PediaSure “growth” claims might communicate height gain, but price premium theory fails

Posted on June 8, 2026 by rtushnet

Noriega v. Abbott Labs., 2026 WL 1601501, No. 23 Civ. 4014
(PAE) (S.D.N.Y. Jun. 4, 2026)

Conventional wisdom is that certification is the ballgame
for consumer class actions, but it might be empirically mistaken. This case is
an example where there’s plenty more litigation ahead. Noriega alleged that the
packaging and marketing of PediaSure Grow & Gain misled consumers when it
claimed to be “Clinically Proven to Help Kids Grow” in violation of New York
General Business Law (“GBL”) §§ 349 and 350.

The court denied summary judgment to Abbott and resolved a
bunch of evidentiary objections.

There’s a disclaimer on the label: an asterisk, dagger, or
other note of the form: “Clinically Proven† to Help Kids Grow.” The disclaimer
has at various times read: “Studied in children at risk for malnutrition”;
“Studied in children at risk for malnutrition, 2 servings per day,” or “Studied
in children with and/or at risk for undernutrition, 2 servings per day.” It appeared
in different colors, sometimes set against a background of the same color, and
other times against a contrasting background.

The label also shows a cartoon giraffe wearing sunglasses,
next to tick marks that resemble a ruler. Under the PediaSure name, the label
states, “Grow & Gain,” and below that, “With Immune Support.” he label
contains circles touting a product attribute, such as “27 Vitamins &
Minerals,” “7g Protein,” and “#1 Pediatrician Recommended Brand.”

Earlier versions displayed an image of a lion. And instead
of the challenged statement, the label read, “Helps Kids Grow.” At least 2 TV
ads also used the challenged statement, including a “worried mom commercial”
depicting a child who is shorter than the children next to him, and who stands
on his tiptoes to appear taller. The voice of a mother states: “Before
PediaSure, I was concerned that he was behind in growth.” She states that her
child’s pediatrician told her to try PediaSure, and that “it’s clinically
proven to help kids grow.” The commercial displays the word, “GROWTH,” above an
image of a child standing next to tick marks. A second ad depicts a child
standing between two taller children, who states that his mother was “concerned
about my growth,” as the commercial depicts a mother measuring the child’s
height against a doorframe. The child states that his mother tried PediaSure
because it is “clinically proven to help kids grow.”

The PediaSure product page of Abbott’s website lists six
published studies, and Abbott completed data collection in another study in
late 2024, after the filing of this lawsuit. Whereas Abbott’s earlier studies
had largely been conducted on children outside of the United States (e.g., the
Philippines, Taiwan, Pakistan and Peru), the new study, AL-48, studied the
effects of PediaSure in children in the United States.

Plaintiff’s experts: First there was marketing expert Dr.
Gita Johar, whose report assessed how consumers would understand the challenged
statement. Her methodology: review academic literature related to consumer
marketing claims, and whether and when consumers can understand disclosures
that purport to modify or limit such claims; review the Complaint and PediaSure
labels and television commercials; then assess, in light of the academic
literature, how target consumers would process the text and imagery on the
PediaSure bottle, whether consumers would notice and understand the footnote
disclaimer, and what reasonable consumers are likely to believe about
PediaSure.

She opined that the PediaSure label would lead consumers to
believe that the product is clinically proven to help kids grow tall and that
the footnote disclaimer is “unlikely to be noticed, read, [or] understood.” She
also opined that this was materially misleading, as clinical proof was a “key
benefit” of the marketing.

This opinion was admissible even though Johar didn’t conduct
empirical research or rely on case-specific data collection. Although a
specific survey would have helped, Dr. Johar’s sources and methodology were
reliable for these “uncomplicated” conclusions. Likewise, considering Abbott’s
internal marketing materials might have helped, but only to fortify “her most
central, and unsurprising, conclusion: that PediaSure’s packaging leads
consumers to believe the product is clinically proven to help kids grow in
height.” With extensive experience in consumer product marketing, a lack of
specific expertise in children’s nutrition drinks didn’t matter.

Her testimony would help the jury because she wasn’t setting
out her personal beliefs, as a consumer, about the meaning of the challenged
statement on the label but rather her opinion, “as a marketing professor, based
on her experience and research, about how a reasonable consumer would view and
process the challenged statement in the context of PediaSure’s packaging.”

The court also denied the motion to preclude Dr. Daniel
Hoffman’s expert report on whether Abbott’s studies supply clinical proof that
PediaSure promotes height growth. He’s a professor in the Department of
Nutritional Sciences at Rutgers University whose expertise includes “[s]tunting
and growth retardation,” and “[e]nergy metabolism and body composition.” Id. He
has published journal articles and presented on topics related to children’s
nutrition and growth. He opined that Abbott ignored its internal claims
substantiation guidance manual that addresses health benefit claims, the
evidence necessary to substantiate such claims, and the claims development
process. He further opined that Abbott improperly applied “inapposite studies
from homogenous populations in developing countries” to children in the United
States, failing to conduct “bridging studies” that enable results from one
population to be translated to another.

He also reviewed FTC communications admonishing Abbott about
its practice of using studies from developing countries to support marketing
claims directed to U.S. consumers and internal Abbott communications that
criticized Abbott’s studies, and depositions in which Abbott employees echoed
those concerns.

The heart of his report analyzed the quality of Abbott’s
studies, concluding that they “do not clinically prove or show that PediaSure
helps children grow.” This heart was admissible, though other aspects of his
testimony were inadmissible, including testimony about Abbott’s internal manual
and whether Abbott complied with its own rules; about Abbott’s compliance with
FTC health claims guidance; and how a reasonable consumer would interpret the
challenged statement.

Finally, Dr. Ingersoll’s expert report claimed that the
challenged statement had a price premium. The court excluded the testimony
because he didn’t specifically test Noriega’s theory of liability: the claim
that PediaSure helps kids grow in height. He also did not test the
disclaimer or imagery on the PediaSure label.

The label’s references to growth “can also—or
alternatively—be read to encompass other forms of growth (e.g., weight, body
composition, and/or muscular development),” and he didn’t test height
specifically. “Nor did it test the features which Noriega claims would make a
consumer more likely to understand the challenged statement as referring to
height growth (the giraffe, tick marks, and ‘Grow & Gain’ label). And it
did not test the disclaimer that Abbott claims contextualized the challenged
statement.”

The court commented that “[i]t would not have been difficult
to design a conjoint survey to test this representation. In cases in which a
label was susceptible of multiple meanings, surveys have tested the premium
traceable to the meaning the plaintiff claimed was false or misleading.”

In addition, the disclaimer should have been included, as
proven by Noriega’s own testimony that she construed the challenged statement
to mean there was “scientific proof that this product can actually make a child
grow in height,” and that such proof entailed examining thousands of children
in the United States who had consumed the supplement for “a year or two” and
“grew more than what they should have.” If she’d read the disclaimer, it might
have changed her assumptions and her willingness to pay. “The challenged
statement unavoidably includes a footnote (indicated by a dagger, asterisk,
paragraph symbol, or section symbol, depending on the packaging) that contains
the disclaimer. To be sure, there is no assurance that any particular purchaser
read the footnote—and conceivably a study could have taken into account the
incidence of purchasers who reviewed the footnote relative to those who
overlooked or disregarded it.” But there was no explanation for its omission
from the survey, suggesting “an impermissibly result-driven methodology.”
Noriega could argue at trial that the disclaimer was too small to read and too
confusingly worded. “But that justification, which is absent from Dr.
Ingersoll’s report, does not support Dr. Ingersoll’s excluding the disclaimer
from the survey and failing to engage with it at all in his report…. By
omitting the disclaimer based on its purported ‘inadequacy,’ Dr. Ingersoll
assumed the conclusion that a conjoint survey is meant to prove.”

Noriega argued that including the disclaimer in a conjoint
survey would have improperly elevated it in importance, causing “focalism
bias.” But conjoint surveys can address that, for example by showing one half
of respondents the disclaimer, and the other half the statement without it. “Beyond
that, there presumably were ways—independent of a conjoint survey—to test Dr.
Ingersoll’s premise that consumers would have overlooked or not understood the
footnote disclaimer. Dr. Ingersoll’s untested assertion to this effect does not
bespeak rigorous methodology.”

Abbott’s materiality witness Dr. Kivetz is a marketing
professor at Columbia Business School. In his survey, the test group was shown
a 360-degree interactive image of PediaSure with the challenged statement and
the cartoon giraffe with tick marks (the product as it appeared in stores). The
control group was also shown an image of PediaSure, but without the challenged
statement and the tick marks on the giraffe. Respondents were then asked how
likely they would be to buy the product; if they didn’t say “don’t know,” they
were asked what made them answer the first question as they did; and asked
about “[a]ny other reason or reasons.” Then all respondents were informed about
the typical price range for a package of six bottles of a pediatric nutrition
drink ($7 to $17), and asked to indicate the highest price they would be
willing to pay for the product that they had been shown.

