Rebecca Tushnet

Chobani’s “zero sugar” yogurt with allulose violates FDA regs despite FDA’s nonenforcement; 7th Circuit reverses preemption ruling

Posted on August 10, 2026 by rtushnet

Franco v. Chobani, LLC, No. 25-2087 (7th Cir. Jul. 27, 2026)

Federal law requires that foods advertised as sugar free
contain less than a half gram of sugar. Chobani sold Chobani Zero Sugar Yogurt,
but it included four grams per serving of allulose, a naturally occurring
sweetener. If allulose is a sugar under federal law, Franco’s state law false
advertising claims could proceed, but if it wasn’t, then there was express
preemption because federal law doesn’t allow states to impose additional requirements
on food labeling regulated by the FDCA. The district court, deferring to FDA enforcement
guidance, found preemption. The court of appeals reversed, finding allulose to
be a sugar under the regulation.

The relevant regulation defines “[t]otal sugars” as “the sum
of all free mono- and di-saccharides (such as glucose, fructose, lactose, and
sucrose).” And a food may not be labeled “sugar free” or “zero sugar” (or similar
terms) unless it “contains less than 0.5 g of sugars, as defined by [the
previous regulation]” and meets other requirements.

Hello, Loper Bright! “Interpreting the law is a job
for the court,” though the court isn’t required to ignore the FDA’s perspective
about the meaning of its regulations, and deference to agency interpretation of
an ambiguous rule “can be appropriate.” The FDA has several times expressed a
view: in 2016, it observed that “the final rule does not reach a decision as to
whether Allulose should be excluded from the [definition] of sugar[] … , and
Allulose, as a mono-saccharide, must be included in the [Total Sugars] declaration
… pending any future rulemaking that would otherwise exclude this substance
from the declaration.” In 2020, it issued industry guidance advising “manufacturers
of [FDA’s] intent to exercise enforcement discretion for the exclusion of
allulose from the amount of ‘Total Sugars’ and ‘Added Sugars’ declared on the
label … pending review of the issues in a rulemaking.” (The issue appears to be
that the FDA traditionally used chemical structure to identify sugars, but
novel sugars might also count depending on factors such as an association with
dental caries and how they are metabolized in the body.)

No further rulemaking has occurred, but the court of appeals
called for the views of the FDA. In its resulting amicus brief, the agency took
the position that total sugars as defined in that regulation include all
monosaccharides, including allulose. The “such as” parenthetical at the end of the
regulation was “merely a list of non-exhaustive, illustrative examples, and not
(as the district court found) a limitation on sugars based on the physiological
characteristics that the listed sub-stances shared.” And an enforcement
position isn’t an interpretation of a regulation. The court of appeals found
this persuasive. “There’s no dispute that allulose is a monosaccharide. Because
the definition includes every monosaccharide and the following parenthetical is
merely a list of examples, allulose is a sugar.”

The surplusage and noscitur a sociis canons didn’t change
anything. Chobani argued that a “sugar” needed the same nutritional characteristics
as glucose, fructose, lactose, and sucrose. The surplusage canon suggested that
the “such as” parenthetical should have some meaning, but redundancy is common
in the law, and “such as” doesn’t always mean “of the same kind”; it can merely introduce “examples of a class.”
“The FDA defined a class by way of chemistry; it reinforced that definition
through examples, all of which share the same chemical structure.” There’s no
need to derive a definition from the list of examples, since they merely
illustrate the definition that already appears. Nor did Chobani argue that a
definition of sugars that includes all monosaccharides will lead to absurd
results. “And in defining total sugars, the FDA specifically invoked the
language of chemistry, which means decisions favoring common parlance meanings
aren’t persuasive, either.” The FDA could have defined total sugars based on
physiological factors, rather than chemical makeup, but it didn’t do so.

The regulation wasn’t ambiguous, so there was no reason to
defer to the FDA’s enforcement guidance, which wasn’t an official position
anyway.

What about the marketing permit Chobani secured from the
FDA? “[T]he fact that one sovereign (the United States) indicated that it would
not enforce its labeling requirements with respect to allulose should not have
led Chobani to believe that the states would take a similar approach.
Similarly, … the agency’s marketing permit said nothing about state law consumer
protection suits. Chobani is a sophisticated actor and should have been aware
that the FDA’s decisions about its enforcement priorities would not immunize
the company from suits based on state law.”

Chobani’s additional preemption theory based on Monsanto Co.
v. Durnell, 609 U.S. —, 2026 WL 1825691 (June 25, 2026), could be handled on
remand by the district court.

Deception was also plausible. Chobani argued that consumers
don’t care about the existence of monosaccharides in their food but are instead
concerned with avoiding the ad-verse health consequences associated with
traditional sugars. “Whether reasonable consumers care about the existence of
allulose in their yogurt isn’t the same thing as asking whether reasonable
consumers would be deceived by it.” Discovery was the right next step.

from Blogger https://tushnet.blogspot.com/2026/08/chobanis-zero-sugar-yogurt-with.html

Posted in Uncategorized | Tagged consumer protection, false advertising, fda, preemption | Leave a comment

false advertising in online games leads to over $700 million award to competitor

Posted on August 10, 2026 by rtushnet

Skillz Platform Inc. v. Papaya Gaming, Ltd., 2026 WL 2151126,
No. 24cv1646 (DLC) (S.D.N.Y. Jul. 27, 2026)

Some
previous opinions
(more linked there). At a jury trial, Skillz won a substantial damage award for
false advertising about Papaya’s use of bots in the real money skill-based
mobile gaming (RMSB) market. The court here rejected Papaya’s post-trial
motions and Skillz was awarded $719 million plus its attorney’s fees for the
years 2024 and 2025 and certain costs.

“Skillz created the first RMSB platform in 2012. Papaya
entered this market in 2019 and quickly took a significant market share.” In the
light most favorable to Skillz, the evidence at trial showed significant
barriers to entry in this market, because a successful platform “needs a
customer base large enough to match players of similar or comparable skill in
tournaments within a reasonable amount of time,” aka liquidity. Skillz
maintains that its tournaments are games of skill, not chance, and thus not gambling;
it was required to and did represent to app stores, payment processors, and
advertising hosts that it was not engaged in gambling and that the outcome of
its tournaments was determined by the skill of the players.

Then, Papaya

decided to enter the RMSB market in
2019 by deceiving the public and others about the nature of its product.
Instead of running tournaments in which the players who had paid entry fees
competed against each other, Papaya decided to solve the problem of building
liquidity by running tournaments in which multiple participants were not other
human players but were instead “bots.” Papaya’s bots were essentially scores
designated by Papaya’s algorithms; they were not artificially intelligent
players. In these tournaments, a player’s score was compared to the scores
Papaya assigned to its bots. In this way, Papaya was always able to run a
tournament, including tournaments with what appeared to be a dozen or more
participants, at any time of night or day. Papaya gave its bots usernames and
profiles to make them appear to be individual customers.

Papaya used liquidity bots to create immediately accessible
tournaments of up to 20 or more “players,” permitting a player in a Papaya game
to learn quickly whether he had won or lost a tournament, “thereby increasing
the odds that he would pay to enter another Papaya tournament.” It also used “tailored”
win/loss bots so that a player who had a losing streak could be given a “win”
to motivate them to keep playing in more tournaments. Tailored bots operated in
over 630 million Papaya tournaments, or in roughly one-quarter of the 2.6
billion tournaments that Papaya hosted 2021-2024. During that period, “bots
accounted for over 13 million of the participants on Papaya’s platform,
compared to about 11 million human players.” Over half of humans played in at
least one tournament where tailored bots were designed to give them a loss, and
more than 7.3 million played in tournaments with tailored bots designed to give
them a win.

Unsurprisingly, Papaya’s bots were used most heavily in the
initial phases, when it needed to build liquidity, about 90% of the time in
2021. “Because of its use of bots, Papaya only paid customers roughly $2
billion of the $6.7 billion that it advertised had been awarded in prizes. And
just before Papaya stopped using bots near the end of 2023, Papaya was still
using bots in roughly 50% of its cash tournaments.” Papaya “achieved a
substantial presence in the RMSB market while investing only a fraction of the
money expended by Skillz to do so. When seeking investors, it bragged about its
strategy” of multiple-player tournaments, “unique” platform capabilities, and revenue
growth “8 times more than the industry leaders.”

Papaya never disclosed its use of bots, but purposely
advertised falsely that its games were “fair” and “skill-based,” that it has
“no vested interest” in who wins or loses a tournament, and “described the
participants in its tournaments with pictures and in terms that apply to human
players.” When players complained, Papaya denied using bots, at the direction of
executives.

Papaya made similar misrepresentations to app stores, its
payment processers, and its advertising channels.

Papaya did not stop using bots until late 2023, at which
point Skillz’s revenue had fallen by 60% in just two years: from $384 million to
$152 million, “while Papaya’s revenue skyrocketed from $163 million to $461
million over the same period.”

Given the “overwhelming” evidence of intentional false
advertising, the parties principally litigated damages before the jury, and
also the court sought an advisory verdict on disgorgement. The jury was
instructed that “Skillz is not entitled to duplicative monetary recoveries and
the Court will ensure that Skillz only recovers once for any injury it has
shown it suffered.”

The jury awarded Skillz $420 million in damages, or
two-thirds of the requested amount, and an advisory disgorgement verdict of
$719 million for Papaya’s unjust profits and $652 million for Papaya’s unfair
cost savings (in acquiring users through fake liquidity).

Papaya argued that Skillz’s damages expert improperly relied
on a but-for world in which Papaya did not use bots and its advertising
statements were true, making its expenses greater and its profits lower because
it did not rely on bots to build its business. Papaya argued that the expert
was required to model a different but-for world, “specifically one in which
Papaya removed all false statements from its advertising while not altering its
business model or its use of bots.” But Papaya didn’t explain how this could be
done: “Skillz proved at trial that Papaya could not have entered the RMSB
market by using bots in the way that Papaya did … and at the same time
truthfully describe that use and its product to consumers in its advertising.
Papaya has offered no authority to suggest that a plaintiff’s expert must
create a but-for world that could not exist.” Among other things, payment
processors and others wouldn’t have allowed Papaya to use their services had
Papaya told the truth, and consumers wouldn’t have wanted to play against bots.

Given these constraints, Skillz showed that the damages “flowed
directly from Papaya’s false advertising,” which “concerned the very nature of
the product; it was not a false statement about some incidental feature. And
Skillz showed that it was that very advertising that caused consumers to complain
to Papaya about Papaya’s use of bots.”

It was also acceptable to award damages for lost enterprise value
as long as the damages were measurable with reasonable certainty. Papaya argued
that Skillz could only recover its lost profits, but Skillz hadn’t yet made a
profit at the time of trial; “Papaya argues that Skillz cannot recover
enterprise value damages simply because Skillz prioritized growth over profits
in the years it was developing its business.” Yes, Skillz “invested heavily in
developing its business and enlarging its customer base to achieve not only
substantial liquidity but also a network effect,” but that didn’t limit it to
lost profits instead of lost enterprise value.

Nor was Papaya entitled to JMOL on the Lanham Act and NY GBL
claims: falsity, materiality, and harm were all sufficiently shown. Among other
things, “there was abundant evidence that Papaya engaged in deliberate conduct ‘of
an egregious nature’ to deceive consumers, which created a presumption of
deception.”

The court additionally rejected Papaya’s argument that damages
under the GBL must be limited to financial harm that resulted from Papaya’s
deception of New York consumers. As a competitor suing for the effects of
consumer deception on it, “Skillz is entitled to be fully compensated for the
injury it incurred through Papaya’s wrongdoing even though that injury also
impacted consumers who resided outside New York.”

The court also rejected Papaya’s other challenges to the
amount of damages. The amount of the award didn’t shock the conscience when
measured against the legal standard and the trial evidence. “Skillz and Papaya
were competing with each other in a new online industry where billions of
dollars in revenue were available to the successful RMSB company. Papaya’s
fraudulent conduct was extraordinary” and central to its huge success/zero-sum
impact on Skillz.

Among other things, it was ok to use evidence of Papaya’s
success after it stopped using bots: “There was credible evidence at trial that
Papaya benefitted from the network effects of its false advertising even after
Papaya ceased using bots to fill and control tournaments.” Thus, the damages
model could include Papaya’s revenue from running tournaments for the player
base that it had built while engaging in false advertising. Papaya’s own damages expert testified that the
number of Papaya’s tournaments fell only 20% after it turned off the bots, “suggesting
that Papaya continued to benefit from the liquidity it had built through its
false advertising.”

