Vericool World, LLC v. Igloo Products Corp., No. 24-192,
2026 WL 1239879, — F.4th —- (9th Cir. May 6, 2026)
Judge Bumatay dissented from this decision extending Dastar
to bar Lanham Act false advertising claims over who was “first” to market a
biodegradable cooler. Given the citation to Bostock, this seems mostly
like a fight about pretending that statutory interpretation is obvious rather
than a matter of judgment.
Vericool alleged that Igloo violated the Lanham Act by wrongfully
taking credit as the first to market a biodegradable cooler. The Lanham Act
creates a cause of action against a defendant who “misrepresents the nature,
characteristics, qualities, or geographic origin” of a good. Under Dastar,
the “characteristic” must be an observable aspect of the “tangible product”
rather than the “ideas or communications that ‘goods’ embody or contain.” “Because
Vericool’s claim concerns the origin of an idea embodied in its coolers—rather
than the characteristics of the product itself—we conclude it is not cognizable
under the Lanham Act.” (What is “union made” under this reasoning? One could
indeed go and observe nonunionized workers making a product—is that observable?
I find the majority’s preclusion reasoning, detailed below, basically
persuasive, but I’m not sure it can be cashed out as “observable aspect.”)
Vericool argued that, because of Igloo’s false advertising,
it lost “the cachet that comes from producing a pioneering product” and could
not capitalize on the same media attention and free advertising Igloo had. The
complaint quoted media coverage referring to the Ohana cooler as “not the first of its
species,” “another alternative to Styrofoam coolers,” and “much like the Igloo
RECOOL biodegradable cooler.” Vericool also pleaded that “consumers . . . are
more likely to purchase a product that is the ‘first’ of its kind rather than a
secondary alternative.” During discovery, a Vericool representative testified that customers were likely to accuse Vericool of attempting to “knock off” Igloo’s
Recool and that “third party entities indicated they were less interested in
Vericool’s biodegradable coolers because Vericool was perceived as not being
the innovator in the product category.”
The district court threw out the case because of Dastar.
On appeal, Igloo argued that Vericool lacked Article III
standing, but it didn’t matter that current Vericool is a new entity; it was an
assignee of the injuries of its predecessor in interest.
Dastar interpreted “the phrase ‘origin of goods’ in the
Lanham Act in accordance with the Act’s common-law foundations (which were not
designed to protect originality or creativity), and in light of the copyright
and patent laws (which were).” Thus, “the most natural understanding of the
‘origin’ of ‘goods’” was “the producer of the tangible product sold in the
marketplace,” not the “person or entity that originated the ideas or
communications that ‘goods’ embody or contain.” Courts must avoid interpretations of the Lanham Act that extend
“trademark and related protections into areas traditionally occupied by patent
or copyright.”
The Ninth Circuit has already extended this logic to §
1125(a)(1)(B) false advertising. In Sybersound,
the court held that “the nature, characteristics, and qualities” of a product
“are more properly construed to mean characteristics of the good itself.” In
particular, false claims that songs on karaoke records were “fully licensed”
were not cognizable under the Lanham Act. The “characteristics of the good
itself” must be observable about the product itself, “such as the original song
and artist of the karaoke recording, and the quality of its audio and visual
effects.” This avoids a copyright/advertising law clash and ensures that only copyright
owners and exclusive licensees of copyright may enforce a copyright or a
license.
The majority also looked to Baden
Sports, Inc. v. Molten USA, Inc., in which the Federal Circuit held that a
plaintiff could not bring a cause of action under § 1125(a)(1)(B) when a
competitor advertised that it was the “innovator” of a technology that the
plaintiff claimed it authored. “If ‘innovation’ or ‘newness’ was an attribute
under the Lanham Act, litigants could find a loophole around Sybersound.”
This seems like a better statement of the rule than “observable,”
and it brings in my favorite concept, materiality:
A misrepresentation about
attributes embodied in a physical product is actionable under the Lanham Act if
it misleads a consumer about the quality of a good itself or misrepresents the
physical producer of a good in a manner that would be actionable under
traditional claims for unfair competition. If, however, the misrepresentation
regards “matters that are typically of no consequence to purchasers,” such as
the source of the idea, design, or innovation embodied in the product, then
plaintiffs must bring an intellectual property claim and cannot proceed under
the Lanham Act.
“Misrepresenting the physical producer” seems like it would
cover false union-made claims.
The dissent wanted to ignore Dastar “and instead be
the first appellate court to adopt the broadest possible meaning of the text.”