Kivetz concluded that consumers’ purchase intentions were
similar across the test and control groups, in that 88.7% of test group
participants and 90.4% of control group participants answered that they
definitely or probably would buy the PediaSure product that they were shown. He
also found that “the vast majority” of the reasons respondents in the test
group provided for purchasing PediaSure did not relate to the challenged
statement or height growth. He reported that “only 1.9% of participants” in the
test group gave a purchase explanation that could refer to the challenged
statement, and “[n]ot a single test group participant” mentioned height. In the
control group, no respondents provided, as a reason against purchasing
PediaSure, that the product is not clinically proven or does not help with
height growth. Likewise, the average willingness to pay for test group
respondents was $12.94, compared to $12.49 for control group respondents.

Noriega’s criticisms were not so strong as to render this
testimony inadmissible. This study was a between-group study; in a within-group
study, respondents are shown multiple products and asked which they prefer.
Noriega argued that within-group studies “should almost always” be used to
assess materiality, but between-group studies have been used before in the
false advertising context. And speaking of focalism bias, within-group studies
would have it.  

Although more questions could have been asked, it did more
than ask for a top-of-mind response: it asked consumers why they were
definitely/probably likely or unlikely to buy the product, and instructed
respondents to “be specific and include details.” One part of his opinion,
saying that the survey he conducted is “routinely used in academic, industry,
and litigation settings,” and also citing cases that accepted his consumer
surveys and found that they “conclusively showed that the challenged claims
were not material,” was inadmissible.

Abbott’s “clinically proven” expert Dr. Heyman, a professor
in the Department of Pediatrics at UCSF, also offered admissible testimony that
there was “ample clinical support for a claim that PediaSure helps kids grow,
including in both height and weight” based on an in-depth review of Abbott’s
studies. He also admissibly opined that two studies, which Noriega contended
disproved that PediaSure has height growth benefits, “do not undermine or
contradict” clinical support for the challenged statement. The court excluded
his opinion that Noriega’s grandson grew in height and weight while consuming
PediaSure, and that the grandson was not harmed by his consumption of it. The
court also part of his testimony that depended on a study that was not relevant
because it was completed after the time period on which Noriega’s claims are
based (and after the proposed class period).

Once that was done, Noriega survived Abbott’s motion for
summary judgment. Along with the expert testimony, there was other relevant
evidence that the height message was communicated. A rational juror “could find
that PediaSure’s packaging, viewed as a whole, communicates that the product
helps children grow taller.” Though the wording was unspecific as to the type
of growth,

the imagery alongside it supplies a
strong basis, to say the least, on which a reasonable consumer could read
Abbott to make a representation about height growth. The central image on the
bottle is of a cartoon giraffe—the animal well-known as the tallest of all
mammals. The giraffe appears next to vertical tick marks resembling a ruler
that climb to the level of the giraffe’s head. There is no comparable
horizontal imagery. And the words “Grow & Gain” appear in large font below
the brand name. These features could readily support a consumer’s conclusion
that the word “grow” in the challenged statement refers to height growth, with
the word “gain” referring to weight gain.

The same was true of the commercials, which focused on
children shorter than the children around them. The “worried mom” ad displayed
the word “growth” above an image of a child standing alongside vertical tick
marks; and, in the final scene, shows the child (who has begun drinking
PediaSure) reaching up to erase a classroom white board. The “basketball
commercial” ad showed a child standing between two taller children. The child states
that he has “got a lot to look up to” and the commercial depicts the mother
measuring the child’s height against a doorframe.

A jury could also find that Abbott records and employee
deposition testimony support the conclusion that a reasonable consumer would
take away from PediaSure’s packaging and marketing that it promotes height
growth. A 2015 slide deck, which discusses how the giraffe concept performed in
a packaging study, includes these quotes from respondents: “Measuring tape
image makes it clear this product helps with growth,” and “The giraffe is cool
and he’s an example of what the product does for growing.” Abbott’s brand
director of PediaSure also testified that Abbott’s marketing team sought to
“include height within the definition [of growth] to better define the segments
of growth.”

Likewise, there were genuine issues of fact on the truth of
the height claims. A “rational juror here could find that the deficiencies
identified by Dr. Hoffman are so basic and devastating that Abbott’s studies
cannot credibly be claimed to constitute clinical proof of the challenged
statement.” That juror could agree that establishing that PediaSure promotes
height growth in a malnourished child in a developing country “says absolutely
nothing about whether it does the same for a healthy New York City child with a
sound diet.” “The Court is unpersuaded by Abbott’s suggestion that the nominal
existence of a study, even one that could be found wholly inapposite to the
proposition at hand, inherently defeats a challenge to a claim of clinical
proof.”

A rational jury could also find that the footnote disclaimer
here was ineffective, relying either on Dr. Johar’s testimony or by “examining
the packaging for him or herself,” noting that “the challenged statement and
disclaimer are on opposite sides of the giraffe and that the challenged
statement is larger and more prominent than the disclaimer,” and/or finding
that the disclaimer didn’t address height specifically or explain the
implications of the study feature (“studied in children at risk of malnutrition”)
that it briefly discloses.

Invoking the Lanham Act standard, “Abbott suggests that,
because the challenged statement is impliedly (rather than literally) false,
Noriega is required to come forward with extrinsic evidence that the challenged
statement would mislead consumers.” This isn’t a Lanham Act case, and “GBL §§
349 and 350 do not have an extrinsic evidence requirement.” [Conceptually, this
difference is hard to defend since the core concept, deceptiveness, is the same
for consumers and competitors, both of whom are only harmed when consumers are
deceived, but the real problem is the Lanham Act survey requirement so I’m
certainly not saddened by the court refusing to port it over.] Given the
giraffe and the ruler, this wasn’t a case where a jury would need extrinsic
evidence to determine what message was received.

And there was a material disputed issue on materiality,
including Dr. Johar’s report. Abbott’s internal documents also included an
online survey of more than 500 mothers, which tested the statements that made
respondents most likely to purchase PediaSure; the challenged statement ranked
third out of 13 options. A 2024 marketing presentation stated that, in 2019,
“height households had significant buy rate growth,” and that the fourth most
popular reason consumers purchased PediaSure was that to “help child grow.”  Abbott’s documents also included statements
that 51% of respondents want to buy products that “help my child grow in
height” and that 20% of respondents give children PediaSure to help “grow in
height.” [This may well be why we shouldn’t give much weight to anybody’s
surveys on materiality or what message was communicated—the fact that Abbott
was easily able to figure out a methodology that would give it the opposite
result when it had a very strong interest in so “showing” suggests either that
Abbott’s marketing department is very bad at its one job or that, for business
decision-making purposes, the claim is material.] Abbott weakly argued that its
internal records didn’t “literally” show that height was a reason for purchase,
but they certainly tended to make that conclusion more likely.

Kivetz’s immateriality study, while admissible, was not
dispositive given the other admissible evidence.

What about injury? There was sufficient evidence to survive
summary judgment on one theory of injury: a benefit-of-the-bargain theory.
Noriega testified that $3.25—the cost she claims to have paid per bottle—is “a
lot to pay for something,” and that she understood PediaSure to cost more money
on account of its capacity to improve height. She testified that she believed
that she was “paying more” for the prospect of height benefits and that she
would not have bought PediaSure had the challenged statement not been on the
label. This could show detrimental reliance, but not on a price premium theory.

Good thing statutory damages are available!

from Blogger https://tushnet.blogspot.com/2026/06/pediasure-growth-claims-might.html

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6th Circuit approves of using (at least) same similarity standard for dilution as for confusion

Posted on June 8, 2026 by rtushnet

Scotts Co. v. Procter & Gamble Co., 2026 WL 1601797, No.
25-3555 (6th Cir. Jun. 4, 2026)

Discussion of trade
dress opinion here. False
advertising claim here. The district court didn’t abuse its discretion in
denying a preliminary injunction against P&G on the claims that P&G’s
weed-killer product Spruce infringes on and dilutes Scotts’s Miracle-Gro trade
dress.

Spruce

Scotts defined its claimed common-law trade dress as (1) A
green and yellow color combination; (2) With each color presented as a separate
horizontal band and the top color taking up a smaller ratio than the bottom
color; (3) With the two bands sharing a common border that runs horizontally
along the package; (4) With a straight line dividing the two colored bands; and
(5) A circular horizontally centered graphic element.

Miracle Gro examples

Approximately one-third of Scotts’s Miracle-Gro products, by
revenue, are “specialty products” that come in different packaging. And a
number of third-party products in the lawncare space, some of which are “widely
sold in the lawn-and-garden marketplace,” and at times “shelved right next to”
Miracle-Gro product, have some overlaps.

third parties

On appeal, Scotts objected to three of the district court’s
factor analyses: (1) mark strength, (2) mark similarity, and (3) relatedness of
goods. The big three!

Strength: the district court weighed this “at least somewhat
in Scotts’ favor” because it found that the trade dress had substantial
commercial strength but less conceptual strength. Scotts argued that substantial
commercial strength should be sufficient to make the factor weigh entirely in
Scotts’s favor. No! Strength depends on the interplay of conceptual and
commercial strength. Even though Scotts has invested “substantial effort and
large sums of money over an extended period of time” in promoting the trade
dress, “there’s nothing particularly distinct about using green and yellow for
packaging in the lawn care industry.” Extensive third party use of similar
marks limited the conceptual strength of the mark, reducing its strength for
purposes of this factor. [We can say—but I’m not sure any court has
outright—that a mark can be both very strong and very narrow. American Airlines
is highly recognizable, but it’s pretty easy to use a mark that is both heavily
overlapping (using “American” or “Airlines” or even both plus a geographic
modifier) and not confusing.]