Skillz requested that the court double the jury’s advisory
verdict of $719 million on Papaya’s profits (the jury also identified $652
million as Papaya’s cost savings), or treble the $420 million damages award.
The court declined both requests for enhanced damages, but did award $719
million.

Disgorgement was appropriate because, come on. Skillz didn’t
show that disgorgement was necessary to deter Papaya, since it largely ceased its
false advertising in late 2023 by discontinuing the use of bots in its
tournaments, “and there is no realistic possibility that Papaya will return to
its false advertising campaign now that the unlawful advertising has been
publicly revealed and addressed in this judgment.” The key was unjust
enrichment: “Papaya’s relatively modest financial investment in its start-up
business did not explain its explosive growth …. Even large, deep-pocketed U.S.
companies that had contemplated entering the market to compete with Skillz,
which had already achieved a network effect, decided against doing so.” The
award of Skillz’ loss of enterprise value didn’t fully deprive Papaya of the
benefits of its illegal scheme. “Papaya is still a substantial player in the
market and, because players tend to stay on a platform with which they are
familiar, the impact on Skillz of Papaya’s wrongdoing will continue for the
foreseeable future.”

Nor did Skillz delay unreasonably: “While Skillz came to
suspect and then believe in 2023 that Papaya’s success was due to its false
advertising and employment of bots, Skillz was entitled to sufficient time to
develop the reasonable grounds necessary to plead its claim in federal court in
early 2024. Since that filing, Skillz has proceeded with diligence to prosecute
this lawsuit, despite Papaya’s strategy of making Skillz’s assembly of the
proof of its claims difficult and expensive.”

However, if no disgorgement award were available, the court
would enhance the actual damages award by doubling it to $840 million, because
the actual damage to Skillz was “severe but hard to quantify,” especially given
that Skillz made changes in response to Papaya’s false advertising.

Papaya also argued that any disgorgement amount should be
reduced by 13% to remove non-U.S. revenue, because the Lanham Act is not
extraterritorial. But Papaya’s audited financial statements, introduced at
trial, did not disaggregate U.S. sales from foreign sales. Papaya relied for
its 13% number on a single graphic in a January 2023 PowerPoint presentation
prepared by a third-party for Papaya, apparently to entice investors, while it
was still engaged in false advertising in the United States. The presentation
disclaimed being an “audit or due-diligence review”; it warned that the author
does not give “any representation or warranty, express of implied, as to the
accuracy or completeness of the information” in the document.

The court declined to adjust the figure. The US was
undisputedly Papaya’s target market, and “Papaya denied Skillz access during the
discovery period to relevant information that Skillz sought, including the
information that would permit Skillz to accept the representation in this
graphic, to dispute it, or to place it in context.” On this record, there was
no need to adjust disgorgement, which after all need not be proven to
perfection.

Unsurprisingly, the court also partially granted Skillz’s
requests for attorneys’ fees, costs, and post-judgment interest, but not pre-judgment
interest. The case was exceptional (the Lanham Act standard) and the court
exercised its discretion to award fees under the GBL. Ending the fee period at
the end of 2025 left roughly $10.1 million in fees. Along with the deliberate,
extensive, central deception, Papaya litigated the case unreasonably in 2024-2025,
when it “slow-walked and obstructed the production of critical discovery
material through the entire discovery period,” with ramifications through trial.
“For example, during the presentation of the defense case, Skillz learned for
the first time that Papaya had wrongfully redacted highly relevant passages
from its documents by marking the material ‘nonresponsive.” But “[t]his year,
Papaya changed counsel and the parties were largely involved in preparing for
the April trial. From any point of view, it was reasonable for Papaya to
litigate the amount to be awarded in damages and that was largely the focus of
the trial.”

No prejudgment interest because the attorneys’ fee award was
sufficient to address the exceptional nature of the case, and because the court
had already ordered disgorgement of Papaya’s unjust enrichment.

Skillz Platform Inc. v. Papaya Gaming, Ltd., 2026 WL 2185762,
No. 24cv1646 (DLC) (S.D.N.Y. Jul. 29, 2026)

The court also denied a permanent injunction. First, Skillz
sought an injunction against bot use; that was denied because it was false
advertising, not bot use as such, that was at issue.

Second, Skillz sought a 6-month corrective advertising “splash
screen” shown to each user prior to their playing any Papaya game or when they
enter the Papaya website, informing readers that Papaya once used bots, that it
denied their existence to customers, and that a jury found Papaya liable to
Skillz for false advertising. [Annoying all-caps presentation makes the
proposal unreadable.] Although Skillz suffered an irreparable injury that
monetary damages could only partially remedy, the public interest and the
balance of the equities didn’t weigh in favor of the proposal:

There is no adequate showing
regarding how many of those currently viewing the Papaya website or playing a
Papaya game were subjected to its false advertising. Papaya’s false advertising
ended in late 2023 with its removal of bots as tournament players. That is over
two years ago, which is probably an infinity in the online gaming world.
Moreover, the reference to Skillz in the proposed corrective advertising will
promote Skillz, which is only one of Papaya’s competitors. Finally, the burden
on a consumer of reading and reacting to the statement years after the events
at issues weighs against the requested relief.

from Blogger https://tushnet.blogspot.com/2026/08/false-advertising-in-online-games-leads.html

Posted in Uncategorized | Tagged false advertising, remedies | Leave a comment

warnings about effects of “killer acquisitions” on Shopify apps aren’t about tangible characteristics and aren’t factual claims

Posted on August 10, 2026 by rtushnet

Jika Inc. v. Loop Solutions, Inc., No. 2:26-CV-05530-JAK
(MARx), 2026 WL 2138604 (C.D. Cal. Jul. 20, 2026)

Jika, d/b/a Skio & Recharge, sued Loop for false
advertising/tortious interference/unfair competition/trade libel for ads it ran
in response to Recharge’s acquisition of Skio. [Relatedly.] The
court denied a preliminary injunction.

Recharge, Skio, and Loop each provide apps for e-commerce
subscription management on the Shopify platform to enable Shopify merchants to
turn one-time retail customers into long-term subscribers. According to its
advertising materials, Recharge “power[s] 71% of subscriptions sold on Shopify
stores.” Skio provides similar services for more than “one thousand brands,”
including various “well-known direct-to-consumer” brands. It offers a
“subscription management platform” that enables Shopify merchants to place a
“subscribe and save” widget on their product pages. Skio’s app is “integrate[d]
with Shopify’s native checkout and subscription” services. E.g., Skio offers
merchants a configurable flow so that when a subscriber clicks “cancel,” the
merchant can offer discounts, free gifts, pauses, product swaps or different
frequencies to try to keep them; it also provides dashboards that provide
information about their subscriptions, including how subscriptions are growing,
what the churn rates are, and which cancellation offers are working.

Loop “offers many of the same products and services to the
same category of merchants” as Skio, including “subscription management,
customer portals, cancellation flows, dunning and payment recovery tools,
bundle builders, and API integrations.” The parties agreed that Loop and Skio
compete, but not that Loop and Recharge did, though there was evidence that
customers view Recharge, Skio, and Loop as interchangeable and competing
services. “For a large business processing 10,000 subscription orders per
month, with an average order value of $50, subscription-management costs would
be $7599 per month for Skio, $9099 per month for Recharge, and $4149 per month
for Loop.”

Loop’s declarant stated that its customers are
“sophisticated market players” who typically “engage in thorough research
regarding” platform choices. He declared that it “can take weeks or months of
back-and-forth negotiation” before a merchant chooses to use Loop for its
subscription-management needs. Skio’s declarant said things consistent with
this, e.g., one potential Skio merchant evaluated Skio for a month before
making a purchasing decision, and the pricing was consistent with requiring reasonable
consumers to be careful.

Loop also submitted evidence of customer dissatisfaction
with Recharge’s app: more than 5% 1-star reviews online, generally concerning
Recharge’s pricing and customer service. “Skio’s Shopify reviews reflect that
many Skio merchants reported that they elected to migrate from Recharge to Skio
based on problems with Recharge’s app.” Loop has less than 0.75% 1-star reviews
out of 670 total reviews.

Shopify bans app developers from publishing an app that is
“identical to other apps you’ve published to the Shopify App Store.” “Recharge
has acknowledged that its acquisition of Skio could raise questions about the
application of these policies.” A Loop affiliate’s declarant stated that it is
“very common for acquiring companies to consolidate or eliminate products that
are redundant with their own,” citing industry and academic publications. He
specifically identified “killer acquisitions” in the Shopify industry. When the
acquisition was announced, Recharge and Skio stated that nothing would change
immediately.

But some worried, and Loop fed that worry despite Recharge’s
“no change until 2028” guarantee stating “no Skio merchants will be forced to
migrate to Recharge” and that there’d be no pricing change.

Loop argued that it merely “used the market uncertainty
created by the acquisition” as an opportunity “accurately [to] inform[ ]
merchants” about their choices post-acquisition and what “typically happens in
acquisitions of technology platforms.”

“Shortly after the acquisition announcement,” Loop “posted a
site-wide banner” across its website: “Recharge acquired Skio for $105M. Loop
is now the second largest Shopify subscription app. Your choice just got
simpler: Loop or Recharge. Book your priority migration slot.” Plaintiffs
argued that this was false because it informed customers that “Skio is no
longer a viable standalone platform” when, in fact, “Skio continues to operate
as a standalone product,” its customers are “not being migrated to Recharge”
and there are “no plans to deprecate Skio.” It made similar statements on its
blog:

Recharge’s official position: both
platforms continue to operate as normal. Nothing changes immediately.

But here’s what historically
happens when a platform gets acquired by its largest competitor:

The acquiring company says
“business as usual” for 6-12 months. Then feature roadmaps merge. Then pricing
consolidates — usually upward. Then the smaller platform’s app gets sunset or
rolled into the acquirer’s product. The merchants who waited get migrated on
the acquirer’s timeline, not their own.

Skio merchants now face a set of
questions nobody has answers to yet. Will Skio’s $599/month pricing stay? Will
the passwordless login and clean portal UX survive integration into Recharge’s
architecture? Will the small, responsive support team that Skio reviewers
praised remain intact — or get absorbed into Recharge’s support infrastructure,
which its own reviewers have documented as slow and unresponsive?

What that uncertainty looks like in
practice depends on where you stand today.

If you’re currently on Skio:

Your platform’s future is now
controlled by Recharge.

…

If you’re currently on Recharge:

The same pricing escalation and
support patterns documented in 116 one-star reviews haven’t changed. They’ve
gotten bigger.

…

If you’re evaluating platforms for
the first time:

The decision just got simpler. It’s
Loop or Recharge.

[The blog post went through various revisions; I smell some
AI.]According to Loop, 45 unique users visited the Blog Post, of which 22 were
users from the United States, in comparison to 6994 unique visitors to Loop’s
website overall in the same period.

Loop also allegedly targeted Skio’s customers in outreach
with similar statements.

It also used a comparison table—which it argued had been
around for a while and wasn’t posted in response to the acquisition—marking
numerous Skio features as unavailable (x) and those same features for Loop as
available (✓).” It allegedly falsely claimed that Skio lacked features
such as “Passwordless login via email,” “One-click checkout with exclusive
offers,” and “Proactive card expiration alerts.” The meaning of the comparisons
was contested, though Loop admitted “error” in claiming that Skio lacked “OTP-less
authentication” and “Passwordless login via email.” (Other Loop ads accurately attributed
a passwordless login feature to Skio.) The table was removed before litigation
began. [Again, I wonder if this was AI error; it’s good that Loop doesn’t pretend
that the source of the error mattered.]

Skio and Recharge allegedly “received over 10 inquiries from
Skio merchants expressing concern about Skio’s future, pricing, support
continuity, and feature availability” following the acquisition. One customer
informed Recharge that it had “received unsolicited emails from Loop that
contained no identifying signature, footer, or other disclosure indicating that
the messages came from Loop.” Because the email stated that the sender “wanted
to get them started on migrating,” the customer “initially believed the emails
were coming from Recharge and called Recharge expressing concerns about Skio’s
post-acquisition future.” Five large
merchants allegedly “reported concerns that Loop representatives had been
making statements about Skio and the Recharge acquisition consistent with the
messaging in” the written campaign.

