ambiguity in consumer class actions v. the Lanham Act: convergence or divergence?

Posted on July 7, 2025 by rtushnet

Slaten v. Christian Dior Perfumes, LLC, 2025 WL 1840026, No.
23-cv-00409-JSC (N.D. Cal. Jul. 3, 2025)

The concept of ambiguity is now on a path to become as entrenched
in consumer protection cases as in Lanham Act cases.
My thinking on this is still evolving, but right now I’m inclined to say that an
“ambiguous” claim for purposes of Lanham Act claims means what an “ambiguous”
claim for purposes of consumer protection litigation does, even though the assessment
process is formally different. That is, a statement challenged under the Lanham
Act is ambiguous if there are multiple plausible interpretations, some of which
are not false. As the Ninth Circuit has clarified, a statement challenged under
consumer protection law can be found plausibly deceptive if reasonable
consumers could think it has a false factual meaning, even if other reasonable
consumers would think it was ambiguous and required more information to interpret/had
a different non-false meaning. That latter group can be expected to consult the
back of the label for clarification, if present. But the first group of
reasonable consumers has no reason to inquire further and therefore can be
deceived; they are functionally equivalent to the deceived group in a Lanham
Act false implication case.

The Lanham Act cases use the modifier “substantial” to
describe the relevant subset (reasonable consumers who are deceived), but accepts
much less than half as a sufficient percentage. Consumer protection cases are
right now generally stricter, requiring bigger percentages where there are surveys
(as there often are these days), so there may still be doctrinal divergence. I
think that divergence, to the extent it exists, is likely unjustified—it is
hard to see why competitors should have an easier path to remedies than the
directly deceived consumers—but it is early days for both the “ambiguity”
concept and the new prominence of surveys in such cases. 

I suspect that courts are thinking that “half or more” is
better for class action treatment, but formally it really isn’t. That is, the
common question in a consumer protection class action in the key states is “is
this ad deceptive?” and the answer to that should be “yes” if it is likely to
deceive a substantial number of reasonable consumers. Then, NY and California
(etc.) presumptions about deception kick in to allow the class to proceed. An
ad that deceives 49% of consumers—or 30%—about a material fact is actually
pretty bad! [Caveat: our concept of deception should incorporate a “compared to
what?” inquiry. If it’s impossible to provide the information in a
non-deceptive way, but the information is also truthful and useful to some
people, then we have to balance those considerations; if it’s not useful/the
ambiguous meaning is just puffery, then we don’t have to worry so much.]

A related question is the role of the jury, at least in a Lanham Act case: If courts applied similar analysis in such cases, they’d ask whether a reasonable jury could find that a claim was literally false with respect to a substantial number of reasonable consumers, such that those consumers would feel no need to inquire further. That’s not how Lanham Act courts tend to treat the issue; it would probably counsel against determining “ambiguity” as a matter of law. 

Anyway, this case involves a remand on claims over alleged
deceptive labeling/advertising of SPF in cosmetics as lasting for 24 hours. The
court initially interpreted McGinity v. Procter & Gamble Co., 69 F.4th 1093
(9th Cir. 2023), to mean that if a front label is ambiguous in that it “could
mean any number of things,” some of which would not be deceptive, a court must
look to the product’s back label to determine whether a reasonable consumer
would be deceived. Upon review of the back label, the court dismissed plaintiff’s
claims.

The court of appeals eventually remanded based on Whiteside
v. Kinberly Clark Corp., 108 F.4th 771 (9th Cir. 2024). Whiteside held
that “[a] front label is not ambiguous in a California false-advertising case
merely because it is susceptible to more than one reasonable interpretation.” On
a 12(b)(6) motion, a label “may have two possible meanings, so long as the
plaintiff has plausibly alleged that a reasonable consumer would view the label
as having one unambiguous (and deceptive) meaning.” That is:

a front label is not ambiguous
simply because it is susceptible to two possible meanings; a front label is
ambiguous when reasonable consumers would necessarily require more information
before reasonably concluding that the label is making a particular representation.
Only in these circumstances can the back label be considered at the dismissal
stage.

Whiteside specifically rejected this court’s earlier “more
than one possible meaning” standard for ambiguity. Bryan v. Del Monte Foods,
Inc., 2024 WL 4866952 (9th Cir. Nov. 22, 2024), did not change matters. Bryan
considered whether a front label describing a fruit cup using the phrase “fruit
natural” falsely led consumers to believe all ingredients in the cups were
natural. The court explained the word “naturals” was “a noun, not a descriptive
adjective,” and so the label suggested “the phrase is just the name of the
product.” Further, the front label context indicated “although the fruit itself
is natural, the syrup may not be,” and customer surveys were insufficient
because they “asked people what they thought ‘natural’ should mean on the label
of a product, not what they thought it actually did mean as used on these
labels.”

But here, reasonable consumers could conclude from the front
label alone that defendant was advertising 24 hours of sunscreen protection.

from Blogger http://tushnet.blogspot.com/2025/07/ambiguity-in-consumer-class-actions-v.html

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Southern discomfort: class certified over malt beverage dressed like Southern Comfort whiskey

Posted on July 4, 2025 by rtushnet

Andrews v. Sazerac Co., 2025 WL 1808797, No. 23-cv-1060 (AS)
(S.D.N.Y. Jul. 1, 2025)

Plaintiffs alleged that Sazerac deceived consumers by
selling a malt beverage that looks like Southern Comfort whiskey but in fact
contains only “whiskey flavor.” The court certified a class of “[a]ll persons
who purchased the Southern Comfort Malt Products in the State of New York at
any time during the period February 8, 2020, to the date of judgment” with one named
plaintiff.

The malt beverage comes in three sizes: 50ml, 100ml, and
355ml. The 50ml bottle is cylindrical, while the two larger sizes are
relatively flat. But each has “colors, themes, fonts, symbols[,] and spacing” identical
to Southern Comfort whiskey bottles. Each bottle has a statement of
composition, which until April 2023 described the drink as a “malt beverage
with natural whiskey flavors, caramel color and oak extract.” Inclusion of the
“whiskey flavors” and “oak extract” language allegedly contributed to this
misleading impression.

Addressing only the parts that interest me:  

Sazerac argued that there was no classwide proof that the
bottles’ labeling was materially misleading. Although plaintiff’s survey found
that 62.9% of consumers believed that the malt-beverage mini bottles contained
whiskey, Sazerac argued that it was fatally flawed, and anyway only applied to the
50ml bottles.  The 50ml bottle is
cylindrical, while the larger bottles have “relatively flat front[s],” and the
statement of composition, which says that the drink contains “malt beverage,”
appears in larger font on the bigger bottles. But the court didn’t find these differences
to be material:

That the larger bottles are flat,
instead of round, might be material if their shape would tend to indicate to
reasonable consumers that the bottles contain malt beverage, not whiskey. But
Sazerac doesn’t say that its whiskey is only sold in round bottles, so it’s not
clear why the bottle shape makes a difference here. Sazerac’s observation that
the statement of composition appears in larger font on the larger bottles seems
similarly irrelevant. On the one hand, “malt beverage” is in larger font. But
so too were the allegedly misleading “whiskey flavor” and “oak extract”
phrases, at least until April 2023. Regardless, the Court sees no reason why
the impression created by a specific combination of elements on a small bottle
would vary “significantly” from the impression created by those same elements
on a larger bottle.

