court rejects TM owner’s attempt to require full chain of custody for first sale defense, but where is the burden of proof?

Posted on January 9, 2026 by rtushnet

ZAGG Inc. v. Ichilevici, 2026 WL 63142, No.
23-cv-20304-ALTMAN/Reid (S.D. Fla. Jan. 8, 2026)

ZAGG sells a variety of screen protectors, power management
solutions, mobile keyboards, cases, and personal audio products, including my
beloved Mophie. Defendant DVG resells products, including ZAGG products,
through Amazon. ZAGG sued DVG for false advertising and trademark infringement;
DVG counterclaimed for false advertising/unfair competition/defamation. Here,
the court rejects the parties’ cross motions for summary judgment on trademark
and also leaves for the jury the related question of whether DVG’s listing of its
ZAGG products as “new” was false advertising, while dismissing the rest of the
counterclaims.

DVG bought its ZAGG products in a liquidation pallet from a
wholesaler. ZAGG argued that DVG’s advertisements are false because “Amazon’s
guidelines require a product listed for sale as in ‘New’ condition to be ‘brand
new’ and [ ] covered by a manufacturer’s warranty.”

Both parties produced Amazon pages supporting their views: it
seems that Amazon’s buyer-facing “Condition Guidelines” define “New” as: “Just
like it sounds. A brand-new item. Original manufacturer’s warranty, if any,
still applies, with warranty details included in the listing comments. Original
packaging is present for most New items but certain items like shoes may be
re-boxed.” However, the Amazon FBA Guidelines and Seller Central, in defendants’
telling, “simply require that the item is brand-new and unused, free of
blemishes, smudges or dirt, and in the original packaging,” and defendants
submitted an expert report in support of this view.

Past cases haven’t involved listings where a seller, like
DVG here, notifies purchasers that “it is not an authorized reseller” of ZAGG
products and urges them to “check with the manufacturer to see if a warranty
may apply.” Thus, there was a disputed question of material fact on literal
falsity.

The court also sent the “liquidation” theory of falsity to
the jury, though I’m not sure it should have under its own standards, given
that ZAGG had the burden of proof here. The “thrust” of ZAGG’s argument was
that, because DVG couldn’t “verify the full chain of custody or history of each
individual item,” it couldn’t confirm that was actually selling “brand new”
items.  Sure sounds like lack of
substantiation to me.

Later, the court found that ZAGG submitted enough to get to
the jury on injury: “diversion of sales to a direct competitor [is] the
paradigmatic direct injury from false advertising.” “There’s no question that
ZAGG and DVG are direct competitors and that they sell the exact same products.”

Trademark infringement: Again, ZAGG argued that defendants
had the burden of proving a complete chain of custody, back to sale by ZAGG,
before they could raise a first sale defense. (So much for selling your used stuff!)
The court’s research did not find any cases imposing this trace-to-manufacturer
requirement. DVG disclosed the identity of its supplier and produced documents
and testimony about that supplier’s sales to DVG. The circumstances weren’t
suspicious, as in another case where defendant claimed to have “found [products]
in storage units he acquired,” and the plaintiff submitted “proof that the
products [the defendant sold] were returned product not to be resold.”

There was no record evidence behind ZAGG’s speculation that
DVG was selling counterfeit or damaged goods; it conceded that all the products
it bought in test buys were genuine. DVG also attested (under oath) that all
the ZAGG products it buys are “independently sorted and graded in accordance
with Amazon’s condition guidelines before sending them to Amazon’s warehouses”
and that “[m]any of the products come in their original case packs from the
factory.”

“So, while DVG may not know where its supplier gets its ZAGG
inventory, that break in the custodial chain isn’t sufficient, standing alone
and at summary judgment, to render the first-sale doctrine inapplicable as a
matter of law. We’ll therefore permit DVG to assert its first-sale defense at
trial.” Still to come: who has the ultimate burden of proof here? I would think
it would have to be ZAGG, even if first sale is labeled a “defense” for convenience: The burden is still on ZAGG to show that defendants sold infringing products, and, just as the defense “this mark isn’t confusing because it’s different enough” would not shift the burden of proof to defendants, “this mark isn’t confusing because it’s a legitimate good from the TM owner” seems like it shouldn’t do so either. 

There were also disputed issues on the “material difference”
exception to the first-sale doctrine. “A material difference is one that
consumers consider relevant to a decision about whether to purchase a product.
Because a myriad of considerations may influence consumer preferences, the
threshold of materiality must be kept low to include even subtle differences
between products.” ZAGG argued that some of the products have been “opened,
repackaged, restickered, or damaged,” and DVG’s products don’t “carry the
manufacturer’s warranty.” DVG argued that it “meets or exceeds” the terms of
ZAGG’s warranty because it offers to replace customers’ defective items without
charging them a $10 shipping fee. This was a jury question, including on DVG’s
expert testimony that any damage to the products’ packaging likely occurred in
transit.

DVG’s defamation counterclaim based on ZAGG’s trademark
reports to Amazon was dismissed because it didn’t show falsity or negligence. One
claim that a test buy product had been “altered” and three that the product was
“wrong” were not shown to be false: the first had been opened and the packaging
seal removed, and the other three had different SKUs than listed. DVG didn’t
meet its burden of showing that the different SKUs didn’t matter.

from Blogger http://tushnet.blogspot.com/2026/01/court-rejects-tm-owners-attempt-to.html

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Temu’s “cheaper and way better quality than Shein” claims were potentially falsifiable, not puffery

Posted on January 8, 2026 by rtushnet

Roadget Business PTE. Ltd. v. PDD Holdings Inc., 2026 WL
44864, No. 24-2402 (TJK) (D.D.C. Jan. 7, 2026)

Plaintiff, aka Shein, sells low-priced fashion and lifestyle
products through a website and mobile application. Defendant runs a competing,
discount-driven online platform—Temu. “Each platform has accused the other of
engaging in unlawful, multifaceted campaigns to interfere with the other’s
competitive posture.” This is Shein’s countersuit alleging trade secret theft,
intellectual property right infringement, false advertising, and other unlawful
acts. The court allowed trade secret claims and false advertising claims, but dismissed
product disparagement or trademark dilution claims (Temu didn’t move to dismiss
all of Shein’s claims).

In May 2022, Shein’s mobile app
allegedly was the most downloaded app in the United States, and as of the
filing of the complaint, Shein had over 33 million followers on Instagram and
nearly 10 million followers on TikTok. Shein says it is “one of the most
popular” online fashion and “lifestyle brands” worldwide.

Shein alleged that its success stemmed from its data-driven
trade secrets about anticipating demand. Shein allegedly owned copyrights in
both its photographs and its designs. Shein owns several trademark
registrations for the SHEIN brand and its affiliate brands, and consumers
allegedly associate all these brands with “the sale of high-quality fashion and
home goods at a fair price.”

Temu, by contrast, functions as an “online marketplace”
where independent third-party sellers sell their own goods. Temu allegedly
stole Shein’s Best Seller Data; used or “instructed” its sellers to use
copyrighted images of Shein products as promotional images on the Temu website
and app; refused to let sellers “discontinue the sale of infringing products”
on Temu, even when sellers request such removal; used the SHEIN trademark (or
close variations, like “She/in”) in online ads, including sponsored ads on
Google, which suggest that “authentic” Shein merchandise is sold on Temu, but
when consumers click on the ads, they are directed to Temu’s website, which
offers no SHEIN-branded products for sale; created “fake” accounts that use the
SHEIN mark—for instance, by using the handle @SHEIN_USA—to “promote its own
website” and to “trick consumers” into downloading its mobile app; and
instructing paid influencers to “disparage” Shein’s products. E.g., one
influencer (with over 137,000 followers) allegedly posted a series of pictures
of herself wearing different Temu apparel with the caption, “Shein
Alternatives, cheaper but way better quality! Check Temu.com out! So freakin
cute and so freakin cheap!”  

Product disparagement: The court applied Massachusetts law
as alleged by Shein. In Massachusetts, a plaintiff bringing a product
disparagement claim must plausibly allege that the defendant “(1) published a
false statement to a person other than the plaintiff; (2) ‘of and concerning’
the plaintiff’s products or services; (3) with knowledge of the statement’s
falsity or with reckless disregard of its truth or falsity; (4) where pecuniary
harm to the plaintiff’s interest was intended or foreseeable; and (5) such
publication resulted in special damages in the form of pecuniary loss.” As is
common with respect to mass advertising claims, Shein failed on (5).