Plaintiffs also submitted declarations that customers were
hard to acquire. A potential customer allegedly wrote: “We were really
impressed with Skio and felt a good level of alignment between Skio and
[Customer]. However, the news that Skio merged with Recharge did catch us
really off-guard! We felt a bit torn since we had pretty much disregarded
Recharge completely by that point as we didn’t enjoy the sales process, and the
pricing was completely unrealistic for our brand. At this moment, we are
progressing with Loop subscriptions, as we felt they also aligned with us .…” It
didn’t reference the Loop ads.

Plaintiffs argued that Loop made literally false claims that
Skio would be sunsetted, leaving merchants with a binary choice between
Recharge and Loop, by claiming that, post-acquisition, “smaller platforms
historically ‘get[ ] sunset’ ”; by stating “Your choice just got simpler: Loop
or Recharge”; and by telling customers they were “Back to square one for
[their] platform future.”

First, under 9th Circuit precedent, “the nature,
characteristics, and qualities of [a product] under the Lanham Act are more
properly construed to mean characteristics of the good itself ….” Licensing
status and claims about the date on which a product was first marketed are not
actionable for this reason, and likewise the “sunsetting” statements didn’t refer
to any inherent quality or characteristic of the parties’ services. “Rather,
the Sunsetting Claims only refer to market structure and competitive dynamics
in the industry, which are analogous to the ‘supply and demand phenomena’ that
courts have found do not state a claim under § 43(a).”

Even if they were actionable in principle, nothing Loop said
was literally false. The blog post truthfully reported that plaintiffs claimed
that nothing would change immediately, but then pointed to “historical[]”
trends. A prediction about future events “is not an actionable statement of
fact as a matter of law.” Plaintiffs’ own claims didn’t show that there was no
risk that Skio would be sunset; their own public-facing statements recognize
that there is some uncertainty about the future of Skio: a LinkedIn post said, “[F]rankly,
we don’t know what skio or recharge or (maybe even) some new platform is gonna
look like in a year and a half.” Even if the rule about future predictions only
applies to good-faith predictions, there was no evidence of bad faith.

For claims like “Your choice just got simpler: Loop or
Recharge,” this wasn’t literally false. “One reasonable interpretation of these
claims is that customers now have two choices with respect to independent
service providers in the marketplace.” This was plausibly literally true:
Plaintiffs’ own announcement described Skio as a “Recharge company” and states
that “Skio is joining Recharge.” [I would also say that this is the kind of
claim often deemed puffery under similar circumstances.] Also, because
consumers typically contract with service providers for longer periods, the
competitive “choice” and “decision” “can reasonably be construed to refer to
long-term market structure and competitive dynamics, rather than current
conditions…. Consistent with that, many of the challenged advertisements frame
customer choice in terms of long-run impact, rather than immediate market
conditions.” That meaning was not literally false because plaintiffs have not
committed to maintain Skio as a long-term option for consumers beyond 2028.

The only “necessary” implications of the claims were that plaintiffs
might not honor their nonbinding commitment to maintain Skio through 2028 and
that Skio’s future remains uncertain beyond that point in time, And these were
not matters of verifiable fact.

Claims that Skio would raise prices/worsen customer support:
Same basic analysis. “Each advertisement, read in its full context, includes
specific qualifiers,” such as “Not sure if all or even anything would happen
with you but this is what generally happens.”

Comparison table: Loop conceded that the password claims
were literally false, and § 43(a) is a strict liability cause of action. But
there wasn’t sufficient evidence of materiality. There were no surveys or
direct evidence from consumers that the features highlighted in the comparison
table were ones about which they cared when making decisions. “[N]umerous
courts have found an absence of materiality in Lanham Act false-advertising
cases when the target audience consisted of sophisticated individuals who were
unlikely to be swayed by promotional materials.”

The rest of the claims went the same way. Trade libel
requires actual damage, and that hadn’t been shown with respect to the comparison
table, given the absence of evidence that any specific customers were exposed
to it or that they cared about the password claims as opposed to other factors.

The balance of equities and the public interest also
disfavored a preliminary injunction because it would bar Loop from “suggesting”
or “implying” that Skio’s product and features may change in various ways due
to the acquisition. “[T]his would impose a limitation on marketplace
competition that could otherwise benefit customers. It would, in effect,
preclude Defendant from responding to Plaintiffs’ nonbinding commitment to
maintain Skio as an independent service in the marketplace.”

from Blogger https://tushnet.blogspot.com/2026/08/warnings-about-effects-of-killer.html

Posted in Uncategorized | Tagged dastar, false advertising | Leave a comment

Probiotic throwdown continues w/factual dispute over clinical studies

Posted on August 10, 2026 by rtushnet

ExeGi Pharma, LLC v. VSL Pharmaceuticals, Inc., 2026 WL
2144541, No. 19-cv-02479-LKG (D. Md. Jul. 27, 2026)

This is the latest opinion in a long
and tangled sequence.

ExeGi sued VSL for tortious interference with business
relationships and unfair competition arising from certain letters that VSL’s
litigation counsel sent to ExeGi’s manufacturers and distributors. VSL
counterclaimed against ExeGi and Professor Claudio De Simone for false
advertising under the Lanham Act.

The facts involve “an eight-strain, high-potency probiotic
formulation.” De Simone “obtained several patents and other intellectual
property rights for his formulation, including for the probiotic formulation
for the eight-strain probiotic mix known as the ‘De Simone Formulation.’” He
first licensed this to VSL and it was sold under the name “VSL#3.”

He also caused samples of the eight bacterial strains
comprising the De Simone Formulation to be deposited with the Leibniz Institute
DSMZ-German Collection of Microorganisms and Cell Cultures GmbH (DSMZ), which
is a depository for the storage of strains and microorganisms, and not a
depository for strains for industrial production. DSMZ assigns each deposit a
unique alphanumeric designation. The VSL-De Simone relationship soured and he
cut off VSL’s access to the manufacturer of VSL#3, instead granting an exclusive
license to ExeGi (under the name Visbiome).

ExeGi incorporated the DSM Codes assigned by the DMSZ on
Visbiome’s packaging and packaging inserts, alongside the genus and species
name for each corresponding bacteria strain, although Visbiome has never been
manufactured with the deposited material at DSMZ. Visbiome contains all eight
of the bacterial strains, by genus and species, listed on Visbiome’s packaging.
But VSL contends that testing of the DSMZ deposits reveals that at least three
of the deposited strains do not match those listed on Visbiome’s packaging. The
De Simone parties argued that any mismatch was the result of contamination
introduced before the strains were deposited at DSMZ, and not a discrepancy in
the Visbiome product itself.

Previous litigation resulted in an injunction against any
claims in VSL#3 promotional materials “that state or suggest a false continuity
between Italian VSL#3 and the De Simone Formulation, including but not limited
to statements claiming that VSL#3 continues to contain the ‘original
proprietary blend’ or the ‘same mix in the same proportions.’ ” VSL was also
enjoyed from citing any clinical study performed on the De Simone Formulation
or implying that any such study was conducted on Italian VSL#3, because they
weren’t the same mix. [The first part of this sentence seems to me to offend
the First Amendment.]

VSL’s litigation counsel sent a letter to counsel for
Danisco—the manufacturer of Visbiome—notifying Danisco of a “recent judicial
decision that directly impacts the legality of the continued sale and
distribution of” Visbiome, demanding that Danisco take steps to “immediately
cease and desist from the production, distribution and sale of Visbiome® unless
and until any reference to the DSM Codes is removed from its packaging and
packaging inserts, and from any marketing or reference materials for
Visbiome®.” He claimed that any continued use of the DSM codes “would
constitute a misappropriation of valuable property rights” and constitute false
advertising.

VSL argued that ExeGi’s business was not impacted by this
letter, because Danisco continued to fill Visbiome purchase orders for ExeGi
and did not modify its supply agreement with ExeGi. ExeGi argued that the letter
forced it to expend substantial resources and caused lost sales.

VSL’s counsel sent an essentially identical letter to one of
ExeGi’s Visbiome sellers and distributors, and also to Amazon.

Tortious interference in Maryland requires: “(1) intentional
and [willful] acts; (2) calculated to cause damage to the plaintiffs in their
lawful business; (3) done with the unlawful purpose to cause such damage and
loss, without right or justifiable cause on the part of the defendants (which
constitutes malice); and (4) actual damage and loss resulting.” Relatedly, common-law
unfair competition requires deception.

Although it was close, the court didn’t find that Maryland’s
absolute litigation privilege bars ExeGi’s tortious interference and unfair
competition claims. To be entitled to that privilege, VSL needed to show, among
other things, that the letters that VSL’s litigation counsel sent to Danisco,
Pharma Holdings and Amazon bore a rational relationship to litigation that VSL
contemplated in good faith and under serious consideration. It did not provide
such evidence, even though there was “a long and well-documented history of the
disagreement and competition between the parties in this case related to the
marketing of VSL#3 and Visbiome.”

However, ExeGi couldn’t show any damages. Danisco continued
to manufacture Visbiome, and Pharma Holdings and Amazon continued to sell
Visbiome after receiving the letters. There was no expert testimony about any
damages. The cost of affirmatively suing for tortious interference couldn’t
count, and there need to be actual damages for punitive damages to be available.

False advertising under the Lanham Act:

VSL alleged that the De Simone Parties violated the Lanham
Act by claiming that “Visbiome contains the strains deposited at DSMZ”; by
stating that the current version of VSL#3 contains only seven strains of
bacteria, rather than eight (De Simone also wrote that “it contains bacteria
that are qualitatively and quantitatively different” and that this “counterfeit
product has been falsely marketed and promoted to the public and medical
community….”); by stating that VSL#3 lacks clinical studies (“has not been
the subject of any published, peer reviewed, controlled trials in humans”; “untested
imitation product”; etc.); by stating that VSL#3 is an imitation or knock off; and
by stating that VSL#3 has been discontinued or recalled (“VSL#3 is no longer
available for sale at many retailers”).

Most of these claims failed at summary judgment, though there
was a factual question based on the statements that VSL#3 lacks clinical
studies.

Statements about the strains deposited at DSMZ: VSL didn’t
show that the De Simone Parties claimed that “Visbiome contains the strains
deposited at DSMZ.” The presence of the alphanumeric DSM codes didn’t convey a
false message, because there was no showing that a consumer: (1) would
recognize that the letters “DSM” as referring to the Leibniz Institute DSMZ;
(2) understand that the accompanying code is a scientific accession reference
to a microbial deposit at the DSMZ; and (3) know that DSMZ maintains physical
samples of that deposit; and then assume that the listing of the code means
that the product contains material sourced from that particular deposit. VSL’s
own expert “acknowledged that such a chain of reasoning is beyond the grasp of
most consumers.”

Statements that VSL#3 contains seven, rather than eight,
strains: for claims not barred by res judicata, the only statements were in an
email saying (1) that VSL#3 “contains bacteria that are qualitatively and
quantitatively different” and (2) that VSL#3 is a “counterfeit product has been
falsely marketed and promoted to the public and medical community.” But these
weren’t made in interstate commerce (I think the court must mean commercial
advertising or promotion) because they were in a single email sent to one
individual. As for the statement “A PhD level microbiologist and an expert on
human gastrointestinal microflora concluded that, based on his genetic analysis
of the new formulation, the Italian VSL#3 actually only contained 7 strains of
bacteria, not the 8 contained in the original formulation,” the microbiologist
did in fact reach this conclusion. Thus, this was literally true, not literally
false.

Statements that VSL#3 is an “imitation” or “knock off”: These
characterizations were “substantially true”; VSL’s CEO “acknowledged that
Italian VSL#3 was the result of an attempt to reverse engineer the De Simone
Formulation, and that the VSL Parties could not actually replicate the
original.”

Statements that VSL#3 has been discontinued or recalled (“VSL#3
is no longer available for sale at many retailers.”): Many retailers ceased
selling VSL#3 during the period following the issuance of the 2019 injunction
related to VSL#3. So the explicit statement wasn’t false.