Anyway, misleadingness was a merits question.

Plaintiffs offered a choice-based conjoint survey to measure
their claimed damages, which estimated a 8.8% price premium from false beliefs
that there was non-malt liquor in the beverage. Sazerac argued that this study failed
to (1) show that the price premium is attributable to the beverage’s misleading
packaging, as opposed to flavor and convenience, or (2) consider supply-side
factors. The court disagreed. Plaintiffs’ theory was that the overall packaging
contributed perceived value, and the survey tested that theory. Even if the study
asked respondents to assume that the products were all available in the same
store (and thus didn’t control for convenience), that was a matter of ultimate
persuasiveness, not a matter of whether it tested the plaintiffs’ theory. “If [the]
model missed the mark, then it did so in one fell swoop for the entire class.”
Likewise, an alleged failure to measure supply-side factors can be accounted
for “when (1) the prices used in the surveys underlying the analyses reflect
the actual market prices that prevailed during the class period; and (2) the
quantities used (or assumed) in the statistical calculations reflect the actual
quantities of products sold during the class period,” as the survey here did. After
all, “[a] conjoint survey that asks respondents whether they would rather pay x
for a product labeled ‘100% Fruit Juice’ or y for a similar product labeled
‘50% Fruit Juice’ … would account for supply-side factors if both x and y
reflect the prices for which juice companies actually sell similarly labeled
products in the marketplace.” Sazerac argued that it would refuse to sell its
malt beverage at the lower price of a generic competitor. But again, that was
not relevant to whether the survey was good enough for class certification. “Moreover,
it would be improper to give Sazerac the benefit of the doubt—and to take its
CEO’s self-interested statements as controlling—at this stage.”

 

from Blogger http://tushnet.blogspot.com/2025/07/southern-discomfort-class-certified.html

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5th Circuit agrees that joint TM owners can’t sue each other under any Lanham Act theory

Posted on July 4, 2025 by rtushnet

Reed v. Marshall, — F.4th —-, 2025 WL 1822673, No.
24-20198 (5th Cir. Jul. 2, 2025)

Jade, an R&B, hip hop, and soul vocal group, rose to
prominence in the 1990s. Jade disbanded in 1995, when the members began
pursuing their respective individual careers. “Appellant Di Reed contends that
her fellow Jade members, Joi Marshall and Tonya Harris, violated the Lanham Act
by performing under their co-owned JADE mark with another singer, Myracle
Holloway.” She lost because “the Lanham Act does not authorize claims between
co-owners of a trademark.”

In 2018, the three original members agreed to a reunion
tour, and collectively applied for joint ownership of the “JADE” service mark;
it was registered in 2019 for “[e]ntertainment services in the nature of live
musical performances.” The registrants were listed as Reed, Marshall, and
Harris, all in their individual capacities. But the reunion fell through, and
in June 2021, Marshall and Harris entered into a six-month work-for-hire
contract with a different singer, Myracle Holloway. That trio performed as Jade
at multiple “90’s Kickback Concert[s].” Promoters created social media ads
that, Reed claims, inappropriately used her name, image, and likeness, along
with the JADE mark.

Reed sued the other individuals, along with two other defendants
(now settled out), alleging infringement, dilution, and unfair competition
through false designation of origin and false advertising; as well as
violations of Texas statutory and common law. After disposing of the federal
claims because co-owners and licensees thereof can’t be sued, the district
court found that it lacked supplemental jurisdiction over the state claims.
This appeal followed.

The court of appeals framed the issue as one of statutory standing.
(Scalia was never going to win this terminological issue.)

Reed, Marshall, and Harris “entered into joint ownership of
the JADE mark—that is, each individual owns a complete interest in the mark.”
This is disfavored—“a mark is fundamentally intended to ‘identify and
distinguish a single commercial source,’ not three distinct owners,” but it is
allowed (why, though, since it can’t actually perform that core function if the
owners part ways and more than one keeps using the mark? This is an example of
the US TM system not fully committing to the principles it says it uses; you
could probably get a highly similar result by saying that the mark stops
signifying the joint owners when they fragment and can be reappropriated by the
first successful user thereof). Because “[a]ny discord between co-owners could
result in ‘multiple, fragmented use’ that may result in ‘consumer confusion and
deception,’” parties should contract to clarify “outcomes should owner
interests become unaligned.” But they didn’t.

Too bad! The Lanham Act, “which is aimed at protecting
consumers and mark owners from fraud and deceptive acts,” does not provide a cause
of action “to remedy disputes between the co-owners of a trademark.” An owner
definitionally can’t be an infringer. “Co-owners of a mark, who generally have
the right to use their marks as they please,” are owners, not infringers. “[T]he
question is not whether joint ownership of a trademark could cause confusion if
co-owners went their separate ways, but whether the Lanham Act affords a
statutory right for those co-owners to sue each other.” And Holloway was not an
appropriate target either, because “Marshall and Harris, as persons with
complete ownership interests in the mark, have an unencumbered right to use the
mark as they please,” including by licensing. [Note that this is not correct—there
are uses of the mark that will lead to loss of rights, not to mention potential
conflicts with, say, JADE for other things if they try to expand.]

Dilution: Same result. Of note: “The plain text of 15 U.S.C.
§ 1125(c)(1) signals that at least two distinct marks need to be in play for
dilution to occur: ‘the famous mark’ possessed by an owner, and an imposter ‘mark
or trade name’ that causes dilution of the original mark.” Here, that mattered because
an owner can’t be an imposter, but it has broader implications (if use as a
mark is still a thing).

False advertising: Reed alleged that the “[d]efendants’
unauthorized use of [her] JADE Mark … in conjunction with the promotion and
provision of live entertainment services constitutes unfair competition and
false advertising.” More specifically, defendants allegedly falsely advertised
that “Holloway is a member of the group Jade” and “that the performances
promoted and provided by Defendants are those of the group Jade.” But this
hinged on the mistaken premise that defendants were using the JADE mark in an
unauthorized manner. Also, there was no evidence that defendants’ use of the
JADE “mark in commerce proximately caused Plaintiff to suffer injuries to
commercial interests in business reputation or sales.”

Reed’s best allegation is that in
marketing materials for the 2024 “R&B Block Party” concert, the event’s
promoters created social media posts that included a Jade song that featured
Reed’s voice. But with respect to the Lanham Act, Reed concedes that “[a]
person’s name, image, or likeness cannot function as a trademark such that it
affords a plaintiff a cause of action for trademark infringement,” and in any
event, the promoters who made the advertisements in question are not parties to
this suit.

Reed argued that she suffered “lost opportunities such as
the creation of new compositions under JADE name and subsequent profits from
new compositions”; “business reputation in the form of deliberate exclusion
from promotional appearances under JADE name”; and lost “performances under the
JADE name.” But, even had there been evidence in the record, “the defendants’
co-ownership of the JADE mark does not exclude Reed from using the mark as she
pleases. In other words, the defendants’ use of the JADE mark has not caused
Reed to ‘los[e] opportunities’ associated with the mark; she, as a co-owner,
has the right to pursue those opportunities consistent with the (lack of)
conditions linked to her ownership interests.” [Among the implications: she
benefits from defendants’ use to preserve her own rights, since their use in
commerce redounds to her benefit. Could a state law proceeding force partition
by sale? What about partition in kind?]