Special damages are “essential” to a product-disparagement
claim, and must be pled with specificity. They “limit[ ] a plaintiff’s recovery
to the ‘pecuniary loss that results directly or immediately from the effect of
the conduct of third persons’ acting in response to the alleged disparagement.’
” If a statement was so “widely disseminated” that it is impossible to identify
specific customers who chose not to buy the plaintiff’s products, then the
plaintiff may show “that the loss of the market has in fact occurred and that
no other factor caused that loss.” A plaintiff asserting that theory must at
least allege “facts showing an established business and the amount of sales
before and after the disparaging publication, along with [facts supporting]
causation.”

The only, conclusory allegation about attendant damages is
that Shein was “harmed by the dissemination of the Influencer Statements
because they caused consumers to believe that SHEIN-branded products were
inferior in quality to products sold by Temu when this is untrue.” Shein didn’t
even allege that it lost any sales, let alone that any such hypothetical losses
were solely attributable to influencer statements.

Dilution: Shein failed to allege fame. The very “nature of a
dilution claim itself makes it difficult to state claim to relief that is
plausible on its face.” Its allegations were conclusory, and worsened by the
fact that it apparently tried to claim fame for its other “affiliate” marks, including
SHEIN CURVE, DAZY, SHEGLAM, ROMWE, and LUVLETTE. It’s not acceptable to lump
marks together like that.

Shein alleged that it “has invested significant time,
effort, and money promoting, advertising, and marketing its business operations
across multiple channels,” and that the “SHEIN brand also enjoys a significant
presence on social media.” These allegations were “without more, conclusions,
which are not a proper factual basis for a finding of fame.” Shein didn’t
allege “how or since when it promoted its marks, or even how much money it
invested in any such marketing.”

Shein’s complaint likewise offered no details whatsoever on
the “amount, volume and geographic extent of sales” of any products offered
under the SHEIN brand, let alone any of its affiliate brands. On “actual
recognition of the mark,” a plaintiff cannot “simply allege” that “it has
attained widespread and favorable recognition.” That Shein—as a “brand” or
marketplace—allegedly enjoys a large social-media presence with “million[s]” of
“followers,” says little about consumer recognition of the “trademarks … in
suit.” The Lanham Act protects “the mark,” not “the designer” or “the brand
itself.”

“Shein’s alleged popularity on social media also says little
about consumer recognition among the general population.” “Many brands are
advertised” on social media and have a significant following there, but “not
all are famous.” As for its registrations, “[o]ne cannot logically infer fame
from the fact that a mark is one of the millions on the Federal Register.”

“[S]tating legal conclusions and reciting relevant factors
is insufficient no matter the pleading standard. But especially so when a claim
is inherently ‘difficult’ to establish because Congress prescribed a ‘purposely
rigorous’ element—in this case, fame.” Shein’s alleged global revenue and
growing customer base, or the number of downloads of its “shopping app,” “do
not speak to the alleged fame of the SHEIN or any other mark.”

False advertising: Shein did better here, though the “influencer
guidelines” were a “close call.”

First, were the accused statements “commercial advertising
or promotion” or merely “[p]rivate communications with business partners.” True,
providing guidelines to non-customers, without more, wouldn’t be false
advertising. But Temu alleged more: that Shein “provided influencers with
guidelines” that “require[d] them to make … false” statements on social media,
which were then made; these should, Temu alleged, count as Shein’s statements.

And social-media posts by paid influencers undisputedly qualified
as commercial advertising under the Lanham Act. Thus, a plaintiff can state a
false advertising claim by alleging that “the defendant itself, or through its
paid agents, made false statements in commercial advertisements.” Shein
plausibly alleged its agency theory of liability.

Temu’s puffery argument was a closer call, but the
statements couldn’t be deemed puffery as a matter of law. (Not every court
would agree, though I’m sympathetic.)

Temu’s Influencer Guidelines allegedly “instruct”
influencers to include, among others, the following statements in their
“Instagram Caption”: “Shein is not the only cheap option for clothing! Check
Temu.com out, cheaper and way better quality!” and “Looking for clothes better
than Shein but cheaper than revolve? Check Temu.com out.” And Shein gave
examples of posts that used these/nearly these captions.

Claims that Temu’s clothes are “cheaper” but “way better
quality” than Shein’s were actionable because they made “specific” claims that
can “be[ ] proved false” or can “reasonably be interpreted as … statement[s]
of objective fact.” “Cheaper” was undoubtedly “objectively verifiable.” While statements
like “better” generally “amount[ ] to little more than an exaggerated opinion
of superiority that no consumer would be justified in relying on,” saying that
a “product can do something ‘more efficiently,’ ‘easier,’ ‘quicker,’ or ‘safer’
is more specific.” This is especially true when a statement “make[s]” an
“explicit comparison” to “other brands” about “particular characteristics that
would be important to a consumer.” A reasonable consumer could “believe” that
the advertising party actually “test[ed]” and compared competing products and
“deduced” that one was “superior in these ways.”

“Here, a reasonable consumer could think just that.” Quality
is a specific enough characteristic for clothes, and it’s material, “particularly
in the fast-fashion context, where buyers know that low prices (a key selling
point) can come at the cost of quality.” Indeed, the fast-fashion context
itself renders the statement less “vague” and “unmeasurable,” “because there
are only so many ways in which one company’s clothing article can be of ‘better
quality’ than another’s.” Also, the “way better quality” claim appeared next to
the verifiable claim that Temu’s clothes are “cheaper” than Shein’s, and was made
by an “influencer” (depicting herself wearing Temu’s clothes) “whom consumers
perceive as having personal experience with—i.e., as having ‘tested’—the
products they promote.” How other courts treat a “a specific word is of little
help unless that word is used in a sufficiently similar context,” and most of
the cases cited by Temu involved general claims of superiority—e.g., “better
customer service” and “better coverage,” or “better data network”—with no
reference to specific features or specific competitor products.

Although a news article appended to the complaint stated
that “Temu’s prices” for clothing “are usually … 20-30% lower than on SHEIN,”
that didn’t show that Temu’s prices are always cheaper than Shein’s—which Temu
would need to show to establish that the alleged influencer statements,
portraying particular products, are true.

For similar reasons, Shein stated a claim for contributory
false advertising, which is available under the Lanham Act, since it’s
available for trademark and 43(a) has the same introductory language applied to
both causes of action.  “[C]ontributory
liability is a common law theory of derivative liability that requires no
express statutory basis.”

from Blogger http://tushnet.blogspot.com/2026/01/temus-cheaper-and-way-better-quality.html

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Dueling geneologists: photo (c) claims allowed, but not Lanham Act or factual compilation claims

Posted on January 8, 2026 by rtushnet

Hein v. Mai, 2026 WL 44798, No.
24-01126-JWB (D. Kan. Jan. 7, 2026)

Some interesting stuff going on in
the genealogy world!

The Volga German
people are individuals of German origin who moved to the Volga region of Russia
in the eighteenth century. … There is a sizable Volga German diaspora in the
American Midwest. Plaintiff Margreatha Hein and Defendant Dr. Brent Mai are
both genealogy researchers on the Volga German people. Their research is the
subject of this lawsuit.

Hein operates volgagermans.org,
where she publishes her research. Mai is the Dean of Libraries at Wichita State
University, has held similar positions with other universities, and operates volgagermaninstitute.org,
where he publishes his research.

Hein first objected to Mai’s
copying in 2020; in 2023, she registered the copyright in eight photos she took
in Europe that were republished on Mai’s website as early as 2017. (This
removes her eligibility for statutory damages.) She also registered ten “textual
compilations” and alleged that Mai copied 107 textual compilations from her
website: paragraph form summaries of genealogical information, organized by
last name.

The parties focused on a particular
example, which plaintiff’s expert contended was representative; as plaintiff
has the burden of proof of infringement, the court extended its finding of
noninfringement to the other, unargued examples; plaintiff didn’t provide “any
additional examples that vary in a significant way.”

Hein registered this text:

Johann Jacob
Hessler (son of Johann Jacob Hessler of Niedergründau) was baptized on 15
December 1718. Anna Maria Meininger (daughter of Johannes Meininger of
Mittelgründau) was baptized on 2 December 1725. Johann Jacob and Anna Maria
married in Rothenbergen on 26 August 1745.

