CFP: Yale/Stanford/Harvard Junior Faculty Forum

Request for Submissions
Yale/Stanford/Harvard Junior Faculty Forum
June 13-14, 2018, Harvard Law School

Yale, Stanford, and Harvard Law
Schools are soliciting submissions for the 19th session of the Yale/Stanford/Harvard
Junior Faculty Forum, to be held at Harvard Law School on June 13-14, 2018. Twelve
to twenty junior scholars (with one to seven years in teaching) will be chosen,
through a blind selection process, to present their work at the Forum. One or
more senior scholars will comment on each paper. The audience will include the
participating junior faculty, faculty from the host institutions, and invited
guests. The goal of the Forum is to promote in-depth discussion about particular
papers and more general reflections on broader methodological issues, as well
as to foster a stronger sense of community among American legal scholars,
particularly by strengthening ties between new and veteran professors.

TOPICS: Each year the Forum invites submissions on selected topics in public
and private law, legal theory, and law and humanities topics, alternating
loosely between public law and humanities subjects in one year, and private law
and dispute resolution in the next. For the upcoming 2018 meeting, the topics
will cover these areas of the law:


– Administrative Law

Constitutional Law—theoretical foundations

Constitutional Law—historical foundations

Criminal Law

Critical Legal Studies

Environmental Law

Family Law

Jurisprudence and Philosophy

Law and Humanities

Legislation and Statutory Interpretation

Public International Law

Race/Gender Studies/Antidiscrimination

Workplace Law and Social Welfare Policy

A jury of accomplished scholars, not necessarily from Yale, Stanford, or
Harvard, will choose the papers to be presented. There is no publication
commitment. Yale, Stanford, or Harvard will pay presenters’ and commentators’
travel expenses, though international flights may be only partially reimbursed.

QUALIFICATIONS: Authors who teach at a U.S. law school in a tenured or
tenure-track position and have not have been teaching at either of those ranks
for a total of more than seven years are eligible to submit their work.
American citizens or permanent residents teaching abroad are also eligible
provided that they have held a faculty position or the equivalent, including
positions comparable to junior faculty positions in research institutions, for fewer
than seven years and that they earned their last degree after 2008. International
scholars are not eligible for this forum, but are invited to submit to the Stanford
International Junior Faculty Forum. We accept co-authored submissions,
but each of the coauthors must be individually eligible to participate in the
JFF. Papers that will be published prior
to the Forum are not eligible.
There is no limit on the number of
submissions by any individual author. Junior faculty from Yale, Stanford, and
Harvard are not eligible. 


PAPER SUBMISSION PROCEDURE:
Electronic submissions should be
sent to Rebecca Tushnet at
rtushnet@law.harvard.edu,
with the subject line “Junior Faculty Forum.” The deadline for submissions is March 1, 2018. Remove all references to
the author(s) in the paper. Please include in the text of the email and also as
a separate attachment a cover letter listing your name, the title of your
paper, your contact email and address through June 2018, and which topic your
paper falls under. Each paper may only be considered under one topic. Any
questions about the submission procedure should be directed both to Rebecca
Tushnet and her assistant, Andrew Matthiesen (
amatthiessen@law.harvard.edu).

FURTHER INFORMATION: Inquiries concerning the Forum should be sent to Matthew Stephenson (mstephen@law.harvard.edu) or Rebecca Tushnet (rtushnet@law.harvard.edu) at Harvard Law School, Richard Ford (rford@stanford.edu) at Stanford Law School, or Christine Jolls (christine.jolls@yale.edu) or Yair Listokin (yair.listokin@yale.edu) at Yale Law School.

Richard Ford

Christine Jolls
Yair Listokin
Matthew Stephenson

Rebecca Tushnet

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That’s swell: court rules that NY doesn’t impose “use in commerce” limit on unfair competition

Can’t Live Without It, LLC v. ETS Express, Inc., — F.Supp.3d —-, 2018 WL 401778, No. 17-cv-3506 (S.D.N.Y. Jan. 15, 2018)
Plaintiff S’well sued ETS for trademark infringement and related claims based on its sales of the Force and Swig Bottles, which have the exact same shape as plaintiff’s S’well and S’ip Bottles, respectively. The court denied ETS’s motion for summary judgment, among other things holding that §349 and §350 don’t incorporate whatever is left of the Lanham Act’s “use in commerce” requirement, which meant that ETS’s partial motion for summary judgment as to its use of the S’well name was only partly granted.
S’well has a registration for the shape of its S’well bottle, on the Principal Register as of 2017. “The S’well Bottle has been very successful, obtaining substantial amounts of free, unsolicited media coverage, selling millions of bottles and an increasing number each year, and generating millions of dollars in income.”  (Turns out I own a bottle with this shape, whose maker I don’t know; I didn’t buy it on the basis of the shape, either as source indicator or as an especially aesthetic shape, though it is pleasantly curved.)  S’well sells to consumers, retailers, and a custom program in which an imprint of a company’s name or logo is added to the bottle and the company then resells or gives away the bottles.