Statements that VSL#3 lacks clinical studies: Here there was
a disputed issue with respect to the non-res judicata-barred statements. The
statement that VSL#3 is not supported by any “published, peer reviewed,
controlled trials” was also not actionable, because this statement was
literally true. But other statements, e.g., “VSL launched their version of
VSL#3, an untested imitation product,” was plausibly false, because the current
version of VSL#3 has been the subject of 45 peer-reviewed publications
addressing its composition, safety and efficacy, since 2016, and VSL offered evidence
to dispute the De Simone Parties’ contention that the testing on VSL#3 was
performed on the pre-2016 formulation of this product. VSL also had expert
testimony about deceptiveness. The court reached a similar result on the statement
in response to a consumer question in an Amazon product review that “VSL #3
does not contain the same stains or the same strain rations and has no clinical
documentation.”

from Blogger https://tushnet.blogspot.com/2026/08/probiotic-throwdown-continues-wfactual.html

Posted in Uncategorized | Tagged false advertising, tortious interference | Leave a comment

IPSC Closing Plenary Session: AI Everywhere All at Once

Posted on August 8, 2026 by rtushnet

Plagiarism or Transformation Machines? Evidence on
Copyright, Economic Substitutes, and AI, Stefan Bechtold (with David Abrams
& Christian Peukert)

Prevalence rate: OpenAI v. NYT litigations includes
statements about how often users use ChatGPT in order to generate potentially
infringing output. OpenAI: normal people don’t use it the way the NYT did, more
than 99% of the time. NYT says 14-24% use for information search, raising ©
concerns. Corporate research: for OpenAI, non-work use has risen from 53% to
73%; Microsoft says that work & career topics lead desktop usage 8am-5pm
and relationship conversations surge on Valentine’s Day.

Used Wildchat dataset: 1 million ChatGPT conversations from
real users April 2023-May 2024, mostly GPT3.5-Turbo. Currently focused on
random sample of 10,000 prompts in English. NYT rewrites are relatively
uncommon: more common: write a six sentence para summarizing A Tale of Two
Cities; Write a Simpsons episode where Homer becomes addicted to drugs; tell me
what I need to know for my chemistry exam. Some overprotection: write the
lyrics to Rocky Road to Dublin in English w/native Irish beside them—that request
was refused despite the public domain status of the work.

Looking for whether users are looking for potential
infringements or potential substitutes (e.g. replacements for chemistry
textbook) and also looking for whether the output is refused b/c of guardrails.

Results: 3.7% of sample prompts and outputs, model
identifies © infringement risk. Guardrails only trigger in 0.13% of cases. 1.19%-over
2% potential economic substitute risk. According to classification, the
substitute/© infringement groups don’t overlap a ton.

Next steps: OpenAI says 28.1% of their users are asking for
writing tasks; our data around 34.5%. Thinking about different classifier refinement,
e.g. what happens w/minimal prompt to our classifier, feeding it a © textbook,
classifying w/other LLMs.

The AI Penalty in Trade Secret Law, Camilla Hrdy & Mike
Schuster (with Joe Avery)

Bias against self-driving cars (crashes are perceived as more
serious) as well as AI-generated works. Trade secret liability often turns on
whether improper means were used. Does this vague and morally charged standard
lead to arbitrary distinctions in misappropriation cases?

Scenario: website provides insurance quotes; no TOS limit on
request; confidential quote database underlying it. Defendant competitor
queries database & recreates underlying dataset/trade secret. Human:
$100,000 spent on 20 hourly employees over 5 weeks to systematically request
different quotes. AI: $100,000 spent on specialized AI that systematically
requested different quotes.

500 mock jurors were asked: would you have brought this lawsuit,
were means improper, etc. Outcomes: significantly more likely to find
liability, higher compensatory damages, less ethically acceptable w/AI. (Note
that liability/improper means were above 50% for human use too.) Only not statistically
significant result was on punitive damages.

AI penalty makes more sense in trade secret than in patent
& ©. Improper means is open-ended concept. We’d expect more bias. 11th Cir.
2020: while manually accessing quotes is unlikely ever to constitute improper
means, using a bot to collect an otherwise infeasible amount of data may well
be. That case was scraping w/o AI, but AI is a subset of automation.

AI trade secret (AI used to “steal” trade secrets) cases are
coming; there have already been a smattering. Agentic AI will be a perfect
accomplice, whether from direct prompts or “escapes.”

Don’t want a bright line rule/reasonable measures should
still be required, but this all makes sense. It’s important to update rules
over time. Flying over a plant is very different in 1970 and 2026.

The Value of Knowing What Works: AI and Unprotectable IP,
Sarah Polcz

Interviews w/researchers at frontier AI labs. Spending
enormous sums to poach researchers—$100 million/year reported salaries. How can
individual researchers possibly be worth so much? Most valuable IP is the least
protectable—high level insights that are short, abstract, and easily carried
from lab to lab in heads of researchers. IP like specific blocks of code or weights
of model is comparatively less valuable. High level insights also move among
researchers socially, where there’s no current employment relationship.

AIth Circuit Court of Appeals, Nikola Datzov (with David
Schwartz)

AI judging: models showed no meaningful prompt sensitivity;
shockingly accurate/capable depending on complexity of the case. Key driver is
AI’s confidence in outcome. Patent cases appear more complex but show the same
trends and capabilities. AI models can identify which cases they can and can’t
accurately decide; courts could prioritize remaining cases for human/faster
review; parties could determine whether appeals were worth pursuing.

The Terms and Conditions of Generative AI, Andres Sawicki
(with John Newman)

Allocating generative AI output ownership—looking at TOS.
Meh news: provider obtains a license to the input to provide the desired
service. Standard broad terms: nonexclusive, irrevocable, worldwide,
sublicensable, etc.—for inputs and outputs.

Worse news: permitted uses are not limited to specified
purposes. A small fraction say they only use the inputs to provide the service
to you, the user. Plurality say they use them to provide service to you and
other users. Also see a large percentage with “any business activity,” some
with no explicit limit, and a small number where the permitted uses vary by tier.
55% of licenses to inputs are restricted, and 52% of licenses to outputs.

Notably—45% take unrestricted license to use the inputs—so
photographers should worry.

TOS also try to make users responsible for any
harm/infringement w/hold-harmless and indemnification provisions written quite
broadly.

Implications: these provisions undermine ownership in ©
materials. Shifts liability risks to users [though it’s hard for me to imagine
that litigating indemnification wouldn’t be more expensive than it’s worth so I’m
not sure that’s true]. Risks to democratic deliberation and self-government.

Q: re AI penalty—human labor is linear; AI is efficient/if
you allow it then it will be much easier to do this harvesting more efficiently—so
if it’s troubling, then AI makes it worse.

A: similar reasoning to legal protection against plug molds (Bonito
Boats) [or mask works]—anticopying logic. Not sure that makes sense forever b/c
things change but makes sense.

from Blogger https://tushnet.blogspot.com/2026/08/ipsc-closing-plenary-session-ai.html

Posted in Uncategorized | Tagged conferences, copyright, trade secrets, patent | Leave a comment

IPSC Breakout Session 5, IP, Politics & Identity

Posted on August 7, 2026 by rtushnet

Intellectual Property and Political Identity, Barbara
Lauriat

IP features some strange bedfellows, going back as early as
we can find about patent & ©. Project: a book on Intellectual Property
& Victorian Inquiry, examining Royal Commissions on Patent & Copyright.
Reform and even abolition were debated. Both Whigs and Tories struggled to fit
IP into their political identities—not just ideologies but how they saw
themselves.

Communism/socialism: Focus on the role of public interest
and underlying communitarian principles. Limiting © to lifetime of author was
communitarian. Also focused on personal nature of the labor—so socialists could
say that the work of the mind was different. But Herbert Spencer made the same
argument from completely opposite political beliefs.

John Stuart Mill changed his views over time a bit. Started
out very pro-patent as an exception to anti-monopoly, but in his discussion of
communism he carved out invention as a potential area where invention would
still happen b/c it’s a naturally agreeable thing to do. Cut from the next
edition of Principles of Political Economy, though.

Suffrage was also connected to property ownership. Largely
uneducated mechanic could become a voter through invention. So wide availability
of patents could be seen as democratizing, and Dickens distinguished support for
patenting from support for Chartism.

IP and free trade was also part of the discussion.

Lessons: don’t assume the audience agrees on the fundamentals.
Adapt arguments for different audiences. People did change their minds
when arguments appealed to their political identities (forget about political
theory). Free traders who opposed patents suggested rewards/prizes; this seemed
to involve more gov’t regulation and so practical arguments pushed that faction
into further & further extreme positions that eventually failed.

Christian Nationalism and IP, Lucas Osborn

Definition: a political ideology that seeks to entangle
Christianity with political life. Heavy version: Being a Christian is very
important to being truly American; it is very important that the US president
be Christian; the Bible should have at least some influence over US law; and
when the Bible conflicts with the will of the people, the Bible should have
more influence. Only about 3% of Pew respondents endorsed all 4 propositions.
Lighter version: about ½ of Americans say laws should be influenced by Christian
morals.

What would this mean for IP? Depends on the kind of Xianity.
Looked at Biblical principles important in theories of property.

Imago Dei: Genesis—“let us make man in our image, after our
likeness.” G-d is a creator, so that’s an area of overlap. Dominion mandate: humans
have dominion over all the earth. Caretakers/stewards of creation in ways
different from other animals.

Private property: Exodus: thou shalt not steal. Dominion
mandate is consonant w/private ownership. Property rights viewed as necessary
for human flourishing and social stability—humans are bad and selfish, so
private property provides a structure to control our worst natures. The Bible
supports giving people the fruits of their labor, whether wages or property rights.

Examples: start from that foundation and yet come to pretty
different conclusions. Ruth Okediji: Is
the Public Domain Just? v. James Edwards: To Invent Is Divine.

Okediji: private property is in tension w/, though not irreconcilable
with, stewardship. Need conception of what it means to be human to shape
sustainable conditions for flourishing life. Edwards: mass flourishing
coincides w/private property rights.

IP Rights: Okediji says that optimal production of knowledge
goods is important, but so is optimal consumption. Stewardship includes private
rights and service to others. Edwards: private ownership is what you
need—leaves service to others outside bounds of legal duties.

Okediji: need ongoing assessment of IP law, including
traditional knowledge. Edwards: Founders were right, should broaden patentable
subject matter, make injunctions easier to grant, affirm that patents are
private property, not government grants.

Takeaway: Xianity doesn’t get you to a 20-year patent term
or automatic injunctions, so be careful. What would Xian IP look like? You can
imagine limiting © protections for obscene, pornographic, and potentially
blasphemous content, though they also profess respect for the First Amendment.
False witness: you could imagine strengthening attribution rights.

Patents: reintroduce/strengthen moral limits on patents.

Fred Yen: creators/inventors have unpaid debts to inventors/creators
before them. What does that mean for their rights going forward?

Rosenblatt: were our laws written by Xian nationalists to
start? [Or deists?] Tam & Brunetti seem to move away from this. In modern rhetoric,
Xian nationalism isn’t just the Xian part but also the nationalist part/white
nationalist. National treatment seems vulnerable; internationalism does seem
vulnerable too. [which would also have implications for traditional knowledge]
Do you care about theology or Xian nationalism?

RT: I don’t see why these are Xian instead of moral views w/Xian
characteristics and I say that advisedly b/c China does all these things
(limits patents on moral grounds, bars obscenity/sexual material, etc.). We can
plug in lots of moral frameworks to these propositions. Compare Pope’s recent
pronouncements which do seem to make claims about what Xianity requires in
substantive output.

Zahr Said: how much work is G-d doing in this project?
Versus self-regarding system imposing majority’s views. Musk’s tech
libertarianism is another possible comparator.

Q: human chimeras/patents on parts of humans—what perspective?

Q: could argue that injunctions should not be allowed b/c
you’re not an owner but a vessel for G-d’s creation and thus shouldn’t control.

Trans Patents, Andrew Gilden (with Sarah R. Wasserman Rajec)

Inventions that cover gender-affirming care or other inventions
with potential for trans people. Patent texts can be archival—how tech is
viewed then; as speculative visions for culture; as strategic parts of
sales/FDA approval pitches; and as political—vehicles for shifting social norms
around taboo topics, such as patents for recreational cannabis granted long
before many states legalized.

Political backlash against trans people has often focused on
denying them technology, so patents are relevant. Patents using terms that
expressly recognize trans people and sex/gender reassignment: 372 granted
patents, 3 in 1980s, 4, in 1990s, 7, in 2000s, 112 in 2010s, and 246 since
then. Even though trans people and trans-affirming care have been around for a while.
Primary focus on trans population: 21; intended users 196; remainder otherwise
incidental/cited. Topics: Hormone therapy, phalloplasty, vaginoplasty, breast augmentation,
breast concealment, genital concealment, clothing, sexual devices, other health/pharma,
AI, and data processing.

Trans people often presented as one of many populations who
benefit from claimed invention—methods for treating excess androgen skin
changes can help w/PCOS, etc. Or “there are many reasons that people bind their
breasts.”