Baptisms were
recorded for the following children, all born in Rothenbergen: Johann Conrad,
born 5 February and baptized 12 February 1747 (died 30 April 1754); twin
daughters born 28 May and baptized 29 May 1751, Anna Margaretha (died 16 May
1754) and Christina; Anna Margaretha born 22 May and baptized 25 May 1755;
Elisabetha, born 24 January and baptized 26 January 1760 (died 27 Jan 1760);
and twin sons born 5 February and baptized 7 Feb 1762, Valentin (died 5 Mar
1764) and Friedrich.

Jacob Hessler
died on 8 Nov 1762. On 5 Jan 1764, Anna Maria Hessler (widow of Jacob Hessler)
married Hartmann Ifland (son of Johannes Ifland from Lützelhausen) in
Rothenbergen. They had a daughter Catharina, born 2 January and baptized 8
January 1765.

Hartmann, Anna
Maria, and three of the Hessler children (Christina, Anna Margaretha, and
Friedrich) arrived in Russia on 9 August 1766. Hartmann apparently died during
the journey to the villages.

Mai admittedly copied; he listed
Hein as a contributor or researcher. The parties’ research is “freely
accessible to the public and neither party receives any income directly from
the disputed material on their website.” Mai, however, on occasion receives income
from leading tours of the Volga region or translating certain documents. Hein
has stated she has no interest in similar business.

The court first allowed Dr.
Kenneth Crews to testify as a copyright expert, but only about issues of fact
(the process of getting a registration and possibly some facts related to fair
use, though it’s harder to see how that would work), not ultimate legal issues.

Mai challenged Hein’s standing
since she doesn’t seek to generate revenue, but she adequately alleged
copyright infringement—which has a sufficient common law analogue—and reputational
harm for the Lanham Act by listing her as a researcher/contributor and
allegedly including inaccurate information.

Copyright limitations period:
contested issue of facts precluded summary judgment for Mai given the discovery
rule and the possibility that Mai engaged in new publications when he moved
institutions/changed domain names. The court accepted Hein’s argument that she
didn’t discover the “full scope” of the infringement until 2023 as sufficient
to avoid summary judgment, though I’m not sure how persuasive that is given the
2020 objections.

Copyright in the form compilations
of historical genealogical information: This claim failed because Mai did not
copy anything copyrightable. The court’s north star was the Supreme Court’s
admonition that “the selection and arrangement of facts cannot be so mechanical
or routine as to require no creativity whatsoever.” Still, there might be a
valid copyright in Hein’s compilations. But even with a triable issue on that,
infringement claims failed.

Stripping each entry of uncopyrightable
facts/asserted facts, what remained was a mechanical “skeleton.” An abstraction-filtration-comparison
approach was useful here given the thinness of the copyright. The sample Hessler
text was “composed almost entirely of facts (names, dates, and locations) that
are not subject to copyright protection.” Without the facts, here was the
selection/coordination/arrangement:

_____________
(son of _____________of _____________) was baptized on _____________.
_____________ (daughter of _____________ of _____________) was baptized on
_____________. _____________and _____________married in _____________on
_____________. … etc.

Mai’s version:

Johann Jacob
Hessler, son of Johann Jacob Hessler of Niedergründau, was baptized on 15
December 1718. Anna Maria Meininger, daughter of Johannes Meininger of
Mittelgründau, was baptized on 2 December 1725, Johann Jacob and Anna Maria
were married Rothenbergen on 26, August 1745.

The Gründau
parish register records the baptisms of the following children of Johann Jacob
& Anna Maria Hessler, each born in Rothenbergen: (1) Johann Conrad, born 5
February 1747, baptized 12 February 1747, died 30 April 1754; (2 & 3) twins
Anna Margaretha (who died 16 May 1754) & Christina, born 28 May 1751,
baptized 29 May 1751; (4) Anna Margaretha, born 22 May 1755, baptized 25 May
1755; (5) Elisabetha, born 24 January 1760, baptized 26 January 1760, died 27
January 1760; and (6 & 7) twins Valentin (who died 5 March 1764) &
Friedrich, born 5 February 1762, baptized 7 February 1762.

Johann Jacob
Hessler died 8 November 1762, and his widow remarried on 5 January 1764 to
Hartmann Ifland. They had a daughter Catharina, born 2 January 1765 and
baptized 8 January 1765.

The Ifland
family, along with 3 of the Hessler children, arrived from Lübeck at the port
of Oranienbaum on 9 August 1766 aboard the pink Slon under the command of
Lieutenant Sergey Panov.

“While Mai’s reproduction
certainly contains the same basic information as Ms. Hein’s skeleton above, it
can hardly be said to be a copy of copyrightable content. Basic sentences,
which at least in this example Mai does not copy verbatim, and words like ‘baptism’
or ‘born’ which appear throughout, do not possess the ‘creative spark’ required
to demonstrate copyright protection.”

What about the “mode of
presentation”? “Because Ms. Hein chooses the humble paragraph format to present
her information, she argues that Dr. Mai should not have been able to do so. But
this argument proves too much. Copyright law cannot grant the first researcher
who discovered and published a compilation of facts with little additional
synthesis a monopoly over the mode of presentation of that information.” All
the other examples Hein submitted were substantially similar; summary judgment
for Mai was appropriate.

That left the photos, as to which
the court denied Mai’s motion for summary judgment on fair use. (This is also
framed as a finding of no fair use, but it seems like it’s still available for
trial.)

Purpose and character: Mai “primarily”
argued noncommerciality, not transformativeness, which probably makes sense.  “While the court agrees that Dr. Mai’s use is
on its face non-commercial, there is at least a question of fact as to whether
the photographs contribute to Dr. Mai’s other sources of income, such as his
tours or translations.”

Nature of the work: photos are
creative. (Sigh; no mention of publication status or free availability
elsewhere, though that shouldn’t necessarily outweigh creativity—but not all
photos are the same!)

Amount and substantiality: eight
whole photos.

Market value: Because Hein has no
interest in monetization of the website or through tours and translations, “there
can be no effect on the market.” However, “the fair market value could at some
future date be affected should Ms. Hein ever decide to monetize her work.” Summary
judgment denied. Mai’s pyrrhic victory on factor four is probably matched by
Hein’s overall pyrrhic victory, given that statutory damages and attorneys’
fees are unavailable.

Lanham Act/state law unfair
competition claims: Hein argued that the use of her name, with the title
“researcher” or “contributor” placed next to it, diminished her stature in her
research field and falsely indicated she has a professional association with
Mai. Mai argued that Hein wrongly tried to create a “required citation format”
through federal law, highlighting “apparently conflicting complaints that Dr.
Mai does not give Ms. Hein credit but also diminishes her when he cites her.”
(This is Dastar’s concern, too.)

The court didn’t have to reach the
issue because it found that the Lanham Act and state law claims didn’t cover noncommercial
uses. “The court’s survey of Lanham Act case law confirms a commerciality
requirement.” (Citing Lexmark and its progeny—this requires the plaintiff
to suffer a commercial injury and is different from requiring the defendant to
be commercial.)

Although Hein alleged that the use
of her name enabled Mai to receive income from selling tours and translations
on a different page of his website, that wasn’t enough; it was simply “too
attenuated,” given that Mai’s website was “overwhelmingly noncommercial in
nature,” despite its link to another website with information about his tours. Even
more attenuated were other alleged commercial connections:  Mai’s “paying for a URL and copyright
registrations, having a bank account, and spending substantial sums on hard
copy research materials, subscription websites, technical support for a
website, and travel for research and to attend conferences.” Thus, Mai wasn’t
using Hein’s name “in commerce.”   

from Blogger http://tushnet.blogspot.com/2026/01/dueling-geneologists-photo-c-claims.html

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false advertising’s injury requirement causes reverse passing off claim to fail

Posted on January 7, 2026 by rtushnet

Kesters Merchandising Display International, Inc. v.
SurfaceQuest, Inc., — F.4th —-, 2026 WL 35198, No. 24-3112 (10th Cir. Jan.
6, 2026)

SurfaceQuest allegedly marketed its products with
photographs of its competitor Kesters’ competing product. Kesters sells “a
lightweight, seamless material used in architectural products” called
MicroLite, while SurfaceQuest mainly sells “architectural film that goes on
surfaces like MicroLite.” Indeed, around 2014, the parties jointly marketed
MicroLite samples wrapped in SurfaceQuest film. In connection with that, Kesters
supplied SurfaceQuest with products, specification guides, and photographs of
Kesters’ products. SurfaceQuest then applied its film to the products.

