Good article on gender and privacy

Not a Mackinnon-style critique of privacy; rather it’s an essay by Kendra Albert about privacy anxieties being played out on the bodies of women (remember also that dad who shot the drone because he was worried about it spying on his daughter?).  Albert asks the Woolf question: what about the voices of the women involved?

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TM/right of publicity mismatch claims another video game victim

Virag, SRL v. Sony Computer Entertainment America LLC, No.
3:15-cv-01729 (N.D. Cal. Aug. 21, 2015)
 
In yet another demonstration of the ridiculous mismatch
between right of publicity law and trademark law, Sony wins dismissal of
trademark claims for its use of a flooring company’s mark on a sign in its
racing game, but a claim of a right of publicity violation based on the
argument that the mark “personifies” the company’s principal survives,
including a claim for punitive damages for that alleged violation.
 
Virag is a successful Italian company in the commercial
flooring business.  Mirco Virag is one of
its owners and a professional racing driver with a number of victories on the
European Rally Circuit; he’s driven a Virag-sponsored car in the Rally of Monza
race in Monza, Italy.   Virag’s mark is
displayed on a bridge over the Monza track. 
Allegedly, in the international racing world, the Virag mark has become
a “personification” of Mirco Virag.
 
Sony makes race car driving simulation games under the name “Gran
Turismo.”  Gran Turismo 5 and 6 included
a simulated version of the Monza track, including the Virag mark on the bridge.  The games have sold over 13 million copies.  Virag and Mirco Virag allegedly received
negative feedback from Virag customers about the appearance of the Virag mark
in the games.
 
Sony allegedly excluded some other marks that appear at the
Monza Track from the game, but allegedly intentionally incorporated Virag’s
mark to create a false impression of sponsorship.  (Sigh.) 
Sony also got licenses or authorization from other mark owners to use
their marks, but not from Virag.  This
appropriation allegedly generated millions of dollars in revenue.  (Note that false advertising plaintiffs get
kicked out on the pleadings for making such ridiculous claims of damages.)
 
The Virag company’s right of publicity claim: A corporation
lacks a right of publicity.  No case
allows it, though groups of people may have rights of publicity they collectively
assign to a corporation.  Use of a mark
may implicate a real human being’s right of publicity if the mark identifies
that human being, but that doesn’t give the corporate markholder a right of
publicity in itself.
 
Mirco Virag’s right of publicity did survive, though the
court acknowledged that the facts alleged didn’t match previous right of
publicity cases.  Virag didn’t allege
that Mirco Virag’s name etc. appeared in the game; plaintiffs alleged that
Virag the mark identified flooring.  But White says that the issue is whether an
individual’s “identity” has been misappropriated, and plaintiffs alleged that,
in international racing, Virag the mark “personifies” Mirco Virag.  Virag has allegedly been using Mirco Virag’s
success at racing to promote itself as a flooring company for years.  And that’s enough to state a claim, at least
for purposes of a motion to dismiss.

A number of thoughts apart from the overall cry of agony: (1) Marketing and
linguistic research indicates that conceptual links are not necessarily bidirectional.
The alleged facts may well support the claim that Mirco Virag stands for Virag
the mark, but that doesn’t mean that Virag the mark stands for Mirco Virag. (Before
you say Motsenbacher, take a look at
the actual Motsenbacher ad.)  (2)  If ever there were a case for incidental use,
this would have to be it.  (3) Because
this claim is identity-based, it does not depend on Virag the mark being the
same, orthographically, as Mirco Virag’s last name.  On this theory, the use of “Microsoft”
implicates Bill Gates’ right of publicity; “Apple,” Steve Jobs; “Virgin,”
Richard Branson, etc.  (4) I can’t wait
for the next Donald Trump right of publicity case based on this theory.

  (5) Good luck applying this theory on summary
judgment!  How will we distinguish evoking
Virag-the-mark from evoking Virag-the-person? 
What evidence will be relevant? 
This is especially important because …

 
Virag’s trademark infringement/false designation of origin
claims were barred by the First Amendment. 
Continuing from previous paragraph: given that the First Amendment
absolutely protects references to Virag-the-mark, there are several significant
sub-issues.  Among them: Should there be
a heightened standard of proof to find that the reference is to Virag-the-person,
because if the reference is only to Virag-the-mark and the factfinder is wrong,
First Amendment-protected noncommercial speech is being suppressed?  Independently, suppose a factfinder
determines that, because Mirco Virag personifies Virag, there is no way to make
the First Amendment-protected reference to Virag without also making a
reference to Mirco Virag.  (That is,
after all, the logical consequence of the “personification” theory—any means of evoking Virag would invoke
Mirco Virag as well.)  If there is a
First Amendment right to make the trademark reference, shouldn’t that override
the right of publicity here?  (Of course,
it always should do so, but we need a case to say that.  This might actually be a good vehicle because
the TM/ROP doctrinal divide reaches peak ridiculousness here, which is not the
judge’s fault in this case.)