False designation of origin: Here it seems like Belmora
would at least allow for some sort of labeling remedy under appropriate circumstances,
but Reed’s theory was not conducive to that. She argued that the defendants’
“unauthorized use” of the JADE “mark” and her “voice and likeness in commerce”
was “likely to deceive consumers as to the origin, source, sponsorship, or
affiliation of Defendants’ services.” Specifically, she argued that consumers
would think that the Holloway-Marshall-Harris performances were “affiliated
with or sponsored by” her. [My theory: people who knew the group but didn’t
know the performers’ names would think that she was performing—this
seems much more plausible. But the remedy might be much more limited.]

The court of appeals found that, even if she did fall within
the statute’s zone of interests, her injuries were not proximately caused by a
violation of the Lanham Act. [I don’t think this is a conflict with Belmora,
but rejecting my theory might be—she doesn’t need to own a TM to bring a Belmora
claim.] Her allegations were all premised on unauthorized use of the JADE mark.
But that use wasn’t unlawful, and Lexmark bars “suits for alleged harm
that is ‘too remote’ from the defendant’s unlawful conduct.”

 

from Blogger http://tushnet.blogspot.com/2025/07/5th-circuit-agrees-that-joint-tm-owners.html

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claim of failure to warn of kratom’s addiction potential not preempted; a “disease claim” involves helping, not causing, disease

Posted on July 3, 2025 by rtushnet

J.J. v. Ashlynn Marketing Gp., 2025 WL 1811854, No. 24-cv-00311-GPC-MSB
(S.D. Cal. Jul. 1, 2025)

Plaintiffs sued on behalf of putative nationwide,
California, and NY classes, alleging that Ashlynn failed to warn consumers of
the potentially addictive nature of its products, which contain dried leaves
from a plant called kratom. As alleged, “the active alkaloids in kratom …
work on the exact same opioid receptors in the human brain as morphine and its
analogs” and it “has the same risks of addiction, dependency, and painful
withdrawal symptoms, among various other negative side effects.” As a result, plaintiffs
allege that kratom “has sunk its hooks into tens of thousands of unsuspecting
customers and caused them serious physical, psychological, and financial harm.”

The symptoms of kratom withdrawal include: “irritability,
anxiety, difficulty concentrating, depression, sleep disturbance including
restless legs, tearing up, runny nose, muscle and bone pain, muscle spasms,
diarrhea, decreased appetite, chills, inability to control temperature, and
extreme dysphoria and malaise.” However, because it “does not produce a
debilitating ‘high’ like cocaine or heroin, it is very easy for users to take
the drug every day without feeling as though they are developing a drug
addiction or harming themselves.”

Plaintiffs alleged that defendant had superior knowledge
compared to reasonable consumers, and that it had received numerous user
reports about the addictive potential of kratom in the United States. They also
alleged that defendant interacted with growers and distributors in Southeast
Asia who have disclosed the addictive nature of kratom to it. Nonetheless, its
product only had “a bog-standard disclaimer stating that the Products are not
regulated or evaluated by the FDA.”

product front (“all natural”)

product back with disclaimer of FDA approval

Defendant argued that the FDCA preempted the claim because a warning about addiction would be a prohibited “disease” claim. A disease claim explicitly or implicitly claims “to diagnose, mitigate, treat, cure, or prevent a specific disease or class of diseases.” As the court easily concluded, a disclosure that a supplement has addictive qualities is not a “claim to diagnose, mitigate, treat, cure, or prevent” disease. “Instead, such a disclosure informs the consumer that, rather than improving one’s health, kratom has exactly the opposite effect.” The defendant “can easily comply with state laws and the FDCA by avoiding false, misleading, or deceptive statements or omissions regarding kratom’s alleged addictiveness.”

The court did, however, dismiss nationwide class allegations because of differences in the consumer protection laws of the various states on reliance, burdens of proof, statutes of limitations, and damages.

Plaintiffs could bring claims for “unpurchased products” (forms in which they didn’t buy kratom) because the products were all substantially similar for purposes of their claims.

NY statutory and common law fraudulent omission claims: A plaintiff bringing a fraudulent omission claim must show either that (1) “the business alone possessed the relevant information,” or (2) “a consumer could not reasonably obtain the information.” This was sufficiently alleged; although defendant didn’t have exclusive knowledge of the risks, “an omission can still be actionable where it is shown that a consumer could not reasonably obtain the omitted information.”

At the pleading stage, it was enough to allege that “selective online materials or niche federally funded studies” are not “reasonably accessible or comprehensible to consumers”; that kratom is marketed as providing benefits without disclosure of its addictive potential, and, “most importantly,” “that consumers are not aware of the risks of kratom consumption before making their purchases because the available information is either difficult to access or, as with the medical literature, incomprehensible to the average person.” Misinformation about kratom is allegedly rampant.

California: A fraudulent omission must either (1) “be contrary to a representation actually made by the defendant,” or (2) “an omission of a fact the defendant was obliged to disclose.” A defendant “has a duty to disclose when either (1) the defect at issue relates to an unreasonable safety hazard or (2) the defect is material, ‘central to the product’s function,’ and the plaintiff alleges … (1) the defendant is in a fiduciary relationship with the plaintiff; (2) the defendant had exclusive knowledge of material facts not known to the plaintiff; (3) the defendant actively conceals a material fact from the plaintiff; or (4) the defendant makes partial representations but also suppresses some material facts.” This too was done.

Although there was a lot of public information about kratom, it was conflicting, and many documents referenced “complex studies” or were “difficult-to-access reports and letters.” It was plausible that the manufacturer had superior knowledge compared to the average consumer. Defendant argued that its labels directed users to consult with a doctor before use, who in turn would have informed a user of kratom’s addictiveness. But “Defendant cannot simply place the onus of warning consumers of the potential adverse effects of its kratom products on consumers’ doctors by adding boilerplate language to its labels.”

Claims for equitable relief also survived because plaintiffs adequately alleged that public injunctive relief would be appropriate. California class members and members of the public are still at risk of harm—public safety harms can’t be redressed through money damages.

from Blogger http://tushnet.blogspot.com/2025/07/claim-of-failure-to-warn-of-kratoms.html

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plaintiffs don’t have to use full FDA methods for testing nutrients to avoid FDA preemption

Posted on July 2, 2025 by rtushnet

Scheibe v. ProSupps USA, LLC, — F.4th —-, 2025 WL
1730272, No. 23-3300 (9th Cir. Jun. 24, 2025)

The FDA specifies testing methods for determining the amount
of carbohydrates and calories in a food, as well as a sampling process for
those tests requiring “a composite of 12 subsamples (consumer packages) or 10
percent of the number of packages in the same inspection lot, whichever is
smaller, randomly selected to be representative of the lot.” A dietary
supplement, is “misbranded” in violation of the FDCA if its label differs by a
specified margin from the results of these tests. Foods containing up to 0.5
grams of carbohydrates can be labeled as zero-carbohydrate, and foods
containing up to 5 calories can be labeled as zero-calorie. State law claims
that aren’t identical to FDCA violations are preempted.