However, two years later, “SurfaceQuest decided to sell and
market its own lightweight beam wrapped in SurfaceQuest film. These marketing
efforts included advertisements using photographs of MicroLite.” Kesters
alleged that SurfaceQuest “published a video characterizing MicroLite as
SurfaceQuest’s product,” “published images from a grocery store renovation and
misrepresented them as depicting SurfaceQuest products,” “placed a SurfaceQuest
sticker on a MicroLite binder and falsely represented to a Kesters customer
that SurfaceQuest had manufactured MicroLite,” “put a SurfaceQuest sticker on a
MicroLite sample and falsely told Kesters customers that SurfaceQuest had
invented MicroLite,” and “allowed a SurfaceQuest dealer to advertise with an
image of MicroLite.”

Kesters lost its Lanham Act claim because “injury isn’t
presumed and the plaintiff has not presented evidence of an actual injury.”

Kesters had the burden of showing injury: either a direct
diversion of sales or a loss of goodwill. The court of appeals reasoned that a presumption
of injury exists when the plaintiff proves material falsity and the “plaintiff
and defendant are the only two significant participants in a market or
submarket.” But, even presuming literal falsity, Kesters failed to create a
genuine dispute of material fact regarding the presence of a limited market.

“[A] market is sparsely populated only when the other
participants are insignificant. Otherwise, the court can’t assume that the
plaintiff’s lost sales would go to the defendant.”  SurfaceQuest showed the existence of multiple
competitors. Kesters had a competing affidavit, but it only offered it in support
of its own summary judgment motion, not in opposition to SurfaceQuest’s summary
judgment motion, and it only offered the affidavit too late—in a reply brief.

Dipping its toes into antitrust reasoning (always a
dangerous move), the court of appeals reasoned that even considering the
affidavit wouldn’t have helped. “To determine the scope of the market, we
examine ‘cross-elasticity of demand,’ which measures the substitutability of
products.” The affidavit didn’t address cross-elasticity of demand, only
similarities between the products made by Kesters and SurfaceQuest. “But these
similarities didn’t necessarily affect the ability to substitute products,” and
“a single market may include companies making dissimilar products.”

Evidence of actual injury was also insufficient. Kesters
argued that it lost a bid for work on a grocery store’s health markets, but
there was no evidence that SurfaceQuest obtained those projects or that the
store had seen SurfaceQuest’s marketing materials, whether directly from SurfaceQuest
or otherwise. Thus, the district court couldn’t reasonably infer a causal
connection between SurfaceQuest’s false advertising and Kesters’ loss of the
bid.

from Blogger http://tushnet.blogspot.com/2026/01/false-advertisings-injury-requirement.html

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laches, once established, bars Lanham Act claims even during more recent periods

Posted on January 7, 2026 by rtushnet

Design Gaps, Inc. v. Distinctive
Design & Construction LLC, — F.4th —-, 2025 WL 3492373, No. 24-1860
(Dec. 5, 2025)

Super complicated
facts; I’ll try to focus on the Lanham Act laches part because of that. “[A]fter
a squabble developed over a cabinet and closet job for a luxury home in
Charleston, South Carolina, the parties went to arbitration. The arbitration
turned out well for the homeowners and the general contractor overseeing the
home renovations but badly for the cabinet maker.” The cabinet maker nonetheless
sued in federal court, including suing people that the arbitrator had held
could not be brought into the arbitration because they weren’t bound by the
agreement. The court of appeals nonetheless found that, because the disallowed
parties were in privity with entities validly in the arbitration, res judicata
and collateral estoppel precluded any claims against them based on the job.

Design Gaps “designs
and installs cabinetry in luxury homes,” and frequently worked with defendant Shelter,
“a general contractor engaged in homebuilding and renovation.” They had
disputes during their years of working together. “For example, Design Gaps
claimed from time to time that Shelter advertised Design Gaps’ cabinets without
attributing the work to Design Gaps.” These claims were not covered by the
arbitration, but they were still barred by laches.

The parties
accepted that South Carolina’s three-year statutes of limitations for fraud and
unfair trade practices supplied the analogous limitations period. Design Gaps
filed its lawsuit on January 13, 2023, meaning that any alleged Lanham Act
violations occurring before January 2020 presumptively were barred by laches.

Design Gaps argued
that it did not have sufficient information concerning Shelter’s violations
until arbitration commenced. But it sent a C&D in April 2018 about
Shelter’s unattributed uses of Design Gaps’ work specifically referencing the
Lanham Act in connection with its failure-to-attribute objections. While “mere
knowledge that [a trademark owner] might have an infringement claim at some
future date is not sufficient to trigger the period of unreasonable delay
required for estoppel by laches,” the inquiry is objective. And the objective
evidence was that “Design Gaps knew Shelter was using Design Gaps’ cabinet work
in its promotional materials and that Shelter was not attributing that work to
Design Gaps. Design Gaps had also stated in writing that it believed such
conduct was false and misleading as to the origin of the cabinet work and that
Design Gaps was being harmed. These facts are virtually identical to those
alleged to support Design Gaps’ Lanham Act claims in this lawsuit.”

Would laches also
cover continuing the same conduct during the presumptively not-lached period? Yes.
Here, the core “claim” remained the same, so the continuing violation doctrine
extended laches to the more recent period.

Design Gaps argued
that its delay was excusable based on Citibank, N.A. v. Citibanc Group, Inc.,
724 F.2d 1540 (11th Cir. 1984); there, Citibank should have known of the
defendants’ use of its name “prior to 1960, but did not file suit until 1979.”
“When [Citibank] first learned of defendants’ adoption of Citibanc as the name
of its holding company in 1972, [Citibank] wrote letters warning that it
regarded the use of” the name “as an infringement of [Citibank]’s rights.” But,
unlike Citibank, Design Gaps did not “sen[d] several other letters over the
next few years” before bringing suit. Moreover, in Citibank, the
defendants did “not rel[y] on the delay of plaintiffs in expanding their use of
the mark; indeed, they [ ] expanded their use while asserting their right to do
so, in the face of plaintiff’s constant complaints.” By contrast, the record here
didn’t indicate that Shelter asserted its belief that it had the right to
promote its work in the way it did to Design Gaps.

Design Gaps also
argued that settlement discussions excused its delay, but the record didn’t
support the existence of discussions, only that Shelter didn’t respond to the letter.

Design Gaps also
argued that there was no prejudice. Prejudice can be economic or evidentiary.
For trademark, a defendant’s “assertion that it would suffer economic injury if
enjoined from using” a plaintiff’s mark, “without reference to any evidence
beyond the length of time it has used the mark, is simply insufficient to
establish economic prejudice.” In another false advertising case, the Fourth
Circuit found that “unreasonable delay prejudiced” the defendant “because of
[the defendant]’s continued use of the advertisement on all of its [products]
in over a dozen retail stores for years,” to the point that the plaintiff
alleged that the defendant “ha[d] been unjustly enriched by over $27 million.” The
record didn’t show that much here, but Shelter “demonstrated its continued
economic investment in promotional materials between 2015 and 2022.”

For evidentiary
prejudice, a defendant must “articulate how” intervening time “would prejudice
[its] defense specifically.” Indeed, a defendant “ha[s] an obligation to adduce
specific evidence of prejudice” to use this type of laches. Shelter relied on
the death of a Mr. Butler, one of its principals, who communicated with Design Gaps
about the challenged conduct. Design Gaps argued that it served interrogatories
and requests for production on Mr. Butler ten weeks before his unexpected death
and that Shelter’s refusal to answer discovery and deficient responses created
the prejudice Shelter claims to have suffered. “Design Gaps has not supported
this argument with citation to the record. Besides, written discovery responses
are no substitute for live testimony. Any responsibility for discovery issues
does not change the fact that Shelter has demonstrated some evidentiary
prejudice. When considered in the context of over four years of unreasonable
delay, we conclude that Shelter has carried its burden.” (Not entirely
sure why it’s Shelter’s burden given the presumption of laches, but ok.)

from Blogger http://tushnet.blogspot.com/2026/01/laches-once-established-bars-lanham-act.html

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what particularity is required when an ad campaign has zillions of possibly algorithmic variants?

