Amicus brief on CMI removal in Doe v. Github

 With Jennifer Urban, Erik Stallman, and Pam Samuelson, I’m happy to have worked on this amicus brief discussing the text, history, and structure of 1202.

from Blogger http://tushnet.blogspot.com/2025/07/amicus-brief-on-cmi-removal-in-doe-v.html

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even if it’s not a security, a stablecoin can trigger false advertising claims

Donovan v. GMO-Z.com Trust Company, Inc., — F.Supp.3d —-,
2025 WL 522503, No. 23 Civ. 8431 (AT) (S.D.N.Y. Feb. 17, 2025)

Plaintiffs sued GMO Trust, alleging that it violated federal
securities laws and NY state consumer protection laws in connection with the
“offer” of a digital asset known as “GYEN,” sold as a “stablecoin.” The court
found that GYEN wasn’t a security, but allowed the NY and California claims to
proceed.  (Claims against Coinbase have
been sent to arbitration.)

GMO Trust touted GYEN as a fiat-collateralized stablecoin—that
is, one unit of the stablecoin is backed by one unit of fiat currency, here the
Japanese yen. GMO Trust retains for itself any interest generated by the bank
accounts where it deposits customer collateral, and it may receive monetary
benefits from third-party exchanges as consideration for agreeing to list GYEN
on their platforms.

Its Whitepaper on its website touted GYEN as “a global
currency solution” that can “virtually eliminate [the] volatility” associated
with traditional digital assets such as Bitcoin “while still benefitting from
the advantages of digital assets, such as high transaction speeds matched with
low costs.” GMO Trust advertised and linked to various “partner” exchanges,
including Binance and Coinbase. It allegedly consistently maintained in its
promotional materials that purchasers could “always redeem 1 GYEN for 1 JPY …
directly with GMO Trust” and on any third-party exchanges that listed the
digital asset.

GYEN launched in March 2021, and there was a lot of price
movement. Plaintiffs bought at elevated prices and lost 90% or even 99% of their
purchase prices as the price of GYEN returned to its yen peg. For example, “GYEN
purchasers whose orders on Binance took time to fill, or who mistakenly bought
GYEN when the price on Binance was untethered from the value of JPY, lost as
much as 99 percent of their purchase value within hours.” Some of this occurred
when exchanges were restricting the ability of customers to trade GYEN in order
to deal with rapid fluctuations.

Whether GYEN was a “security” is outside my wheelhouse, so I’ll
just report the court’s top-line conclusion: no (specific to the stablecoin
context).

However, it was reasonably likely that there would still be
CAFA jurisdiction over the state law claims, to which the court turned:

Plaintiffs allege that GMO Trust
targeted consumers with statements and advertisements representing that GYEN
would always remain pegged to the value of a historically stable fiat currency;
omitted the risk that the asset’s value could become untethered from JPY on
certain of GMO Trust’s “partner” platforms; and continued to make such
representations and omissions even after the price of GYEN on Binance
temporarily untethered from the value of JPY in May 2021. Indeed, Plaintiffs
allege that GMO Trust not only omitted the risk that the price of GYEN could
become untethered on third-party platforms, but it affirmatively stated that
consumers would “always” be able to purchase GYEN at a one-to-one value with
JPY on GMO Trust’s “partner” exchanges.

They also sufficiently alleged that these statements were
objectively misleading, deceptive, and false because the value of GYEN in fact
could—and allegedly did—become untethered from the value of JPY on third-party
exchanges, and fluctuated over 200% against the dollar in one period. “Given
that GMO Trust held GYEN out to consumers as a ‘stable’ counterweight to the
extreme volatility of the digital asset market, and held itself out as a
regulated and licensed entity offering a product backed by fiat currency held
in FDIC-insured U.S. bank accounts and monitored by independent auditors, a
reasonable consumer, acting reasonably in the circumstances, could have been
misled or deceived by GMO Trust’s statements, acts, practices, omissions, and
advertisements.”

As to California law, the court declined to require plaintiffs
to meet Rule 9(b)’s heightened pleading standard, because the UCL’s “fraud”
prong is not the same as common law fraud—it has lower standards. Unfairness
claims also survived.

from Blogger http://tushnet.blogspot.com/2025/07/even-if-its-not-security-stablecoin-can.html

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California’s Made in the USA safe harbors aren’t preempted by federal law

McCoy v. McCormick & Co., 2025 WL 1918546, No.
1:25-cv-00231-JLT-SAB (E.D. Cal. Jul. 11, 2025) (R&R)

McCoy alleged that French’s mustard bottles were falsely
advertised with the claim “Crafted and Bottled in Springfield, MO, USA,”
appearing at times with “American flavor in a bottle,” because the product
contains foreign-made components. The magistrate recommended granting the
motion with leave to amend. Interesting dive into the “Made in the USA” waters.