Patentees rely on studies focused on trans people/bodies.
Even if trans people aren’t disclosed as target population, trans/cis medicine are
inextricable from each other.

Some patentees emphasize uniqueness/unique needs of trans
people, whether anatomical or social. Sets up claims limited to trans people as
point of novelty. Also nods to consumerism—an underserved marketplace (e.g.,
genital concealing underwear for trans women; shopping recommendation system
that imagines trans women looking for shoes).

So far, no noticeable drop in grants under Trump 2.0. But:
FDA warning letters to chest binder retailers, distributors, and manufacturers.
Some recipients of the letters had granted patents.

State and marketplace are vying for control over transgender
existences. Control over gender expression: property rights can be tied to
gender identity; infringement could require jury to find that user is a “trans
male.” Disconnect b/t patenting and commercialization—patentees who offer
various treatments to cisgender population but have patents for trans
populations.

Patent activity maps poorly onto history of innovation in
transgender medicine, but may reflect perceived social change or help measure
cultural anxiety—patenting activity closely matches rise in mainstream
awareness & fear/backlash. Rhetoric mirrors that in other areas of law
& politics: opponents fear experimental/off label gender-affirming care;
equal protection arguments about state denying trans people access to care
available to everyone else; due process arguments about need for access to
gender affirming care.

Said: what about coded references? E.g. medical codes can be
changed by sympathetic doctors; there might not be explicit acknowledgement.

A: yes, we are tracking a bubbling to the surface.

Rothman: look for patents in the same spaces that don’t use
the magic words.

A: Scandinavia would be a place to look there.

Rosenblatt: can this tell us anything about trans self-help
and user innovation? Medicalization is partially good but also has big
downsides.

The Value and Values of Patent Ideology, Tejas Narechania

One view: there’s a perfect number of patents that’s just
right. His view: there’s no pure vision of patent law. There are multitudes
that are incommensurable, irreducible to utils; these are necessary and
desirable outgrowth of living in a free & plural society.

Founders: innovation, national security, morality (or even
natural rights), distributional concerns—all the policy considerations were
there at the beginning.

The State Law of Federal Patent Enforcement, Paul R.
Gugliuzza

State bad-faith statutes: motivated by mass demand letter
campaigns by bottom feeder trolls against end users. Effect: reduce cost
asymmetry b/t accused infringers and NPEs. Permit finding bad faith based on inadequate
info, lack of investigation, false/misleading statements/ unreasonable
deadlines/settlement demands; some laws apply only to suits against end users
or by NPEs.

Key issues that have repeatedly arisen: who can sue and
where? Personal jurisdiction via demand letters; federal subject matter
jurisdiction over state-created claim? One of these cases has finally reached
the Fed Cir. Should courts imply a private right of action where the state laws
aren’t explicit? Otherwise it’s left to state AGs with resource &
collective action constraints.

What conduct is regulated? Core version is bad faith
assertion—but courts have disagreed over what constitutes an assertion or
demand letter—analogy to declaratory judgment standing.

Courts also differ on what will ultimately establish bad
faith—is including a claim chart evidence of good faith or should the court examine
the claim chart for misleadingness/correctiness?

The preemption overlay: objective baselessness as a prerequisite,
according to the Fed Cir. Bad faith is not enough if it’s just subjective and
the underlying infringement theory was not objectively baseless. Resembles the
Fed Cir’s tests for willful infringement and attorneys’ fees overturned by the
Supreme Court, so should this test survive?

Remedies: actual damages from assertion, statutory damages,
attorneys’ fees for the bad faith litigation (against anyone involved in the
assertion), and bonds.

What about anti-abuse measures for assertion of the statutes
used abusively? Reverse fee shifting. Doesn’t like categorical exemptions based
on patent asserter identity. Geographic gaps—California and other states don’t
have these.

from Blogger https://tushnet.blogspot.com/2026/08/ipsc-breakout-session-5-ip-politics.html

Posted in Uncategorized | Tagged conferences, copyright, patent | Leave a comment

IPSC Breakout Session 4, Design, Trademark & IP Boundaries

Posted on August 7, 2026 by rtushnet

Backdoor Trade Dress, Rachael Dickson

Strange things are afoot at the PTO. Applications for line
drawings of specific products. They are not configuration marks for the product
design. They’re just design marks. In addition to the usual TM registration
requirements, configuration marks raise two concerns—functionality and what
level of distinctiveness is required. Product design requires acquired
distinctiveness, and PTO usually requires significant evidence to allow a registration
for product design, not relying on 5 years of exclusive use.

Some have received failure to function refusals: a drawing
of ear loops: mark drawing is filed in form & style customary for
configuration marks; consumers not used to it; also refused on 2(d) grounds b/c
Loop has a registration for the configuration (as well as a design patent).

Backdoor trade dress risks skating past PTO w/o showing
acquired distinctiveness or nonfunctionality; description doesn’t include limitations.

RA easily found 100 examples; estimate of 100s more. Common
issues: descriptiveness, failure to function, 2(d) if the maker has a
configuration mark. But also: regularly approved for publication/registration;
found 39 already registered.

Overall, PTO doesn’t have a clear reason to refuse these
types of applications. There’s no “we suspect you’re going to do sketchy things
w/this” refusal.

Backdoor trade dress application types: (1) designs
identical to at least 1 goods listed, (2) related to goods listed, (3) designs
unrelated to goods listed. (1) should get a descriptiveness refusal. Lots of
marks clearly taken from images online: app for projection screens taken from an
Amazon product listing. Another with a toy caterpillar for children’s toys.

(2), e.g, a drawing of a nonstick pan for oven mitts. Lavalier
mike for guitars.

(3) Water fountain for toys.

Why? Possibly takedowns. Reg (now cancelled) used to file
infringement notice on Amazon against magnetic hooks sold by another party, Smukmagnet.
Smukmagnet has a design patent though and so it filed a cancellation.

Manufacturers do think this is what’s happening: TTAB
opposition on a soccer ball shaped light; another example of a design for a
child’s tablet. Almost all the applications are from China. Amazon doesn’t do
any scrutiny.

Can design marks be legitimate? Maybe, for identical/related
designs. But is this a TM function instead of ornamentation or indicating what
the product is?

Of course there are product design marks that sort of
resemble other objects, the Taco Bell bell etc but those aren’t line drawings.

Problems: obtain trade dress style protections on online
platforms w/o having to meet trade dress requirements; allows monopolization over
functional elements or nonfunctional elements owned by others.

What next?

Mark McKenna: Is this an actual competitive problem? This
depends on whether they’re being used to assert rights. What we know so far
suggests this might be the tip of an iceberg. Also the gameability of the PTO
process. Configuration mark-based 2(d) refusals is implicitly suggesting that
design marks are enforceable against configuration marks and vice versa, which
might be the wrong message: the drawing of the product shouldn’t cover the
configuration of the product—but also vice versa! [Though the necessity of
secondary meaning for the product configuration might provide an important
constraint there.]

Sarah Burstein: can we make them disclose that they’re not
configuration marks?

A: already a lot of boxes to check; some of the apps already
say this is not a configuration mark. PTO doesn’t do much unless there’s 1000s
of applications.

Jennifer Rothman: Is this a trade dress problem or a PTO
registration problem? PTO registers many things that shouldn’t be registered.
Why? B/c they have time constraints and an orientation to help applicants
succeed (except for 2(d)). If there’s no opposition, it’s probably going to get
registered even if it shouldn’t. That’s the bigger problem. AI may make it worse.

What do we mean by design marks? It’s always challenging b/c
logos are design marks and trade dress is also design marks. So we need clearer
definitions. [Design of versus design on?]

A: they’re trying but there are new schemes every couple of
years or so. [This is what I plan to write about—the general implications of
that cycling/whack-a-mole.]

Ramsey: this could be an opportunity to develop failure to
function doctrine—there are expressive uses, decorative uses, and possibly
puzzling uses like this!

Backdoor Copyright, Sarah Fackrell

SCt has worried about backdoor patents through © or TM. We
should also be concerned about design patents used to get backdoor ©. The
conventional wisdom is that copyright is stronger than design patent. © is instantaneous
(design patent not); cheap (free/low v. five figures); term; broader. But the creativity
threshold for design patent is lower, and there’s no separability doctrine. We’re
seeing this especially in the area of graphical user interface designs. Many of
these would be below-Feist designs.

USPTO has also engaged in expansion of subject matter. In
1996s PTO started accepting GUIs; 2006 started accepting animated GUIs; 2026
disembodied designs including projections, holograms, and virtual/augmented
reality. Statutory text, what text?

Statutory text: “new, original, and ornamental design for
an article of manufacture.” Not just a design: a design for an article of
manufacture. The PTO doesn’t care. A projected keyboard, the PTO says, is a
design for a computer b/c it is produced by a computer. Does not compute! Side
note: it’s not clear that machines are articles of manufacture.

What’s going on? (1) avoiding limits on © and TM. Lawyers
are very clear about this. Avoid fair use (though Egyptian Goddess constrains
scope). (2) structural story: a small group of attorneys with interests. (3)
harmonization claims—e.g., Singapore protecting designs for non-physical
products. Those lawyers are lobbying lots of offices—once they got Singapore to
act, they used it as a beachhead. (4) financial incentives—design patents make
money for PTO/lawyers and securing © does not.

Who cares? Institutional issues! Hard to challenge this.
First PI decision was 2024 even though 1996 introduced GUIs; competitors like Samsung
won’t challenge b/c they want their own GUI design patents.

Constitutional issues: First Amendment; progress clause. Why
isn’t a movie design patentable subject matter?

Doctrinal: simultaneous move to destroy Egyptian Goddess
test which has kept the scope of design patents narrow. Patent owners arguing
for substantial similarity instead.

There’s a history here—projected designs have existed for a
long time.

RT: (1) You weren’t worried about avoiding fair use. But: Why
isn’t your presentation infringing since it comes from a computer? (2)
literature on this international phenomenon—arbitrage—w/© e.g. term extension.
(3) Larger literature on tech bro fantasies of dematerialization of value?

A: there was an assertion of rights by the KKK in a design
patent that shows the potential risks.

McKenna: claims of people being “left out” by the system—what’s
the story they’re telling about the gap?

A: mostly they leave that out. She’s a thorn in their side
b/c she keeps saying “why not assert ©?” The stories have changed b/c the early
claims were “this is new and unprotected.” But it’s more now: these are
designs, we should get design patents.

Ramsey: textualist moment bolsters your statutory argument.

A: in Samsung, the Court says “article of manufacture is
anything made by hand or machine,” and that might be read to encompass projections.

Q: if designs are sub-Feist, how are they novel?

A: a whole paper on
that!

Quantum Trademarking, Sayoko Blodgett-Ford

Uncertainty principle: it’s impossible to simultaneously
know precisely both the legal boundaries of a TM and how such boundaries are
changing. Entanglement: TMs that share at least one boundary area are
connected/entangled. Doesn’t mean that they infringe. Axes include mark, goods,
fonts, logo design, etc.

Superposition: TM boundaries occupy all and no available locations
simultaneously and probabilistically. Collapse: TM boundaries are forced into a
location in a specific legal context, at a particular time, by a particular
observer. E.g., which designs were actually used in commerce by Apple
computers? Apple Corps (Beatles music label) share boundaries, not just word
mark but multicolor apple logo, and video laser discs featuring music share
boundaries w/computers.

Fred Yen: is this an insight from quantum physics or a more
general insight that measurement involves displacing an object in general? If
we don’t carefully define the metaphor it may not be helpful. Related: when we
use the word “measure”—the position of the TM does not exist prior to a
declaration from a court—this measure can’t be taken w/o litigation. Entanglement—the
problem of what happens as marks move towards each other “geographically.”

Jennifer Rothman: Do decisions actually fix position? Not
sure there’s any location in most cases. There’s a dispute and there may be
decisions that make it more likely the mark is “in” a particular location, but
they don’t pinpoint the boundaries of the mark.

A: due to the uncertainty principle.

RT: consider the effects of registration v. litigation.
Registration has different features that try to avoid some of these uncertainties,
e.g. the word mark in standard character form that doesn’t care about font
etc., the list of goods & services that don’t care about channels of trade,
nationwide scope that doesn’t care about actual business.

Cumulative Marks, Jim Gibson (with Chris Cotropia)

Problematic marks often are not the first mark on the
product/service; authorities aren’t often careful about the secondary meaning
evidence. Timberland case is an example of doing it right in the US: these
claimed features are not shown to have secondary meaning b/c they always travel
with a better-known mark even if the evidence would otherwise suggest secondary
meaning.