Posted on January 7, 2026 by rtushnet

Ledesma v. Hismile, Inc., — F.Supp.3d —-, 2025 WL
3785960, No. 24-cv-03626-KAW (N.D. Cal. Sept. 23, 2025)

Blogging because it’s one of the first cases I’ve seen that has
to address questions raised by algorithmically modified ads that are different
for different users. Hismile allegedly engaged in fraudulent marketing of its
teeth whitening products, “which promise to deliver instant and dramatic
results.” Plaintiffs brought the usual
California claims. The judge grants the motion to dismiss, with leave to
amend (except as to a nationwide class for breach of warranty/unjust enrichment,
which is out for good).

Hismile allegedly advertises its products through social
media, particularly on TikTok, Instagram, and Facebook, with falsified
before-and-after images, misleading celebrity endorsements, deceptive/undisclosed
influencer marketing, and “customer reviews” by its own employees.

For example, ads for one product allegedly show the
product’s purple serum while it is still on the models’ teeth, giving an
illusion that the purple serum cancels out the yellow tones (consistent with
their advertising focusing on “color correction” and the “color wheel”), but “fully
rinsing off the product causes the color-correcting effect to disappear
entirely.” They also allegedly used unnaturally bright lighting and models who
already have very white teeth to exaggerate the before-and-after effect of
another product. Celebrities paid to endorse allegedly already have very white
teeth and are not bona fide users. They also allegedly made false claims of
clinical proof, in contradiction to the science indicating minimal
effectiveness.

Hismile’s primary argument was that plaintiffs failed to
identify the specific ads they saw sufficient to satisfy Rule 9(b). (I’m not
convinced that Rule 9(b) should apply to false advertising statutory claims,
which were designed to change all the key elements of common-law fraud, but most
courts routinely apply it.) The court agreed, but indicated its willingness to
accept a somewhat more detailed pleading.

Plaintiffs argued that it was enough to describe their
experiences and provide example ads. E.g., plaintiff Tanaka “relied on
before-and-after images and videos on Defendants’ Instagram and TikTok,
customer reviews, and customer reactions on Defendants’ website and on social
media.”  It’s true that “courts have
found that pleadings are insufficient where the complaint included a number of
representative advertisements, but it was unclear which specific advertisement
the plaintiff had seen and relied upon in making their purchase. Likewise,
courts have often found it insufficient to simply point to a particular
misleading and fraudulent statement or phrase that appeared in various
advertisements. Courts have also found it insufficient to merely provide
representative advertisements without stating that those were the same
advertisements that the plaintiffs saw and relied upon.”

However, plaintiffs argued that they alleged exposure to a
long-term advertising campaign, allowing their claims to proceed under In re
Tobacco II Cases, 46 Cal. 4th 298 (2009), which stated that when “a plaintiff
alleges exposure to a long-term advertising campaign, the plaintiff is not
required to plead with an unrealistic degree of specificity that the plaintiff
relied on particular advertisements or statements.” The circumstances of the
advertising campaign may make it “impossible” to identify the specific
advertisement that persuaded an individual to purchase a product.

The court reasoned that “this appears to be a case where
Plaintiffs could potentially allege a pervasive, targeted advertising campaign
over a period of time, all of which pushes the same message: that Defendants’
products will ‘instantly and dramatically whiten’ teeth.” They alleged a
multi-million dollar advertising campaign on social media; they also alleged
posts of fifteen or more advertisements per day. One plaintiff alleged seeing
approximately sixty advertisements before deciding to purchase the products; requiring
a plaintiff to “specifically identify each and every one of these sixty
advertisements hardly seems practical or practicable.”

This is especially true for modern social media advertising.
At the hearing (not in the pleadings, which is key), plaintiffs noted that the
ads include a “seemingly infinite variations of what the ads can look like,”
with multiple ads including the same video but in different orders. “One video
may include the yellow rubber duck clip followed by a scientist clip, while
another video may have the scientist clip come first followed by the yellow
rubber duck clip or a yellow banana clip. In short, the same yellow rubber duck
clip may be in hundreds of different of ads, making it difficult to identify
which advertisement an individual may have seen.” The realities of social media
exposure to “numerous 30-second or shorter advertisements, each of which may
have focused on demonstrating that whitening worked through color-correction
technology,” had to be taken into account.

Bottom line: “To find that Rule 9(b) requires a plaintiff to
meet such a high standard would be the same as insulating a defendant from
liability simply because they have created so many different types of
advertisements that are then repeatedly pushed onto social media users. This
would not be a fair result.”

However, the complaint wasn’t enough as currently pled. “Plaintiff
must still plausibly allege that this is the type of advertising campaign that
would not require them to identify the specific advertisements they viewed,”
with allegations about its duration or their exposure; allegations about the
strategy of using the same clip in multiple advertisements; and/or allegations
that defendants’ social media accounts include thousands of false
advertisements.  

Also, with respect to some categories of claims— “before or
after videos, videos with scientists and dentists explaining color theory, and
videos demonstrating color theory by wiping off purple paint from yellow
objects”—there was more specific information, but some plaintiffs alleged that
they relied on influencer endorsements without identifying who the influencer
was and what was stated:

Significantly, Plaintiffs do not
appear to allege that all influencer endorsements are false, such that every
influencer endorsement would constitute false advertising. Likewise, some
Plaintiffs relied on customer reviews, but do not specify who made these
reviews or what they stated. Again, Plaintiffs do not allege that all positive
reviews are fake, nor do they suggest that reviews from real customers would be
actionable. To the extent Plaintiffs intend to rely on influencer endorsements
or reviews, Plaintiffs will need to provide sufficient allegations to
demonstrate that the endorsements or reviews they relied upon were false.

The court also commented, looking forward to an amended
complaint, that claims of “instant” and “dramatic” whitening might well be
non-actionable puffery; “[s]tatements that characterize the speed of an action
with terms like ‘fast’ are frequently held to be puffery.”

from Blogger http://tushnet.blogspot.com/2026/01/what-particularity-is-required-when-ad.html

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literal falsity can exist without bald-faced lies, 9th Circuit confirms

Posted on December 30, 2025 by rtushnet

InSinkErator, LLC v. Joneca Co., No. 25-286 (9th Cir. Dec.
29, 2025)

The court of appeals affirms the grant of a preliminary
injunction, previously
discussed, against Joneca’s advertising of its garbage disposals.
InSinkErator argued that Joneca’s horsepower designations were literally false
because they do not reflect the output power of the disposals’ motor, despite
Joneca’s argument that its designations accurately reflect the electrical power
drawn by its units.

“Joneca attributes its lower prices to various mechanical
advantages, like its use of direct current and the torque of its smaller
grinder turntable.” Horsepower is a unit of power; InSinkErator argued that consumers
necessarily understand references to “horsepower” to mean “output
horsepower”—the amount of power that a disposal’s motor can provide to the
disposal’s grinding mechanism—as opposed to “input horsepower,” the electric
power used by the system as a whole. The parties offered competing evidence, including
expert declarations; Joneca argued that input power was used for rating
disposal units under Underwriters Laboratories standard UL 430.

Was using input power ratings literally false in this
context? The district court held that “[t]he advertisement unequivocally claims
that a given machine has a specific horsepower, such as 1 HP, 1 1/4 HP, 3/4 HP,
or 1/2 HP.” And it accepted a definition introduced by InSinkErator from a
national retailer’s website that described horsepower for a disposal unit as
“[t]he total power output capability from the included motor.” What about the
UL guideline? It was “plainly a safety guide for ensuring that switches and
controls can safely handle the input current drawn by a motor,” which provided
for current input testing “regardless” of horsepower designations on the motor
or accompanying packaging.

Procedural issue: what kind of review should the appellate
court give to the district court’s finding of literal falsity by necessary
implication? Joneca argued for de novo review to determine the meaning of the
ad claims. The court of appeals declined to resolve the issue; even if ad
claims should be construed de novo like contract terms, “subsidiary factual
findings bearing on construction” are reviewed only for clear error. And those
were the factual findings at issue here. The district court found that Joneca’s
“input-based interpretation d[id] not seem reasonable.” When a court construes
“technical words or phrases” by reference to “extrinsic evidence” about usage,
that “factual determination, like all other factual determinations, must be
reviewed for clear error.”