This is the background for the claims here, over a dietary
supplement: Hydro BCAA. The supplement’s FDA-mandated label states that each
13.8-gram serving contains 10 grams of amino acids but zero grams of
carbohydrates and zero calories. Scheibe bought the supplement to help him lose
weight and gain muscle mass; his preliminary testing of one sample, using a FDA-specified
method, found that the supplement contained 5.68 grams of carbohydrates and 51
calories per serving, “far exceeding the FDA’s allowable margins for
zero-carbohydrate and zero-calorie labeling.” He sued under California consumer
protection law.

The district court dismissed the claims because he didn’t
use the 12 random sample process. But a plaintiff need not prove a claim in the
pleadings, and his allegations made misbranding plausible.

Anyway, because compliance with the FDCA can be determined
only by the FDA’s testing methods and sampling processes, “the Act necessarily
preempts mislabeling claims proven only through testing methods and sampling
processes ‘not validated or accepted by the FDA for use in th[at] context.’” But
ProSupps bears the burden of showing preemption, and Scheibe didn’t plead
himself out of court. Instead, he pled facts allowing a reasonable inference
that the supplement was misbranded. His preliminary testing “allows a court to
draw a reasonable inference that testing a composite sample according to FDA
regulations would show that the supplement is misbranded under the Act.” It was
plausible that additional samples would contain similar amounts, and even if
those samples they had far fewer carbohydrates and calories than Scheibe’s
original sample, “they still could lead to a result that exceeds the margins
for zero-carbohydrate or zero-calorie labels and thereby establish misbranding
under the Act.” (It’s not clear whether the result would be the same with lower divergences from the label. If every other sample in a 12-sample group was zero and zero,
the average would be 0.47 grams of carbs and 4.25 calories per serving, just slightly below the relevant thresholds. Whether such a result is likely is of
course well beyond the record and my expertise.) Maybe his test result was
weird. “But the Federal Rules of Civil Procedure do not cast judges as skeptics
of pleadings.”

Scheibe wasn’t arguing that every serving must have the same
amount of nutrients; he was arguing for a reasonable inference about the results
of the FDA-mandated twelve-sample process. Indeed, it may be “impracticable”
for a plaintiff to test 12 different samples “randomly selected to be
representative of the lot” before discovery opens. “[T]he fact that defendants
may have exclusive control and possession of critical facts—like their own
product inventory—cannot categorically prevent plaintiffs from stating a
plausible claim.”

from Blogger http://tushnet.blogspot.com/2025/07/plaintiffs-dont-have-to-use-full-fda.html

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Scotts loses trade dress claim over green & gold for Miracle-Gro

Posted on July 1, 2025 by rtushnet

Scotts Co. v. Procter & Gamble Co., 2025 WL 1779167, No.
2:24-cv-4199 (S.D. Ohio Jun. 27, 2025)

A different Scotts trade dress claim than the
one I blogged last year. While it’s hard to get rid of trademark claims on
a motion to dismiss, a preliminary injunction may be a different matter—as it
is here, where the court does a thorough job with an expansive trade dress
claim (which frankly should have John Deere’s lawyers taking notice, given its
own reliance on green and yellow). This might be a good case to give students,
given its accessibility.

Scotts makes the Miracle-Gro line of plant food and lawn and
garden products, some of which are depicted below: 

P&G recently introduced a new non-selective herbicide—a weed
killer—called “Spruce”:

Scotts is the market leader in the lawn and garden business.
What is its Miracle-Go trade dress? It has an incontestable registration that “consists
of a rectangular shaped box in the colors green and yellow” for “plant food.” When
the appropriate colors are transposed onto the lined image in the registration, the
mark looks something like this:

But Scotts claimed more, alleging a trade dress comprising:

(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.

The court referred to the “rectangular shaped box”
combination as the Registration, to avoid confusion with this broader trade
dress claim—broader because it lacked a shape restriction and applied to more
than plant food. Nonetheless, Scotts has never used the Miracle-Gro Trade Dress
with any herbicide, nor did it plan to. Also, the broader trade dress did have
some greater specificity—specifically, the “circular horizontally centered
graphic element.” As implemented, this element was the Miracle-Gro logo or
wordmark, which consists of “white text overlaid on (and extending beyond the
horizontal border of) a black circle with some additional graphic sheen.”

Products using this broader trade dress have been on the
market from 15 to 70 years, depending on the product. Plant food was the
original, sold for over 70 years, and was most closely associated with the
registration.

Since 2014, Scotts has sold around 104 million units of this
product for approximately $650 million. During the same period, Scotts sold
roughly one billion units of Miracle-Gro, generating approximately $5.6 billion
in revenue, although just under one-third came from so-called “specialty
products” or “flavors,” “which come in quite different packaging (although
sometimes with at least some of the design elements from the Trade Dress).” 

Ninety percent of sales occur at brick-and-mortar stores,
including “do-it-yourself … home centers” like “Lowe’s, Home Depot, Menards”;
large chain retailers like Target, Walmart, and Meijer; and hardware, garden,
and club stores. The cost ranges from $6 to $20 depending on the product and
configuration.

Spruce became available to consumers mid-November 2024. It
costs between $12.99 to $39.99 depending on the configuration. Spruce is
carried in brick-and-mortar retailers such as Home Depot, Lowe’s, Walmart,
Target, Ace, and True Value, as well as online. P&G has invested
significantly in television, online/social media, print, and in-store
advertising as part of the product rollout:

The bottom of each container consists of a clear or
transparent section. The transparent portion is designed to allow consumers to
see the liquid product. A spruce green portion predominates most of the product
packaging. “The Miracle-Gro green is a brighter green with a glossy finish that
resembles a freshly cut lawn on a sunny day, while the green on the Spruce
packaging has a matte finish and is darker, more like a pine (or spruce) tree
in a shadowy forest.” On most packages, a round, yellow dandelion image (with
an even darker green background) traverses the clear and dark green portions, intended
to depict a half-living, half-dehydrated-and-dying, dandelion. The Spruce
trademark appears in bold white text, with a yellow “violator” containing the
text “Visible Results in 1 HOUR.” I learned: “A graphic violator is a visual
element used in product design that sellers use to draw the consumer’s
attention to certain messaging the seller wants to emphasize.”

Many third-party lawncare products similarly use green and
yellow color combinations: 

Although market presence for all of these wasn’t shown, Scotts
admitted that Preen Weed Preventer Plus Plant Food product (leftmost) is
“widely sold in the lawn-and-garden marketplace” (perhaps outselling the
Miracle-Gro weed preventer product) and at times “shelved right next to” that
Miracle-Gro product. That is true also of Spectracide (center), which Scotts
admitted is “a leading weed killer product.”

Plaintiff’s witness Sass had worked for Scotts for over 20
years. He testified about the 12 distributor declarations and 110 consumer
declarations submitted to the PTO for the Registration. The declarants each
said something like: “when I see packaging which is green on top and yellow on
the bottom in connection with plant food products, I interpret the packaging
design as an indication that the goods come from a single source, i.e., the
makers of Miracle-Gro.”

Testifying about differences from other products on the
market, Sass emphasized the importance of the proportions (“typically one-third
green on top, two-thirds yellow on the bottom”) and a dark circle element for
the Scott products. The court concluded that the proportions were “perhaps more
important” than Scott argued.