The S’ip and the S’well

ETS is a drinkware company that sells various water bottles, including ones that are “patterned after” retail brands. The Force Bottle is one of ETS’s most popular products and is shaped identically to the S’well Bottle. ETS operates in the “promotion products market” rather than the retail market, meaning it fulfills orders placed by intermediaries for custom-printed products and the intermediaries then sell those products to businesses that give them away as promotions, though ETS does sell Force Bottles directly to some retailers — including, at least, college bookstores and a coffee shop chain with locations throughout California. Some distributors also sell to retailers who sell Force Bottles to end-users either online or in retail stores.
The Force

The Swig

ETS’s argument against the distinctiveness of the S’well bottle was that consumers couldn’t possibly associate the bottle shape here at issue with any single source because so many different businesses manufacture similarly shaped bottles. Declarations from various ETS employees stated that they purchased S’well-like bottles from various stores and websites, providing pictures, descriptions, and receipts, and ETS identified 130 different sources of water bottles that had the same shape. There’s no numeric rule about how many other sources prevent distinctiveness.  “If, for example, one source has such a large market share and strong brand awareness that the public strongly associates its mark with that brand, consumers will likely assume that products bearing that mark are associated with that brand, regardless of the number of ‘knockoff’ manufacturers. The number of manufacturers is therefore a relevant, but not determinative factor.”  [NB: This reasoning, which I accept, puts the lie to trademark owners’ claims that they have to enforce their trademarks to the hilt to avoid losing them. As long as the trademark retains trademark significance, it’s not going to be a problem.]
S’well submitted “substantial evidence suggesting that the public in fact does associate this particular shape with S’well, including undisputed, significant levels of advertising expenditures, sales success, and unsolicited media coverage.” ETS salespeople in emails with distributors themselves referred to the Force Bottle as a “S’well knockoff,” a “swell like option,” “S’well-like,” and “the ones that look like Swell,” and online retailers advertised Force Bottles similarly.  “These comparisons would be meaningless if the audience did not associate the shape with the brand.”
Nor did ETS show functionality.  S’well submitted material to the PTO indicating that the S’well and S’ip contain “mouths” that are big enough for ice cubes but small enough for “drip-free sipping” and are located in the center of the bottle, so users never need to rotate the bottle to begin drinking. ETS also argued that the circular shape is the “strongest and the easiest to make,” and that the bottles’ “smooth tapering at a relatively shallow angle from the base to the mouth permits the bottles to be emptied completely with relatively minor tilts.” The alternative, straight sides with a sharp angle just before the mouth, creates “a ‘catch basin,’ so that the liquid in the bottle, rather than smoothly flowing out, is trapped in the depression where the angle changes until the bottle is tilted further, at which point it comes rushing out all at once, leading to spills and other dangers.” [As a certified spiller of things, I can testify to the truth of this.]  However, ETS didn’t submit evidence on its claims, and it wasn’t self-evident that they were true—for example, a rectangular shape might likely be easier to stack and ship. S’well’s founder also declared that she made several aesthetic choices when she designed the bottles that she knew would be more expensive.
ETS also offered no evidence suggesting that no other designs could have these same functional benefits; S’well hadn’t registered “all water bottles with gently sloping sides.” In fact, ETS’s argument that “both the S’ip and S’Well Bottles have ideal shapes, despite the two being shaped differently, suggests that these benefits may be available in other shapes as well.” Nor did ETS make arguments about the distinctive bottle cap, which is part of S’well’s trade dress.
Likely confusion: again, summary judgment was unavailable, given the evidence of distinctiveness/strength and the similarity of the parties’ products.  Though ETS argued that the products
were sold in separate markets to sophisticated consumers who would not confuse them, ETS submitted
no empirical research or data analysis. S’well submitted evidence of distributors specifically requesting “S’well Bottles” from ETS, which appeared to fill the orders with Force Bottles without correction. And 10-15% of S’well’s business was in the promotional market, while ETS sold directly to at least some retailers and some distributors, who then sell Force Bottles to retailers or directly to end-users online, so there was some market overlap.  In addition, post-sale confusion among end consumers was still possible.
And listen to this take on status goods: “Nor does it matter, as ETS argues, that the two bottles are of the same physical quality, particularly where, as here, there is evidence that they are not of the same expressive quality” (citing magazine article describing S’well Bottles as “suddenly a feverish must-be-associated-with-thing among a certain stylish, in-the-know set”). “The purchase of one product under the mistaken belief that it is another product is a prototypical harm against which the Lanham Act protects.”
There was also evidence of actual downstream confusion. “At least one retailer mislabeled Force Bottles as ‘Swell Bottles’ on its shelves, and several consumers have contacted S’well customer service in the mistaken belief that they had S’well Bottles, when in fact they had Force Bottles or, perhaps, similar bottles from other brands.” An internet survey indicated that 59% of S’well’s target demographic — female potential purchasers of stainless steel water bottles — associated the shape at issue with S’well, and calculated an overall net confusion rate of 26.6% between the S’well and Force Bottles.