But “Dastar, Sybersound, and Baden Sports are not the
one-off, fact-bound dispositions the dissent claims; each case examined the
text and context to determine the extent to which the Lanham Act federally
codifies common-law unfair competition claims while preserving the ‘carefully
crafted bargain’ of intellectual property law.”
It didn’t make sense to assert that “the partial federal
codification of common-law claims is necessarily limited in § 1125(a)(1)(A),
but that Congress—in the same paragraph—intended the broadest possible codification
of common-law claims in § 1125(a)(1)(B).” Instead, Dastar held that, “when
determining whether a § 1125(a) cause of action incorporates common-law claims,
we must be careful to avoid rendering limits on intellectual property claims ‘superfluous.’
That reasoning is not cause-of-action dependent—indeed, the Court cited
subsection (a) without further specifying (1)(A).” This is preclusion
reasoning.
And while the Court suggested in
dicta that a plaintiff may have a cause of action under § 1125(a)(1)(B) if a
defendant copies its video and advertises it as “quite different from” the
original, that does not mean the subsection allows claims based on the ideas
contained in the goods. The Court still contemplated observable qualities, as a
viewer could watch the scenes and narration and observe that they were the
same. And there is no way to distort the dicta to support a workaround to
Dastar’s core holding that a misrepresentation about the author of a
copyrighted work is not actionable under the Lanham Act.
Sybersound was also binding: it “held that plaintiffs
cannot use § 1125(a)(1)(B) as a workaround for limits placed on
copyright-infringement claims, such as copyright standing. But patent law also
has limits, and allowing Vericool’s claim would allow it to collect damages for
infringement on an idea that is not patentable.” Sybersound’s
“characteristic of the good itself” test “requires proof of something
observable by the consumer—‘such as the original song and artist of the karaoke
recording, and the quality of its audio and visual effects’—to be cognizable
under the Lanham Act.”
The dissent argued that this test will be difficult to
apply, but it’s been a while since Dastar and Sybersound were
decided, without much evidence of chaos. “If anything, the dissent’s crabbed
reading of Sybersound is far more ‘difficult to administer,’ as it would
require district courts to probe plaintiffs’ motives to ‘plead around’
restrictions in intellectual property law.” Rather—and here’s another, better statement
of the test—courts should examine the defendant’s “objective statements to
determine whether they relate to intellectual features of goods or to qualities
of the products themselves.”
As a matter of statutory interpretation, too, adopting “something
less than the broadest possible meaning of the text” is fine (citing Chevron
USA Inc. v. Plaquemines Par., 2026 WL 1040461, at *6 (U.S. Apr. 17, 2026)
(“But, generally in statutory interpretation, it is the ordinary, not
literalist, meaning that is the better one.” (cleaned up))). Using “isolated
dictionary definitions contributes little to finding the ordinary meaning of
the terms of the Lanham Act. ‘The ordinary meaning is not merely a possible
meaning,’ and the fact that we could stretch statutory terms further does not
mean that we should.” That’s a key message of Dastar. “Ignoring context
in textual interpretation can lead to contorted statutory interpretations. See,
e.g., Bostock v. Clayton Cnty., 590 U.S. 644, 661–62 (2020).”
But where the dissent really foundered was on preclusion:
the dissent never grapples with the
difficult question of which congressional enactment prevails when in conflict. “Congress
does not hide elephants in mouseholes.” If Congress intended to undo detailed
limitations on patent claims, it would have done so with more specificity than
amorphous words such as “nature,” “characteristics,” and “qualities.”
What about the textual neighbors “geographic origin” and
“services”?
The difference between a tangible
geographic origin and an intellectual origin is a manageable distinction and
the very distinction set forth in Dastar. And even though consumers may
not be able to physically hold a service, a consumer may still observe
qualities of a service. Neither term supports the dissent’s conclusion that
Congress intended “nature,” “characteristics,” and “qualities” to include the
ideas or designs embodied in goods or services.
The dissent also pointed to two examples of
misrepresentations offered by the Restatement of Unfair Competition:
misstatements as to whether a product is patented, and misstatements as to
whether something is “the original.” Sure, perhaps false claims of being the
“original” may also state a claim for reverse passing off under § 1125(a)(1)(A)
by causing confusion as to the actual “producer of the tangible product sold in
the marketplace.” As one district court explained, “it is plausible that such a
claim to originality could sway a consumer . . . by intimating that these
‘original’ [products] are the ones the consumer remembers fondly from his
childhood.” But that wasn’t argued here.
And the patent example was already dealt with by preclusion.
(The majority doesn’t mention the false patent marking cause of action in the
Patent Act, but that would bolster its argument.) “Here, because Congress chose
to protect patents through a separate body of law, we doubt that this aspect of
the common law is cognizable under the Lanham Act without a connection to the
characteristics of the product itself.”