Meanwhile, P&G’s witness Croswell testified that P&G
settled on Spruce’s dark green because P&G believed it would make Spruce
distinctive in the weed-killer market and because it invoked the namesake of
the brand (i.e., Spruce trees). “[D]uring development, P&G and one of the
third-party marketing companies it used identified concerns about whether a
certain version of the Spruce design may have been too similar to a particular
competitive product. But at no point during that process did anyone raise a
concern that any version of the proposed Spruce design was too similar to the
Miracle-Gro line of products.” And P&G has no plans to expand the Spruce
brand into other product categories in the lawn and garden space.

Nobody was aware of instances of actual confusion.

Winning my heart, the court began its confusion analysis by cautioning
that it would not allow Scotts to extend the benefits of incontestability to
the common-law trade dress, and that incontestability and likely confusion are
two different questions.

Strength of the mark: Miracle-Gro’s trade dress likely
acquired distinctiveness through secondary meaning, even though its PTO declarations
were only directed to a rectangular box and it had no survey evidence. Length
of time on the market, advertising, sales volume, and market leadership favored
secondary meaning nonetheless.

The trade dress was also probably nonfunctional.

Without evidence of actual confusion, “it basically comes
down to the Court’s assessment of the objective likelihood of confusion based
on the products and packaging, along with the evidentiary value of the
competing consumer surveys the parties tendered.”

Given that strength of the plaintiff’s mark and similarity of
the marks are the most important, Scotts lost primarily because of
dissimilarity.

Miracle-Gro’s trade dress had substantial commercial
strength, but its conceptual strength was unclear, especially given the definitional
questions (are proportions key to the trade dress, or not?). The court noted
that, on all the products it saw, the one-third/two-thirds division was the
same, and the green was above the yellow. With that, plus the “circular
horizontally centered” black circle at the dividing line between the colors,
there was likely some conceptual strength.

“But when you start subtracting individual elements from
that combination, the distinctiveness quickly vanishes.” There was nothing
particularly distinct about using green and yellow for packaging in the lawn
care industry: they “are the colors of sunshine and plants.” Although the
burden is on the defendant to show what actually happens in the market, P&G
did so, showing that several other strong market performers use green and
yellow. It’s not that those others are confusing—it’s that reasonable consumers
wouldn’t just rely on seeing green and yellow to attribute source given the
market.

The dissimilar Miracle-Gro variants also sapped some of the
conceptual strength of the trade dress. “[T]he more consumers come into contact
with Miracle-Gro products with a different style of packaging, and in
particular different color combinations, the less likely they are to look for
the green and yellow combination as identifying their favorite lawn and garden
product.” (But the black circle abides.)

Nonetheless, this factor overall tilted towards Scotts.

Relatedness of the goods: One of the products bearing the Scotts
trade dress is a “Weed Preventer.”

That didn’t move the needle much (herbicide is not “weed
preventer” but killer, and you’d use the weed preventer on a flowerbed but not
the weed killer, and vice versa for weeds sprouting between bricks), but the
products were somewhat related insofar as they are all in the lawn and garden
category.

Similarity of the marks: a “defendant’s resounding success
on this factor makes the plaintiff’s burden of prevailing on the seven other Frisch’s
factors effectively insurmountable.” Similarity doesn’t depend on a
side-by-side, element-by-element comparison; it is based on the overall
impression arising from the combination of elements. Even going element by
claimed element, there was substantial dissimilarity.

Color: Very distinct shades of green, and Spruce was matte
(and transparent in part) while Miracle-Gro was glossy and entirely opaque.

Separate horizontal bands of color with top smaller: Scotts
has the one-third/two-third ratio, and Spruce uses a clear, bottom portion (about
one-fifth), then dark green predominates over most of the rest. The yellow
portion, it is relatively small and is used to highlight a message—“Visible
Results in 1 HOUR.”

True, on both packages, the colors “shar[e] a common border
that runs horizontally along the package” in the form of “a straight line
dividing the two colored bands.” “But these visual elements are wholly
unremarkable and add little to the overall visual impression of each product.”

Likewise, both products contain a “horizontally centered
graphic element.” But on one, it’s the Miracle-Gro logo, which is white text on
a black circle with some additional features. Spruce, has a circular yellow
dandelion (with different graphics on each half) overlaid on a dark green
background. Moreover, the circular graphics are “in different places on the
package ([top] v. bottom).” “The dissimilarity on this element could not be
more stark.”

There were other dissimilarities as well, including in the
actual containers—with five Spruce configurations versus the entire Miracle-Gro
product line, “none of them even remotely resemble each other in shape.” Scotts
didn’t have text in the top portion; P&G did. The graphics were “meaningfully”
different: photorealistic images of vegetation versus graphic design-like
elements (e.g., an outlined paw print). And the Spruce trademark creates its
own distinct visual impression, serving as a house mark.

The trade dresses at issue are “clearly distinguishable and
would appear so to all but the most obtuse consumer.”

Scotts tried to change this result with survey evidence. Its
expert, Dr. Wind, conducted a Squirt survey—one that presents survey
respondents with both of the conflicting marks and “do[ ] not assume that the
respondent is familiar with the senior mark.” Potential purchasers of
Miracle-Gro and Spruce were broken into three groups, Home Depot, Lowe’s, or
Meijer, each with a test and control cell. After telling respondents to imagine
they were considering purchasing a lawn and garden product, the survey showed
respondents in each group in-store displays from the stores to which they were
assigned (except the Lowe’s, which was mistakenly shown Home Depot; the court
found this rendered the survey “suspect and deserving of little weight” as to
this subgroup). E.g., Home Depot respondents saw these: 

Then test respondents were shown some of the same photos
containing Spruce, with red lines surrounding the Spruce products, and asked
how they would describe those products to a friend.

Finally, test respondents were shown the in-store display
that included Miracle-Gro products along with various other third-party
products (the right-most photo in the initial photo array above) and were
asked: “Do you believe that any of these products or product lines on this
plant food display were made by the same company that manufacturers the
products you saw that were circled in red?” Respondents were asked some
follow-up questions (e.g., the reason they selected the products).

The survey repeated the process for (1) asking whether
respondents thought any of the products or product lines in the display with
the Miracle-Gro “ha[d] a business affiliation or connection with the company
that manufactures the products you saw that were circled in red” [I note that
there was no training on what a “business affiliation” is, and there probably
should be]; and (2) asking whether respondents thought any of the products or
product lines in the display with the Miracle-Gro “gave permission or approval
to the company that manufactures the products you saw that were circled in
red.”

Control groups saw the same images and stimuli, except the
colors on the Spruce products were black, white, and silver.

If a respondent who answered positively mentioned green and
yellow in connection with Spruce, the coders tagged that respondent as
“confused.” Dr. Wind calculated net confusion rates, “[d]ue to explicit
reference to the green and yellow packaging” of 16.2% for the Lowe’s subgroup,
9.1% for Home Depot, and 17.7% for Meijer.

P&G objected to (1) the Squirt survey format; (2)
the design; and (3) what Wind counted as “confusion.”