ETS argued that it didn’t know about S’well before it decided to make the Force bottle, and learned about it only after researching the bottle shape requested by customers.  Given S’well’s success, that was a disputed issue, and anyway ETS learned of S’well before the Force bottle was actually produced.  Evidence also suggested that ETS “made changes to the Force Bottle for the express purpose of making it more similar to the S’well Bottle.”  ETS’s “Retail Brands Guide” compared its products to retail products, which was distributed to at least some customers.  A jury could find bad faith.
Under §§ 349 and 350 of the NY GBL, a plaintiff must show “that a defendant has engaged in (1) consumer-oriented conduct that is (2) materially misleading and that (3) plaintiff suffered injury as a result of the allegedly deceptive act or practice.”  Consumer-oriented conduct must threaten an injury “to the public interest over and above ordinary trademark infringement or dilution.”  However, the court rejected federal district court precedent that something like “potential danger to the public health or safety” is required, reasoning that the New York courts interpret these laws broadly. “New York courts distinguish not between minor economic harms and threats to public safety, but between disputes that are essentially between two parties, such as contract disputes, and “acts or practices [that] have a broader impact on consumers at large.”  However, the court still granted ETS’s motion for summary judgment on those claims, because S’well didn’t show a genuine dispute about whether Force bottles were inferior to S’well bottles. Though there had allegedly been complaints “from time to time” about customer misuse leading to leaks and the “imprint” on Force Bottles coming off, but even setting aside hearsay problems with this evidence, S’well might have shown that Force bottles weren’t perfect but did not show that its bottles were any better.
S’well also argued that ETS’s plastic Impact bottle was not made of stainless steel and argued that this would harm consumers, but S’well didn’t address the Impact bottle in its complaint, and anyway no reasonable consumer boying plastic Impact Bottles would think she was buying a stainless steel S’well Bottle, nor would she infer that S’well’s steel bottles were somehow worse simply because a plastic version existed.  She might think there was a link to S’well somehow, “but that consumer confusion is insufficiently consumer-oriented to state a claim under New York’s deceptive practices and false advertising statutes.”
False designation/unfair competition under federal and state law: S’well moved for summary judgment in its favor based on claims that ETS (1) misleadingly suggested to its customers that Force Bottles were a type of S’well Bottle, and (2) sold Force Bottles to customers who requested S’well Bottles without informing them of the difference. ETS argued that there was no relevant “use in commerce.”  The court disagreed with 1-800 Contacts, but Rescuecom didn’t overrule it, so there is still some “use in commerce” requirement for infringement.  The use of a mark in the sale of products, as opposed to services, where the mark isn’t attached to the product/associated with it physically, doesn’t fall within the §1127 definition of “use in commerce.”  The only “printed” version of the S’well mark was in ETS’s Retail Brands Guide, but that use was more like use “in the sale or advertising” of the product than it was to a sales display. Anyway, no reasonable juror could find that this guide could confuse a distributor into thinking that the Force Bottle was a version of the S’well Bottle, as it clearly stated that the two were simply similar, and the Guide had dozens of other retail brands along with their ETS analogues.
Because of 1-800 Contacts, “even if ETS employees actually provided Force Bottles to distributors seeking S’well Bottles without informing them, and even if ETS representatives really did suggest in emails to distributors that Force Bottles were a type of S’well Bottle, ETS nonetheless did not violate Section 43(a) of the Lanham Act because of an absence of applicable ‘use in commerce.’” This ended the Lanham Act claims, but the court didn’t belive that New York courts would impose a similar limit on common law unfair competition claims, which are “adaptable and capacious.”  “Palming off — that is, the sale of the goods of one manufacturer as those of another — was the first theory of unfair competition endorsed by New York courts, and has been extended to situations where the parties are not even in competition.”
Because ETS was allegedly using S’well’s exact mark, Polaroid analysis was not required; “[u]se of the exact same mark is inherently confusing.”  So the key question was how ETS employees had actually used the S’well name.  S’well identified multiple emails in which various distributors asked for “S’well” or “Swell” bottles and ETS employees didn’t clarify in those email threads that they only sold Force Bottles. In one email, a distributor requested S’well Bottles, and asked that ETS “try to get these exact brands and items!” Another email involved a new customer who asked for a quote and sample of S’well Bottles.
ETS rejoined that these requests were in fact for Force bottles, and “a lot of people call it just ‘the S’well shape.”’ ETSs CEO testified that “they “try” to train their sales staff to correct customers who ask for S’well Bottles, but repeat customers consistently respond that they know they are getting the Force Bottle and are just referring to the shape, sometimes growing frustrated by being corrected.”
Another employee similarly testified that repeat customers “get upset sometimes if you keep asking them to confirm what item they’re looking for,” saying things like, “’Dang it, Jen. You know what I’m looking for. Stop asking me. You know it’s the Force.”’  A reasonable juror could find either way.