Crocs, Inc. v. Effervescent, Inc., 119 F.4th 1 (Fed.
Cir. 2024), came out a different way because the claimant alleged that the “patented”
misrepresentation conveyed a specific message that competitors could not offer
the same materials. But Vericool waived any argument that the claimed
misstatements related to any tangible characteristic or quality of the
products. Here, the claims were “fundamentally
about the origin of an idea.”
Igloo’s claim that its product was the “first” biodegradable
product on the market
is not inherently a claim about the
tangible characteristics of the cooler itself. No observable quality of the
coolers suggests whether they are the first to be sold in the market. A
consumer cannot determine whether a good is the first to the market without
reference to additional knowledge about the market as a whole. Thus, such a
statement—without more—is a statement about the “idea, concept, or
communication embodied in those goods.” And the mere date on which a seller
finalized a design for a product or first marketed it is “typically of no
consequence to purchasers” when deciding which product is their preferred
choice.
Indeed, Vericool’s own argument was only that this harmed
its reputation for innovation. “Unfair competition law protects consumers
purchasing products, not the goodwill and positive publicity of competitors in
the market.” The dissent’s argument that Igloo’s statements implied that
Vericool’s product was a “knock-off” and thus inferior conflated different meanings
of “quality.”
The dissent’s argument relies on
the inference that a product derived from someone else’s idea is less desirable
and thus of inferior value. From there, the dissent chains together the added
inference that inferior value connotes an observable characteristic. But while
both inferences could be true, neither is necessarily true.… Vericool has no
evidence that Igloo’s statements suggested that the Ohana was made of different
materials, performs worse, or is less biodegradable than the Recool.
That is, it would be a cognizable theory that consumers
believed from Igloo’s messaging that Vericool’s products had physical
differences that made them not biodegradable, since that would be about
physical qualities. In Crocs, for example, the Federal Circuit
emphasized that “the false claim that a product [was] patented [did] not stand
alone,” but rather allegedly “misled current and potential customers to
believe” that the product was “made of a material that is different than any
other footwear.” But Vericool presented no evidence of this on summary judgment;
all its evidence was about confusion about which cooler was first. This wasn’t
just a new argument—it was a new theory of harm/deception that required
different evidence than Vericool’s initial first-to-market claim.
Ultimately, “Vericool’s claim based on statements claiming
to be the first to the market also impermissibly seeks to vindicate an economic
interest that patent law alone protects.” The PTO rejected many of Vericool’s
claims in its patent application. “If Congress had intended to protect the
economic value of inventing the general concept of a biodegradable cooler, it
would have done so ‘with much more specificity than the Lanham Act’s ambiguous
use’ of the terms nature, characteristic, and quality.”
Judge Bumatay dissented, at length, with many dictionary
definitions of “nature, characteristics, [or] qualities.” He concluded that when
a product reached the market is a “distinguishing quality,” a product’s
“traits,” “qualities,” or “properties” could include its “design concepts,” and
the “quality” of a thing can refer to its observable or non-observable
attributes.
The dissent noted, correctly, that the list of words has
similar, overlapping meanings. The point, he thought, was to ensure a broad,
self-reinforcing, “belt and suspenders” meaning. The neighboring terms also
were relevant: a false claim about “geographic origin” “generally has nothing
to do with a good’s tangible or observable features.” The dissent thought that “geographic
origin” was similar to the “idea” or “design concept” that the majority excluded.
(Seems like that could cut the other way, though—if “origin” alone means only
physical origin per Dastar, and needs a modifier to do something else,
then the other terms plausibly are also physical.)
But, the dissent continued, services are “often intangible.”
“If a company lied and said that Albert Einstein invented its physics-tutoring
service, that would be a ‘characteristic’ of the service—but not a tangible or
observable one.” The dissent also claimed, without real citation of pre-Lanham
Act cases, that “Section 43(a)(1)(B) creates a federal cause of action for
common-law ‘false advertising,” defined as occurring when “a seller falsely
advertises that his product has qualities which in fact it does not have, but
which products of other sellers do in fact possess.” “Thus, the common law of
false advertising applied broadly to all material misrepresentations—regardless
of whether the misleading statement went to tangible or intangible features of
a product.” The Restatement of Unfair Competition says that “a representation
that only indirectly relates to product quality or that in some other manner
relates to the desirability of the proposed transaction may also be material.” (Citation
to something other than the Restatement needed; there really wasn’t a non-disparagement-based, common-law false advertising cause of action for competitors, which is why the
Lanham Act proved so popular that 43(a) was explicitly split up in 1988 to
recognize false advertising as a separate claim.)