Anyhow, Rogers v.
Grimaldi
controls.  Virag argued that
the games  had “no plot, no characters,
no dialog, and no meaningful interaction between the game player and the
virtual world,” but were just driving simulators.  Nope. 
They have “characters (the race car drivers), plot (the drama of the
races), and music. And there certainly is meaningful interaction between the
game player and the virtual world: how else would a game player play the games?
By not interacting with them?”  Brown
v. Electronic Arts
found that realistic simulations of American football
[nice one, judge!] were protected expressive works; so too here.
smo 6. They all are expressive works that qualify for First
Amendment protection.
 
Virag argued that Rogers
didn’t apply because the Virag mark didn’t have enough cultural significance to
be an integral part of our vocabulary, like Barbie.  That’s not a threshold for the Rogers test, as E.S.S. demonstrated when it applied Rogers to the Play Pen strip clup in L.A. despite the fact that the
mark had “little cultural significance.” 
Rogers can also be applied on
a motion to dismiss because the standard for artistic relevance is so low—it’s
an on/off test—and because the only limit is on explicit misleadingness, which can be judged on the face of the
work.
 
“[G]iven the central role of realism to Gran Turismo 5 and
Gran Turismo 6, the defendants’ use of the VIRAG® mark has at least some (i.e.,
more than zero) artistic relevance to the games.”  The fact that Sony allegedly used the mark
for commercial gain was irrelevant as long as there was artistic relevance.
There were no plausible allegations of explicit misleadingness.  It was insufficient that, given their
involvement in the European racing scene, consumers could allegedly think that Virag
provided expertise and knowledge for the games or sponsored them. “The mere use
of a mark is not explicitly misleading, even if combined with consumer
confusion.”  Electronic Arts, Inc. v.
Textron Inc., No. C 12-00118 WHA, 2012 WL 3042668 (N.D. Cal. July 25, 2012),
was not to the contrary.  Textron refused to dismiss a claim
brought by Bell Helicopter about a helicopter focused game; it preceded Brown v. EA, where the Ninth Circuit “drove
home the point that a defendant must give an ‘explicit indication’ or make an ‘overt
claim’ or ‘explicit misstatement’ that causes consumer confusion.”  Plus, in that case, the helicopters were
allegedly a main selling point for the game (which shouldn’t matter, given Brown), whereas here the games are
racing games, not flooring games, and the Virag mark was “on a bridge over a
track and not on a car,” which “comes nowhere close to an explicit misstatement
as to source or content.”
 
However, Virag’s request for punitive damages for the right
of publicity violation survived. 
Punitive damages are available against a tortfeasor who has acted with “oppression,
fraud, or malice.” Malice is “conduct which is intended by the defendant to
cause injury to the plaintiff or despicable conduct which is carried on by the
defendant with a willful and conscious disregard of the rights or safety of
others.” In federal court, a plaintiff need not allege facts supporting the
punitive damages claim with particularity.
 
The allegations of the complaint that Sony “intentionally
and without authorization chose to incorporate the VIRAG® mark to create a
false impression of sponsorship or authorization” and that Sony obtained
licenses or authorization from other trademark holders to use their marks were
enough to fall within the definition of malice—conduct intended to cause injury
to the plaintiff.  But (1) those
allegations go to the trademark claims, not the right of publicity claims, and
the trademark claims are barred by the First Amendment; (2) relatedly, how
could there be malice as to the ROP given the First Amendment protection for
use of the mark to identify the mark owner?

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Do implicit falsity plaintiffs have to plead the existence of a survey?

Vincent v. Utah Plastic Surgery Society, — Fed.Appx. —-,
2015 WL 5090868, No. 13–4146 (10th Cir. Aug. 31, 2015)
 
Plaintiffs (cosmetic surgeons) sued defendants (plastic
surgeons) for false advertising under the Lanham Act and monopolization under
the Sherman Act by running billboard ads called “Public Safety Announcements,”
allegedly promoting the deceptive message that cosmetic surgery is safer when
performed by plastic surgeons rather than cosmetic surgeons.   The
Sherman Act claim failed.
 