Similarity of marks: Scotts that the district court erred as
a matter of law by “rel[ying] on a legally improper side-by-side comparison of
the packages in the courtroom,” and that it made a “clearly erroneous” factual
finding that the Miracle-Gro trade dress always uses the same ratio of green
and yellow.

While the Sixth Circuit “do[es] not approach trade dress
claims by parsing minute differences between products,” “that does not mean
that actually comparing the packaging is inappropriate.” Indeed, that’s the
best practice. The district court identified the appropriate legal standard:
“[W]hether a given mark would confuse the public when viewed alone, in order to
account for the possibility that sufficiently similar marks may confuse
consumers who do not have both marks before them but who may have a general,
vague, or even hazy impression or recollection of the other party’s mark.” The
district court “appropriately” cited a variety of individual visual differences
to show that the “visual differences add up to a highly dissimilar overall
visual impression between the Miracle-Gro Trade Dress and the Spruce packaging,”
and correctly identified that the products were typically not shown side by
side in retail stores.

The ratio finding was also not clearly erroneous. Scotts’s
registration defines a specific one-third green to two-thirds yellow color
combination. And while Scotts claimed a broader common-law trade dress, its
expert testified that “our Miracle-Gro trade dress says typically one-third
green on top, two-thirds yellow on the bottom,” mentioning  the “one-third/two-third” ratio repeatedly as,
in the court’s words, “a key factor that distinguishes Miracle-Gro from a
multitude of other green and yellow products.”

The court also noted Scotts’ attempt to make its trade dress
a nose of wax.
“[S]ome of the products that Scotts cites as using other ratios also completely
lack other elements that Scotts identified as part of its broader common-law
trade dress …. Scotts can’t have its cake and eat it too; either the
yellow-and-green combination is distinct from the many other green and yellow
products on the market because of its specific ratio, or it isn’t nearly as
distinct as Scotts claims.”

Relatedness of the goods: Because Spruce is a weed killer
and there is no equivalent product in the Miracle-Gro product line, the
district court reasoned that the products are “only somewhat related” because
the products are not “directly competitive.” This too was not an abuse of
discretion. The Sixth Circuit sorts this factor into three categories: “(1)
direct competition of services, in which case confusion is likely if the marks
are sufficiently similar; (2) services are somewhat related but not
competitive, so that likelihood of confusion may or may not result depending on
other factors; and (3) services are totally unrelated, in which case confusion
is unlikely.” This was category (2) because both were lawn and garden products,
but did not directly compete.

Dilution: Scotts argued that the district court erred in
holding that its finding that the Miracle-Gro trade dress and Spruce’s
packaging are “highly dissimilar” also meant that Scotts wasn’t likely to
succeed on its dilution claim. The Sixth Circuit has held that “[t]he degree of
similarity required for a dilution claim must be greater than that which is
required to show likelihood of confusion” because “[t]he purpose of
anti-dilution laws is to provide a narrow remedy when the similarity between
two marks is great enough that even a noncompeting, nonconfusing use is harmful
to the senior user.”

Scotts argued that this precedent had to be rejected after
the TDRA. It noted that both the 9th and 2nd Circuits
have held that there’s no requirement of substantial similarity for dilution
purposes, though I think they’re both wrong. [The underlying logic is that the
TDRA gives a multifactor test for blurring referencing the “degree” of
similarity as well as the “degree” of other factors, so it must be possible to
dilute without a high degree of similarity. I think this is wrong as a matter
of grammar—the statute simply doesn’t say where to draw the line. Moreover, the
other factors are essentially all about fame (with the arguable partial
exceptions of intent/actual association), which by definition will be satisfied
if you get to the multi-factor test because you’ve shown ownership of a famous
mark. So if we want continuity with the other “degree” factors, “very high”
should be required for the factor to favor the plaintiff.]

According to Scotts, the district court should therefore
have done more balancing, which would favor it because of its claimed fame. P&G
pointed out that the definition of dilution is dependent on some amount of
similarity, and that the Ninth Circuit also held that while “a particular
degree of similarity is not a threshold, similarity is the necessary predicate
for dilution analysis.” “The statutory text itself does not seem to mandate
that the district court specifically weigh all six factors; it only states
courts ‘may’ consider ‘all relevant factors’ and offers six examples.”

The court of appeals didn’t resolve the issue; even assuming
that the similarity requirement is no longer heightened relative to a
likelihood-of-confusion analysis, there was no abuse of discretion in finding
that the “high level of dissimilarity” found in the infringement analysis also
ended the dilution inquiry. [This next quote shows why the 2nd and 9th Circuits
are wrong: if it’s not a humorous understatement, it’s a sign that something
has gone very wrong.]  “Since dilution
definitionally requires similarity and some similarity is ‘the necessary
predicate’ for dilution analysis, a finding of a complete lack of similarity
should strongly influence the dilution analysis.”

Even if the dilution similarity standard isn’t more
rigorous than the infringement similarity standard, it was not error to
hold it to the infringement similarity standard—thus, the court of appeals
strongly implies, the dilution similarity standard can’t be less rigorous
than that for confusion.

Some thoughts: If dilution were a less rigorous standard, how
would we calibrate using the other factors of the test (“test”)? Perhaps we
could say that no one can get closer than other slightly-similar marks or
designs on the market. This would be particularly beneficial to makers of
allegedly famous product designs or even packaging, since they’re the ones
particularly likely to want to constrain competitors. This seems to me
to be unrelated to any evidence we could gather about diminished distinctiveness—because
even if we have a theory about preserving conceptual space around a mark, the
fact of the matter is that conceptual space will shift based on other features,
not just similarity. Dida’s Café would probably not make you think about
Adidas, but Dida’s Sneakers could well do so. So identifying the comparators “nearest
to” the famous mark that are perceptually somewhat similar and that therefore define
the scope of its protection against dilution will be conceptually and practically
difficult. Why would we compound our troubles by requiring less than compelling
similarity, which offers us a way to define the scope of protection that is at
least consistent with the idea of drawing firm boundaries around things that
are property?

from Blogger https://tushnet.blogspot.com/2026/06/6th-circuit-approves-of-using-at-least.html

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Promoting Progress part 2 at AU WCL

Posted on June 5, 2026 by rtushnet

Framing the Public Interest Agenda – Beyond the Narrative of
“Content vs. Tech”

Framing Digital Consumer Rights

US experience is v different from rest of world—want to
support the int’l discussion keeping that in mind. US libraries are ubiquitous,
122,000 in US; int’lly, often they’re more gov’t focused. Most tech companies
are globally minded—come up with Content ID, etc. to go through all
jurisdictions. So int’l issues affect consumers here.

Consumer Bill of Rights was drafted some time ago—Zoe Lofgren
& Boucher. Dept of Commerce also has White/Green papers. Places to start?

Dark patterns: example of non-© issue that is about being
free from manipulation—consumer bill of rights shouldn’t just focus on ©. A
bunch of things can undermine consumers’ digital rights. What is “information
justice”? Defensive/we don’t like big tech/mechanisms of resistance like
protest v. affirmative visions of social life.

Google is still the only company supporting policy work in ©
space where Anthropic & OpenAI & everyone else is benefiting from it.

Bill of rights as a foundational concept that could also
provide int’l models. Framing human rights. Biden admin’s AI Bill of Rights
could also be a source of inspiration. Privacy/consumer rights provisions built
into any AI settlement.

Current democratic crisis is so broad that little corners of
© are not going to be compelling; the temptation is to think that the public
interest is whatever doesn’t serve the interests of big tech.

Participatory democracy as a structuring idea: need agency
as citizens—access to info, quality of info ecosystem, ability to communicate
w/each other not always mediated by algorithms.

Copyright in a quixotic place: enormous obstacle to many
things even as content owners complain that there’s too much competition. The
importance of © in this era for creativity is completely different from what it
used to be and that gets lost.

There aren’t many functional ways to regulate content
online. Copyright is asked to be a jobs program, privacy law, antidefamation
law, to carry all kinds of water b/c it’s there and people can see they’re not
getting any help to solve digital problems. Congress also realizes this for
better or worse. Anticircumvention exceptions are an example of realizing they
had to make it someone else’s problem or nothing would happen.

Lots of nonprofit & public benefit & prosocial uses
of tech but they tend to be invisible to average person (except Wikipedia).
Everyone’s yelling at ChatGPT, but integrating AI into hospitals for info collation/troubleshooting
insurance is making huge strides, not for diagnosis but for better management—internal
only. Fear of backlash is one reason for silence.

There is a difference b/t consumer advocacy and public
interest advocacy—they don’t overlap as much today as they did 10 years ago
though there’s still a ton of overlap. Music streaming as an example: consumers
benefit from Spotify but the music ecosystem is tanking as a result of it.
Tech/public interest coalition broke down, and rhetorically public interest
messaging was tied too closely to “you need fair use so you can do this fun
thing on the internet.” Internet is surveillance, AI in your job, etc. We need
to pivot to address bigger questions and our positions’ importance to them.
Antitrust moment: is it the hammer that we need to turn everything into a nail?
Room for discussion about antitrust/© interface as policy (not whether having 3
record labels is technically a “monopoly”). RIAA speaks as if for “creators”
but they’re representing the intermediaries; musicians are independent
contractors who are very hard to organize for a variety of reasons.

