a federal anti-SLAPP law and a Supreme Court ruling on the right of publicity to guard against these claims, which are only ridiculous because lower courts continue to discriminate against video games.