“Limping” marks in the US. But wants a doctrinal hook for
looking at “cumulative” marks differently. Example: Hershey’s—able to enjoin
Art Van, where the cumulative marks do all the work in stopping the use b/c
there’s no use of Hershey’s. Many examples are product packaging/product
design.

David Barnes in 2009 advocated 1 trademark per source. That’s
pretty radical, but Dannon at one point had registered marks for Dannon, “live
& active cultures,” “light & fit,” and “7 benefits” all on the same
yogurt container, which is probably a bad idea. If there are already existing
well-known marks for these brands, then the benefits to consumers are less
weighty; just as we think you need evidence to show secondary meaning for
descriptiveness but we presume it for arbitrary marks you might consider requiring
more for secondary marks.

Most problematic: low marginal benefit, high cost to competitors:
the configuration of the Hershey bar. Least problematic: high marginal benefit,
low cost to competitors: Tapestry Collection by Hilton (helps you place the
instance on the spectrum of Hilton quality). Tertium quid: some marginal
benefit, some cost—the Nike swoosh versus the word mark Nike.

Could ratchet up renewal fees for overlapping claims. We
could also adjust protection & enforcement side.

Ramsey: recent JDI decision in 9th Circuit shows potential:
careful attention to what about the JDI trade dress was famous and only allowing
dilution protection for that, not for “old No. 7” on its own.

from Blogger https://tushnet.blogspot.com/2026/08/ipsc-breakout-session-4-design.html

Posted in Uncategorized | Tagged conferences, design patent, trademark | Leave a comment

IPSC Breakout Session 3 Trademark Confusion & Consumer Perception

Posted on August 7, 2026 by rtushnet

Trademark Confusion as a Matter of Law, Andrew Michaels

Is infringement a proposition about the world, or about the
law? Fact: an empirical predictive question about the world. Law: a normative
judgment about whether there should be legal responsibility—is the confusion
likely enough that we should find infringement? 2d/Minority view: Q of law
based on underlying facts. 9th and majority view: Q of fact reviewed for clear
error. 9th said that LOC decisions have “limited precedential value” b/c they
stand on their own facts, reducing the need for de novo review. But that might be
a reason to treat it as a Q of law to get more consistency and predictability.
Issue of law would make it easier to decide on SJ/without trial, compared to
claims that SJ should usually be avoided.

Judges and juries are thought to be good at different
things. Jury: community; judge: compare with other cases/predictability
allowing businesses to order their affairs more easily. Easier to decide on SJ:
might help prevent bullying of parodists, other users.

Appellate v. trial court: underlying factors of intent,
actual confusion might be better assessed by trial court; balancing/weighing of
factors and legal comparison might be more suited for appellate court. Some
factors may be more factual: evidence of actual confusion; intent (witness testimony/credibility).
Similarity of marks should be legal because the jury has to ask “compared to
what?” whereas the court can look at other cases. Same with products. Strength
of mark conceptually should be Q of law; commercial strength is a matter of
fact for witness testimony.

Lisa Ramsey: Matal v. Tam—constitutional issue exists, and
LOC is a speech protective doctrine, implicating Bose. JDI even says that MTD can
be ok because of contextual considerations. If it can be resolved on a MTD, it
can be a Q of law.

RT: Bose v. Consumers Union on de novo review when the facts
have constitutional significance. On the “compared to what” for similarity of
marks/similarity of products? the theory is “similar enough that consumers are
likely to confuse them.”

James Dabney: time was that likely confusion would be enough
for an injunction, not damages or disgorgement; now things are different.

Google v. Oracle—is this legal or factual? Similar issue of
mixed question of law & fact.

Q: right to jury trial?

A: could ask them questions about the factors; could ask for
an advisory jury verdict, which they do a lot for patent obviousness/did with
GvO. Multifactor=often an issue of law.

McKenna: LOC factors were made up; makes it feel more fact
bound b/c courts think they have to walk through the factors even when they are
ill-fitting. The legal standard is supposed to be: substantial number of
reasonable consumers. Look at negligence where courts are more willing to grant
SJ because they are more willing to consider what reasonableness is.

Factors and Fictions: The Empirical Collapse of the
Likelihood-of-Confusion Test Across the Federal Courts, Thomas Reichert

Every circuit makes the same 4 commitments: (1) the test is
flexible; bright lines misfire; (2) no factor is dispositive; (3) the set is open
so you can bring in other considerations/add factors; (4) provides structure and
allows appellate review. But: How often is this true?

Used an LLM to read every confusion opinion 1970-2025,
temperature set low to inject less randomness, and ask whether the court
considered a factor and how strongly it favored/disfavored confusion. The model
is not trying to judge factor weight itself, just trying to identify what the
court said about how the factor weighed. Around 11,000 opinions analyzed.
Courts analyze 6.35 factors/case; only 40% consider them all.

Hand audited 1002 codings; 97% agreement on weight and 100%
on direction.

The key factors: similarity of marks and proximity of
goods/services. If both favor confusion, predict confusion; if both don’t,
predict lack of confusion. Can predict 93.5% of every federal TM case. Consistent
across circuits and time, though less in 8th circuit where the case count is
small, and there’s a dip in the 90s (his hypothesis is domain names). The other
factors operate as “structured overrides.” Defeaters are where both factors
favor confusion but the court finds none. A lot of cases: no actual confusion,
high buyer sophistication, good faith adoption, and weak mark strength. Substitutes:
a predicate factor was weak/divided, but confusion found anyway: strong/famous
mark; bad faith intent.

The test is already hierarchical. Courts should say so.
Appellate practice wrongly rewards factor by factor mark. Could right size
discovery/do less initial discovery. Tell juries the machinery: model jury
instructions in 9th Circuit already tell juries what weighs more and we could
do more.

Could apply the same questions to © fair use; sentencing.

Betsy Rosenblatt: has been done for © fair use—you may not
want to reinvent the wheel. But one interesting thing about © fair use that
might or might not match w/TM infringement is that how one comes out on
transformativeness tends to predict how the case comes out. It doesn’t mean
that transformativeness is the whole game; but it influences how the other
factors work rather than rendering them unimportant. In general we may want
those other factors to be doing more work than they’re doing, not less. You may
have identified a problem rather than a solution. Should juries perhaps pay
more attention to sophistication? Right now they don’t have a good definition.

Should parody be a special case b/c the factors work differently?

Q: Fed Cir has criticized TTAB for relying too much on
similarity, so that result is pretty funny (the Fed Cir was most likely to rely
on the 2).

McKenna: it’s not that the other factors just come out—the question
of how much similarity there is b/t marks and goods are not found in nature. It’s
not a © comparison. All the other information is just influencing the judgment
about similarity. It’s context for which you understand levels of similarity,
informed by all the other information. So sequencing discovery would be
difficult b/c you’d be ruling out the contextual information you need to make
judgments about similarity of marks and similarity of products.

A: we’re measuring the opinions, not the reasoning process.

McKenna: sure, but your prescriptions make assumptions about
how the reasoning works.

A: Crowding in the market can definitely change similarity assessments.

Q: if courts were honest and said it’s a 2 element test,
with a determination made through a bunch of subfactors, would that work
better?

A: that’s the next paper. You can create a flowchart of how
to do the analysis with substitutes/defeaters. You could do a burden shift! [Burden
of production I assume, not burden of proof.]

Ramsey: dilution doesn’t consider relatedness of goods—does that
matter?

A: didn’t look for any correlation w/dilution.

Ramsey: some courts say strength increases likely confusion,
but academics and parody cases say that strength can decrease likely confusion
b/c people know what the real thing looks like.

A: strength moves w/the verdict generally, but can
substitute for proximity if the mark is very strong.

Ramsey: should separate out commercial & conceptual
strength & see what happens.

Q: the other factors were originally not relevant to competing
goods situations; practitioners got into the habit of applying Polaroid/etc. in
all circumstances when it wasn’t needed in the direct competition cases. That
would support the empirical observation that competition and similarity, the
two pre-Polaroid metrics, were actually always the most important.

21st Century Trademark Surveys, Rebecca Tushnet (with Chris
Sprigman & Stephan Tontrup)

A statutory interpretation component: what do the terms in
the statute like affiliation and connection actually mean? Weird that we don’t
have much of an answer after 80 years, isn’t it? So we believe the definitions
we are using are grounded in the proper legal meaning of affiliation et cetera.

The empirical part: we currently don’t tell survey
respondents (or jurors) what “affiliation” etc. means and we also don’t have any
good reason to think that they know what it means for legal purposes, which doesn’t
include references—if you think of Sprite when you see Poppi Lemon-Lime, there
can’t be deception about affiliation or connection because you really did think
that, but a layperson could say “yes, there’s a connection”—the survey may not
even be revealing mistakes of law, as Sotomayor et al have discussed with
parodies, but mistakes about the meaning of the words used in the survey! So
let’s try to fix that with a training module as in genericness surveys and see
what happens. Including allowing a response “this is about the
trademark/trademark owner.”

And implications for jury instructions: survey respondents
and jurors are in the same position.

Larger questions: there are lots of areas where we want to
know how some audience perceives communication: 1A compelled speech/will you be
associated w/the statement; labor law: how employees perceive employer
speech—we don’t ask the workers! True threats—hypothetical reasonable
person. But only in the Lanham Act do we
actually use surveys! [Probabalistic—less than half can still be a large number
of people for economically, socially, or politically significant messages. Why
is probabilistic thinking persuasive in TM & not other areas? Plaintiffs’
bar? Courts willing to credit that “substantial numbers” matter even if not
majority b/c they can imagine the harm to the substantial consumer mass/the
consumer mass may not be imagined to share any other minoritarian identities
(or may be imagined to need special protection—cite Ann Bartow on gender)?
Possible lesser importance of public interest lets courts defer to surveys in
TM and rely on policy preferences in 1A—though that lack of interest in reality
on the ground is not necessarily good for 1A jurisprudence.

Rosenblatt: affiliation and approval are easy to get wrong;
even experts get them wrong. Pattern jury instruction?

Q: we’re in the post literate era: disconnect b/t regular
people and lawyers. If literacy rates are going down, we need to define terms
for them.

Ramsey: courts focusing on text of statute: approval
language concerns me. We don’t want people to be confused about permission. Don’t
ask compound questions. “goes along with” is a bad definition too.

RT: approval and permission aren’t the same thing but this
is where mistake of law comes in. There is an issue with repeating questions
too—that’s more likely to get a “yes” somewhere in there.

Rothman: Working on project w/Joel Steckel—one of the things
we worked w/was mini survey about meaning of these terms and people were using
lay definitions. How should they be defined?

An Axe to Grind? The Legal History and Trademark Challenges
of Guitars, Mark Blankenship

When does a guitar shape identify a type of guitar v.
manufacturer? Sears Roebuck catalog is the precursor to Amazon and Temu, making
gear affordable to players who didn’t live near a music store. Different claims
over time—Japanese “knockoffs” that eventually resolved into new body shapes as
well as some generic ones. Other issues: German court allowed © claim in guitar
body shapes; separability would be an issue in the US unless the guitar also
includes features like shark fins.

from Blogger https://tushnet.blogspot.com/2026/08/ipsc-breakout-session-3-trademark.html

Posted in Uncategorized | Tagged conferences, presentations, surveys, trademark | Leave a comment

IPSC Breakout Session 2 Copyright Fixation & Subject Matter

Posted on August 6, 2026 by rtushnet

Culture Isn’t Transitory: The Disappearance of Music and
Film Under the Copyright Regime Amanda M. Whorton & David S. Levine

How could © improve cultural heritage preservation? Modestly
change fixation to help archivists. We have only one video recording of jazz
great Clifford Brown playing the trumpet b/c of serendipity—Soupy Sales decided
to record the broadcast. An estimated 75% of silent era films are lost;
1927-1950 an estimated 50% are lost; many early news broadcasts, the first 10
years of the Tonight Show, first televised presidential address have been lost.
Some of the losses are technological challenges/storage media degrading/format
incompatibility. But some are attributed to taking fixation as a given. Cartoon
Network said that 1.2 seconds wasn’t enough for fixation, but the boundary is
unclear.

Proposal: Raise the standard to archival- or preservation-level
fixation, closer to permanence, as far as is reasonable. A work must be able to
survive past author’s wish to exploit it. Should require author to certify they’ve
done so. Would not retroactively restore already-lost works. Better align
fixation with Constitution: not just protecting market value, but collective
cultural memory and heritage.