S’well also argued that ETS told customers that its Force bottle was a version of the S’well bottle specific to the promotional products market. In one email chain, a distributor asked, “What is the retail brand that looks like this?” and the manager responds, “The S’well bottle is the retail version of this bottle.” The distributor’s question suggested that he understood the lack of affiliation, and that the Force just “looked like” the S’well; a reasonable juror could find that the employee meant only to convey the similarity.  Other email chains were similarly ambiguous.  Interestingly, the court indicated that the success of S’well’s claim would turn on “the credibility of the ETS witnesses regarding what they meant to communicate in these emails,” rather than the messages their interlocutors received; I would have gone the other way.

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Beyond Belmora: foreign TM owner proceeds under Lanham Act and Inter-American Convention

S.A.S. v. Latinfood U.S. Corp., Civ. No. 16-6576, —
F.Supp.3d —-, 2017 WL 6940696 (D.N.J. Dec. 29, 2017)
Industria, a Colombian food corporation and Colombian owner
of the Zenú and Ranchera marks, sued Latinfood, for reasons you can guess when
you learn that they are doing business in the US as Zenú Products Co.  Applying Belmora,
the court allows the various Lanham Act claims to proceed, and cites Christine
Haight Farley’s work
in also allowing claims under the Inter-American
Convention for Trademark and Commercial Protection (IAC).  Copyright claims weren’t discussed in the
motion to dismiss.
The Zenú mark “has been used for more than sixty years to
identify meat, sausage, beans and other packaged food products in Colombia and
elsewhere,” while the Ranchera mark “has been used extensively in Colombia and
elsewhere for more than 25 years, and is among the most well-known trademarks
for sausages and meat products.” Industria claimed fame across Latin America
and alleged that people “residing in Colombia, individuals who have travelled
to Colombia and individuals who have moved from Colombia to the United States
are familiar with the [Zenú] and Ranchera trademarks and [Industria’s] food
products sold under the [Zenú] and Ranchera marks.” (Id.)
Industria Ranchera

Part of Industria website

Industria’s Zenú products include “the [Zenú] mark in a red
stylized font underlined by a brush-stroke type line against a white
background.” Words indicating the type of food contained in the packaging are
“often written diagonally underneath the [Zenú] mark.” Canned products an
additional “thick colorful band at the bottom of the label where additional
information such as the weight or quantity of the product is conveyed in white
type.” Industria maintains a website “that is accessible by the public,
including consumers in the United States, at http://www.zenu.com.co.”
Industria’s Ranchera mark is “always displayed in a red
‘western’ or ‘rancher-inspired’ font which is then outlined first in white and
then in black.” It “curves slightly upward in the middle of the word.” A “rancher
theme” is used across the Ranchera packaging.  
Industria has numerous relevant trademark registrations in
Colombia, and an International Registration from 2014 from WIPO; it filed an
application to extend the IR at the PTO in 2014.  Prior US registrations have lapsed.  In 2014, Industria also filed a 44(e)
application for “ZENÚ (Stylized)” for various food products which was barred by
Latinfood’s US-registered Zenú mark.  Industria
also applied in the US for “RANCHERA (stylized)” for various meats, based on
Sections 1(b) and 44(e), in 2016.
Latinfood allegedly began copying Industria’s marks around
2011.  Latinfood allegedly touted its
possession of “ ‘an exclusive distribution and importing rights agreement for
the tri-state area’ with a major product manufacturer in Colombia.” Latinfood
allegedly uses the identical stylized logo and trade dress for Zenú, as well as
its trade dress, and its website, http://www.zenu.us.com, “closely mimics both the
domain name and trade dress presented on [Industria]’s website,
http://www.zenu.com.co.” The labels were also allegedly substantially similar to
Industria’s copyrighted labels.  Indeed,
Latinfood allegedly attempted to buy 400,000 Zenú labels from Industria’s own Zenú
label provider in Medellin.
Latinfood website: note Ranchera listing 3d row left

Latinfood applied to register the Zenú mark for various
meats in the US in 2013, claiming 2011 as its year of first use. Industria alleged
that this was fraudulent and in bad faith, and that Latinfood’s claimed
specimens were in fact Industria products. Latinfood’s Zenú registration has been
cited by examiners under 2(d) in Office Actions blocking Industria’s
applications, allegedly preventing it from offering its goods for sale in the
US under the Zenú mark.  (It’s legal to
sell stuff without registering the marks, but I see why there’s a problem.) In
2014, Industria began a cancellation proceeding before the TTAB, which is still
pending.  (One suspects that Belmora played a role in encouraging
Industria to move to litigation.) 
A similar story can be told for the Ranchera mark, though
Latinfood’s application for registration was ultimately denied by the PTO
because of a third-party registration. However, Latinfood is allegedly still
selling products bearing the mark.
Industria further alleged that the Latinfood product labels
falsely suggested affiliation with Industria’s business in Colombia, for
example by identifying the company as “Zenu Products US Inc.” instead of
Latinfood, suggesting that it’s a US-based Industria affiliate. The labels also
include a “linea de exportation” designation, meaning “export line” in English,
further implying “that Latinfood products are produced outside of the United
States, much like [Industria]’s products from Colombia would be.” Latinfood
products are allegedly often “featured in the import/foreign sections of the
groceries in which they are sold and are sold alongside products from other
Latin American companies.”  Latinfood
sales representatives allegedly advised store owners that Latinfood has full
rights to the distribution of ZENÚ- and RANCHERA-marked products, misleading
them into believing that they’re dealing with Industria.  The suggestion that the products are imported
was allegedly also false because a majority of the goods were manufactured and
labeled in the US. 
In addition, www.zenu.us.com
was allegedly “confusingly similar” to Industria’s www.zenu.com.co, and described Latinfood’s products
as being part of “una deliciosa tradición,” suggesting an affiliation with Industria’s
sixty year old brand.
Under Belmora, the
Lanham Act claims were ok even though Industria didn’t allege its own use in
commerce in the US of the Zenú and Ranchera marks.  Belmora
wasn’t binding on this court, but the judge found its reasoning persuasive;
there was no “use in commerce” requirement in §43(a), only the Lexmark requirement of standing to bring
false advertising, trade dress infringement, and false association claims,
which was sufficiently pled, even if it might ultimately be difficult to prove.  So too with the claims for cancellation of
Latinfood’s registered mark for fraud. 
Industria sufficiently alleged that Latinfood’s sale of allegedly “sub-par
and noninspected products” harmed Industria by altering consumers’ estimation
of products using the mark and damaging its reputation.  Proximate cause was sufficiently alleged by
allegations that Latinfood targeted Colombians and other consumers familiar
with Industria’s mark, damaged Industria’s goodwill by selling subpar/different
products, and foreclosed Industria’s registration and use of the Zenú mark in
the United States.
Separately, the court specifically rejected any attempt to
impose any more rigorous pleading standard on a Lanham Act false advertising claim
than Iqbal/Twombly requires.  A 1985
case in the Third Circuit was probably no longer good law.  But regardless of the standard, Industria satisfied
it. Industria’s allegations about Latinfood’s use of “Zenu Products US Inc.,” its
use of www.zenu.us.com, its labeling of
its products as imported and representations to have an exclusive distribution
and importing rights agreement with a major product manufacturer from Colombia,
and its allegedly false importation labels for food from manufacturers in the
United States sufficed to state a claim.
The court also held that the IAC creates private rights of
action.  Though there is a presumption
that treaties, even those labeled as “self-executing,” do not create private
rights, the Supreme Court has already held that the IAC is self-executing, and
the court proceeded to examine the terms of the treaty itself, which “was the
culmination of the efforts of many years to secure the cooperation of the
American States in uniform trade mark protection.”  Beneficiaries under the Convention are
defined as (1) nationals of contracting states, and (2) domiciled foreigners
who own a manufacturing or commercial establishment or an agricultural
development in any of the contracting states. The language of the IAC strongly
supported the conclusion that it was intended to create private rights to those
benefited parties.  Even if knowledge of
the other mark were a required element under the IAC, which was not supported
by any authority, Industria sufficiently alleged such knowledge.