Joneca argued, nonetheless, that input horsepower “more
closely correlates to the performance of the entire waste disposer system” as
it would be used by a consumer. But that wasn’t clear error. “The district
court considered battling expert opinions speaking to these questions alongside
a wide range of supporting resources, including industry resources and a
national retailer’s website.” (The district court also found particularly
persuasive correspondence from UL engineers that “UL 430 is a safety standard
for Waste Disposers and is not meant to be used to determine the horsepower
ratings of Waste Disposers.” This might be hearsay, but hearsay can be
considered on a preliminary injunction.)

It was not clear error to find that the horsepower claims
weren’t ambiguous in context. The district court found Joneca’s proposed
interpretation implausible, “explaining that UL engineers themselves refuted
Joneca’s use of UL 430, its sole supporting reference.” Joneca argued that the
consensus among engineers, or industry usage, wasn’t relevant, but the district
court did consider the audience when it found that “Joneca had no support for
its interpretation other than an inapplicable and non-consumer-facing safety
standard.” Meanwhile, the materiality evidence supported the finding of literal
falsity to consumers, including explanations from a national retailer’s website
that “[g]arbage disposal horsepower (HP) determines what the disposal is
capable of grinding” and evidence from yet another national retailer’s website
discussing that “higher . . . HP” would mean “[f]ood waste will be ground into
finer particles.” Thus, it was not clear error to find that Joneca’s horsepower
claims referred to output horsepower by necessary implication.

Was that literally false? Joneca argued that its claims were
not sufficiently unsubstantiated to meet the standard for literal falsity,
because a literal falsehood has to be “bald-faced, egregious, undeniable, over
the top,” or “completely unsubstantiated.” But those quotes came from
discussions of “per se” falsity, as opposed to discussions of literal falsity
that were “proved by evidence.” The latter category can also be literally
false, and involves considerations of context and audience. (The Seventh Circuit’s
“bald-faced” language is an invitation to err, and raises considerations
probably better dealt with as materiality issues.) “At least when literal
falsity is shown by evidence, a complete lack of substantiation for the
opposing position—or absence of ‘conflicting evidence,’ as Joneca puts it—is
not required.”

Materiality: The district court found that horsepower was
“an inherent part of” garbage disposals because of “the importance of
horsepower to the quality and characteristics of a garbage disposal.” In
addition, InSinkErator’s “market research” showed that “consumers ranked
horsepower as one of the top purchasing considerations for garbage disposals,” and
retailers organized disposals by horsepower in shelving those products, which
“signals that horsepower is an important—if not primary—distinction used by
retailers to market [disposals] to consumers.” Retailer websites also expressly
link horsepower to the effectiveness of disposal units, e.g., “[t]he higher the
HP, the better the disposal will run.”

The court of appeals didn’t have to rule on whether the
Second Circuit’s “inherent characteristic” language was appropriate; it
rejected Joneca’s request for a requirement of “direct evidence showing how
consumers would likely react to the alleged deception”—“like surveys and
consumer declarations”—to show that a deception is material. To the contrary,
“[c]ircumstantial evidence is not only sufficient, but may also be more
certain, satisfying and persuasive than direct evidence.” There was no clear
error in finding materiality.

Joneca argued that it submitted evidence that “consumers
prefer Joneca’s disposers because of their better performance.” But the quoted customer
reviews “primarily discuss how ‘powerful’ Joneca’s units are, indicating that
consumers do care about power.” It didn’t matter that consumers were satisfied
with their Joneca units; that didn’t show that they didn’t care about
horsepower when choosing a disposal. In particular, “[b]ecause retailers
display disposals to consumers by horsepower level, it was reasonable for the
district court to infer that a false claim about a disposal’s horsepower—i.e.,
a horsepower claim that causes a disposal that lacks even the horsepower to
qualify as Medium Duty to be displayed in the Heavy Duty section—would
materially affect whether and how consumers would compare the unit to competing
products.”

Injury: The court of appeals noted with approval the Second
Circuit’s statement that “in many cases the evidence and the findings by the
court that a plaintiff has been injured or is likely to suffer injury will
satisfy the materiality standard—especially where the defendant and plaintiff
are competitors in the same market and the falsity of the defendant’s
advertising is likely to lead consumers to prefer the defendant’s product over
the plaintiff’s.” The district court found that “horsepower—and thereby falsehood—is
prominently displayed at the point-of-sale in retail shops” and reasoned that
“horsepower is commonly used to differentiate garbage disposals.” It was not
error to find that, when “a false statement is prominently displayed on a
direct competitor’s product, and sold side-by-side at the same retailer as if
to compare products and value, there is a real likelihood” of “diverted sales
or diminished goodwill.”

The district court should have presumed irreparable injury
from likely success on the merits, but its error didn’t help Joneca. That court
independently found likely irreparable injury, which was not clearly erroneous.
It apparently credited InSinkErator’s account that a retailer had awarded shelf
space to Joneca instead of InSinkErator and that Joneca’s “fake value
proposition” of inflated horsepower at a low price would influence bidding that
was in process for “private label contracts with major retailers.” But, even if
Joneca’s story had more details than InSinkErator’s, it wasn’t clear error to
side with the latter.

from Blogger http://tushnet.blogspot.com/2025/12/literal-falsity-can-exist-without-bald.html

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court rejects politician’s slogan claim

Posted on December 29, 2025 by rtushnet

Cloobeck v. Villaraigosa, No. 2:25–cv–03790–AB (SK) (C.D.
Cal. Dec. 8, 2025)

Cloobeck, a 2026 California gubernatorial election candidate,
alleged infringement of the phrase “PROVEN PROBLEM SOLVER” by competing
candidate Villaraigosa. Cloobeck used “I AM A PROVEN PROBLEM SOLVER” in
connection with his gubernatorial campaign since March 2024; he applied to
register it in late 2024. Villaraigosa later began using the phrase “PROVEN
PROBLEM SOLVER” in connection with his campaign.

Obviously this is a bad claim. The difficulty is that
trademark has extended far beyond protecting source indication, but source
indication is the only thing that really involves a substantial government
interest in suppressing political speech. We could say that the Lanham Act is
only constitutional as applied to political speech when it addresses source
identification, and not other kinds of (immaterial) confusion, but courts
generally don’t want to do that and therefore end up having to make somewhat
less convincing distinctions.

First, the court says, the Lanham Act governs commercial
speech, not “purely political” expression. What about United We Stand Am., Inc.
v. United We Stand, Am. New York, Inc., 128 F.3d 86 (2d Cir. 1997) (not for
nothing, endorsed by the Supreme Court in JDI)? First, it’s not binding
in the Ninth Circuit. Second,

the defendant was a political
organization operating as an entity that provided membership, political
advocacy, and fundraising services to the public. By contrast, here
Villaraigosa is merely an individual gubernatorial candidate—he is not running
a political organization engaged in offering “services characteristically
rendered by a political party to and for its members, adherents, and
candidates.” In addition, in United We Stand, the court emphasized that the
defendant’s use of the mark was tied to soliciting contributions, memberships,
and event participation, activities with clear commercial characteristics under
the Commerce Clause.

Here, however, Villaraigosa’s use
of “PROVEN PROBLEM SOLVER” occurs in the course of political messaging,
debates, and campaign communications—not the sale or advertisement of goods or
services.

I tend to think this distinction is unpersuasive even though I accept the result in United We Stand. [Side
note: United We Stand was a default judgment, and so the facts are particularly unhelpful—I’m trying to
track down some images if they’re available.]

Political messaging and campaign communications also
routinely involve soliciting contributions, event participation, and even
memberships (donor’s circles!). They’re two different ways of saying the same
thing. Please note the “contribute” button on these screenshots from
defendant’s website, included in plaintiff’s complaint:

Which is to say, individual candidates promote services/participate
in commerce just as much as political parties. However, the role of a name
compared to that of a slogan can provide a meaningful difference: a name tells
you who is speaking in a much more direct and unambiguous way than a slogan. It
is a core source-identifier, where the interest in avoiding confusion is at its
highest.