The holding of note: plaintiffs conceded they were bringing
implied falsity claims.  Because this
requires a showing of actual deception, they needed extrinsic evidence to show
that “a statistically significant part of the commercial audience holds the
false belief allegedly communicated by the challenged advertisement.” But the
complaint didn’t plead any specific facts about consumer deception.  The allegation that “Defendants’ false and
misleading statements have created confusion among Plaintiffs’ clients,
potential clients, and will continue to do so if permitted to continue,” unsupported
by even a single relevant fact, was insufficient. 
 
Nor did generally pleading that they suffered
damages in the form of lost sales and potential customers suffice to allege
sufficient facts to prove an entitlement to damages.  By way of example, “the complaint does not
indicate how much Plaintiffs’ profits have decreased since Defendants began
their advertising campaign; it does not quantify or estimate the decrease in
goodwill; it does not quantify the number of potential customers who allegedly
have been lost because of Defendants’ statements or how that number would be
measured.”

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Announcement: Howard U Entertainment/Sports Law conference, Sept. 18-19

On September
18-19, 2015 Howard University School of Law is hosting a national conference focusing on entertainment,
arts, and sports law. It will be held at the Marriott Marquis in Washington,
DC. The conference agenda is below. Online registration is available here:
 
http://newglobaleas.com. The gala
dinner and awards ceremony honoring Professor Spencer Boyer is on Friday night.
The tickets for that event are available here: 
http://ift.tt/1JKb2Ne.
 
New Global Paradigm for Entertainment,
Arts, and Sports Law Conference Agenda
 
Friday,
September 18, 2015
 
9:00 am
– 9:10 am – Opening remarks
Course
Directors:
Danielle
Holley-Walker, Dean, Howard University School of Law
Aubrey
“Nick Pittman, 
Managing
Partner, The Pittman Law Firm. P. C.
 
9:10 am
– 10:30 am
The New
Frontier in Sports Agency
This panel will provide a wide-ranging discussion on the business
of sports agency, including the changing landscape of player agency and the
benefits, if any, of sports participation or legal training in handling sports
agency issues and the changing standards that apply to agents
.
Panelists:
Mason P. Ashe, President, Ashe
Sports & Entertainment Consulting, Inc.
Andrew
Brandt
, Director, Moorad Center
for Sports Law, Villanova University; Columnist, Sports Illustrated, TheMMQB.com; NFL Business Analyst, ESPN
Donald Dell, Group
President, Lagardère Unlimited Americas
Rand E. Sacks,Principal, The
Sacks Group, PLLC
Leigh Steinberg,Principal, Steinberg
Sports and Entertainment
William “Bill” Strickland, Senior
Managing Partner, Stealth Sports, Stealth SME
 
10:30
am – 11:50 am
Assessing
and Protecting Intellectual Property Rights Globally
Experienced practitioners and academicians will discuss the top
legal and business trends in the intellectual property area of the
entertainment and sports industries. Discussions will include those issues
surrounding the many challenges in obtaining and protecting intellectual
property rights domestically and internationally, and litigating infringement
and contract cases. 
Panelists:
Tonya M. Evans,
Associate Professor of Law, Widener University Commonwealth Law School
Russell Frackman,
Partner, Mitchell Silberberg & Knupp LLP
Jonathan D. Goins,
Partner, Lewis Brisbois Bisgaard & Smith LLP
Loren
E. Mulraine
, Bone McAllester Norton P.C. and
Professor of Law, Belmont University College of Law
 
11:50 am
– 12:00 pm
Break
 
12:00 pm
– 1:20 pm (Lunch)
Inside
the NCAA’s Legal Division
Speaker:
 
Donald Remy, Esq., NCAA Executive Vice President and Chief Legal
Officer
 
 
1:30 pm
– 3:15 pm
Trending
Topics in Television and Digital Media 
This panel will include discussion of trending topics
surrounding business and legal affairs matters across all aspects of
television and digital media, including negotiation of deals for the
acquisition of original and off-network television series and movies;
television production of scripted, reality, sports and live programming;
digital programming, content creation, production and advertising; current
regulatory and other legal positions, policies and trends in the areas of
conventional and subscription television broadcasting, radio broadcasting,
telecasting via satellite communications, multi-point distribution or cable
television, as well as other related programs or informational delivery
systems.
Panelists:
Rhonda Edwards-Powell, Vice President, Business and Legal Affairs, Scripps
Networks Interactive Inc.
Aleena Maher, Senior
Vice President, Business & Legal Affairs, Viacom Media Networks
Crystal Morales, Vice President, Business
Affairs, Turner Broadcasting System
 