The right to share with my friends; the right to tinker; the
right to transform; the right to repair. The cost of access/price discrimination
is also relevant & the huge wealth transfer from publishers & consumers
to intermediaries—terms and nature of access. Consumer as creator also matters.
Consumers’ interests in reaching audiences and interacting w/one another.
Consider also FTC/deceptive conduct restrictions/state consumer protection for
shaping production & consumption of content. Are the terms of the exchange
unfair or deceptive? Antitrust has the potential to expand again. But Google
search case is depressing in that regard b/c it shows the limits of antitrust
remedies.

Product liability/failure to warn/plaintiffs’ bar as
potential allies? Some of the tort litigation is brought by copyright ps’
lawyers. Folks in this room use the internet very differently from one another
and from the ways that many politically engaged young people do. Tiktok: you
can train your algorithm away from not just topics but tones. As a result, when
you think about losing your ability to lend a CD to a friend—teenagers don’t
think about that any more; they just tell you to go to YT or Spotify. So
picking that as a battleground won’t resonate w/a lot of younger people.

© misuse: more flexible than antitrust? Not as constrained
as patent law misuse.

We’re better at ID’ing copyright problems or how problems
are being caused behind the scenes even as we argue that © isn’t the solution
to all your problems.

If we can’t figure out how to understand or mobilize people b/c
we don’t know what they’re doing, that feels like the authoritarians have one—at
some level, we need a common culture. That’s about journalism, ©, and many
other things—seems like an order of operations problem.

Control of Information and Knowledge – Responding to
Technical,  Business Structure,
Regulation, Lawfare, Contractual and Other Means Beyond Copyright

Style claims: people think they’re supporting individual
artists but style protection would let Disney claim to control modern
Polynesian art (Moana). How do we talk about why and how it’s really important
to not expand ownership of ideas & info even if it feels pleasant to think
of it as a weapon against big tech.

1202 claims: huge statutory damage assertions, even if
people aren’t © owners. The play is extortion, not stopping AI. 1201 cases are
challenging web scraping as violation of 1201. Big threat to viability of open
internet.

Music: Controlled private domain—public domain music that is
still hard to access through score controls. Draws attention to market power. Publishers
will only rent scores. Similarly warps selection of scores by operas, ballets,
etc.

Protecting the Roles of Public Institutions – Libraries,
Archives, Museums

Provocation: consumer interests are losers in this policy
space. Access to information is practically more broad, often freely or for
relatively low costs. Outside of right to repair, where there is more appeal,
it’s pointless to talk about consumer interests bc it’s so much better now than
it used to be. Disappearance of 1984 from Kindle is an exception that proves
the rule.

Preservation: physical items are easier legally speaking;
licensed access means someone else’s server is in charge. But maybe the
solution is ultimately not © or exceptions but instead money: finding mechanisms
to work with industries. Films—would like to believe the industry wants preservation
and could accept preservation on a voluntary basis. It would take a boatload of
money though. Let the Academy run the archive to reassure industry that it’s an
archive not to be used for piracy. We want our analog facility, but digital
levels of access; we may have to accept tradeoffs. What if we can’t save everything?
Not everything can/should be digitized, and even if it is, preservation institutions
are brittle. The copy is the point: do we need shadow libraries? Something
else? Technical solution to allow controls for reassurance? [Have big content
owners ever been reassured enough to allow permanent copies? Maybe w/ music
downloads b/c that’s no longer a big consumption vector.]

Telecom conceives of libraries as fundamental to broadband
access; should also frame them in © as fundamental to access to culture.

Monopsony problem w/Overdrive means that more money can’t solve
the problem—they’ll just soak up as much money as is available.

What is the Public Interest in Copyright Law in Relation to
Other Consumer Interests – Recognizing Accretive Surveillance Harms

[personal matters took me out of the room] Anonymity/ability
to be pseudonymous online. Europe has more experience balancing incommensurable
human rights. Publishers would love to have all the data in the hopes of being
able to monetize it somehow, but it seems to be turning into a panopticon w/o
even that. Amazon doesn’t give publishers their data. Data collection is a
reflex but may not have as much economic value as hoped—that might be a point
where we could find common cause. Publishers often still operate like 19th
century businesses. Simon & Schuster merger documents: they just guess
whether a book is going to be popular.

But big businesses are hungry: Elsevier is bidding on ICE
contracts. Tying back to ©: Hachette is a case in point. Are we going to allow
libraries without the strictures imposed by publisher agreements copy & lend
works while protecting users’ privacy? We should insist on the public benefits
of privacy. Compare to invasive level of detail demanded for 1201 exceptions.

We don’t have enough privacy-© overlap in scholarship. We
have to recognize the various other interests to address & name. And
remember that we have to deal w/privacy overrides in contracts—that’s why
ownership is not the answer for privacy. AI is an opportunity to bring privacy
folks into consultation.

It’s worse when people have to pay twice—both for access to
content and then with their data. It should be one or the other: content for
free, in return for sitting through ads, not double-dipping. People hate data brokers;
they don’t like their info being used in completely unrestrained ways. Related
to labor issues: people who are surveilled and subject to secret algorithms
that can change their pay/kick them off a gig work app with no recourse to
them: that’s a privacy issue!

from Blogger https://tushnet.blogspot.com/2026/06/promoting-progress-part-2-at-au-wcl.html

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Promoting Progress: 50 Years of the Copyright Act from the Perspective of the Public Interest

Posted on June 5, 2026 by rtushnet

AU Washington College of Law, Program on Information Justice & Intellectual Property

Chatham House rules.

Opening discussion: The Role of the Public Interest in
Framing the Copyright Act of 1976

AI is sucking all the air out of © discussion about other
topics. It doesn’t have to be the predominant question of © and the public
interest. 76 Act was a point where libraries and educational institutions
realized they had to advocate for the public interest, but it was basically
them negotiating against publishers; DMCA was enacted w/ a broader coalition of
public interest organizations. Now: parents, consumer groups pushing back
against platforms, and now plaintiffs’ bar finding chinks in armor w/product
liability suits. Question: is social media having an “Unsafe at any speed”
moment? Is this a resurgence of digital consumer rights, or something else? If
it is, can we imagine © as a part of this, e.g. in a digital consumer’s bill of
rights? Should YT have to have due process before a third strike nukes your
account? Doesn’t seem like Congress will change © law comprehensively any time
soon; we’ll be living with the 76 Act for a while.

Enactment of 76 Act: keep in mind the excitement of that
time, not b/c there was necessarily so much love for the new law or experience
of the new law as a loss, but a collective idea that one was about to be
presented with a new tool that was fundamentally different from what had come
before—part of the first generation of lawyers who first applied the law (and
then of course immediately began to complain about it). Present in the
classroom and in practice for decades. Ben Kaplan’s advice to students:
occasionally at least, one working in the field ought to represent clients who aren’t
copyright owners; classes of such people with copyright-relevant interests did
develop (called alleged infringers in the cases) but were not always visible at
the time.

Authorship and Copyrightable Subject Matter – From the Sweat
of the Brow Doctrine to Originality

Sweat of the Brow doctrine wouldn’t die—the directory cases
were where the money was! BigLaw of the time was litigating directory cases b/c
knowledge-based works were valuable. They all involved Lockean labor theory
type claims. Connecting to AI: as people start to make AI output claims, they
feel like twists on sweat of the brow—which was always a reward for capital
investment into someone else’s labor—we shouldn’t reward the labor of operating
capital-intensive machinery any more than we would do that.

We need a term to capture the AI output that would satisfy
the originality standard if created by a human—a work, but not a work of
authorship—to name that aspect of something that might also have human
authorship in it. The human contribution: not really a derivative work; how do
we conceive of the collective expression of the human/AI output? If mixed into
interdependent work that would otherwise count as joint authorship, seems like
we just have a single author—but have we really dealt with that issue (we don’t
even know whether there can be joint authorship with someone who is an
employee/making a WFH)? Will people find state law alternatives for protection
that aren’t preempted? There are already attempts to create state protection.

AI on the Lot conference in LA: working lawyers’
perspectives in Hollywood: lots of lip service to need to center human creativity
in AI generated work and the need to document it. See Jacob
Noti-Victor’s current project on deciding infringement cases after AI. Using
human actors & generated backgrounds: human-generated performances keep
that package protected. There was some doubt about fully AI-generated animation.

Clients want to see prompts before they’re used to see if
they are intentionally or unintentionally going to infringe. They also want
indemnity for the studio.

Registration: how does this scale? How do I have to document
& disclose my AI use? Is the Office going to be able to meaningfully review
it anyway? Is this an empty exercise? Critterz: AI-generated short film from April
2023; used text prompts to create visual characters & background design.
Was registered: Script was human, voices were human, editing was human, and
humans animated the characters once designed, which included human performance
capture. So registration isn’t surprising, but how did it do that?

General advice: infuse as much human involvement & control
if possible at every step of creation and document those touchpoints—scripts;
document how humans influenced, modified, selected/arranged/combined outputs.
Instead of just text prompting, use outputs other than text: have a sketch fed
into a multimodal engine; make text prompts as detailed as possible in case
those will confer protection. Keep the original outputs confidential, including
in your filing with the Office.