The court here also distinguishes other political speech
cases like Browne v. McCain, 611 F. Supp. 2d 1073 (C.D. Cal. 2009),
which applied the Lanham Act to unauthorized use of a musical work in political
advertising as a sponsorship/approval case. The court said that the use of
“PROVEN PROBLEM SOLVER” here “does not implicate confusion over the origin or
sponsorship of goods or services, but rather falls within the heartland of core
political expression. Accordingly, while Browne recognized that the
Lanham Act may extend to certain political activities when there is a
significant risk of confusion, this Court is unconvinced the Lanham Act is
applicable to the political circumstances at bar.”

OK, but (1) if the issue is lack of confusion, no special
treatment for political speech is required; (2) if the issue is that political
speech requires us to tolerate more risk of confusion, that should be said
outright; (3) if the factual claim is that this kind of political speech is
just inherently less likely to cause confusion than two nearly identical
political party names or the use of famous songs by famous entertainers, then
that should also be said outright. To be clear, I think both (2) and (3) are
correct and also more helpful than just saying “these are different
situations,” because knowing why they’re different is useful. Why couldn’t one
politician endorse another? Brad Lander and Zohran Mamdani cross-endorsed in their primary—and
although if you’re reading this, you probably understand why that’s different,
most Americans have only a vague understanding of ranked-choice voting.

The court thought this case was more like Think Rubix, LLC
v. Be Woke. Vote, No. 2:21-CV-00559-KJM-AC, 2022 WL 1750969 (E.D. Cal. May 31,
2022), where the slogan “Be Woke. Vote” slogan was “inherently intertwined”
with social and political advocacy and therefore noncommercial under the Lanham
Act. “Both Think Rubix and the present case involve political and civic
engagement campaigns that use short punchy phrases as part of their political
messaging. In each, the marks’ purpose is to inspire individuals to vote, not
to identify or promote a commercial product or service.” “PROVEN PROBLEM
SOLVER” was also used in campaign materials and messaging to persuade voters, “not
to engage in commercial trade.”

[Political fundraising is apparently “commercial trade,”
though, at least when a party does it—this is not as good of a dividing line as
“name” for purposes of protecting political speech.] “Villaraigosa is not
selling goods or services or participating in the marketplace—he is seeking
votes from the public for his 2026 California gubernatorial campaign.” [We’ve
just stuffed the relevant considerations into the definition of “participating
in the marketplace,” though—was the McCain campaign “participating in the
marketplace” when it ran its allegedly infringing ad? If so, how was it doing
so differently than defendant here? Are political endorsements a relevant
“market”?]

Even if the Lanham Act did apply, there was no plausible
risk of confusion.

Voters understand that Cloobeck and
Villaraigosa are two distinct individuals and political candidates—they are
opponents in a high-profile gubernatorial election. They have separate and
distinct campaign websites, social media accounts, and both engage with the
public widely and separately through campaign speeches and messaging. No
reasonable person would believe Cloobeck and Villaraigosa are affiliated simply
because both use a descriptive phrase commonly used by political candidates for
their campaigns. Moreover, the [complaint] contains no allegations of
misdirected donations, mistaken identity, or any other indica of confusion.

“PROVEN PROBLEM SOLVER” was also generic for a desirable
political trait, not a source identifier. “When voters consider candidates for
public office, they naturally seek individuals who can solve the problems of
their communities.” Numerous politicians have used the phrase “proven problem
solver” in campaign materials “dating back decades. This signifier in politics
can be traced all the way back as far as 1989.” [So far back! /is old] “Granting
exclusive rights to a single candidate for such a common descriptor would
remove a phrase from ordinary political discourse and risk chilling core
campaign speech.”

Cloobeck analogized to political trademarks obtained by
other candidates, citing examples such as “MAKE AMERICA GREAT AGAIN,” “YES WE
CAN,” and “BUILD BACK BETTER.” But “those slogans were historically distinctive
and uniquely associated with a specific candidate or movement,” not merely
descriptive. [Ugh. The first two at least were very deliberately, intentionally
not new! If we want to protect political speech (we should), we need (a) a high
barrier for protecting political slogans as a factual matter and (b) a test
that is hesitant to impose liability on politicians’ speech. Both are useful,
(a) to prevent the use of political trademarks as a sword against political
speech and (b) as a shield for political speech even against non-politicians’
claims.]

[Side note that the court calls the phrase at issue a
“descriptive, generic” slogan, and TM law would say there’s a big difference
between the two in terms of theoretical protectability—but it doesn’t matter
here, and also the PTO understandably requires more evidence of distinctiveness
if something is highly descriptive/bordering on generic, so the court’s
instincts here make sense.]

from Blogger http://tushnet.blogspot.com/2025/12/court-rejects-politicians-slogan-claim.html

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no abuse of discretion in PI requiring advertiser to terminate liens that it told homeowners weren’t liens

Posted on December 24, 2025 by rtushnet

People v. MV Realty PBC, LLC, 2025 WL 3719896, B341121 (Cal.
Ct. App. Dec. 23, 2025)

Blogging more in my property law prof hat, but with false
advertising. MV Realty recorded liens on its customers’ properties, but assured
homeowners that these were “notices” and not “liens.” The court of appeals affirmed
a preliminary injunction requiring, inter alia, that MV Realty terminate its
recorded liens.

MV Realty’s “Homeowner Benefit Program” sold “Forward
Listing Contracts” to California homeowners. “The program offered a cash
payment to homeowners, of approximately .27 percent of their home value, in
exchange for the homeowners granting MV Realty the exclusive right to sell
their home.” MV Realty marketed the program as a “one-of-a-kind, innovative
program that allows homeowners the chance to receive an immediate cash payment
by agreeing that [MV Realty] will be your Real Estate agency if and when you
decide to sell your home in the future” with “no credit check,” “[no]
[r]equirement to [s]ell [y]our [h]ome,” and “no obligation to repay the money
….” This requirement applied if the homeowner sold the home within the next
40 years; if they didn’t use MV Realty, they were required to pay a three
percent penalty of either the sale price or of the home’s initial valuation by
MV Realty, whichever was higher, the “Early Termination Fee.”

The agreement stated that the homeowner’s “obligations
hereunder shall constitute covenants running with the land” and granted MV
Realty “a lien and security interest” in the property as security for the
homeowner’s obligations under the contract. MV Realty promised to “consider in
good faith any request from [the homeowner] to facilitate such refinancing or
new mortgage by subordinating the lien of this [a]greement to the refinanced or
new mortgage.”

Unsurprisingly, “[i]nternally, MV Realty referred to the
memorandum as a lien and promoted it to investors as a security feature of a
future revenue stream. Externally, underwriters, prospective lenders, and
escrow officers treated the memorandum as a lien on the property.” But prospective
customers heard a different story. “On its website and in its marketing
e-mails, MV Realty stated it would not record a lien on the homeowner’s home;
it would record only a memorandum to serve as public notice of the homeowner’s
obligations under the agreement. MV Realty trained its telemarketers to tell
homeowners it would not record a lien on their homes.”

The People sued for violations of the UCL
and FAL. The People argued that MV Realty’s fraudulently placed liens
caused ongoing harm to over 1,400 California homeowners who, as MV Realty
explained in an investor presentation, are “unable to convey clean title
without receiving a lien release from MV Realty.” The People “submitted
declarations from over a dozen homeowners who contracted with MV Realty, and
several more from declarants whose family members contracted with the company.”
Homeowners stated that they never would have entered into the agreement if MV
Realty had explained that there was a lien to them.

A few explained how the lien became
an obstacle to their later obtaining a loan secured by the property, and they
eventually gave up on refinancing. Others stated they were forced to pay the
Early Termination Fee, which was ten times the amount of the consideration they
had received from MV Realty, before they could secure refinancing. Many shared
their views that MV Realty lied to them, that they no longer trusted MV Realty
to sell their home, and that they felt trapped by the agreement. Almost all homeowner
declarants stated they had not seen the 12-page agreement until a notary, who
could not explain the terms of the agreement, brought the document to their
home to be signed.