3:15 pm
– 3:30 pm
Break
 
3:30 pm
– 5:30 pm
Fireside
Chat with Players’ Association Executives
This panel includes player association executives and
practitioners discussing the challenges and successes of player associations on
issues such as collective bargaining, player compensation, antitrust issues,
player safety and player discipline issues. 
Panelists:
Anthony “Tony” Clark, Executive
Director, Major League Baseball Players Association (“MLBPA”)
Donald Fehr, Executive
Director, National Hockey League Players’ Association (“NHLPA”)
Michele A. Roberts,
Executive Director, National Basketball Players Association (“NBPA”)
DeMaurice F. Smith, Executive
Director, National Football League Players’ Association (“NFLPA”)
 
7:00 pm
– 10:00 pm
Reception
and Awards Gala
 
Saturday,
September 19, 2015
 
9:00 am
– 10:30 am
The
Business of Entertainment & the Arts 
This panel includes business executives, academicians and
practitioners who will offer views on a broad range of business and
legal topics related to the entertainment industry. Whether you are thinking
about starting a business or are facing the challenges of being in business,
this panel will be informational.
Panelists:
Serona
Elton
, Associate Professor,
University of Miami Frost School of Music and Vice President, Business
Solutions at Warner Music Group
Charles King, CEO
and Founder, Macro Ventures and Former William Morris Super Agent
Edward Woods, Senior
Partner, Edwards Woods, P.C.
 
10:30
am – 11:45 am
Inside
the Company’s Business and Legal Affairs Division
This panel will provide an insider’s view into the company’s
business and legal affairs division, as well as outline specific examples of
business developments that require both the application of traditional legal
skills as well as collaboration with business counterparts.
Panelists:
Joseph Dimona, Vice
President Legal Affairs, Broadcast Music, Inc.
Melanie S. Jones, Director,
Business & Legal Affairs, Discovery Communications, LLC.
Danielle Robinson, Counsel,
Radio One
 
11:45
am – 12:00 pm
Break
 
12:00
pm – 1:25 (Lunch)
CLE
Speaker: TBD
 
1:30 pm
– 3:00 pm
A
Primer on Counseling Entertainment Industry Clients
Experienced attorneys and business executives will debate the key
legal, business and ethical issues that confront entertainment
clients. The panelists will discuss practicing entertainment law in a
secondary market versus a primary market and how to gain knowledge and
experience starting out in entertainment law. The panel will also provide
overviews on the predominant issues involved in personal management and agency
contracts, artist-record company agreements, producers and writer agreements,
TV and Film contracts, music publishing and book publishing and much more.
Panelists:
Ricky Anderson, Managing
Partner, Anderson and Smith, P.C.
Reggie Osse, Partner, Wade Osse Waldon, LLP;
Radio Personality, The Combat Jack Show
 
3:00 pm
– 3:15 pm
Break
 
3:15 pm
– 4:45 pm
Hottest
Topics in Sports Law
From safety concerns to injury issues, from play to discipline,
from on-the-field to off-the-field activities, and everything in-between, these
Panelists will discuss issues involving sports figures, teams,
leagues, and colleges ontoday’s and tomorrow’s hottest topics.
Panelists:
Timothy
Davis, 
Executive Associate Dean for
Academic Affairs and Professor of Law, Wake Forest University School of
Law
N. Jeremi Duru,
Professor of Law, American University’s Washington College of Law
Bret M. Kanis,
Hightower Law Firm
Daryl Washington, The Washington Law
Firm, P.C.
Brandon Wright, Director
of Compliance, University of Maryland 

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court rejects stay, orders recall in pregnancy test false advertising case

Church & Dwight Co., Inc. v. SPD Swiss Precision
Diagnostics, GmbH, 2015 WL 5051769, No. 14–CV–585 (S.D.N.Y. Aug. 26, 2015)
 
The court previously
found that SPD engaged in false advertising
; SPD moved to stay or modify
any injunction pending appeal and the court declined to do so.
 
An applicant for a stay of an injunction pending appeal
“must establish more than a ‘mere possibility’ both of irreparable injury
absent a stay and of success on the merits of the appeal” to prevail.  As for irreparable harm, it was undeniable
that the injunction would cause SPD some harm. 
Monetary cost alone isn’t sufficient to justify a stay.  The cost of a recall here, $3.6 million,
wasn’t insignificant, but SPD didn’t explain how it would irreparably harm the
company.  SPD also argued that a recall
would cause loss of consumer trust and goodwill.  The court found the magnitude of any such
loss to be speculative; SPD had no evidence that health care providers would change
their views on the quality of the product based on a false advertising recall,
or that consumers would view the product as unsafe or believe it was no longer
approved by the FDA.  SPD would “certainly
endeavor to communicate to customers that any recall has no bearing on safety.”  In any event, damage to consumer goodwill
wouldn’t be from the injunction or recall, but because of SPD’s “intentional
deception of an egregious nature.”   These speculative injuries didn’t rise to the
level of irreparable harm.
 