3 practical Qs: (1) The Office demands you disclaim © in AI
generated stuff, but they may be wrong that you don’t have a © in that. Waiting
on Theater De Opera Spatial case: fully AI-generated artwork based on a text
prompt; challenging denial of registration. (2) how much specificity does the
Office actually need in registration? Detailed audit trail (keep for litigation
purposes but might not need to expose). (3) how do you keep people from copying
unprotected bits? If you vague it up, people won’t be able to be sure what they
can freely copy.

No pushback from Office for Critterz by saying: (1) “to the
extent not copyrightable” andgeneral description of images, etc. generated by
AI, with same disclaimer; (2) no detailed audit trail, and Office didn’t even
publish their general 2-page description document with the registration, which
doesn’t say much/can scale; (3) if you keep disclosures vague and specific
outputs confidential, people can’t copy any part of the work w/o risking
copying the human element. Great for © owner but calls into question whether

Is this right for registration? Burrow-Giles said: they made
these choices so the whole thing is ©able.

Single Piece of American Cheese: the documentation of the creation
was extensive, which led to a finding that the selection & arrangement was ©able
even though the visuals were AI-generated. It may matter who you are:
represented by BigLaw, perhaps you can vague it up more readily. Or if you
signal that you are following Office policy.

What kind of market do you imagine? If you’re worried about wholesale
copying, all you need is a Burrow-Giles ©. It’s only when you care about
copying bits that this kind of copying really matters.

Sure, the “whole thing” is copyrighted, but not everything
in Burrow-Giles was ©able—Oscar Wilde’s appearance was not copyrightable. A
copy of the photo would be an infringement, but not another photo of Wilde.

If that’s what you believe, what have we accomplished with
the Office’s policies where registrants don’t really tell you enough to decide
what you can use?

Might become even harder to ascertain what’s protected than
it already was. (Relevant: Jeanne Fromer’s
work on scope and claiming by exemplar.) You can look at a photo and decide
what’s ©able more easily (though not always!).

Costs of nailing scope down are generally not worth bearing
at the registration stage, but what if AI changes that? Alternative discussed
by Noti-Victor: Markman hearing analogy, so claim scope costs are not borne at
registration stage but are still required early in infringement claim.

Multiple page-long prompts may be used for a single shot,
including what lens was “used.”

The issue is that the output may not be copyrightable at
all, even though there are always uncopyrightable elements in a work; we used
to do this reasoning only in the context of infringement, not at the front end.
Doing it at the front end is not stable/scalable b/c Feist says the tiniest bit
of creativity is enough to make a work original.

Issue isn’t doctrine but economic power. Human
creators/actors want creativity not b/c of © but b/c of labor power. Restraints
should come from the outside.

Single Piece of American Cheese: wanted to prove concept of
selection, coordination and arrangement resulting in © for people who didn’t
have (other) artistic skills. That sounds nice, but consider the power of the
owners of the tools. Adobe v. open source: nothing in our copyright doctrine
speaks to that.

Fair Use and the Constitutional Purpose of Copyright

Start w/ assignment given to students: is the quote “use the
force, Luke” substantially similar to Star Wars, the movie from which it comes?
Half the students, reading the standard cases, say it is, b/c it’s recognizable
and not de minimis. That is, when they just read the cases, they conclude: Fair
use has to handle everything if there’s a recognizable quote.

This is a bad idea, and contributes to the challenges we’re
facing in a world where a lot of the litigated fair use victories are big data,
not uses of individual works.  Sometimes
defending big data means denigrating acts of choosing a specific work to react
to: 9th Circuit said in one of its Perfect 10 cases: “a search engine
may be more transformative than a parody because a search engine provides an
entirely new use for the original work, while a parody typically has the same
entertainment purpose as the original work.” Robust fair use requires multiple
types, not crapping on one type for the benefit of another.

Big data cases also highlight the distinction b/t straight
reproductive copying and alteration: also important to avoid tilt towards the
former on purpose-based grounds, which would mean that fair use was mainly for
quotations in a different context and then once in a while for parody. The kind
of analysis needed to produce ASTM v. Public Resource gave us a good result,
but also heavily favors pure reproduction. One thesis: Warhol’s language has negative
effects on copying that alters.

Relatedly: we face a risk of substituting fair use for
substantial similarity analysis, which did great damage in Warhol. Example:
concurrences in the Sedlik cases suggesting that b/c copying in fact was so
obvious, there was obviously substantial similarity, leaving only fair use as a
limit on use of photographic references. Asking about fair use first without
establishing substantial similarity enlarges the scope of what courts consider
protectable, to the detriment of future creators who might not do so well on
the first and fourth factors.

Also, the way courts use factor three in small-amount
cases—favoring fair use because the defendant took almost nothing
protectable—sits poorly with the rest of the structure of fair use analysis.

Factor three is generally a calibrating factor: it assesses
whether the defendant took more than was reasonable in light of the purpose of
the use. That’s why full copies can be fair use, when a transformative purpose
requires a full copy. Using fair use as a substitute for putting a lower bound
on substantial similarity, by contrast, is purpose-independent, suggesting that
taking only a little bit is a virtue in itself.

Third and relatedly, although there are justified
predictable subclasses of fair use cases, the only justification for a
small-amount subclass is to avoid the need to put a lower bound on substantial
similarity. That has value to judges understandably looking for shortcuts, or
for Justices looking to put together a majority (looking at you, Google v.
Oracle), but it can’t supply overmuch in the way of predictability, and it
has serious costs for the defendants who are forced to litigate the extra
issues required for a fair use analysis, including expensive economic
discovery.

Fourth, and potentially of greatest significance, Warhol may
put defendants who didn’t take much, if anything, that was protectable at a
significant disadvantage going forward. Because the Supreme Court suggested
that competing uses were not transformative even if they had different meanings
or impacts, and because defendants who copy a lot of unprotectable material
tend to be using it in ways that compete with the plaintiff (or at least with
the plaintiff’s licensees), such defendants may be particularly likely to have
the highly important first fair use factor weighed against them. For the same
reasons, the market harm factor will do the same—and courts often say that
those are more important factors than two and three, where what I’m calling small-copying
defendants do well. Rentmeester is a good example of a case where a
similar-in-unprotectable-ways photo would fare badly on factors one and
four—both photos of Michael Jordan depicted him as a star player of almost
unearthly talent, and both would be fine illustrations for articles about him.

This problem is particularly acute in the context of
litigation over training generative AI. Recently, the Copyright Office and one
court have offered a new theory of “copyright dilution”: works produced by
generative AI might cause market harm by flooding the market for certain
genres. But this only looks like cognizable harm by skipping over the question
of substantial similarity: unless the AI-generated works are themselves
infringing because they contain substantial amounts of protectable expression,
they should not (and I think constitutionally cannot) count as inflicting
cognizable harm.  Quickly skipping past
substantial similarity reduces infringement to a question of but-for causation.
Even if you don’t like generative AI—and I don’t—that is the wrong standard.
Shows how fair use and scope of protection need to be considered separately to
do their modern jobs.

Is public interest really a fifth factor, rather than part
of the fourth factor? Where does it really fit in?

Another issue: We have to figure out how to deal w/use by
use analysis without chopping everything into too-small bits. Use by use
analysis kind of makes sense, but we’re in early days figuring it out.

We the public can & should fit into all four factors,
& Breyer actually did that in GvO.

Rhetoric of copying and morality that infuses every conversation:
by the time we get to fair use, we’re using words of morality, which can lead
to twisted or troublesome logic. We end up with analysis that starts with
copying in fact & moves directly to fair use, or even skips over copying in
fact. You can’t demand that the public do the inquiries in order as you can
w/students—how do we shape the conversation about the moral valence of copying
and fairness?

One concern is how much weight is being put on fair use—all of
AI, much of computer programming, etc. Part of that is the dysfunctionality of
Congress. And 76 Act doesn’t say what the infringement test is. Fair use is at
least a test! Worries of judges in GvO: protectability would be across the
board so it was more comfortable to use fair use instead which is case by case.
Wild because protectability in GvO was also entirely case by case—nobody else
was going to copy those 11,000 lines of code. Substantial similarity is also
supposed to be case by case!

Structure is just more comfortable to many lawyers/students for
analysis for fair use than seemingly unstructured analysis for substantial
similarity (certainly no structure for infringement present in statute). Questions
of law can be raised—that’s why we have more SCt decisions on fair use after
the 76 Act, b/c now they can say they’re interpreting a statute.

Sedlik is an opportunity to think about clarifying
infringement/substantial similarity. Commit to all the limits on ©! Not just fair
use. Opportunity for a Leval-type theory for theorizing substantial similarity
to reinterpret the test.

People are obsessed with copying in fact. We have a bench of
people who like to think they’re originalists, but as we’re talking about the
public interest being part of the fair use factors, that is a way to put the constitutional
concept of “progress” into the factors. (Unless the public interest is market
aggregation.)

Worst offender: Sotomayor, the most experienced © Justice,
not an originalist, but substantial similarity analysis in 2d Circuit in Warhol
is laughable and she just buys it.

Do you try substantial similarity and fair use together in
one trial? Give the jury a special verdict form? Try substantial similarity
first for PF infringement before getting to fair use, or let jury hear both
together? Leval says: from now on, fair use facts should be decided through
special verdict; jury answers those questions; judge makes ultimate determination.