Specifically, McCoy alleged that the primary substantive
ingredient is mustard seed, which is sourced primarily, if not exclusively,
from Canada. Some varieties, including French’s Yellow Mustard, allegedly contain
turmeric, another imported ingredient.

McCormick argued that California’s statutory safe harbors for
“Made in the U.S.A.” protected it against McCoy’s California
claims
(including state law claims). McCoy argued that California’s safe
harbor provisions are preempted by federal law—a conclusion rejected by the
court. But he also argued that he alleged that a substantial portion of McCormick’s
products exceeded California’s safe harbor levels.

The FTCA provides:

To the extent any person
introduces, delivers for introduction, sells, advertises, or offers for sale in
commerce a product with a ‘Made in the U.S.A.’ or ‘Made in America’ label, or
the equivalent thereof, in order to represent that such product was in whole or
substantial part of domestic origin, such label shall be consistent with
decisions and orders of the Federal Trade Commission issued pursuant to section
45 of this title.

The FTC’s resulting Rule states:

[I]t is an unfair or deceptive act
or practice…to label any product as Made in the United States6 unless the
final assembly or processing of the product occurs in the United States, all
significant processing that goes into the product occurs in the United States,
and all or virtually all ingredients or components of the product are made and
sourced in the United States.

16 C.F.R. § 323.2 (emphasis added).

California law also makes it unlawful to sell products as
“Made in U.S.A.,” or other similar words, if the product or “any article, unit,
or part thereof, has been entirely or substantially made, manufactured, or
produced outside of the United States.” However, under California law, a
product may be lawfully labeled as “Made in the U.S.A.” if no more than five
percent of the final wholesale value of the manufactured product is obtained
from outside the United States, or if no more than ten percent of the of the
final wholesale value of the manufactured product is obtained from outside the
United States and the manufacturer shows that it can neither produce the
foreign article, unit, or part within the United States nor obtain the foreign
article, unit, or part of the merchandise from a domestic source.

The FTC’s Rule provides that “this part shall not be
construed as superseding, altering, or affecting any other State
statute…relating to country-of-origin labeling requirements, except to the
extent that such statute…is inconsistent with the provisions of this part,
and then only to the extent of the inconsistency.” There is clearly not field
preemption, and the judge was not persuaded that California’s safe harbor
provisions were inconsistent with the FTC’s “all or virtually all” standard. The
disjunctive standard of “all or virtually all” “necessarily means the FTC
contemplates that a small amount of foreign content may be present to lawfully
label a product as Made in the U.S.A.” The FTC has expressly declined to adopt
a definition of “all or virtually all” because “adding further specificity also
increases the risk the rule would chill certain non-deceptive claims.” Instead,
it says that its rule requires a “de minimis, or negligible, amount of foreign
content.” There was certainly no rule that a product containing foreign
materials that make up less than 90-95% of a product’s wholesale value
qualifies as more than a “de minimis, or negligible, amount of foreign
content.” The legislative notes for the state safe harbor specifically
referenced the FTC’s Rule, and the FTC, while it declined to adopt percentage
thresholds because the “ ‘all or virtually all’ standard is better tailored to
prevent unqualified U.S.-origin claims that will mislead consumers in making
purchasing decisions,” it didn’t suggest that California’s safe harbors were,
in every instance, inconsistent with the “all or virtually all” standard. Nor
was it inherently inconsistent with the FTC Rule to rely on “final wholesale
value,” since the FTC considered that one of the often-relevant factors in
determining whether foreign content was de minimis.

Thus, there was neither express nor conflict preemption. And
McCoy failed to plead facts showing that his claims weren’t barred by the safe
harbor provisions, but the magistrate judge recommended that he should get a chance
to fix that. It wasn’t enough that mustard seed was the third ingredient by
weight, since that didn’t show final wholesale value in a product with six or
more ingredients.