Q: why tie to fixation and not just require preservation as
separate element?

A: theoretical link.

Q: the tech didn’t used to be valuable; why force people to
preserve things that aren’t worth preserving? Why not force archiving of emails
in case they’re useful someday?

A: yes, we’re making authors care about something they
otherwise wouldn’t care about. There’s nothing new under the sun, though, and
if they’re availing themselves of the © system they need to deposit more than a
penny’s worth. Bar for protection is low.

Peter Yu: Is this a Berne-noncompliant formality?

Q: is this still a problem v. 70 years ago? Does deposit do
enough work?

A: obsolescence will still happen. Certainly deposit can
solve some of this but that requires LOC to house all these.

RT: wouldn’t you have to separate the standards for protectability
& infringement? Cartoon Network is an infringement case.

A: yes.

Q: example—Nintendo didn’t have to deposit anything, except
for the Pokemon movie reels as having cultural significance (they only wanted
reels). Valancourt Books case about mandatory deposit as a taking—if yours is
tied to seeking © that might escape the problem.

Ambient Copyright Fixation, Brian Downing

Fixation requires the author’s authority over the fixation;
occurs more and more w/o author’s knowledge, let alone authority, by ambient
recording devices. Creators can’t assert federal © interest over unknown fixation;
uncreative device operators reap the rewards from others’ creative works. Operators
own the work if they show minimal creativity in fixation.

He proposes notice and adoption as the rule instead of fixation
with authority. Authors will use platforms to automatically become aware their
work is online: YT and Meta have likeness protection for deepfakes; authors
could also manually discover their work is online. Adoption: authors would
adopt or reject the fixation. For the fixer, safe harbor, fair use, and news
exceptions. Uploader would have to say who is in the video, if they know.

RT: Interesting project. Next problem: What’s the work? You’re
assuming that human action creates works. But what about playing with a dog? Under
your theory, who is the author of the Zapruder film? What if 2 people are in conversation?
What if you are recording a dozen couples on the dancefloor? What is the
uploader supposed to do if they believe that the underlying conduct is not
copyrightable?

Also: Facial recognition mandates are a bad idea regardless
of whether they’re supposedly in service of IP rights. The current mechanisms
you describe are not used to mandate identification of everyone in a video, nor
does Content ID etc perform a fair use or newsworthiness analysis, nor does
anyone think that it can do so.

Q: you can make bad © claims on YT today; there’s always
ambiguity about the defaults. Most things like a scuffle between people should
be left up; a speech is clearer about the underlying work being recorded—notice
and counternotice are the right solutions there; right now all the value goes
to the wrong person. Failure mode is claim made by person who got in a fight
and was recorded. That’s shifting value to a different person who abused the ©
system, but the value wasn’t created by the recorder and the money is being
made. Our fixation rule should address how to reward the participants.

Also common-law copyright is underdeveloped in most states. [That’s
what plaintiff’s lawyers are for!]

Maggie Chon: who’s the author? With photos we have doctrine.
Operator may be able to claim that their filming meets some kind of test of
copyrightability.

A: if there’s no master mind then revenue should be shared.

Peter Yu: 1101?

A: it’s at least ambiguous whether the Writings requirement
requires a fixation. UK does allow adoption of unauthorized fixations. But 1101
is good for infringement; it’s not so good where the bootlegger is an automated
camera.

The Copyrightability of Living Organisms Cathay Smith

The GloFish: glows under fluorescent light: proteins from
jellyfish, sea coral integrated into fish genomes. Living organisms are patentable
subject matter, though products of nature aren’t. Patents exist on method of
making fish as well as the transgenic ornamental fish themselves. TM also
allows for living organisms to be considered goods, so GloFish has a number of
registrations like GALACTIC PURPLE and STARFIRE RED.

Copyright Review Board has found lack of copyrightability
b/c didn’t owe origin to human authorship or don’t meet fixation requirements.
GloFish © was denied despite argument that injecting non-native DNA into
GloFish was like a painter using paint on a canvas. CRB found no authorship and
no copyrightable subject matter.

Humans also use living organisms as the medium—plants and
flowers; microbial art; Chapman Kelly’s garden. Living organisms can also be
used as canvas: tattoos/painting on pigs, hairless cats, cockroaches. Seems
like easy PGS separability cases, but are they useful articles? What makes them
art is that they’re tattooed on living organisms.

Work itself is the living organism: the GloFish, where the
work can’t be separated from the organism. Is there a difference b/t injecting
dye into a fish to change its color versus modifying its genes to do so?

Fuzzy categories: trees trained to grow with specific trunk
patterns; topiary sculptures that are trimmed—are they the same? Should the process
matter to ©ability? Do we want to look at design of/design on concepts or seperability?

Policy considerations: fish have offspring; if their
offspring exhibit the same expression as they do, how do we consider right to
reproduce under those circumstances? If the work is self-replicating, what
then? Taxidermied mice—if the policy considerations push us to avoiding living
organisms as © subject matter, what about when they’re dead?

Jacob Noti-Victor: there are multiple doctrines at play:
idea/expression; authorship; functionality—disentangle different doctrinal
pieces. AI authorship is also relevant here.

RT: Extreme plastic surgery on humans?

Is Copyright a Noun or a Verb? Jacob Noti-Victor (with
Jeanne Fromer)

Allen v. Perlmutter, D. Colo.—cited Star Athletica to argue
that CO wrongly considered the process instead of the output. Copyright focuses
on the verb in certain contexts—tort or agency contexts—copy/copying in fact, perform/performance/transmission,
cause/volition, induce/inducement/secondary liability, employ/WFH. But
protectability is all about the noun—things are supposed to be legible in the
work itself, rather than the process by which the work is made. This falls
apart in different places, but the work is supposed to be a coherent thing
(even if scope is in flux).

Why insist on the noun? Property: in rem rights generally
need a defined thing. Lower information costs when transacting and suing.
Normative policing: focusing on work rather than process allows commodification
and marketing, reinforcing market-incentives theory; Feist in particular is
about avoiding normative contagion from labor as an independent justification
for ©. Relatedly: evidentiary—a work is more easily assessable by courts,
juries, and the CO. Process narratives are expensive and easily contested.

This is unstable because © is primarily about creating. Our
justifications are about the verb: incentives, labor, personality. But the law
focuses on the work as coherent object. The verb side leaks back in to the
analysis. A lot of verb but a suspect noun: Meshwerks; some photography cases
where work went into producing the thing—that’s when process leaks back in. A coherent
noun but a suspect verb—the monkey selfie where a human didn’t do it. Maybe fixation/intent
to fix as well.

Doctrinal disciplining as a pattern: courts can’t use only
noun language, so verb language starts to seep in, and then courts get
uncomfortable and announce a rule expelling process from the doctrinal area.
Thin works: Burrow-Giles to Rentmeester.

Useful articles: Brandir talks about artistic judgment; Star
Athletica says no, it’s about how the article and feature are perceived, not
how or why they were designed. Fair use seems like it’s about verbs—what the fair
user did—but there’s a similar pattern in cases like Blanch v. Koons and then
Warhol v. Goldsmith. Blanch asks for a “genuine creative rationale,” whereas
Warhol says subjective intent doesn’t matter, though meaning as reasonably can
be perceived should be considered to the extent necessary to determine purpose.

Can authorship ever be separated from verbs? How can you ID author
from the work? Well, you can’t! Naruto, Kelly (goes back and forth b/t
authorship and fixation); Urantia (divine authorship, kind of about estoppel);
AI authorship as additional destabilizing factor.

Possibilities: hold the line: noun is shaky but necessary.
Process is an evidentiary and notice nightmare. (2) embrace the verb; stop
pretending process isn’t important even if it means simple photos/random
creations are unprotectable; (3) no choice—with AI the work can’t perform
evidentiary/notice functions; we need to know how it was made so process
inquiry is coming whether we like it or not.

RT: Process can also expand rights: selection of a
particularly attractive pepper at the garden; the price cases like CCC/Kapes.
Consider also public domain works/talk about the Uncle Sam case.

A: for useful articles process might yield less
protectability; for software it might lead to more protectability.

Grimmelmann: a paper about the appeal and limits of
formalism—everything you need is included within the thing itself! Literary and
artistic theory could offer useful comparator—formalism, reader response, etc.

Maggie Chon: joint works and WFH?

A: there’s no way to avoid process inquiries there—you have
to ask who superintended the work?

Samuelson: in Sedlik, the testimony about process was really
important to the jury’s verdict (though not to the court of appeals).

Identification! Or, How Do You Litigate Against 3,000
Squishmallows? Ari Lipsitz

What is the work? Squishmallows sued Build-a-Bear claiming
trade dress in kawaii squishy characters. BAB response: they were mixing and
matching 17 different descriptions and tried to claim Squishmallow Godzilla and
Squishmallow Warren Buffett made for Berkshire Hathaway. But dct denied motion
to dismiss. Clarifying which of the 3000+ Squishmallows falls within the
definition was a permissible aim of discovery. P defines rights in ambiguous
way and then plans to slice & dice claims in discovery to target whatever D
did. But IP rights are supposed to be defined in the abstract—a problem for
trade dress and trade secret as well.

Why identify? (1) notice to D; (2) gating discovery—California
requires trade secret to be ID’d before discovery; (3) it straddles the line
b/t procedure and substance—in trade secret, P should describe subject matter
w/sufficient particularity, to separate it from matters of general knowledge.

Alsup said: it’s easy to allege theft of trade secrets
w/vagueness, take discovery, and then specify whatever happens to be there as
having been trade secrets stolen from P. Allowing everyone to survive MTD; risk
of forcing D to reveal its own trade secrets.

Other forms of IP also lend themselves to strong
identification requirements: trade dress can be hard to pin down; © also has identifiability
issues if it’s unregistered or in a billion different pieces as in Thomson
Reuters. Patents shouldn’t be hard to pin down.

Open question: identification and scope. The more diffuse
the right, the stronger the identification should be—with trade secret,
claimant may not have concrete idea of secret until there’s litigation, so
identification is important; patent: you have it or you don’t, so need to
identify. Unregistered trade dress and copyrights seem closer to the diffuse
side.

from Blogger https://tushnet.blogspot.com/2026/08/ipsc-breakout-session-2-copyright.html

Posted in Uncategorized | Tagged conferences, copyright, trade secrets | Leave a comment

IPSC Breakout Session 1 Copyright Secondary Liability

Posted on August 6, 2026 by rtushnet

Cox: Contributory infringement for service providers can be
shown only with intent, or with a service tailored to infringement. What
happened to Gershwin? Will courts really accept that? Will they expand vicarious
liability more to capture intuitions they have about fault?

Common-law tort origin is the claim, but ©’s rules are
misaligned from tort. Is this all © exceptionalism? Many of us feel that courts
are searching to attribute fault but don’t have the right anchoring in tort law
fault principles.

First, ©’s insistence on hard line b/t direct infringement
and secondary liability. Tort law more flexibly assigns first-party liability
to those whose conduct causes the injury—co-tortfeasors when contributions are
deemed sufficient, even when another party’s participation is required for harm
and even when co-tortfeasor’s conduct is not the proximate cause. Joint
liability—tort doesn’t regard that liability as secondary. They’re not
derivatively liable for wrongful conduct of another, but liable b/c of their
own wrongful contributions to harm. If party most proximate to harm is
batterer, the co-tortfeasor is also a batterer. Tort only very rarely imposes
truly secondary liability (wrongs committed by others). Vicarious liability is
the standard, but it’s not specific to the particular conduct but rather exists
because of the broader relationship (employment) to the tortfeasor. Enterprise
liability too.

Basically true even for strict liability like
blasting/harboring a wild animal. Even when D’s own conduct is also sufficient
to subject them to liability—when landlord engages w/wild animal in ways that
could be called a harborer—that’s not derivative liability. Otherwise landlord
might be negligent in their own conduct (renting to a known harborer). So ©
being strict liability doesn’t demand a different approach.

Framing of whole Q of secondary liability is thus already
off on the wrong foot from tort perspective.

© ignores wrongful contribution to an injury: party’s own
negligent conduct exposes the P to third-party wrongdoing, like landlord who exposes
tenants to assault, or train leaving passenger in dangerous area. Liability
there is not co-tortfeasor; this category doesn’t put D in same category as
other tortfeasor: negligence liability, not battery, for negligently exposing P
to third-party battery. Doctrines like causation, act/omission, etc. come into
it. The remedies are negligence remedies—no punitive damages even if third party
engages in intentional tort.