MV Realty submitted 51 declarations from California
customers who stated that they were not misled by MV Realty and that they were
aware that “MV Realty ha[d] the right to record th[e] [m]emorandum on my
property records to provide notice of the agreement.” Its own spreadsheet
showed that it did not provide the agreement to 80 percent of California
homeowners who signed it until the moment a notary presented it to them. MV
Realty admitted homeowners had difficulty refinancing because of the memorandum;
there was evidence that some lenders rejected MV Realty’s offers to subordinate
the memorandum. Its own document, “Termination of Memorandum of MVR Homeowner
Benefit Agreement,” explained that the memorandum was an “encumbrance.”

The trial court found that “[MV Realty] knew the memoranda
operated as liens, represented this to their investors, but materially
misrepresented the effect of the memoranda to the Homeowners.” Thus, it granted
the preliminary injunction, including the requirement to remove the liens.

The UCL and FAL are “broadly enforced to protect the public,
including “extraordinarily broad” remedial power to enjoin prohibited business
practices “in whatever context they may occur.”

Under California law, “[w]here a governmental entity seeking
to enjoin the alleged violation of an ordinance which specifically provides for
injunctive relief establishes that it is reasonably probable it will prevail on
the merits, a rebuttable presumption arises that the potential harm to the
public outweighs the potential harm to the defendant. If the defendant shows
that it would suffer grave or irreparable harm from the issuance of the
preliminary injunction, the court must then examine the relative actual harm to
the parties.” An injunction in such circumstances is only appropriate if the
trial court concludes, balancing (1) the degree of certainty of the outcome on
the merits, and (2) the consequences to each of the parties of granting or
denying interim relief, that an injunction is proper. The standard of review is
abuse of discretion.

First, the court of appeals found there was no error on likely
success on the merits. MV Realty argued that it “properly disclosed to
homeowners that the memoranda would be recorded with the county recorder’s
office,” so it made no material misrepresentations to homeowners, and that the “memorandum”
wasn’t legally a “lien.” The court of appeals understandably disagreed. The
evidence demonstrated that “[MV Realty] knew the memoranda operated as liens,
represented this to [its] investors, but materially misrepresented the effect
of the memoranda to the Homeowners.”

MV Realty argued that a lien has to be “a legal claim
against a property to secure the payment of a debt” and the memorandum was a
mere “notice disclosing its contract rights,” such that MV Realty could
file a lien for 3% of the value of the property upon sale or transfer if the
consumer breaches the agreement and does not use MV Realty in the real estate
transaction.

Not so. “A lien is a charge imposed in some mode other than
by a transfer in trust upon specific property by which it is made security for
the performance of an act.” The documents called it “a lien and security
interest.” More than once! MV Realty called it a lien when talking internally
or to investors, and “[u]nderwriters who analyzed the memorandum instructed
their agents to treat it as a lien or a mortgage.” There was substantial
evidence of likely success on the merits.

What about balancing the harms? The trial court stated that
it was “not persuaded that [MV Realty has] shown grave or irreparable harm to
warrant denial of the preliminary injunction,” though it accepted MV Realty’s
contention that if the preliminary injunction issued, it would “essentially
[be] force[d] … to cease business in California and require[d] … to
terminate thousands of [m]emoranda, which it ha[d] already provided consumers
consideration for.” The court also accepted MV Realty’s contention that it
would be put “ ‘in a state of financial disarray.’ ” Nonetheless, even if the
district court wrongly found no grave or irreparable harm, MV Realty was not
prejudiced and there was no clear error because the trial court acceptably balanced
the harms to the parties. (And of course that’s one completely coherent way to
read the statement that MV Realty didn’t show harm to warrant denial of the
PI.)

“At this stage of the analysis, no
hard and fast rule dictates which consideration must be accorded greater weight
by the trial court. For example, if it appears fairly clear that the plaintiff
will prevail on the merits, a trial court might legitimately decide that an
injunction should issue even though the plaintiff is unable to prevail in a
balancing of the probable harms.” The goal is to minimize the harm that would
be caused by an erroneous interim decision.

The trial court didn’t clearly err when it found there would
be imminent, irreparable harm to homeowners bound by the agreement if the
preliminary injunction did not issue because each homeowner would be bound by
terms they never would have knowingly accepted. Not one of the roughly 70
homeowners who submitted declarations stated that a cloud on marketable title “was
something they willingly bargained for in exchange for the .27 percent of their
home value they received as consideration.” (Yeah, I noticed that about the
quote from MV Realty’s declarations too.) 
“Even when MV Realty offers to subordinate its lien, as the evidence
shows it has done in the past, many lenders will not accept the subordination.
A homeowner who wishes to refinance or take a home equity loan, therefore, must
pay the Early Termination Fee to clear the title.” Thus, there was no abuse of
discretion in balancing the harms.

MV Realty proposed that instead of
ordering it to terminate all memoranda, the trial court could order it to:
provide notice to every customer, title company, and lender that the memoranda
is not a lien; subordinate when requested to do so by a lender; and terminate a
memorandum if a lender rejects the subordination. None of these suggestions was
a deviation from what MV Realty represented was its contemporaneous practice to
assist homeowners with refinancing. The People submitted evidence that homeowners
nevertheless continued to suffer harm as they struggled to get in touch with
the company to request subordination and complete the lengthy process of
clearing title.

There was no abuse of discretion in finding these steps
insufficient.

from Blogger http://tushnet.blogspot.com/2025/12/no-abuse-of-discretion-in-pi-requiring.html

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“monk fruit sweetener” plausibly should have more than 1.15% monkfruit

Posted on December 22, 2025 by rtushnet

Grimbaldeston v. Saraya USA, Inc., 2025 WL 3677857, No.
25-cv-05649-RFL (N.D. Cal. Dec. 17, 2025)

Grimbaldeston brought the usual
California claims based on allegations that Saraya deceptively overstated
the amount of monk fruit in its sugar substitute. The court mostly declined to
dismiss the case.

The back label describes the benefits of monk fruit and
lists the ingredients: “Erythritol, Monk Fruit Extract.” Grimbaldeston alleged
that testing confirmed that the Sweeteners contain 1.15% monk fruit extract,
and that the remaining 98.85% is made up of Erythritol.

This was adequate to plead deception.  

In text that is more than twice as
large as any other text on the front label of the product, the Sweeteners’
front label describes the product as “MONK FRUIT SWEETENER,” while the words
“WITH ERYTHRITOL” are approximately one third of the size and written in a
lighter color. The back label describes the health benefits of monk fruit,
which it calls a “superfood” and “The Immortals’ Fruit.” The back label does
not discuss Erythritol, other than listing it as an ingredient. At the pleading
stage, Grimbaldeston has alleged that the amount of monk fruit extract in the
Sweeteners is de minimis, and that a reasonable consumer would expect the
Sweeteners to contain more than a de minimis amount of monk fruit, given the
front label and the back label discussion.

Nothing on the label indicates the ingredient proportions, and
the ingredient list reflects that the product contains more erythritol than
monk fruit. “But even taking the ingredient list into account, it is plausible
that a reasonable consumer would believe that a product prominently labeled ‘Monk
Fruit Sweetener,’ and extolling the benefits of the fruit, would contain more
than 1.15% monk fruit.”

Saraya argued that purchasers would know that a sweetener
made “mostly of monk fruit” would be “cloying[ly] sweet,” and that “such
products must contain a larger proportion of less-sweet ‘sugar alcohol’ ” to be
a “one-to-one sugar replacement.” “While bee pollen collection is undisputedly
common knowledge, it is plausible that an average consumer of sugar
replacements would be unaware of the relative sweetness of monk fruit, even if
they are aware of the supposed health benefits of monk fruit and specifically
sought out a monk fruit product.” Also, even if so, “a reasonable consumer
might plausibly have expected that the Sweetener was not primarily monk fruit
while also expecting the product to have a non-negligible amount of monk fruit.”

Saraya also argued that because the “back label discloses
that for a serving size of 8 grams, there are 8 grams of sugar alcohol
(erythritol) … [it] fully discloses that approximately 8 grams of each 8-gram
serving is erythritol, not monk fruit.” But the word “erythritol” is not part
of the “sugar alcohol” disclosure. A reasonable consumer plausibly wouldn’t
know that only erythritol—and not monk fruit extract—contains sugar alcohol, or
wouldn’t “connect the dots” to determine that nearly all of the Sweetener is
comprised of erythritol.

The CLRA claim was, however, dismissed to provide the proper
pre-suit notice.

 

from Blogger http://tushnet.blogspot.com/2025/12/monk-fruit-sweetener-plausibly-should.html

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