AI makes some GvO/big data case features look regrettable in
hindsight: (1) ignoring commercial v. noncommercial use. Puts us in position
now where courts have to bless fair use by the most heavily capitalized
industries on the planet who could clearly pay for what they want; if they find
no fair use, that will prejudice the ability of noncommercial, public interest,
open source AI efforts they might want to promote. (2) Google Books turned on
copy protections at end of product, but open source AI means you aren’t the one
deploying it or people can take them off even if you do deploy copy protections.

Model building bears more weight in fair use than in the
real world—people are mad about outputs, but think the only thing they can
actually control is model building, so they focus on that. They don’t think
outputs are controllable. © has statutory damages and enforcement mechanisms so
it seems like the point of control.

Judges resort to fair use to avoid big swings that set
precedent they’re scared of: GvO and ASTM where they don’t want to say the
standards aren’t copyrightable. But fair use can also be used to wave away bad consequences
of protection decisions in Eldred and Golan. Sedlik: J Wardlaw was shaking with
rage at the concept that the jury found the works not substantially similar. Courts
will appeal to fair use if they broaden substantial similarity—allowing them to
answer doctrinal questions w/o attending to public interest which is shoved
into fair use.

First Sale – From Ownership to Licensing

People used to have book & music collections, and now
that’s not how we access pop culture, educational materials, and everything
else. Questions about the common law basis. Single recovery rule has public
interest consequences that have been underexplored. Origins: early 20th
c antitrust/competition cases, but SCt reiterated single recovery rule in
Kirtsaeng, Lexmark—you get to recoup your costs through the first sale. You don’t
get to make a sale over and over again. That’s the single recovery rule. Now
honored in the breach through licensing despite SCt unanimity.

Recommendation: don’t use exhaustion and first sale interchangeably:
whether a country decides to allow national exhaustion is different from first
sale—Kirtsaeng was the first case to confirm that we have exhaustion as well.

Many countries don’t have broad exhaustion even internally—many
countries have lending rights and we (mostly) don’t, as a clear choice. Heavy
users don’t pay more for their copies as a conscious decision. But that’s
destroyed by licensing, which requires libraries to pay substantially more than
everyone else, putting users at mercy of platforms. For most users, that’s not
horrible. For preservation, it’s horrible. At the margin it does allow platform
or © owner to control ongoing uses.

Provocation: First sale is dead; get over it.

It matters that this is a wealth transfer to specific
entities. Amazon is not principally passing on the revenues to authors to
support authorship and creativity. It’s yet another wealth transfer to the
platforms like Elsevier.

Libby/Overdrive is owned by private equity. So much profit
being sucked out of this—makes publishers look good!

Publishers do get a share of a lot of this. Not all
publishers are equal. Overdrive has over 95% of the public library, 774 million/year
before sale to KKR. Publishers have always really disliked secondary markets
like used book stores. Contract preemption: US is unique when it comes to
contract preemption limiting exhaustion, creating a situation in which “first
sale is dead” is a real possibility. But what is the technical solution for
digital copies? Internet Archive case: if you scan something it’s a new copy. Without
contract preemption there’d still be other contract doctrines that caused problems;
this is like printing money for publishers/platforms so they want to defend it even
with the huge problems for the public interest.

Restraints on alienation of chattels: those doctrines should
be resurrected b/c of their public benefits. Lots of problems also stem from
the contracts being really bad. 6-7 streaming platforms distribute 90% of video
content; 5 ebook distributors; etc. Consumer protection and antitrust are important
parts of the solution.

We need to be able to reuse our things: first sale is
essential to conservation.

Digital first sale is going to be tough to achieve, but
right to repair movement is a positive development.

©-specific policy interest relates to the public interest:
access to knowledge. That is a double-edged sword when it comes to exhaustion
& first sale. European reactions to Kirtsaeng/shift from ownership to
access model: concern over disappearance of content. E.g., Infinity Train.
There are advantages to high quantity uses paying more. What happened to prices
in Thailand after Kirtsaeng? (One possible cite: Zhang, Z. and Feng, J, “Price
of Identical Product with Gray Market Sales: An Analytical Model and Empirical
Analysis,” Information Systems Research, 28(2), pp. 397-412, June 2017.) Global
price discrimination might promote cheaper access to knowledge—exhaustion v.
first sale.

109: every cobbled-together exception to allow Blockbuster,
but not renting software. CleanFlicks at the bottom. All Bobbs-Merrill said was
that if the legislature wants to modify the common law it has to do so explicitly.
There’s no constitutional right; the legislature could erase access or © for
any of these things. Book publishers would love to see first sale go away, b/c
that’s the path for every AI company to build its corpus in training its model.

Details matter: do we want compulsory licenses at a set
rate? The publisher decides whether a library gets the book? Does money go to
the author? 109 could be the home of a new rule that says “you can’t scan a
book for AI”—it would fit there. Or it could be the home of a rule that allowed
that.

Consider anti-criticism licenses—you can use it as long as
you don’t criticize it. That’s also a power issue.

Specific Exceptions: Lessons Learned

Questions about preservation, classroom use, other subjects
of best practices—almost always come down to fair use because the specific
exceptions haven’t been powerful for public institutions. Trying to craft
specific exceptions will probably fail: too narrow b/c of negotiations with stakeholders;
technology will change substantially by the time it makes it into actual law.

Copyright law is working great for libraries, but they don’t
get to live in © space any more, they live in contract land. © policy choices
reflect the public interest and we should be able to live in that land! 110(1)
is amazing, 110(2) is not: when it aligns with your incentives and intuitions
as an educator, as 110(1) does, an exception can be amazing. When it doesn’t, as
with 110(2), it is not. We have a model for doing a good job: general, values-driven
as in 110(1); horsetrading means it doesn’t work in 110(2).

Everyone is terrified of asking Congress to fix 110 b/c we
know they won’t. What do you do? The only alternative is “fair use for
everything,” with its own disadvantages. Think very carefully about long term implications
of opportunities to enact change: university counsels can’t rely on 110(2).
108: not litigated; just used to apply savings clause to confirm that fair use
is different. Maybe libraries are using it a lot and doing a bunch of things
that don’t trigger litigation—that’s likely what’s happening.

Maybe fair use helps confidence that 108 means what
libraries want it to mean. Jon Band’s Gravitational
Pull paper—unintended effect could be to shade how we understand fair use.

As time went on and fair use proved expansive, librarians’
interpretations of 108 probably became broader/put a fair use gloss on 108.
Compared to 110(1), which is clear, short, and understandable, and has developed
its own fair use gloss—to allow distance education, doing what 110(2) doesn’t
allow. The question for us: how did 110(1) get so good, even compared to 108?

Patry wrote that 110(1) came from language from an agreement
b/t publishers & teachers, whereas 108 was trench warfare over 10 years.
110(1) was already existing practice of teachers; it was late-breaking insertion
into the statute but not controversial. Tech constraints: they imagined
teachers using mimeo machine in the principal’s office. But also: under the
1909 Act, public performance right was only for profit; when they decided to
lift that restriction, they also decided to grandfather in existing practices—education,
church, agricultural fairs, etc.

Don’t lose track of the damages part. You can think 108
means whatever you want and there’s essentially no litigation b/c you can’t get
statutory damages against a librarian acting in good faith. Institutions need a
substantive hook to point to say they’re good © citizens, and they need
liability protection. Maybe that’s the formula: give an exception plus a
statutory damages safe harbor. Libraries also are comprised of people who want
to do the right thing.

Limitations and exceptions may contribute to courts thinking
“if no exception then infringement” as we’re seeing in TM. Savings clause in 108
is really important. At oral argument in Hachette rights holders argued that 108
meant there was no need for fair use, but the cases have been very hostile.

But there are cases saying that “de minimis isn’t a listed
defense so there’s no de minimis exception”—if it’s written too narrowly to be
effective and has the compounding effect of broadening rights, that’s
worse. [Like the statutory DMCA 1201 exceptions!]

University counsel might not be © experts; they like being
able to look at a provision that says “notwithstanding the above, this isn’t an
infringement.”

Penalties: Remedies, Secondary Liability, and their
Consequences

Today’s Hikma borrows Grokster to really
require active steps/intent to induce—the worry of loosening inducement is
something the Court is signaling against. Gershwin no longer stands for
material contribution + knowledge—it stands for inducement. Not causation!

What about vicarious liability? We’ll see more efforts to
expand that to bypass Cox. But there’s also a case to be made for
implications for vicarious liability in Cox. Basic takeaway from this
and Hikma: they want to see purposeful, culpable conduct. Vicarious liability
has been expanded past employer/employee, where lack of sufficient supervision
was your problem/culpable conduct. So too w/independent contractors. But when
you’re talking about entities that are farther apart, it will/should be harder
to expand vicarious liability.

Also going to be pressure on volitional conduct: something
that used to be considered indirect becomes direct, then you won’t have to
worry about knowledge, intent, or control.

But if the courts take seriously that nothing in the statute
gives rise to that broad liability, then there will be a narrowing. Wish it
would have implications for 1202! Framing it as Twiqbal: when you just
make general assertions in the complaint, that’s not enough.

eBay worked to limit injunctions—fewer sought, fewer
granted. Libraries & educational institutions don’t need to worry about profit
disgorgement; elsewhere, courts really need to think about disgorgement as a
tool of equity, to be adjusted down where appropriate. Likewise, 103(a) should
have equitable limits; otherwise Goldsmith might own the (c) to the Warhol
images and the estate would have no (c) interest.