SPD argued that it was likely to succeed on the merits of an
appeal, because there’s a post-Pom
Wonderful
question of first impression in the Second Circuit on whether the
FDA’s pre-approval of advertising for a medical device precludes Lanham Act
false advertising claims, as well as a serious question as to whether C & D
was entitled to a “presumption of consumer confusion as to all of SPD’s
advertising based on … intentional deception … tied to only specific pieces
of advertising.” 
 
So far, all courts to have consider Pom Wonderful have applied it equally to medical device labeling;
the case only strengthens the non-preemption conclusion.  Nor did the court here rely only on a
presumption of consumer confusion; it also pointed to C&D’s consumer
surveys, so that undercut the seriousness of the second legal question.
Ultimately, SPD didn’t show that the balance of the equities weighed heavily in
favor of granting the stay, especially given its intentionally false
advertising.
 
As for injury to C&D, SPD argued that its proposed plan
to “place curative sleeves on the packaging … would eliminate or mitigate any
loss C&D might suffer from any misleading message on existing packaging.”
But without an injunction in force, SPD would be under no obligation to place
sleeves on the packaging and its product would remain on store shelves without
corrective labeling for the duration of the stay. That would prolong C&D’s
harm, especially in light of the bifurcation of the liability and damages
stages of the case, which would delay C&D’s ability to obtain damages.
 
The public interest was also served by preventing consumer
deception.
 
As for the content of the injunction, SPD wanted to sleeve
the existing packages with a new package at their retail locations.  The essential difference was what happens
between entry of the injunction and the preparation of new packaging—SPD needs
FDA approval to put new packaging on the product, which SPD estimated would
take two weeks, and then 5-6 more weeks to deliver the new packaging to
retailers.  With sleeving, current
misleadingly packaged product would remain on the shelves for at least 7-8
weeks, whereas a recall could begin immediately and be completed within 4
weeks.  SPD had already completely ceased
shipping the product in its existing packaging; sleeving would allow SPD to
sell out its current inventory, obviating the need for either recall or
sleeving.  “Given the intentional nature
of SPD’s false advertising and the interest of avoiding consumer confusion, the
Product should not be allowed to remain on the shelves for weeks before steps
are initiated to correct false advertising. Thus, this Court concludes that
‘sleeving’ is not an appropriate remedy.”
 
Thus, the court ordered a recall.
 
SPD also sought a stay to seek FDA approval for its new
packaging. The court acknowledged the necessary delay brought on by FDA
involvement, but “allowing intentionally false and misleading packaging to
remain on store shelves for a longer period of time in order to accommodate
SPD’s FDA approval schedule is not an appropriate solution,” especially since
SPD could’ve begun seeking approval for new packaging as of the court’s July 1
opinion, but didn’t.  Nor would the court
grant a temporary stay to seek a stay from the Second Circuit.
 

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Upset tummies at P&G: Sixth Circuit affirms class certification on “snake oil” theory

Rikos v. Procter & Gamble Co., — F.3d —-, 2015 WL
4978712 (6th Cir. June 16, 2015)
 
A court of appeals affirms the certification of a consumer
protection class action, a rarity worth noting.
 
Plaintiffs bought Align, P&G’s probiotic nutritional
supplement, and found that the product did not work as advertised—that is, it
did not promote their digestive health. They sued for violation of various
state unfair or deceptive practices statutes, and  the district court certified five single-state
classes from California, Illinois, Florida, New Hampshire, and North Carolina. “While
there is a consensus within the medical and scientific communities that
utilizing bacteria as a therapeutic measure in human disease is promising,
current knowledge of the use of bacteria for these purposes remains fairly
primitive.” Overall “[m]edical understanding of probiotics in humans is still in
its infancy.” Align is a nonprescription supplement sold in a capsule that is
“filled with bacteria and [otherwise] inert ingredients.”
 
P&G initially had trouble convincing consumers of
Align’s value, given its premium price point, though it eventually launched
Align nationwide through a comprehensive advertising campaign, which included
in-person physician visits, television and print advertisements, in-store
displays, and product packaging.
 