Squirt: P&G argued that Miracle-Gro and Spruce do
not appear side-by-side in the marketplace and that an Eveready survey
is the appropriate tool to use where one of the marks at issue (here Miracle-Gro)
is a strong mark. The court agreed with this criticism. “The products at issue
are typically not displayed side-by-side in a retail setting, nor was there a
sufficient showing that the typical consumer sees them sequentially,” and
Miracle-Gro is commercially strong. The court quoted McCarthy to the effect
that “Squirt methodology is inappropriate unless there are ‘a significant
number of real world situations in which both marks are likely to be seen in
the marketplace sequentially or side-by-side.’”

Design: P&G argued that Squirt surveys have an
inherently leading nature (seems true), which was amplified by stimuli unreflective
of true market conditions. This was even more problematic than choosing Squirt
in the first place. First, there was the Lowe’s error. Second, in the Home
Depot image, nearly half of the “plant food” display shown to respondents was
dominated by a pallet of Miracle-Gro potting mix. “[T]he Court finds it
unlikely that large pallets of Miracle-Gro potting mix typically sit directly
in front of Home Depot’s plant food shelves (or at least, that customers
typically would stand behind such a pallet while selecting something on the
plant food shelf). Simply put, the Home Depot photo was highly suggestive.”

Identification of confused respondents: Dr. Wind “classified
any respondent ‘confused’ for simply describing the products as ‘green and
yellow’—even if they mentioned nothing about Scotts or Miracle-Gro.” That is,
if a respondent accurately noted that the packaging for Spruce products
contained the colors green and yellow, that would be coded as reflecting
“confusion.” This the court found most troublesome of all. “P&G identified
a significant number of responses that clearly should not have been coded in
that manner—namely, respondents who referenced “Spruce” in their answers, and
who did not mention “Miracle-Gro” or “Scotts” at all, but who happened to
mention that the Spruce bottle was green and yellow (which it is).”

P&G offered its own survey by Dr. Simonson: an “aided Eveready
survey.” An Eveready format assumes that survey respondents “are aware
of the [senior] mark from their prior experience.” This “format is especially
useful when the senior mark is readily recognized by buyers in the relevant
universe.” Respondents are shown the allegedly infringing products,, then asked:

• Who do you think makes or puts out this product?

• Does the company that makes this product put out any other
products?

• Does the company that makes this product have a business
affiliation or connection with any other company? [Again, no definition/training.]

• Did the company that makes this product receive permission
or approval from another company?

However, Simonson used the typical Eveready questions, but displayed
multiple products from the marketplace (as would occur in a Squirt
survey), instead of the single, allegedly infringing product. Each respondent
viewed a picture array of products, like so:

They were asked to review all the products “as they would if
they were considering purchasing a weed preventer at an online store.” The
respondents then saw one of the four images below, with the Spruce product (or
a control version of the Spruce product, bottom) blown up on the left-hand
side: 

They were then asked variations of the four standard
Eveready questions along with follow-up probing questions as necessary. The
“control” “had a different trade dress, but still incorporated green and yellow
elements as well as the language and small icons used on Spruce.” Simonson found that “only 2.9% of the Test group respondents … mentioned either Miracle-Gro or Scotts.” Although the
court didn’t rely on the Simonson survey, it didn’t like the control.

Here, the characteristic being
assessed was the color combination. But instead of altering solely Spruce’s
color, as Dr. Wind did for his control, Dr. Simonson created an entirely new
shape, maintained the colors green and yellow (but making white the most
prominent color), and added a circular graphic element to the top portion of
the packaging. In many ways, Dr. Simsonson crafted a control that was more
similar to the Miracle-Gro’s Trade Dress than Spruce’s current packaging, which
may explain why the control group displayed greater confusion than the test
group.

(The court  did reject Scotts’ criticism that
the answers “Ortho,” “RoundUp,” “fertilizer,” or the like should have been
coded as confused. “This case is about Miracle-Gro; not every brand Scotts
uses. And Scotts certainly does not have a monopoly on the word ‘fertilizer.’”)

Remaining factors: Marketing channels favored Scotts; degree
of purchaser care was not very significant/it was dependent on mark similarity.
Intent: (1) P&G considered other packaging designs with other color
schemes; (2) some third-party reports prepared for P&G, as part of Spruce’s
packaging development process, featured images of Miracle-Gro products; (3)
Scotts sent P&G a letter expressing concerns about confusing similarity
between the products’ designs in May 2024. This was “attenuated at best” intent
evidence. “It seems natural to the Court that a product development team might
consider different colors and designs, then test those options before going to
market.” Nor was a study’s inclusion of “a few images of Miracle-Gro products
(along with many, many other lawn and garden care products)” evidence of
intentional copying. “Scotts is the category leader; you would expect some of
its products to appear in any report about the market.” Finally, the Scotts
letter had no bearing on intent—the packaging design was nearly finalized by
then. No weight.

Likely product line expansion: Not likely; no weight.

Dilution: In the Sixth Circuit, “[t]he ‘similarity’ test for
dilution claims is more stringent than in the infringement milieu.” Given the
high level of dissimilarity here, that was fatal.

from Blogger http://tushnet.blogspot.com/2025/07/scotts-loses-trade-dress-claim-over.html

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“local” can be literally false when a company is foreign

Posted on July 1, 2025 by rtushnet

El Paso Disposal, LV. v. Ecube Labs Co., 2025 WL 1766310,
No. EP-24-CV-97-KC (W.D. Tex. Jun. 26, 2025)

Plaintiffs operate waste collection companies that collect
trash from customers in Texas, New Mexico, and Oklahoma. Defendant Haulla, a
“waste broker” that acts as an intermediary between waste haulers and their
customers, allegedly fraudulently obtained their confidential customer
information by posing as customers, accessing plaintiffs’ customer portal in
violation of its terms of use. Using that information, Haulla allegedly
contacted customers to entice them to break their contracts and switch to
another, Haulla-affiliated waste pickup company. The false advertising part is
that Haulla’s agents allegedly falsely claim to be calling from a “local
pickup” or “local [waste] collection company” when they contact plaintiffs’
customers. (Common law fraud and tortious interference claims were preempted by
Texas’s trade secret law to the extent that the relevant information was a
trade secret, but not if they weren’t; plaintiffs could  plead in the alternative.)

This motion addressed state and federal false advertising
claims as well as negligent misrepresentation.

Was “local” plausibly false here, where Haulla operates in Texas
but is a South Korean company that operates out of the Philippines? Bimbo
Bakeries USA, Inc. v. Sycamore, 29 F.4th 630 (10th Cir. 2022), found that “local”
was puffery in the tagline, “Fresh. Local. Quality,” for bread baked in
multiple out-of-state locations. “Local” could take on multiple different
meanings, including that the company merely hired local workers.  But there have to be limits, for example “if
somebody says they support the ‘local’ NFL team” but instead support a team
“more than two thousand miles from here,” “then they have undoubtedly deceived
you.” Thus, the phrases “local pickup company” or “local collection company” provided
more specificity than the slogan in Bimbo and could be falsified—they could
imply “that the company maintains an office in close enough physical proximity
to collect the customer’s trash.” And Haulla’s offices were allegedly located “halfway
around the world, much too far away to drive to businesses in Texas and pick up
their trash,” so that was plausibly false.