 

from Blogger http://tushnet.blogspot.com/2025/07/californias-made-in-usa-safe-harbors.html

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New book chapter on advertising, TM, and antitrust

Misleading advertising as a matter of unfair competition law 

Graeme B Dinwoodie and Ansgar Ohly (eds),
Research Handbook on Unfair Competition and Passing Off (Edward Elgar,
forthcoming 2026)

Abstract

The prohibition of false and misleading advertising should
be the prototypical example of unfair competition law. False and
misleading advertising, after all, is generally held to be unequivocally
bad, even if punishing every instance would be more costly than it’s
worth. But most of modern unfair competition law, at least in the United
States, is focused on different things—more in the realm of trademark
law (and sometimes antitrust), and I think to its detriment. As
trademark’s scope has ballooned, and as the law has tolerated more and
more monopoly power, it has also tolerated more and more false
advertising. A rebalancing towards false advertising could strengthen
the field of unfair competition as a whole.

from Blogger http://tushnet.blogspot.com/2025/07/new-book-chapter-on-advertising-tm-and.html

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P&G’s brand extension ZzzQuil must face lawsuit alleging falsity of its “Non-Habit Forming” claim

Sneed v. Procter & Gamble
Company, — F.Supp.3d —-, 2025 WL 1017933, No. 23-cv-05443-JST (N.D. Cal.
Apr. 4, 2025)

This case is about a product
I recently noticed, “Nighttime Sleep Aid” products containing diphenhydramine
hydrochloride as ZzzQuil. Sneed alleged that the “Non-Habit Forming” claim on
the product was misleading, as diphenhydramine is in fact habit-forming/not
different from other sleep aids.

The court rejected P&G’s
preemption arguments, some of which were already rejected in an earlier opinion.
Briefly, that opinion looked at a FDA tentative final monograph finding “little
to no pharmacologic potential for abuse of the ingredients in OTC nighttime
sleep-aids,” and that “antihistamines like diphenhydramine ‘have generally been
regarded as having low abuse potential and no ability to create dependency.’”
But the same monograph specifically concluded that “[t]he term
‘non-habit-forming’ is misleading, undesirable and probably false because it is
very hard to prove that any product with psychotropic activity can be non-habit
forming; but more importantly, there is an insinuation that other OTC sleep-aid
products obviously are habit-forming.” Thus there was no preemption.

Here P&G also pointed to two
FDA approval letters where the FDA approved for marketing two cough syrups
containing diphenhydramine and their corresponding labels describing the
products as “non-habit forming.” But those were cough medicines for temporary
use, with less diphenhydramine present
per dose, and a sleep aid would foreseeably be used more regularly than cough medicine. That
label wasn’t “materially identical” to the one at bar. Nor did the FDA approval
for “non-habit forming” cough-medicine labels showed that it must have
“reversed its tentative view [on diphenhydramine being potentially habit
forming] as it evaluated additional studies.” Fundamentally, the court wasn’t
convinced that the claim here would challenge an approved label. There’s no federally
approved label for ZzzQuil as to the challenged statements, and “circumstantial
evidence surrounding the approval of a different drug with a different
dosage—even if containing the same main ingredient—does not pose the risk of
conflicting factual determinations about whether ZzzQuil specifically is habit
forming.”

The court had previously
found that Sneed failed to sufficiently allege that the product actually could
be habit-forming; the amended complaint remedied that deficiency by adding citations
to “a variety of scientific studies and articles,” including (1) a declaration
that discussed clinical case reports; (2) a 2008 study where the researchers
detected “a cocaine-like pattern of stimulation of [dopamine] transmission” in
rats after the rats were provided with intravenous doses of diphenhydramine;1
(3) a 2002 study finding that individuals rapidly developed tolerance to the
sedative effects of diphenhydramine when administered a 50 mg dose twice a day;
and (4) a 2021 study reporting a 63% increase in intentional diphenhydramine
exposures from 2005 to 2016, including a 230% rise in misuse among adults aged
55 and older.

P&G said that the sources
(1) do not focus on diphenhydramine specifically, (2) are based on anecdotes,
(3) involve the significant abuse of diphenhydramine rather than the use of the
drug as directed, or (4) involve studies that expose test subjects to
diphenhydramine at levels exceeding 50 mg per day. But none of that was enough
to make the claim implausible given the evidence alleged. As another court wrote:
“[t]he cited studies reference at least [the diphenhydramine] identified in the
complaint and purport to document their [tendency for misuse and potential
habit formation]. Discovery may expose that those studies contain vital flaws,
but it is enough for now that the studies do not plainly refute the allegations
in the complaint.”

from Blogger http://tushnet.blogspot.com/2025/07/p-brand-extension-zzzquil-must-face.html

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GIs can be indications of quality for purposes of applying failure-to-conform exclusion to advertising injury insurance policy

Allied World Nat’l Assur. Co. v. NHC, Inc., 2025 WL 1852789,
No. 22-00469 MWJS-WRP (D. Haw. Jul. 3, 2025)

Nice to see good old-fashioned legal reasoning in these
times.