Latinfood also made a number of arguments about the
interplay between the IAC and Section 44 of the Lanham Act.  In particular, the last clause in Article 7
of the IAC says “the opposer may claim for himself the preferential right to
use such mark in the country where the opposition is made or priority to
register or deposit it in such country, upon
compliance with the requirements established by the domestic legislation in
such country and by this Convention
” (emphasis added).  Latinfood argued that Industria couldn’t
bring an Article 7 claim because it didn’t comply with §44(b) and (d).  However, international treaties “may grant
rights broader than those granted by domestic law, including the Lanham Act.
Contrariwise, Section 44(d) is not the only potentially applicable section of
the Lanham Act.”  In addition, Section
44(h) of the Lanham Act limited remedies to those “appropriate in repressing
acts of unfair competition,” and Latinfood argued that Industria’s claims didn’t
fall within Chapter IV of the IAC, which is the Chapter devoted to “Repression
of Unfair Competition.” “The resolution of these Section 44 issues will depend
on the development of the facts and the precise contours of the overlapping (or
not overlapping) claims under U.S. law and the treaty. This case is going
forward in any event. These may turn out to be redundant claims, alternative
claims, or supplementary claims; it simply is not clear at present.” 

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Another IP plaintiff fails to show irreparable harm (false advertising/trade secret)

Impax Media Inc. v. Northeast Advertising Corp., No. 17 Civ.
8272, 2018 WL 358284 (S.D.N.Y. Jan. 10, 2018)
Impax, which provides digital video screens that show ads
(mostly in supermarkets), sought to enjoin defendants (AdCorp) from competing
with Impax by installing or contracting to install new digital signage
platforms at supermarket checkout counters during the term of the parties’
Commission Sales Agreement in the northeastern United States and Washington D.C.
AdCorp pays supermarkets and other venues to permit the installation of digital
and print advertising platforms.  
Impax initially talked to AdCorp about providing services in
the northeast, especially for introductions to supermarkets with which AdCorp
had relationships, including Wakefern, a large grocery store cooperative.  AdCorp told Impax that AdCorp would pitch
Wakefern on Impax, but then Wakefern terminated its discussions with Impax, and
Impax learned that Wakefern had entered into an agreement to have AdCorp
install AdCorp’s own digital signage. AdCorp then told Impax that it would
limit digital media screen sales going forward, focus on print advertising, and
would continue to serve as Impax’s exclusive agent for the sale of local
advertising.   The parties then executed
a Commission Sales Agreement granting AdCorp an exclusive right to sell ads on
Impax’s behalf in the relevant territory for 3 years.  AdCorp promised to use its best efforts to
sell ads, in return for a commission. 
The agreement also covered Impax’s trade secrets.  Before the agreement was signed, the phrase
that Adcorp “may not sell Advertising under his own or any other name” was
removed, and a statement that AdCorp was “mandated” to sell 15-second ads was
changed to “allowed.” An addendum allowed Impax to sell local ads in the territory.  In 2017, Impax began to develop a
relationship with Foodtown, a large supermarket cooperative, then found that Foodtown
had decided to install AdCorp digital screens at its checkout counters.
Impax sued for false advertising and related claims.  The court addressed only the issue of
irreparable harm, finding it wanting. Impax argued that it “faces the very real
possibility of losing the benefit of two years of hard work developing its
product and its market opportunity and being driven out of this market altogether.”
 Impax argued that it had identified “strategic
gaps and opportunities in the U.S. market for digital signage and advertising
at supermarkets,” and AdCorp’s alleged misappropriation of its information
would keep it from effectively marketing its own platform, losing out on
incalculable future profits.
However, Impax didn’t show evidence of potential clients
with whom Impax was currently contracted, in talks with, or even planning to
negotiate, and the sum of whose potential business revenue was incalculable. Impax’s
claim was “even more speculative because of [its] own admission that its
digital platform program is in its ‘infancy.’” It was speculative to claim, without
more evidence, that Impax would have to drop out of the market.  The misappropriation also didn’t threaten
irreparable harm because AdCorp wasn’t threatening to disseminate Impax’s trade secrets, only to use them; no presumption of irreparable harm was warranted because “damages
will often provide a complete remedy for such an injury.”