Commercial advertising or promotion: Like almost all courts
(and correctly), the court decides that Lexmark means that “by a competitor”
is not part of the current test, only the other three elements of Gordon
& Breach. So, what constitutes sufficient public dissemination to be commercial
advertising or promotion in the context of this industry? Plaintiffs offered
only one specific allegation where a customer was contacted by Haulla and it
referred to itself as a local trash pickup company. It was unclear exactly how
large the customer group was, though Haulla allegedly created more than “2,500
fake customer profiles.” But, given that plaintiffs alleged a “sophisticated
and wide-ranging fraudulent scheme that turns on Haulla’s attemptsto secure
confidential information, which it then uses to systematically target
Plaintiffs’ customers and entice them to switch waste collection providers,”
there was “a reasonable inference that these statements were made a substantial
number of times to Plaintiffs’ customers, and as part of broader efforts to
encourage customers to switch to a Haulla-represented company.” [This is a
classic example of the manipulability of Twiqbal. A hostile court could
easily have said exactly the opposite.] The court noted that evidence on this point
would be required to avoid summary judgment. The rest of the elements of the commercial
advertising test weren’t disputed.

Materiality: Taking what is the increasingly minority view,
the court found that literal falsity (which it characterized as being allegedly
present here) allowed a presumption of deception without need for materiality.
Even though plaintiffs conceded that Haulla was “registered to do business in
Texas” and that it acts as a middleman for Texas-based waste collection
companies, “this does not take away from the literal falsity of Haulla’s
alleged statements that it is a local trash collection company even though it
does not actually collect trash and is not local under any reasonable reading
of that term in this context.”

Plaintiffs also plausibly pled injury, so the Lanham Act
claim survived.

Texas common-law false advertising: claim dismissed because
it doesn’t exist in Texas, per two Texas appellate decisions.

Negligent misrepresentation (based on the alleged statements
to plaintiffs): not barred by the economic loss doctrine. Plaintiffs allegedly relied
on Haulla’s representation of “being a customer or acting with a customer’s
authorization” to supply “Haulla with information that enabled Haulla to access
[Plaintiffs’] confidential and proprietary information and steal [Plaintiffs’]
customers through use of the information.”

Under Texas law, courts analyze the economic loss doctrine by
first determining the extent to which a legal duty exists between the parties
independent of the contract, then examining the extent to which a party
suffered an independent injury, or is merely seeking to recover
benefit-of-the-bargain damages under the terms of the contract.

But the allegations supported the theory that there was no
valid contract, thus no economic loss doctrine involved, because plaintiffs’
website terms of use prohibited uses by third parties, only allowing “customers
and their respective employees” who are limited to using the site “solely for
purposes relating to their own respective account(s).” Under Texas law, “if a
contract is fraudulently induced, ‘there is in reality no contract’ because
there was no assent to the agreement.”

Even if there were a valid contract, Haulla allegedly breached
an independent duty, causing Plaintiffs an independent injury. First, “a party
has a legal duty to use reasonable care when supplying information in the
course of its business for the guidance of others in their business,” which
“exists independent of any contractual obligation.” Haulla’s agents had a “duty
imposed by law” to use reasonable care in communicating information to plaintiffs,
which they allegedly breached when misrepresenting themselves as customers or
customers’ agents.

Second, an independent injury is one that goes beyond the
“economic loss” that is the “subject matter of a contract.” Plaintiffs alleged
reputational damage due to Haulla’s actions: a non-economic loss.

Fraud claims also survived.

from Blogger http://tushnet.blogspot.com/2025/07/local-can-be-literally-false-when.html

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Visa logo doesn’t represent that cards will be protected against fraud

Posted on June 25, 2025 by rtushnet

Schuman v. Visa U.S.A., Inc., — F.Supp.3d —-, 2025 WL
1731795, No. 1:24-cv-666-GHW (S.D.N.Y. Jun. 23, 2025)

This one is interesting both as a fraud warning and as a
pronouncement on what reasonable consumers think about the possibility of
fraud.

Schuman bought eight Visa-branded gift cards at a CVS,
loaded each of them with $500, and gave them to his employees as holiday
presents.

Three of the cards, however, had
been emptied of funds by scammers before Plaintiff’s employees could use them.
The scammers allegedly stole the cards’ funds using a well-known technique
called “card draining”: they removed the cards from their packaging on the
shelf, recorded the cards’ account numbers, returned the cards to their
packaging, and when Plaintiff later loaded money onto the cards, they used the
account numbers to quickly make purchases before his employees could.
Defendants’ cards, Plaintiff says, are especially susceptible to “card
draining” because their flimsy cardboard packaging allows scammers to access
the cards inside without enough evidence of tampering to alert a reasonable
consumer.

Schuman alleged “that the cards’ prominent display of Visa’s
logo gave him the false impression that their funds would be secure from fraud,
and that without this peace of mind, he would not have purchased the cards.” The
cards’ express warnings regarding tampering and other potential security
threats allegedly did not do enough to put him on notice of the potential for
“card draining.” There were also allegations of other barcode vulnerabilities
(a scammer can attach a barcode to an unsold gift card, leading the consumer to
load money onto the scammer’s card), though he didn’t allege that happened to
him. He sued under NY’s GBL.

The back of the packaging includes two warnings related to
potential tampering by third parties. First, in the top right corner, the
packaging states, in capital letters: “IF TAMPER EVIDENT, DO NOT PURCHASE. NO
VALUE UNTIL ACTIVATED AT REGISTER.” Second, above the account number associated
with the card, the packaging states, in red lettering: “For security purposes,
please check that the underlined portion of this number matches the number
below.” Visa allegedly knew that its Visa Vanilla cards were susceptible to
fraud because scams affecting those cards were “known and widespread.”

But “no reasonable consumer would fail to recognize the
possibility that a gift card they bought may be subject to a third-party scam.
Nor would one reasonably expect that the Visa logo, standing alone, was a
promise that no scam could ever occur.”

“The Visa logo consists simply of the word ‘VISA’—it makes
no assertions about the security from the possibility of fraud of the cards or
of their packaging.” It didn’t claim that fraud would be prevented, or that if
it did occur that Visa would help out in good faith (something plaintiff also said
he trusted Visa to do). “No reasonable consumer would expect the allegedly ‘widespread’
practice of third-party scams affecting prepaid cards to somehow not affect one
of the industry’s major suppliers.” Other statements from Visa about the
importance to Visa of keeping its consumers’ cards secure were, among other
things, nonactionable puffery. (These statements included that Visa is “one of
the most trusted brands in the world,” that it “protects consumers,” that
“security is embedded in everything we do,” and that it “aim[s] to increase
transaction approvals so that business can thrive while customers are protected
and satisfied.”)  Finally, Visa’s use of
specific statements about its commitment to anti-fraud measures “only confirms
that the word ‘Visa’ alone does not, in and of itself, include a promise about
the cards’ fraud security or the measures Visa takes to combat the possibility
of fraud.”