Commonality: P&G argued that there was no common injury,
only anecdotal evidence that Align didn’t work for the named plaintiffs.  Consumer satisfaction, and repeat purchases,
showed Align’s benefits—along with at least some studies that appeared to
concluded that Align was effective in promoting digestive health.  Dukes
doesn’t require plaintiffs to show that all class members were in fact injured
at the certification stage—rather that their claims depend on a common
contention capable of classwide resolution. 
The common question here was whether Align is “snake oil” and thus does
not yield benefits to anyone.  If true,
that would make P&G liable to the entire class “every class member was
injured in the sense that he or she spent money on a product that does not work
as advertised.”  Consumer satisfaction
isn’t the right way to think about injury in the false advertising
context.  It’s misleading to state that a
product is effective when that effectiveness rests solely on a placebo effect.
See, e.g., FTC v. Pantron I Corporation, 33 F.3d 1088 (9th Cir. 1994).
 
Typicality: basically the same, though P&G framed its
argument as being that “many of the unnamed class members have no interest in
pursuing restitution, nor in crippling the product. Indeed, this lawsuit may be
antithetical to their interests.” That didn’t make the named plaintiffs
atypical in the relevant sense.
 
Predominance:  P&G
alleged that some putative class members weren’t exposed to its marketing
campaign; they may have bought Align based on advice from a family member,
friend, or physician.  But the plaintiffs
all bought Align because it allegedly promoted digestive health. “That is the
only reason to buy Align.” And there was evidence showing that P & G
undertook “a comprehensive marketing strategy with a uniform core message, even
if its packaging has changed somewhat over time: buy Align because it will help
promote your digestive health.”  P&G
argued that doctors could recommend Align based on their independent judgment,
but P&G developed the probiotic and the campaign that promoted it to
doctors.
 
Reliance and causation: under each state’s laws, the
plaintiffs could prove what was necessary on a classwide basis as long as (1)
the alleged misrepresentation that Align promotes digestive health is material
or likely to deceive a reasonable consumer, and (2) P & G made that
misrepresentation in a generally uniform way to the entire class.  California is Tobacco II.  Illinois’ ICFA
requires a showing of damage to the plaintiff as a result of the deception—that
is, proximate cause from the false advertising. 
If the challenged representation was made to all putative class members
and was material, it’s capable of classwide proof.  Florida’s FDUTPA case law is divided, but
many courts have held that it doesn’t require proof of actual, individualized
reliance, only a showing that the practice was likely to deceive a reasonable
consumer, at least as long as there’s a generally uniform material
misrepresentation.  New Hampshire’s Consumer
Protection Act also doesn’t require proof of individual reliance or causation;
materiality is a proxy for causation and an objective question that can be
answered classwide.  North Carolina’s
UDTPA requires reliance, but reliance can be proved circumstantially, and a
consumer protection class action can be certified on those grounds, especially
since the alleged misrepresentation here was the reason to buy Align. 
Plaintiffs were prepared to show materiality and the existence of a
generally uniform misreprentation; that sufficed.
 
P&G argued that Align actually works, at least for some
consumers, which is to say that the scientific evidence might show that Align provides
benefits for some purchasers, but not all, requiring individualized proof of
injury.  But this is a factual dispute;
plaintiffs argued that P&G’s studies were flawed and that Align didn’t
work, at least not any more than placebo. 
Plaintiffs’ theory was not that the effectiveness of Align was variable,
but that it hadn’t been shown that Align worked for anyone.  P&G’s
effectiveness argument went solely to the merits, and plaintiffs provided
enough evidence to support plaintiffs’ theory of liability. The fact that the
common answer might be that Align does work for some people doesn’t transform
the classwide issue into one precluding certification.  If there’s an identifiable subclass of people
for whom it works or doesn’t work, the district court could even revisit the
issue of certification.
 
The court’s holding was is consistent with the Supreme
Court’s recent decision in Halliburton
Co. v. Erica P. John Fund, Inc.
, ––– U.S. –––– (2014), which held that, at
the class-certification stage, defendants in private securities fraud class
actions must be able to present evidence rebutting a particular presumption of
classwide reliance available in these kinds of cases. “The Halliburton Court’s holding is limited to allowing rebuttal
evidence on issues that affect predominance, not evidence that affects only the
merits of a case,” and P&G’s evidence went only to the merits; in any
event, P&G was allowed to put forth its evidence, so Halliburton was satisfied.
 
Relatedly, P&G argued that plaintiffs failed to present
a viable theory of classwide damages under Comcast
Corp. v. Behrend
, ––– U.S.–––– (2013). 
If Align is snake oil, then there’s no problem with the damages theory;
a full refund of the purchase price would satisfy Comcast, since “there is no reason to buy Align except for its
purported digestive benefits—‘[i]t is a capsule filled with bacteria and inert
ingredients. If, as alleged, the bacteria does nothing, then the capsule is
worthless.’” Even if some customers were satisfied, for whatever reason, “either
0% or 100% of the proposed class members were defrauded. There is no evidence
that some proposed class members knew of the alleged falsity of Defendant’s
advertising yet purchased Align anyway.”
 