Good that SCt accepted cert in Cox on
willfulness/statutory damages—they are clearly interested in the issue.

We should also be citing, quoting, relying on the
Restatement of Copyright, which says that statutory damages should approximate
actual damages.

Are class actions appropriate in © cases? Could we make more
progress on that front?

Texaco was the key there: 80 journal publishers as a
plaintiff class.

Build on what broke Google Books class certfication—similarity
of interests or lack thereof.

Is there room for apology as a remedy or other equitable
remedies unrelated to the economic conditions ordinarily associated with ©?

Here’s an argument: In our textualist era: there isn’t any
contributory infringement provision in the © statute. Therefore Congress never
authorized statutory damages for contributory infringement and they don’t
apply.

Secondary liability in the context of TRIPS: Didn’t say
anything about secondary liability, so countries have maximal flexibility on
whether to adopt it.

If “to authorize” is the scope of secondary liability it
will shrink in scope, which would be fine!

from Blogger https://tushnet.blogspot.com/2026/06/promoting-progress-50-years-of.html

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Second Annual Aspiring Free Speech Scholars Workshop

Posted on June 4, 2026 by rtushnet


jointly sponsored by the Sandra Day O’Connor College of Law (ASU)
and the Hoover Institution (Stanford University)

Because
of a technical problem, any submissions before June 4, 2026 were lost;
please resubmit (or submit for the first time) at the new URL listed
below, https://tinyurl.com/aspiring-free-speech-scholars

Are
you a law student, judicial law clerk, lawyer, or beginning academic
hoping to publish a journal article on free speech law? Would you like
the opportunity to get advice about your draft from leading free speech
scholars?

If so, send us your draft by Sunday, August 16, 2026.
(This should still be a draft article, not an article that’s already
published or expected to be published within six months.) We plan to
select the submissions that we think are particularly promising, and invite their authors to a workshop where
they can present their papers and get helpful feedback on them. The
workshop will be Saturday, October 24, 2026 (with dinner the night
before) at the Sandra Day O’Connor College of Law in Phoenix. We will
inform the selected authors by Tuesday, September 8, 2026.

We have funds to pay for transportation and lodging for the selected authors’ trips. Eligibility is limited to people who have so far published three or fewer law-related journal articles. 

We also plan to officially recognize
zero to three of the top articles among those we review. If the authors
wish, they can also have their articles reviewed for publication in the
Journal of Free Speech Law (http://JournalOfFreeSpeechLaw.org), presumably after they revise the articles in light of the workshop feedback.

If you’re interested, please submit your draft at http://tinyurl.com/aspiring-free-speech-scholars (Google logon required). Please single-space, and format the article nicely, so we can more easily read it.

Please do not include your name or law school affiliation
in the document or document filename, and please do not include an
author’s note thanking your advisors and others. Please make your
filename be the title of your article (or some recognizable subset of
the article title). We want to review the article drafts without knowing
the authors’ identities.

If you have questions, please check http://tinyurl.com/aspiring-free-speech-faq; if your question isn’t answered there, please e-mail volokh@stanford.edu.

Many thanks to the Stanton Foundation for its generous support.

* * *

James
Weinstein, Dan Cracchiolo Chair in Constitutional Law and Professor of
Law, Sandra Day O’Connor College of Law, Arizona State University

Eugene
Volokh, Thomas M. Siebel Senior Fellow, Hoover Institution (Stanford
University), and Gary T. Schwartz Distinguished Professor of Law
Emeritus, UCLA School of Law

from Blogger https://tushnet.blogspot.com/2026/06/second-annual-aspiring-free-speech.html

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court allows TM and false advertising claims against “toxic backlink” SEO disparagement campaign (SEM, for minimization?)

Posted on June 4, 2026 by rtushnet

Montway LLC v. Nexus AT LLC, 2026 WL 1552185, No. 25 C
13100, No. 26 C 1056 (N.D. Ill. Jun. 2, 2026)

Although the UCL unfair competition claims got kicked out,
federal trademark and false advertising claims survive in this dispute between
automotive transportation brokers. They provide  “automotive transportation services to a broad
range of clients including individual car owners, auto dealerships, financial
institutions (for vehicle repossession), rental car companies, original
equipment manufacturers, and others.” Plaintiffs Montway and SGT have
registered various trademarks related to their services, including “MONTWAY
AUTO TRANSPORT” and “SGT AUTO TRANSPORT.”

Plaintiffs alleged that their SEO spending meant that, e.g.,
“Montway.com” is one of the first websites that Google returns when a user
searches for “Montway,” “Montway Auto Transport,” “best car shipping company,”
or “how to ship a car to another state.” Allegedly, SEO considers “trustworthiness.”
Google allegedly measures website “trustworthiness” by measuring the quality of
“backlinks,” which occur when links for a given website appear on other
websites.

Nexus allegedly launched a toxic-backlink campaign to damage
the companies by adding links to “Montway.com,” “sgtautotransport.com,” and
other Montway and SGT subdomains on untrustworthy websites. Another
toxic-backlinking technique to degrade SEO allegedly involves using misleading
“anchor text” (the clickable text that appears on screen when text is
hyperlinked) such as keywords related to online gambling and “adult content.”

Some of the toxic backlinks Nexus created allegedly used
“sgtautotransport.com” as anchor text on websites like pokerstarcasinolives.com,
or anchor text such as “online casino,” “hiding illegal funds,” “CBD products
online,” “illegal border crossing,” “illegal drug distribution,” “corrupt
influence,” “drug paraphernalia” and “heroin is a drug” leading to Montway or
SGT’s websites. This creates the false impression that plaintiffs are connected
to and/or affiliated with such products or services.

Montway sued for Lanham Act false advertising, trademark
infringement, and tarnishment, as well as violation of Illinois consumer
protection law and California’s UCL.  

False advertising: The allegedly false statements were in
the “anchor text,” and they were plausibly literally false, e.g., anchor text
stating “sgtautotransport.com” but connecting to a website like
“pokerstarcasinolives.com,” or “online casino,” “hiding illegal funds,” “CBD
products online,” and other similar statements connecting to SGT’s website. If
anchor text states that “a link will lead to a website offering certain goods
or services—car transport services or a variety of unsavory goods and
services—but that the link actually takes the consumer to a different
destination,” that’s false.

Plus, the allegations were that the anchor text created the
impression that their services were affiliated with the spam websites as well
as the unsavory products and services promoted on those websites, misleading consumers
about the quality and type of services that Montway and SGT offer.

Was this commercial advertising or promotion? The Seventh
Circuit doesn’t use Gordon & Breach, but instead applies the Lanham
Act only to “traditional commercial advertising or promotion methods.” [Like…
backlinks? I guess, because:] “Based on plaintiffs’ allegations, Nexus’s
alleged toxic backlink campaign involves an innovation in communications media
that is covered by the Lanham Act. Montway and SGT allege that they have made
significant investments in online advertising, search engine optimization, and
affiliate marketing to ensure they continue to reach prospective customers,”
with which defendants interfered. [But that indicates that plaintiffs
are involved in commercial advertising, not that defendants are. This is one of
the early mistakes courts made about domain names.] The court agreed that “Nexus’s
alleged toxic backlinking campaigns are comparable to negative advertising. … The
alleged toxic backlinks serve the same goals as negative advertisements: to
denigrate a competitor.” [That might work under Gordon & Breach, but
I can’t see why that makes them comparable to traditional advertising and promotion
methods.]

Plaintiffs also sufficiently alleged materiality or injury
because the toxic backlinks and included anchor text allegedly “created the
impression that their services are affiliated with untrustworthy websites
and/or unsavory goods and services. According to Montway and SGT, this
ultimately led to fewer consumers reaching their websites.”

[I really wonder what Google would say about all of this.]

Trademark infringement: Fact-intensive so no motion to
dismiss for you despite defendant’s argument about the high degree of care used
by consumers of the relevant services. The court doesn’t require the confusion
to be about the source of defendants’ goods or services, but confusion about
whether plaintiffs’ “services are affiliated with untrustworthy, spam-filled
websites and/or the service advertised therein, rather than with the
trustworthy services normally associated with the SGT Mark.” That doesn’t
actually seem like trademark confusion to me, even if it’s disparaging false
advertising.

The theory of harm here is purely algorithmic. In fact, the
theory works without any allegations that any consumers ever hover over any of
these links in order to see the allegedly disparaging connections. This is perhaps
what a rump unfair competition common-law cause of action is for, but it’s not what
trademark law is for and the Supreme Court has been pretty clear that the
Lanham Act doesn’t cover all forms of unfair competition.

Tarnishment: Appallingly, the court finds fame sufficiently
alleged because of allegations that Montway’s mark “has been in continuous use
since at least July 2007” and, based on that use, the mark “has acquired
consumer recognition, positive reputation, and extensive goodwill with
consumers,” SGT’s mark has been in use since 2014 and, based on that use, SGT’s
mark “has acquired consumer recognition, positive reputation, and extensive
goodwill with consumers,” and they’ve spent hundreds of thousands of dollars
each year to reach prospective consumers. No citation to the standard set forth
in the statute or any case law. If a human being ever looked at the links—a big
if—the negative associations qualify for the ordinary meaning of tarnishment, I
suppose.