Plaintiff also objected to the failure to warn about
specific scams/card draining in particular. The anti-tampering warning didn’t
warn consumers of the possibility that a card-drainer may access a card’s
account information by tampering with the packaging in a way “that can go
unnoticed by the reasonable consumer.” And the red-letter instruction consumers
to compare the portion of the card’s barcode number that is visible through a
window in the packaging with a number inside the packaging and confirm that
they are the same was equally nonmisleading. For omissions, Second Circuit
cases read NY law to require that a plaintiff must plausibly plead either that
“ ‘the business alone possesses material information that is relevant to the
consumer and fail[ed] to provide this information’ or that plaintiffs could not
‘reasonably have obtained the relevant information they now claim the defendant
failed to provide.’ ” The latter is the more important standard. Given the
allegations of widespread complaints and reporting on card fraud, as well as
the warnings on the card itself, plaintiff could reasonably have obtained the
relevant omitted information.

from Blogger http://tushnet.blogspot.com/2025/06/visa-logo-doesnt-represent-that-cards.html

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“natural” plausibly meant “all natural”

Posted on June 25, 2025 by rtushnet

Cobovic v. Mars Petcare US, Inc., No. 24-CV-7730 (ARR)
(JAM), 2025 WL 1726261 (E.D.N.Y. Jun. 20, 2025)

Cobovic alleged that Mars’s use of the word “natural” on the
label of its pet food products violates New York consumer protection law and
constitutes a breach of express warranty. The claims survived a motion to
dismiss. I’m blogging this mostly because consumer protection caselaw is
beginning to develop a distinction between “ambiguous” and “unambiguous” label
claims that uses the same words as Lanham Act caselaw, but possibly to
different effect. It’s only a matter of time before the streams cross, and we
should probably think about whether there is in fact a difference, and if there
is, if there is justification for the different ways to slice the salami of
meaning.

Anyway, Mars sells a product labeled “NATURAL CAT FOOD +
VITAMINS, MINERALS & OTHER NUTRIENTS.” But the products allegedly contain
“multiple synthetic ingredients.” Although the label includes the phrase “Plus
Vitamins, Minerals and other nutrients,” Cobovic alleged that a reasonable
consumer would assume that the vitamins, minerals, and other nutrients are
themselves “natural” rather than “synthetic.” Anyway, Cobovic alleged that
“some of the synthetic ingredients in the Products,” such as xanthan gum,
cannot be categorized as vitamins or minerals, such that the label was false
either way.

Drawing on the “large body of case law” about product
packaging that is alleged to be false or misleading “with respect to the
product’s actual ingredients,” the court concluded that “the relevance of the
product’s ingredient list depends on whether or not the allegedly deceptive
statement is considered ‘ambiguous.’” Where the plaintiff’s claim “turns on”
the “unavoidable interpretation” of the statement in question, the reasonable
consumer is not expected to consult the ingredient list to ascertain the label’s
meaning. “But where the statement in question is ambiguous, a reasonable
consumer is expected to consult the ingredient list ‘in order to clarify his or
her understanding of the label.’” “Consumers who interpret ambiguous statements
in an unnatural or debatable manner do so unreasonably if an ingredient label
would set them straight.”

First, labelling a product that contains synthetic and/or
artificial ingredients as “natural” may be false or misleading; the label need
not state that the product is “all natural” or “100% natural” for a reasonable
consumer to infer that the product is free from synthetic ingredients. And Mars
didn’t meaningfully contest the allegations that the products contained
multiple synthetic ingredients. Even if “+ vitamins, minerals, and other
nutrients” indicated that not all ingredients are natural, at least one ingredient—xanthan
gum—appeared to be neither “natural” nor a “vitamin, mineral, or other
nutrient[ ].”

Plus, Mars was arguing that the ingredient list would reveal
to consumers the presence of synthetic ingredients. The court was unwilling to
assume that “a reasonable consumer can identify which listed ingredients are
natural and which are not,” especially because many “naturally occurring forms
of the same vitamins and minerals have similarly difficult-to-pronounce names.”
A jury would have to decide. (Note that the jury would be resolving any
ambiguity, and the court isn’t requiring extrinsic evidence.)

from Blogger http://tushnet.blogspot.com/2025/06/natural-plausibly-meant-all-natural.html

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parties’ marketing to Spanish speakers in SoCal is not meaningful marketing overlap

Posted on June 25, 2025 by rtushnet

Olé Mexican Foods Inc. v. SK Market Inc., 2025 WL 1717646, No.
2:25-cv-01877-WLH-BFM (C.D. Cal. May 13, 2025)

Courts have already converged on “everybody uses the
internet to market, so that’s not a significant overlap.” This is the first
decision I’ve seen to extend the same reasoning to Spanish-language marketing,
but since that conclusion was already implicit for English-language marketing
(nobody ever claims that overlap in targeting English speakers deserves weight)
it’s not that surprising.

Olé sued SK for its use of the Olé City Market; the court
denied a preliminary injunction.  

Olé has registrations for OLÉ for what the court describes
as “authentic Mexican-inspired foods,” which it sells in various grocery
stores, including in Southern California. SK Market adopted the Olé City Market
mark for its grocery stores in Southern California. They sell items such as
fruits, vegetables, meats, seafood, deli and frozen goods, beverages,
detergents, toothpastes, cleaning supplies, and alcohol.

SK filed ITU applications for OLÉ CITY MARKET to use with
“retail grocery store services and in retail grocery stores. Olé objected in
February 2023 and filed a notice of opposition after June 2023. It also sued
for state and federal trademark infringement/false advertising.

The court found the word marks similar, though distinguished
by the additional words “city” and “market.” The design marks were not similar:

Instead, they were “easily distinguishable from the Olé City
Market design mark in use of images (bull v. sun), color, font, arrangement and
overall appearance.” Weighed slightly in favor of confusion for the word marks
and “decidedly against” for the design marks.

Relatedness of goods: related, but not closely so. Olé’s
marks were directly related to specific Mexican foods, while SK’s were for a
grocery store selling a wide variety of goods and products. “[T]he Court finds
persuasive the distinction between Plaintiff’s sale to customers of certain
types of packaged Mexican food on the one hand and Defendant’s operation of a
chain of grocery stores on the other.” But this factor might be “markedly”
different if SK sold house-branded Mexican food; it just doesn’t do so or plan
to do so. Weighed against confusion.

Marketing channels: neutral. “While the trade channels used
by the parties include websites and print ads, those are the obvious channels
that anyone in business today would use.” Marketing “target[ing] the Hispanic
community” by having Spanish language advertising was not significant “because
anyone marketing anything in Southern California would find Spanish language
advertising appropriate.”

Strength of plaintiff’s mark: Neutral. Though the mark was
arbitrary and used since 1988, “Olé is a common word in Spanish meaning
“hooray,” and Plaintiff’s Olé word mark exists within a crowded field,
including among others registrations for use with 1) nachos, tacos, tortillas,
enchiladas, chalupas, tamales, coffee, and tea; 2) restaurant services; and 3)
frozen Mexican entrees and prepared foods.” So the mark wasn’t especially
strong in relation to grocery stores.

Degree of purchaser care: Disputed—inexpensive, but maybe
the cultural significance of Mexican food increases care; plaintiff didn’t meet
its burden at this stage.

Intent: Uncontroverted evidence showed that SK didn’t learn
of the Olé marks until after they filed the ITUs. Although Olé’s registrations
provided constructive knowledge, that didn’t persuade the court of any bad
intent.

Actual confusion: no evidence.

Likely expansion: SK didn’t intend to expand into
house-branded Mexican foods. (The court didn’t explicitly address whether Olé
intended to open grocery stores, but that seems inherently less likely.)

Unsurprisingly, then, the requested PI was denied.

from Blogger http://tushnet.blogspot.com/2025/06/parties-marketing-to-spanish-speakers.html

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