P&G also contested class standing, on similar grounds
(Align may have worked for some of them). 
There was no need to enter a circuit split over whether it’s sufficient
for a named class plaintiff to have standing, given the snake oil theory of the
case.
 
Further, the proposed class was sufficiently
ascertainable.  Carrera v. Bayer Corp., 727 F.3d 300 (3d Cir. 2013), is not the law
of the Sixth Circuit, and there was no reason to follow Carrera, given the strong criticism to which that decision has been
subject and the Third Circuit’s subsequent caution against a broad reading of
that case.  Ascertainability requires the
court to be able to resolve the question of class membership with reasonable
accuracy by reference to objective criteria. 
Purchases of Align in California, New Hampshire, Illinois, North
Carolina, or Florida could be determined with reasonable—but not
perfect—accuracy. “Doing so would require substantial review, likely of
internal P & G data. But as the district court pointed out, such review
could be supplemented through the use of receipts, affidavits, and a special
master to review individual claims.” 
Here, customer membership cards and records of online sales—more than
half of Align’s sales—could be used; also, P&G’s studies showed that “an
overwhelming number of customers learned about Align through their physicians,”
so verification could be accomplished through a signed statement from a
customer’s physician.
 
A concurrence by Judge Cohn suggested bifurcating the
proceedings and first looking for whether there was scientific evidence that
Align promotes digestive heath for anyone, which might allow early dismissal of
the case.
 
A dissent by Judge Cook would have found that the district
court abused its discretion by failing to conduct a rigorous inquiry into
certification.  Plaintiffs didn’t offer
proof in support of their argument that Align was “snake oil” that produces
nothing more than a placebo effect.”[A]ll the available evidence tends to show
the opposite: that consumers benefit more or less from Align based on their
individual gastrointestinal health. P & G’s scientific studies and
anecdotal evidence tend to show, at the very least, that patients suffering
from irritable bowel syndrome (IBS) benefit from Align.”  The certified class included both IBS patients
and healthy consumers, so plaintiffs failed to show that their theory of
liability lends itself to common investigation and resolution.  Whether Align works similarly for each class
member “is relevant to certification and therefore not beyond the scope of the
court’s rigorous analysis.” Also, the majority therefore affirmed a class
definition that included a “clutch” of members without standing.  Plaintiffs’ “promise to conduct the
definitive trial of Align that accounts for all variables of human physiology”
was insufficient under Dukes and its
progeny.

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Fifth Circuit upholds mandatory self-abnegating disclosure to correct competitor’s harassment

Test Masters Educational Services, Inc. v. Robin Singh
Educational Services, Inc., No. 13-20250 (5th Cir. Aug. 21, 2015)
 
The parties, test prep companies, have competing claims to
TESTMASTERS as a trademark, and have been litigating for over a decade.  Plaintiff TES operates under the name
Testmasters; it was founded in 1991, initially concentrating on engineering
licensing exams but expanding to others, including the LSAT. Until 2002, TES
offered live courses only in Texas, primarily in Houston; it has since expanded
outside Texas.  Singh started offering
test preparation courses under the name “TestMasters” in 1991. Singh initially
offered only LSAT courses in California, but has since expanded to offer
courses nationwide for a variety of exams.
 
Singh applied for registration in 1995; the PTO first denied
the application on the basis of other similar marks, but approved the
application “after determining that none of the three marks were still in use.”
At that point, Singh discovered that TES already owned the domain name
“testmasters.com” and sent TES a demand letter. 
Litigation ensued, and continued. 
In 2002, the Fifth Circuit held that TESTMASTERS was descriptive, that
TES’s rights to the mark were limited to Texas, and that Singh had failed to
prove that the mark had acquired secondary meaning.  After the second lawsuit, in 2005, Singh was
enjoined from interfering with TES’s use of the mark in Texas, and Singh was
permitted to challenge TES’s claim to the mark outside of Texas.
 
Also, TES applied for nationwide registration in 2001; Singh
opposed.  In 2011, after a lot of stuff I’m
sure everyone involved wishes they could’ve skipped too, the TTAB denied the
applications, holding that the mark was descriptive and that TES had failed to
demonstrate “substantially exclusive use” of the descriptive mark. In April
2013, the district court affirmed the TTAB’s decision, granted Singh summary
judgment on TES’s infringement claims, and dismissed Singh’s infringement
counterclaims based on collateral estoppel. 
There was also a contempt issue, of which more below.
 