Industria de
Alimentos Zenú 

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There’s only one master of The Commodores: the group itself

Commodores Entertainment Corp. v. McClary, 2018 WL 327302, No.
16-15794 (11th Cir. Jan. 9, 2018)
McClary was an original member of the award-winning
Commodores, but, by his own admission, he “split from the band” in 1984 to
strike out on his own in the world of music. He later formed a musical group
that performed as “The 2014 Commodores” and “The Commodores Featuring Thomas
McClary.” CEC, a corporation run by two original Commodores who remain active
with the group, found out about McClary’s group, sued for trademark
infringement, trademark dilution, passing off, false advertising, and unfair
competition. The court of appeals affirmed a permanent injunction against
McClary, who left behind his common-law rights to the marks when he left the
band.
The original members of the Commodores “are generally
regarded as William King, Ronald LaPread, Thomas McClary, Walter Orange, Lionel
Richie, and Milan Williams,” who formed a general partnership with their
manager in 1978. The agreement said: “Upon the death or withdrawal of less than
a majority of the Partners, the remaining majority of the Partners shall
continue to have the right to use the name THE COMMODORES for any purpose.”  Its agreement with Motown Records also
restricted use of the name: band members could perform as “sidemen” for other
artists and groups, but “in no event” could they use the name “Commodores” in
connection with that engagement.  Richie
left the group and the manager passed away. 
A revised 1984 agreement stated: “Upon the death or withdrawal of less
than a majority of the Partners, the remaining majority of the Partners shall
continue to have the right to use the Group Name for any purpose.”  Later that year, McClary “split from the
band” to pursue his own solo career. J.D. Nicholas joined the group, while LaPread
and Williams departed from the group, leaving King and Orange as the only
remaining original members. At some point, King and Orange transferred their
common-law trademark rights in The Commodores’ name and logo to plaintiff CEC,
which registered four COMMODORES trademarks in 2001.
In 2009, McClary performed with Richie and LaPread at the
Superdome in New Orleans. McClary’s wife sent an email advertising the show as
a Commodores reunion, and CEC objected. In 2010, McClary was asked to fill in
as a guitar player when The Commodores’ regular guitar player became ill.
McClary appeared with The Commodores two or three times and signed autographs
with The Commodores’ members. In 2013, McClary formed the group “Commodores
Featuring Thomas McClary.” His group began performing under the names
“Commodores Featuring Thomas McClary” and “The 2014 Commodores,” and he
scheduled a performance at a New York venue on July 6, 2014. On June 5, 2014, a
friend called King to ask about the performance, thinking that it was an
official Commodores show. King and Orange’s manager contacted the executive
director of the venue, who said he thought he had booked the Grammy
Award–winning Commodores—not a tribute or cover band featuring a former member.  (McClary had no involvement in the single
that won the Grammy.)  A few days later,
McClary’s wife sent a C&D claiming that McClary’s band name constituted
fair use and asserted that CEC was interfering with McClary’s ongoing business
relationships.
The district court enjoined McClary from “using any of the
Marks at issue in a manner other than fair use, including performing under the
name ‘The Commodores featuring Thomas McClary’ or ‘The 2014 Commodores’ ” based
on the trademark infringement claim. The district court clarified that the injunction
covered upcoming extraterritorial performances in the United Kingdom and
Switzerland because use of the marks overseas would have a substantial and
negative impact on CEC.
The court of appeals agreed with the district court that
McClary walked away from his common law rights to the marks when he left the
band in 1984.  Those rights remained with
the group, then were validly assigned to CEC.
McClary offered the testimony of an attorney, Wolfe, on the
validity and value of the marks, the goodwill associated with the marks, the
validity of the assignment to CEC, the difference between statutory and
common-law trademarks, and whether CEC breached duties owed to its shareholders.  After reviewing Wolfe’s report and hearing
his testimony outside the presence of the jury, the district court excluded the
testimony entirely, and the court of appeals found no abuse of discretion.  Wolfe’s expert was “replete with legal
opinion,” offering the legal view that the original members “owned the
underlying marks jointly as tenants in common, owning an undivided interest in
the totality of the partnership assets” and similar legal conclusions, invading
the court’s exclusive prerogative to determine the law.  His proposed trial testimony was no better:
he said, inter alia, that a hiatus from a band is not enough to relinquish
ownership in the band; and that “[t]here are multiple ways in which an owner of
a mark can continue to participate and exploit that mark even though they may
not be standing up on stage and performing.” 