In the underlying lawsuit, class plaintiffs alleged that MNS
falsely advertised coffee products labeled as “Kona” that contained little to
nothing of the real thing, thus capturing a price premium. MNS ultimately
settled the lawsuit for $12 million and sought indemnification from its umbrella
insurers. Interpreting the relevant policy’s advertising injury coverage, the
court found that an exclusion barred coverage and granted summary judgment for
the insurers.

The underlying lawsuit asserted Lanham Act violations. MNS
and other named retailers sought the dismissal of the Lanham Act false
advertising claim against them to the extent they had acted purely in their
role as retailers. The court granted that motion, reasoning that a false
advertising claim requires “a false statement of fact by the defendant in a
commercial advertisement about its own or another’s product.” Although the
court recognized that “[t]here is limited case law on this subject” and that
“the Ninth Circuit has not weighed in on this issue,” it concluded that
retailers are not liable for false advertising under the Lanham Act “because
they do not make a false statement simply b[y] displaying or selling a product
that was falsely labeled by another.” However, it cautioned that “[i]f, for
example, a retailer controls or participates in the creation of the offending
label or creates additional marketing materials for a product that amplify the
manufacturer’s misrepresentations, imposition of liability for false
advertising may be appropriate.”

As the case headed for trial, other defendants settled and
MNS’s supplier filed for bankruptcy. Plaintiffs alleged that MNS was an active
partner with that supplier: “MNS regularly collaborated with Mulvadi in
developing marketing materials for Mulvadi coffee … Mulvadi advertising
commonly featured MNS’s logo and slogan … [And] MNS’s 30(b)(6) deponent
agreed that the company’s internal emails ‘demonstrat[ed] MNS’s involvement
with Mulvadi and Mulvadi promotion.’ ” Then they settled.

The settled claims were defined as “any and all actions,
claims, demands, rights, suits, or causes of action, whether asserted or not
asserted, that arise from or relate to the allegations made or conduct
described in” the last operative underlying complaint, “including but not
limited to allegations related to the labeling, packaging, advertising,
promotion, branding, marketing, manufacturing, design, formulation,
distribution or sale of coffee labeled as ‘Kona,’ regardless of the statute,
regulation, common law legal theory, or other legal basis on which the
allegations may be asserted.”

Ultimately, Allied World alleged that it had no defense or
indemnity coverage obligation under its policies because the settlement
liability did not arise out of the “use of another’s advertising idea in
[MNS’s] Advertisement” or “infringement upon another’s copyright, trade dress
or slogan in [MNS’s] Advertisement.” In addition, it invoked the exclusion for advertising
injury arising “out of the failure of goods, products or services to conform
with any statement of quality or performance made in [MNS’s] Advertisement.”

The insured bears the burden of establishing that the
coverage provisions apply, while the insurer bears the burden of establishing
that an exclusion applies. Hawai‘i state law governed. Insurance policies “must
be construed liberally in favor of the insured and [any] ambiguities [must be]
resolved against the insurer.”

The settlement constituted a legal obligation, and it plainly
covered the Lanham Act false advertising claims. Indemnification does not
require a finding of liability or a finding that there would have been
liability. “If insurance coverage in the settlement context were to turn on a
prediction about whether a defendant would have been held liable if a case had
gone to trial, the very uncertainty of that prediction—which is presumably one
of the factors that would otherwise induce parties to settle—would encourage
them instead to trudge on with the litigation.” True, the Hawai‘i Supreme
Court’s has stated that an insurer’s indemnity obligation “depends upon the
true state of facts surrounding the loss or injury.” But that case did not
involve a settlement. “And in cases that do not involve settlements, it makes
logical sense to say that an insurance company must defend the insured if there
is a possibility of covered liability, but that it need only indemnify the
insured if there actually is covered liability.” Settlements are different— “it
is no longer a question of possible or potential liability.” Thus, to determine
whether the legal liability created by settlement “flows from a covered claim,
a court must inquire not into what has been or would have been resolved on the
merits, but what claims the settlement has legitimately and reasonably been
designed to cover.”

That doesn’t mean that insureds can insert frivolous or
legally barred claims into a settlement just to get coverage; the court predicted
that state law would agree that “an insurance company has the right to present
evidence that some or all of a total settlement amount should be allocated to
the settlement value of non-covered claims.” But there was no such argument
here.