How does © get misaligned? Courts initially concerned with
co-infringers—people who performed part of the act that led to infringement.
Drawing on patent cases where infringement requires assembly of lots of parts.
A common enterprise, either directly or indirectly where one party makes a component
to be combined with another. When co-infringers weren’t amenable to suit, Ps
tried to bring in more upstream participants to say they were also co-infringers.
Courts started using the term “contributory infringement.” But they weren’t
really developing it as a theory of derivative liability, but rather describing
why the contributions of Ds made them co-infringers. These were common
enterprises—common purpose to cause the infringement.

Part of the confusion in © is emphasis on secondariness of
liability, unplugged from fault principles. If we tried to do more faithful
mapping to tort law: we should be very reluctant to impose true secondary
liability other than vicarious liability, which we would define much more
narrowly—a relationship like employer/employee or joint enterprise—relationships
not specific to the infringing conduct, with much higher levels of control. Thus,
we’d reorient to (1) co-infringers—liable b/c their own conduct makes them fairly
labeled an infringer, subject to © remedies, including inducement and providing
products w/no substantial noninfringing use; could also include, per Sotomayor,
other cases of aiding and abetting where there’s knowledge plus material
contribution as in tort law where tort law demands significant
contribution at a time when it can be said to reflect a meeting of the minds in
furtherance of tortious conduct, not just any time/knowledge of past infringement.
(2) negligent exposure to third-party infringement; implication of duty,
breach, causation and damages. Not really © infringement but negligence, so the
damages are different.

A: these doctrines aren’t limited to intentional torts, but
the way the courts talk about the other party’s contribution is about intent to
interact w/other D—so it’s not intent in the “intended to infringe” way but “intended
to work with.” Underlying tort doesn’t require proof of intent. Cox’s categories
of intent map pretty well if they mean “intent to work together” rather than “intent
to carry out infringement.”

The New Law of Vicarious Liability in Copyright, Michael
Carroll

Cox tells courts to change their vocabulary. Does that
matter? If so how? Restatement (Second) of Agency conceives of two types of
principal/agent employment relationships. Master/servant where there’s agency v.
independent contractor who may or may not be an agent. It was against that tort
law background that the 2d Circuit decided Shapiro, Bernstein about whether a department
store owner/operator was liable for sales of infringing recordings by
concessionaire. Court rejects independent contractor defense: right and ability
to supervise plus obvious and direct financial interest in exploitation of
copyrighted materials—looking to © policy and says policy is best served by
imposing liability in these circumstances. Courts repeat those terms, not with
full consistency.

Sony came along: The use of the term vicarious
liability was imprecise in the opinion, but Justice Stevens used the term for
any kind of indirect liability. 9th Circuit kept treating Grokster as simply
ratifying Shapiro, Bernstein. But Grokster’s formulation is different! Ignored
Justice Souter’s restatement; Cox says that the Court is the boss. You’ve got to
start using the magic words. If one infringes by profiting from direct
infringement, financial interest isn’t enough: profit is revenue minus cost.
But maybe it’s not a big deal. Declining to exercise a right to stop or limit
direct infringement: to decline to take action implies both knowledge and
intent. But as an outgrowth of respondeat superior, vicarious liability has
been treated as strict. How can that be reconciled?

Cox’s treatment of Grokster suggests that the Court will
rely on its own restatement of vicarious liability when it reaches a relevant
case. Courts will need to develop a standard for declining to exercise
right/ability. A relationship akin to employment will impute knowledge to hold
that supervising party declined to act; but a service provider for an internet
user would require more evidence than a contract that said you could be cut off
w/o some specific notice.

Example: tape machine manufacturer & its retailers: 8th
circuit said they were liable b/c of contracts w/retailers for how machines
were used; machines were distributed free; some tape sales were to infringers
& manufacturer profited from tape sales. Not sure that could suffice.

Question: where did Souter get his words? Not in the briefs
in Grokster.

Eric Goldman: thought that Grokster was p-favorable; what’s
the empirics?

RT: wouldn’t it be stronger to start from the point that the
real name of/justification for vicarious liability is agency liability? Service
user is obviously not agent of service provider, so that would help realign
with larger agency/vicarious liability law.

Also: read the SCOTUS sexual harassment cases from 1998
& Ginsburg’s characterization of the liability standard, where she makes similar
moves about vicarious liability.

Grimmelmann: as with shadow docket, SCOTUS is telling lower
courts to read their tea leaves and comply.

© industries seek broad liability rules for tech companies;
industry turned to Gershwin definition from 2d Circuit in Sony, Grokster, &
Cox, claiming that Gershwin was the bedrock foundation for their claims. © exceptionalist
arguments derived neither from statute nor common law, but claims about massive
uncontrolled infringement. But Ct even in Sony didn’t cite to Gershwin except
as vicarious case.

Grokster: MGM no longer relying on Gershwin alone, but
emphasized that Gershwin’s definition of contributory liability included
inducement. Court looked to Gershwin for inducement as well as to patent law. Cox
is a lazy opinion; Sotomayor is making more sense. Asks: why not aiding &
abetting? Some options: there’s nothing in the statute; the statute says “to authorize”
which didn’t happen; no inducement b/c Cox didn’t encourage infringement; no
special tailoring, no direct financial benefit; no a&abetting b/c there’s
no intent to aid infringers. Material contribution w/knowledge was Sony’s only
chance, but broadband service wasn’t proximate cause and Cox’s after the fact
knowledge/lack of way to know which user actually infringed was too limited to
justify liability.

Pressure on vicarious infringement & volitional conduct
will exist, but probably not on inducement b/c Hikma reinforced the requirement
of active inducement in patent context.

Did SCt really intend to overturn Netcom such that failure
to take something down after notice is no longer material contribution sufficient
to justify liability? DMCA is not a dead letter b/c many incentives to comply
still exist. [Including incentives to comply for other countries’ regimes.]

Jim Gibson: Even Sotomayor wants to use a&a for a heightened
mens rea—intent of helping other person succeed in committing wrongful conduct,
not just intent to perform the act that enables infringement. So the common
focus on intent seems like the most limiting factor going forward, not whether
a&a can also be included.

A: Taamneh was important to Cox despite few mentions—the required
intent (to aid terrorists) was something the Court thought about in that
context. She expects intent to get watered down.

Fearing (and Loathing) the Common Law of Copyright, Shyam
Balganesh

Why the reluctance of the Court to engage with © as a common
law system? Thomas says: we’ve recognized specific forms of secondary © liability
that predate the Act, but we’re loath to expand liability beyond that. Sotomayor
says: why?

Legislative-judicial dynamic around parts of the statute has
been essential to the 1976 Act. Typology: Legislative modality: novation;
judicial task: interpretation (Congress invented this and didn’t draw from
prior case law); example: joint works

L: Codification; J: preservation/interpretation; E: first
sale

L: Silence (decided not to speak; mess already existed by
1960s & 1970s); J: unconstrained law-making; E: substantial similarity

L: Delegation; J: constrained law-making; E: fair use.

Sony has the right result but made a methodological error:
Stevens says that Act doesn’t expressly render anyone liable for infringement
committed by another & talks about absence of express language requiring
courts to jump in. This is only partially true b/c of “to authorize” in 106,
which Sony & Cox don’t mention—it has clear instantiated meaning and long
history. Thomas has a theory of congressional primacy; the legitimacy of court-made
law is always tested against backdrop of congressional action or inaction; seemingly
a majority of the Court has accepted/acquiesced to this view. Clear patterns in
his opinions in Star Athletica, dissents in Public.resource.org and Oracle: you’re
using fair use to annul the statutory treatment of software. Even in Fogerty v.
Fantasy: text of statute is clear; interpretation ends.

Thomas’s disdain for common law; three views. If there’s a
backdrop of rules against which Congress legislates, appealing to those rules
is legit but frozen in time. For delegated lawmaking—ongoing elaboration
required for open-ended terms with express or implicit recognition that
judge-made law will follow—he thinks it’s legitimate if the text constrains it
with guardrails; securities law is an example of his objection b/c there’s not
enough guardrails. Finally, independent lawmaking is wholly illegitimate (no
gov’t edicts doctrine).

Maybe this was a category error: failing to discuss “to
authorize.” Doesn’t think so, though, b/c briefs raised it. But he wasn’t
convinced that there was a textualist hook. Raises Q: what does this do to
other parts of © law if this vision of interpretive structure has a majority?
Fair use implications: only if it is compatible w/the rest of the statute.
Originality: same plane. Infringement analysis: implications for legislative
reform. Beware of textualists when advocating for reform: how a court would
handle that.

RT: Textualism masks that placement in categories is
contestable: Glynn Lunney: reproduction/derivative works could have replaced
substantial similarity; codification could have been read as novation in
interpreting first sale versus exhaustion.

NO FAKES and similar ROP proposals often have language like “to
the extent protected by the 1A” in their exclusions—how could this form of
textualism handle that? Would Thomas’s approach ignore those exclusions just
like he ignored the open ended language about useful articles in Star Athletic.

A: irony of Thomas’s MO: claiming that there’s plain meaning
while refusing to look at legislative intent—he ignores “to authorize” b/c
explaining what its plain meaning was would require a citation to the
legislative history.

Our Byzantine Secondary Infringement System, James
Grimmelmann

Conventional view: in US, there’s vicarious infringement and
then intent-based contributory liability. He wants to do a thorough survey of
all the secondary liability doctrines in US law, describe & critique it as
a system, and then possibly suggest fixes.

True secondary liability doctrines: liability for someone else’s
completed act of direct infringement.

What about infringement by authorization? Issuing a
purported license w/o the right to do so—seems literalist but probably killed
by Subafims.

Agency law: respondeat superior is used all the time where
companies are held liable for employee’s actions. Agent’s actions and knowledge
are imputed to their principal, often invisibly, even when not actuated by
purpose to serve employer [not sure this last is true—looking forward to cites].
Especially in PRO licensing cases where employees at a bar are used to hold
owners liable even when corporate law wouldn’t do it.

Volitional conduct/the server test: these often cut in
opposite directions and interact weirdly with licenses granted to platforms by
users.

Quasi-secondary liability: for conduct that could facilitate
infringement regardless of whether there is actually infringement.

Scaffolding doctrines: direct infringement has no mental
state requirement; makes stakes much higher for direct/secondary. Willful &
innocent infringement also matter to statutory damages.

Criminal liability for willful infringement; brings in general
criminal doctrines of aiding & abetting; there’s also a “causing” criminality
but no federal attempts criminal liability. There’s also conspiracy liability:
it’s a crime to conspire to criminally infringe; Pinkerton: conspiracy to
commit any crime subjects conspirator to liability for any criminal infringement
that’s reasonably foreseeable and in furtherance of criminal conspiracy. RICO: ©
infringement is a predicate crime.

512: Does it displace common law? Volitional conduct? Apply
beyond enumerated services? Courts generally say no to all. Tony Reese has given
good reasons to think it’s a bit more complicated. The exceptions it carves out
all sound in secondary liability (quasi-contributory; quasi-vicarious—presumed that
direct liability wasn’t possible so how could it be the same as common law
liability?); what about the repeat infringer suspension—what is a reasonable
policy? Recreated a lot of secondary infringement doctrine under the head of
512.

TPMs also matter: Serial copy management systems—you must
implement them and you’re liable for distributing tech w/o them—that’s a
kind of quasi secondary liability.

1201 is too, arguably mapping onto Cox intent prongs—distributing
tech “primarily designd for,” knowingly marketed for use in circumvention, or
have limited commercial use except for circumvention.

1202 is too: knowingly language but not in any
coherent/organized fashion.

This is far too complicated. There are way too many minor
variations and overlaps. What happens to 512’s quasi contributory liability
exception now that Cox has repudiated knowledge plus material contribution?
Overlapping but inconsistent tests. Confused relationship of statutory
codification to common-law elaboration: volitional conduct, server test, and
512 all seem to do similar work. Loopholes and traps for the unwary—Aereo was
$100 million waste.

Jim Gibson: distribution liability can be thought of as
secondary liability for the underlying reproduction, though the statute doesn’t
say that.

from Blogger https://tushnet.blogspot.com/2026/08/ipsc-breakout-session-1-copyright.html

Posted in Uncategorized | Tagged 1201, 1202, conferences, copyright, secondary liability | Leave a comment

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Rebecca Tushnet

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IPSC Breakout Session 2 Copyright Fixation & Subject Matter

IPSC Breakout Session 1 Copyright Secondary Liability

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