Opinions on music industry customs and norms weren’t offered in his
expert report and he was also properly excluded from discussing those
topics.  Although an attorney was allowed
to testify for CEC, he was offered as a fact witness who testified about
McClary’s interactions with the group, the letter he received from McClary, and
whether any group member had formally voided his shares in the corporation.
There were no contested facts that would lead a reasonable
juror to say that McClary should properly be termed the legal owner of the
trademarks and allowed to use them to identify the source of his separate services.  The court of appeals found two distinct but
reinforcing reasons for this: “First, the common-law trademark rights were
initially jointly owned, could not be divided for simultaneous use by multiple
independent parties, and remained in the group continually known as ‘The
Commodores.’” Second, the parties’ various contractual agreements “confirm the
group members contemplated that the marks were to be jointly but not severally
owned and, in addition, that a member leaving the group would cease using the
group’s name as an identifier.”
The court of appeals reasoned that, once trademark meaning
was established, the original group, including McClary, had common-law rights
to the marks.  But ownership was joint—leaving
was like dying in a joint tenancy; McClary carried no rights with him when he
left. “[O]wnership of the marks began in, remained in, and could not be divided
from the group, as opposed to its individual members.” King and Orange were the
only original members of “The Commodores” who maintained continuity with the
performing group since McClary’s departure, and that group continued to perform
as “The Commodores” in the years after he left. 
McClary lacked control over that group. 
Though he performed with The Commodores in 2010, there was no evidence
that at he was being invited to rejoin the group as a permanent or otherwise
ongoing member; instead he performed “with The Commodores.” “Even if the
evidence could support a finding that McClary rejoined the group—and in no way
does it afford that inference—it could not support the conclusion that McClary
should be able to use the group’s name while performing separately from the
group.”  Collecting royalties didn’t
indicate that McClary retained rights to the marks, because he only collected
royalties for the songs he wrote with the band before his departure; if
anything, that temporal distinction supported the contention that he no longer
had rights in the marks.
Even if McClary never formally left the partnership, none of
the relevant agreements allowed him the right to use the marks in connection
with his own musical performances.  That
isn’t meant to diminish his contribution or that of other founding
members.  Lionel Richie said that he
would “always be a Commodore,” but when asked if he “identif[ied] with being in
the group now,” he said he didn’t. “While an individual might identify with a
name, he still might not have the right to use that name to identify himself in
commerce.”
McClary argued that the injunction was overbroad because it
prevented him from “hold[ing] himself and his music out to the public in an
historically accurate way.” But CEC didn’t object to McClary billing himself as
“Thomas McClary, founder of The Commodores” and other fair uses.  They objected to names like “The 2014
Commodores” or “The Commodores featuring Thomas McClary.” Thus, McClary “could
either perform under a different band name without causing any confusion, or,
to uphold his notoriety as a Commodore, he could make fair use of the Marks.”  The court of appeals declined to further
enumerate which fair uses would be appropriate; that would be an advisory
opinion.
Nor was the injunction overbroad because of its
extraterritorial reach. The parties were citizens of the US; McClary’s booking
agent operated from the US; and “use of the marks extraterritorially w[ould]
have an effect on CEC, a United States corporation.” And “given the actual
confusion that was experienced in the United States in connection with the New
York performance, it is likely that McClary’s use of the marks abroad would
create confusion both abroad and in the United States.” Though this was a closer
question, there was no interference with the sovereignty of other countries
because McClary didn’t have final approval for registrations in other countries,
even though McClary’s corporation filed for a CTM in the EU, and OHIM denied
CEC’s opposition. CEC appealed the denial of its opposition, so the opposition hadn’t
yet been “rejected by a definitive decision,” and no CTM had yet issued.
McClary also argued the federal registrations of the marks
were fraudulent and defective. But this had no relevance to the common-law rights
to the marks. And it was wrong anyway: McClary’s claims of fraud failed for
want of any evidence that CEC knowingly made false representations of fact; his
burden was to show fraud by clear and convincing evidence.  Nor did challenges to the stated dates of
first use and first use in commerce matter. “A misstatement of the date of
first use in the application is not fatal to the securing of a valid
registration as long as there has been valid use of the mark prior to the
filing date.”