On appeal, TES argued that Singh lacked standing to oppose
the registration, because he’d previously lost on the secondary meaning issue.  But he’d only been enjoined from pursuing
registration, not from claiming trademark rights, so he had standing.  TES further argued that it had presented
enough evidence of secondary meaning in “unrestricted geographic and subject
matter areas” to survive summary judgment. 
It had not.  The evidence showed
that both parties had used the mark for a while, and that Singh’s company was
larger and did significantly more business outside Texas.  Both parties advertised extensively, TES
mostly to engineering students and Singh primarily to LSAT takers.  TES’s survey was flawed because, though it
asked engineering exam-takers whether they associated “Testmasters” with one
company, it didn’t determine which one that was for the 50.7% who said
yes.  Plus, the survey was directed only
at people taking engineering exams and half of those polled were from Texas. As
for direct consumer evidence, the court of appeals agreed with the district
court that “[e]ach party’s evidence shows that, in its strongest subject matter
area, it is well-known and there may be some consumer confusion.”
 
What TES needed to show to prove its case was that the mark
had “secondary meaning on a nationwide basis for all test preparation courses.”
At most, it showed that the mark has acquired a secondary meaning for
professional engineering examinations, not any other test preparation services.
 
Singh argued that the district court erred in finding him
collaterally estopped from claiming secondary meaning.  It didn’t. 
Singh claimed that the passage of 13 years changed things enough to
justify giving him another bite at the apple: among other things, his annual
revenues increased from just over $3 million in 2001 to an average of $14
million between 2008 and 2010. But “[e]vidence of increased business success alone
is insufficient to show a significant intervening change” to justify rejecting
collateral estoppel.
 
The court of appeals vacated a contempt order against Singh’s
lawyer, Daniel Sheehan, but not against Singh. 
In 2003 and 2004, the district court enjoined Singh from registering the
mark, interfering with TES’s attempt to register the mark, and using the mark
in Texas/directing the mark at Texas; then added an order barring Singh from “threatening,
or harassing [TES], its employees, its staff, or TES’s counsel, counsel’s
employees, or counsel’s staff.” (A bar on direct communication was reversed by
the court of appeals; the threat/harassment prohibitions were upheld.)
 
According to TES, Singh continued to advertise in Texas,
instructed employees to post negative comments about TES on various websites,
and aided in the posting of defamatory videos online. One posting referenced a
state-court paternity suit involving TES’s founder, calling him a “deadbeat
dad” and mentioning the minor child involved in the suit by name.  At the contempt hearing, the court ordered
Singh’s lawyer incarcerated to get Singh to remove the postings, which Singh took
steps to do; the court also ordered Singh to remove the harassing posts. 
 
TES then requested additional contempt sanctions, which were
granted in part, and the district court ordered Singh to publish a “remedial
posting” on “ripoffreport.com” in response to the “deadbeat dad” post he had
previously made, requiring him to post: “Robin Singh and Robin Singh
Educational Services previously posted on March 25, 2010, a Complaint Review of
Dr. Haku Israni and his website testmasters.com. Singh and Dr. Israni were
involved in litigation at that time and Singh would now like to retract his
prior complaint. No credence should be paid to that complaint or any of its
contents.”
 
Singh argued that the contempt sanctions and remedial order
violated the First Amendment. The court of appeals disagreed.  Harassment isn’t protected by the First
Amendment, even when the harassment is published on the internet and not
directly communicated to the target.
 
Singh also argued that the remedial statement violated his
First Amendment right not to speak, and that he was forced to say things that were
simply untrue, because he didn’t “wish” to retract his complaint and believed
that credence should be given to his
claims.  Singh’s statements were
commercial speech.  Though the post
focused on TES’s founder’s personal life, “Singh must have made it with the
economic interest of harming TES.”  A
required disclosure related to commercial speech need only be “reasonably
related to the [government’s] interest in preventing deception of consumers.” Because
the original posting was deceptive, the district court’s order was reasonably
related to its interest in preventing consumer deception by correcting the
misleading information.  Singh’s
objection to the language indicating he’d like to retract the statements didn’t
identify a “relevant” falsehood.  “Whether
Singh enjoyed taking this medicine is an insignificant question of phrasing.”
 
[Note that under the panel opinion in the NAM v. SEC case,
this result couldn’t occur.  The Ripoff
Report complaint isn’t “advertising” even if it is commercial speech, and the
like/credence wording would seem to trigger the controversiality/not purely
factual limit as interpreted therein.]

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