Illinois consumer protection: Fine, given what’s gone
before.

California UCL: Montway and SGT argued that they suffered an
injury in California because Google is headquartered in California. That’s not
where they suffered injury, though. They didn’t allege “any specific
instance where a potential customer in California was impacted by Nexus’s
actions.”

from Blogger https://tushnet.blogspot.com/2026/06/court-allows-tm-and-false-advertising.html

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Instagram disparagement by alleged competitor isn’t commercial speech

Posted on June 4, 2026 by rtushnet

Farina v. Omari, No. 24-11098 (SDW) (AME), 2026 WL 1552256
(D.N.J. Jun. 2, 2026)

The court grants a motion to dismiss in this defamation/false
advertising claim centered on online videos.

“Farina is a consultant in the aesthetic surgery industry
and operates through her business Beauty Brokers. Defendant is also a plastic
surgery and aesthetics consultant.” Defendants made several defamatory
statements on Instagram questioning plaintiffs’ credentials and alleging that they
received kickbacks from surgeons. Omari also streamed live on Instagram,
allegedly stating that “Farina is a bad person and bad businesswoman; that she
scams a lot of people; and had a surgical procedure but never paid for it.” The
complaint asserted (1) defamation; (2) false light; (3) tortious interference
with prospective business relations; (4) false advertising/unfair competition;
and (5) trade libel.

Defamation: Failed for want of defamatory character/being
opinion. The allegedly defamatory claims: 1. “[Farina] is just a dental
hygienist.” 2. “[Farina] gets paid on both ends and allegedly gets kickbacks.” 3.
“Basically, people now pay $1,000 to have a consult with her so she can suggest
one of these surgeons from “Beauty Brokers’ Little Black Book of surgeons.” 4.
“Lots of surgeons I know have STORIES, and tons of my followers have sent in
stories of [Farina] being super rude, canceling all the time and being late,
not helpful, and having a hard time getting their money back if she messes up
or doesn’t provide the services promised.” 5. “[Farina] is a bad person/bad
businesswoman.” 6. “She scams a lot of people and had a surgical procedure that
she owed money for but never paid it.”

Since Farina previously worked as a dental hygienist, “just
a dental hygienist” was substantially true, and the complaint didn’t explain
why highlighting Farina’s background as a dental hygienist subjects Farina “to
contempt or ridicule,” and “harms [her] reputation by lowering the community’s
estimation of [her] or by deterring others from wanting to associate or deal
with [her].”

“[G]ets paid on both ends” and “allegedly gets kickbacks”:
The gist of the first part was substantially true since plaintiffs admitted to
a previous membership program where surgeons paid a membership fee to join their
referral network, and to experimenting with a fee-splitting arrangement
involving surgeons in their referral network and receiving gifts from surgeons.
Although “kickbacks” could be read to accuse plaintiffs of a criminal offense
or other illicit behavior, in context it referred to payments from surgeons for
referrals and not to any criminal or illegal conduct.

The “pay $1,000 to have a consult with her so she can
suggest one of these surgeons from Beauty Brokers’ Little Black Book of
surgeons” didn’t rise to the level of defamation. And the final statements were
opinion, especially given the context: the statements “were delivered by a
social media influencer on Instagram,” and Instagram is a place “where a
reasonable [viewer] will expect to find many more opinions than facts,” thus “strongly
signal[ing] to readers that the posts merely reflect the publisher’s opinions.”

False light failed for failure to plead actual malice. Trade
libel failed for the same reasons as defamation did. Tortious interference
failed because plaintiffs failed to allege the existence of any lost
prospective economic benefit that they would have retained “but for” the
alleged interference. Attributing the sixteen customers who cancelled their
appointments in the three weeks following the first post to defendant was speculative
even though plaintiffs alleged that they normally only get one cancellation per
week.  

Lanham Act false advertising: Not commercial speech, even
assuming the parties were competitors. “Plaintiffs argue for an overly broad
definition of commercial speech, essentially stating that any criticism from a
purported competitor must be commercial speech.” But “the alleged misleading
statements do not advocate for the reader to purchase a particular product or
service over another. In fact, none of the alleged statements explicitly or
implicitly refer to the alleged similar service offered by Defendant.” [don’t
love this!]

New Jersey’s Uniform Public Expression Protection Act (its
anti-SLAPP law) applied in federal court “to the extent that it affords fees,
costs, and expenses to a prevailing movant who successfully dismisses a SLAPP
suit under Federal Rule 12 or Federal Rule 56.” “For UPEPA to apply, the
challenged speech must pertain to an area of public concern.” Farina was a
limited purpose public figure, and the challenged statements related to a
particular public controversy within the cosmetic surgery industry. UPEPA doesn’t
apply to a cause of action asserted “against a person primarily engaged in the
business of selling or leasing goods or services if the cause of action arises
out of a communication related to the person’s sale or lease of the goods or
services.” But the challenged statements weren’t commercial speech and don’t refer
to any services offered by defendant. Thus, the defendant could get her fees,
costs, and expenses.

from Blogger https://tushnet.blogspot.com/2026/06/instagram-disparagement-by-alleged.html

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Reading list: Deception wins at the Federal Circuit

Posted on June 2, 2026 by rtushnet

 “A doctrine that was meant to deter deception thus rewards its most sophisticated form: technically accurate fragments presented as universal facts.” This student article shows how the Federal Circuit allowed two layers of deceptive advertising: advertising results from p-hacking, without even disclosing the subgroup to which the p-hacking purportedly applies.  

Porter A. Tynes, III, Truth That Lies: How Literal Falsity Lost the Consumer and How to Restore It, 33 J. INTELL. PROP. L. (2026)

From the introduction:

For centuries, courts have treated false advertising law as a safeguard against deception, ensuring that claims of efficacy rest on verifiable fact. ThermoLife unsettles that foundation. The U.S. Court of Appeals for the Federal Circuit (Federal Circuit) held that an advertisement is not literally false so long as it is true for someone—even if it misleads almost everyone else. In a single stroke, the court hollowed out the Lanham Act’s most potent protection by turning literal falsity into a loophole.

from Blogger https://tushnet.blogspot.com/2026/06/reading-list-deception-wins-at-federal.html

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9th Circuit applies Dastar to bar false advertising liability based on “first to market” claims

Posted on June 1, 2026 by rtushnet

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

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claim that entity sells unapproved drugs does not misrepresent “origin, sponsorship, or approval” for Lanham Act purposes

Posted on June 1, 2026 by rtushnet

Peptide Tech LLC v. Avidia Bank, 2026 WL 1506049, No.
25-13179-MJJ (D. Mass. May 28, 2026)

Plaintiff sells peptides; Avidia is a bank and acquiring
bank for merchants who accept credit and debit card payments. Doe defendants
allegedly reported Peptide Tech to Mastercard, leading Mastercard to place
Peptide Tech on the Member Alert to Control High-Risk Merchants (“MATCH”) List.
Plaintiff brought claims for breach of contract, tortious interference with
business relationships, violation of Mass. Gen. Laws ch. 93A (a state false
advertising provision), and violation of the Lanham Act. The court granted the
motion to dismiss.

“To accept debit and credit card payments, merchants must
obtain payment processing services through a payment processor and a member
bank, also known as an acquirer. These payment processing services are
contracted with payment card brands … [whose] rules govern participants in the
payment processing system, including payment processors, acquirers, and
merchants.” Avidia is an acquirer with whom Peptide Tech entered into a
merchant processing agreement. Peptide Tech identified its business category as
“Research Chemicals,” and alleged that it doesn’t sell peptides for human
consumption, but to research labs, which is legal.

“MATCH is a Mastercard-maintained database that identifies
merchants terminated by acquirers due to suspected high-risk behavior, such as
fraud, excessive chargebacks, or regulatory violations.. Placement on MATCH
effectively eliminates a business’s ability to accept credit card payments for
its products.”

 

Avidia allegedly recommended, supported, or otherwise caused
Peptide Tech to be placed on the MATCH List, causing significant monetary harm.

Breach of contract claims failed for want of terms plausibly
breached; tortious interference failed for want of pleading actual malice.

The Ch. 93A claims failed as repackaged breach of contract
claims; the agreement plainly said that Avidia could terminate the relationship
in its “sole discretion,” and there were no facts pled that Avidia misled payment
card entities; Peptide Tech merely speculated that Avidia incorrectly
communicated to them that Peptide Tech’s products were unapproved.  

Lanham Act: Peptide Tech argued that Avidia violated §
1125(a)(1)(A)’s ban on false statements “likely to cause confusion, or to cause
mistake, or to deceive as to the … origin, sponsorship, or approval of his or
her goods, services, or commercial activities by another person,” because it
allegedly communicated that Peptide Tech was selling unapproved drugs.

But §43(a)(1)(A) is for trademarks, and Peptide Tech didn’t
plausibly allege trademark confusion: “marketplace confusion about whether
goods are affiliated with or approved by another person.” A false suggestion
that a plaintiff’s products were “unapproved or illegitimate”  “does not allege confusion about the origin of
Plaintiff’s products, affiliation with another entity, or sponsorship or
approval by another person in the Lanham Act sense.”

§43(a)(1)(B) false advertising: No commercial advertising or
promotion.

from Blogger https://tushnet.blogspot.com/2026/06/claim-that-entity-sells-unapproved.html

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