Finally, McClary’s laches defense failed. He claimed to have
used the marks with CEC’s knowledge since 1984, but offered no facts or details
about any use between 1984 and 2010.  In
May 2009, when McClary’s wife sent a blast email advertising a Commodores
reunion, CEC promptly sent a C&D to which McClary never responded. When CEC
learned about of McClary’s “The 2014 Commodores” or “The Commodores Featuring
Thomas McClary,” CEC promptly filed suit two months later. Moreover, McClary didn’t
show prejudice from any delay. 

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“I’m your lawyer” might be false advertising when lawyer’s firm won’t do the work

Rosenbaum & Assoc., P.C. v. Morgan & Morgan, 2018 WL
327167, No. 17-4250 (E.D. Pa. Jan. 8, 2018)
A Philadelphia personal injury law firm that advertises
extensively on TV and billboards alleged that a national personal injury law
firm’s expansion into Philadelphia caused it to lose potential personal injury
clients through TV and billboard ads when the national law firm didn’t, and
never intends to, represent Pennsylvania personal injury clients. Instead, it
allegedly referred all or a vast majority of potential local clients to other
law firms in exchange for a referral fee if the client eventually recovers.  The court allowed plaintiffs to proceed
against the national firm, its managing global partner and (for one statement)
the national firm’s senior partner for four possibly false, deceptive or
misleading statements in TV commercials.   In one TV ad, John Morgan, a founding Morgan
& Morgan attorney, states “I’m not just any lawyer, I’m your lawyer,”
though he’s not licensed in Pennsylvania. 
Another ad says “we’re all here for you,” and, “our family is here for
your family.” In addition, an ad says “you don’t pay us unless we’re
successful.” Although this is true, Rosenbaum argued that it could be deceptive
because it suggests Morgan & Morgan needs to be successful when, in fact,
Morgan & Morgan has no role in the success. 
Ads used to include a written disclaimer claiming not to be “a referral
service.” After the lawsuit was filed, Morgan & Morgan revised this
disclaimer to remove that statement and add “Cases may be referred to and
handled by another law firm as co-counsel.”
The complaint stated a plausible claim that “I’m your
lawyer” was misleading or literally false because it could deceive Pennsylvania
consumers into believing John Morgan would personally represent then when in
reality he wouldn’t represent, and arguably couldn’t represent, them in a
Pennsylvania personal injury matter. Unidentified members of the Morgan family also
appeared in a television ad and a voice states “We’re all here for you” and
“Our family is here for your family.” This also plausibly stated a claim for
misleading or literally false advertisingbecause Morgan & Morgan didn’t
employ attorneys licensed to practice in Pennsylvania and the members of the
Morgan family appearing in the advertisement allegedly weren’t licensed to
practice in Pennsylvania and didn’t intend to ever represent clients in the
Philadelphia area.
“You don’t pay us unless we’re successful”: Similarly, this
could be misleading or literally false insofar as Morgan & Morgan would
never represent the clients in the Philadelphia area, meaning a client could never
owe fees to Morgan & Morgan because Morgan & Morgan could never be
successful. [This seems to be necessary implication: the necessary implication of “unless” is that “we might be successful” and further “it will be ‘we’ representing you.”] “Not a referral service” and the revised disclaimer “may be
referred to and handled by another firm as co-counsel”: Morgan & Morgan
argued Rosenbaum couldn’t claim to be a “referral service” without implicating
Pennsylvania Rule of Professional Conduct 7.2(k), but there’s an absence of
authority defining referral service. The comments to Rule 7.2 (k) say that it’s
“misleading to the public for a lawyer or law firm, with knowledge that the
lawyer or law firm will not be handling a majority of the cases attracted by
advertising, to nonetheless advertise for those cases only to refer the cases
to another lawyer whom the client did not initially contact.”  Because this question “involves both a fact
investigation of the extent of these referrals as opposed to retained matters
and eventually a determination of whether telling potential clients of your
interest in being their lawyer when, in fact, you do not intend to be their
lawyer is unfair competition,” it couldn’t be resolved at the motion to dismiss
stage.

Rosenbaum also pled a claim against individual attorneys who
allegedly “authorized and approved the acts of unfair competition,” and as to
which he alleged “some specific role in the statements which equate to unfair
competition,” whereas merely being a senior officer of the advertiser wasn’t
enough.  Being a spokesperson in the ad,
unsurprisingly, was enough.  So was the
allegation that the global managing partner “approved” and “authorized” the
advertisements to be shown in the Philadelphia area.  Other named defendants, however, weren’t
sufficiently alleged to be personally involved, even if they were Morgan family
members who appeared in an ad; the “family” statements were made by voiceover
and it wasn’t clear who said it.  Appearing
in a commercial where an alleged misrepresentation is also stated “without more
detail is not sufficient to show they ‘actively participated in or personally
directed or actively supervised or approved of or sanctioned’” the allegedly
false ads.

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Finding of willful infringement still doesn’t merit injunction under Herb Reed

A.C.T. Prods., Inc. v. W.S. Indus., Inc., No. 16-0476, 2017
WL 4708152 (C.D. Cal. Jul. 14, 2017)
Herb Reed strikes
again.  The jury found that defendant had
engaged in willful trademark infringement and false advertising, but also that
the four-year statute of limitations had run. The court found that there was
sufficient evidence before the jury to so hold, because of evidence that the
defendant was infringing before the limitations period by being willfully blind
to infringement: it was aware that it was buying the products at issue from a
manufacturer that did not own the mark.
The plaintiff argued that the jury’s findings were
irreconcilably inconsistent, but that wasn’t the case. It was possible to
reconcile the jury’s conclusion as to liability with the factual finding
establishing the affirmative defense because there was evidence that willful
infringement and advertising occurred only from 2010 to 2011.  Once the jury found that the plaintiff knew
before the relevant timeframe, the court could conform the determination of
liability to the factual finding.

In addition, a permanent injunction was unwarranted, because
the plaintiff didn’t show irreparable injury. 
 The plaintiff argued that the
infringement (1) damaged its reputation and goodwill because its witness
testified during trial that its customers called to complain about the
defendant’s inferior goods that they thought were manufactured by the plaintiff;
and (2) caused the loss of business opportunities because the parties
competed.  Economic injury won’t suffice
to show irreparable harm, but intangible injury like loss of customers or
damage to a party’s goodwill can do so, as can lost control over a
business.  Here, the allegations of harm
to business, goodwill, and reputation were in the past tense, and there was no
evidence of continued infringement or an inclination to restart, nor any
evidence of continuing customer complaints, making continuing reputational harm
speculative. The jury’s finding of the affirmative defense of statute of
limitations also weighed against an injunction. 

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