Ultimately, § 43(a)(1)(B) should apply to a false claim that
a biodegradable cooler is, as a historical fact, “the first of its kind.” “After
all, purchasers may want to reward innovators in environmentally friendly
production—so the identity of the first producer may be material.” (Citing
Joseph P. Bauer, A Federal Law of Unfair Competition: What Should Be the Reach
of Section 43(a) of the Lanham Act?, 31 UCLA L. Rev. 671, 743 (1984) (“[F]alse
claims about the goods’ uniqueness . . . are often . . . important to the
consumer, and have [a] likelihood of injuring both consumer and
competitor[.]”.) [Well, it’s a citation, though not to empirical evidence.]
Dastar was about § 43(a)(1)(A), not § 43(a)(1)(B).
But the latter isn’t just about likely confusion, a “traditional intellectual-property
concern.” [Again, citation needed. The idea that trademarks—or, even more,
unfair competition and the unregistered/unregistrable matter that was covered by § 43(a) when the Lanham Act was enacted—are part of “intellectual property” is a relatively modern
one.] Section 43(a)(1)(B) is “more broadly” about “misrepresent[ations]”—as
fits its false-advertising roots. (Oh, how I wish it were broader than likely
confusion.)
Because Dastar was about the “federal cause of action
for traditional trademark infringement of unregistered marks,” it didn’t cover
false advertising. Indeed, in discussing the potential for false advertising
claims, all Dastar required was a misleading claim that the product was
“different” than the original in some way— “it didn’t limit those differences
to only tangible or observable features.” “Section 43(a)(1)(B) is concerned
with policing outright lies in advertising and commercial promotion—not
confusion between intellectual properties.” [Note that the rhetoric of
“outright lies” is inaccurate: Lanham Act false advertising includes both
implied falsehoods and entirely unintended falsity. This tends to happen to
everyone when trying to defend a distinction—to give nuance to one body of law
is often to flatten out another one.]
Sybersound, too, “dealt with a specific
problem—misusing a false-advertising claim to plead around the requirements of
a copyright claim.” The dissent accepted that “[s]ome plaintiffs have attempted
to avoid a Lanham Act § 43(a)(1)(A) trademark infringement and unfair
competition allegation by asserting that the same facts establish a claim of
false advertising under § 43 (a)(1)(B).” “The usual aim of this improper
pleading is to avoid having to prove the validity of a trademark by claiming it
is some new type of false advertising.” [From a false advertising perspective,
this framing is very odd, given that it’s generally much harder to prove a
false advertising claim with its extra materiality and commercial advertising
requirements, plus the requirement of survey evidence for implicit falsehoods,
whereas courts routinely find trademark infringement by implication without
extrinsic evidence.]
In the dissent’s view, Sybersound was apparently only
about this misstated infringement claim, even though the plaintiff contended
that the false advertising was about whether defendant’s copies were legitimately
licensed from the copyright owner. [The dissent also doesn’t seem super
interested in distinguishing copyright from trademark.] Sybersound said
that § 43(a)(1)(B) doesn’t cover “misrepresentations about copyright licensing
status” because that would conflict with copyright law. [Does the dissent think
that misrepresentations about patent licensing status are actionable as well?]
Indeed, the case even suggested that the intangible origin of a product, such
as who was the “original . . . artist” of a karaoke recording, was an
actionable “characteristic.” “Instead, the original artist of a karaoke song is
a characteristic like who was first to market a biodegradable cooler.” [This is
playing with the meaning of “original”— “whose voice is recorded in this
recording?” is a very different issue than “who was the first to sing this?”]
The patent conflict was narrow: Vericool wasn’t bringing a
faux patent claim, but merely asserting that, “as a matter of historical fact,
it was the first to manufacture the coolers.”
And the majority’s atextual “observable-characteristics
only” test would be difficult to administer. A claim that a product is made of
“patented” material could be actionable, or not.
Plus, Vericool could satisfy the “observable-characteristics
only” test with its argument that Igloo’s advertising caused confusion that its
cooler was a “knock off” of Igloo’s cooler. “Whether something is an imitation
or copy of another thing seems potentially ‘observable’ to me. … And usually a ‘knock
off’ is considered a cheaper version of the original—again, potentially a
tangible or observable characteristic.” [I see most of the dissent’s points,
but this one seems wrong, given the failure to develop an evidentiary record on
this different theory of falsity & harm.]
from Blogger https://tushnet.blogspot.com/2026/06/9th-circuit-applies-dastar-to-bar-false.html
Rebecca Tushnet 