Allied World did argue that there was no possible liability
for ad-related Lanham Act claims as a matter of law. But it didn’t show that
the advertising-related Lanham Act claims were frivolous or meritless. The
underlying plaintiffs made clear in their motion for summary judgment that
their view of the evidence was that MNS did not merely act as a retailer, but
also participated actively in its supplier’s advertising and marketing efforts.
Moreover, the retailer-only liability claims were still appealable at the time
of settlement, and the court acknowledged that there was no binding circuit
precedent on the issue. Finally, joint and several liability for advertising
conduct was still on the table at the time of settlement.

The court turned to the relevant part of the “Advertising
Injury” provision, which defined it as an “injury arising out of your business
… arising out of one or more of the following offenses”: (i) “the use of
another’s advertising idea in your Advertisement,” or (ii) “infringement upon
another’s copyright, trade dress or slogan in your Advertisement.” The policies
further define “Advertisement” as “a notice that is broadcast or published to
the general public or specific market segments about your goods, products or
services for the purpose of attracting customers or supporters,” including any
“material placed on the internet or on similar electronic means of
communication.” But “only that part of a web-site that is about your goods,
products or services for the purposes of attracting customers or supporters is
considered an Advertisement.”

The court rejected Allied World’s claim that the phrase
“another’s advertising idea” should be understood narrowly as a “process or
invention used to market one’s goods.” “[N]o reasonable layperson would
anticipate such a stingy construction of the phrase. Instead, an “advertising
idea” is better understood as, and construed in favor of the insured as being,
“any idea or concept related to the promotion of a product to the public.” This
is similar to the California interpretation of the term as covering the “manner
or means” of advertising goods and services.

Allied World also argued that the word “another’s” in the
phrase “another’s advertising idea” means that the injury must arise from the
use of an “advertising idea” that another person owns or in which they hold a
proprietary interest of some sort. But the Kona farmers, it argued, did not
hold any legal property right in that term.

But nothing in the language of
Allied World’s policies requires that the Kona farmers have the exclusive legal
right to use an advertising idea. Indeed, nothing in the language of the
policies requires them to have any legal right or property ownership at all in
the advertising idea. The possessive term in the phrase “another’s advertising
idea” is readily understood to refer to the factual question of whether another
person uses something, rather than the legal question of whether they own it. …That
broader meaning accords with how language is ordinarily used. For example, when
trying to find a place to sit in a coffee shop, one might ask “is this your
seat?” When doing so, one is not literally asking if that other person owns the
seat. … In a similar vein, one would naturally say that Kona farmers—who
advertise their coffee as “Kona” precisely to signal the high quality and
special characteristics of their product—have hit on “Kona” as their
advertising idea. They use it, and it is theirs in that significant sense. And
it is theirs even though they have no property right in it.

While “some concepts are simply too common or too widely
used to be considered anyone’s advertising idea,” this was not one of them.

Allied World also argued that the injury from the use of
another’s advertising idea must come from that idea’s use in “your”—the
insured’s—“Advertisement,” and that the underlying lawsuit plaintiffs did not
challenge any of MNS’s own advertisements. But the underlying plaintiffs argued
that the ads at issue were legally attributable to MNS.

The court did agree that “Kona” was not a “slogan,” as
relevant to the separate definition of “Advertising Injury” as also covering
injury from infringement on a copyright, trade dress, or slogan. The court
agrees that “Kona” is not a “slogan,” that is, a “distinctive cry, phrase, or
motto of any party, group, manufacturer, or person; catchword or catch phrase.”
“Whether labeling products as ‘Kona’ might qualify as trade dress is a more
difficult question.” But it didn’t matter because initial coverage was already
established.

What about the exclusions? There, MNS faltered. The
failure-to-conform exclusion provided that Allied World’s policy “does not
provide coverage” for any “Advertising Injury … arising out of the failure of
goods, products or services to conform with any statement of quality or
performance made in your Advertisement.” Although “exclusionary clauses are
interpreted narrowly against the insurer,” Allied World would meet even a
heightened standard for applying the exclusion.

When MNS settled claims that alleged MNS was making
statements about the quality of their coffee products when they labeled those
products as “Kona,” those claims amounted to a statement of quality for
purposes of the policy. The underlying lawsuit plainly alleged that Kona coffee
has a “distinctive flavor and aroma” resulting from its cultivation in the
“volcanic soil, the elevation, and the humidity” of the Kona District of
Hawai‘i island; that “Kona coffee is one of the rarest and most prized coffees
in the world” and that a vendor of same is “tell[ing] consumers that the coffee
has a distinctive flavor profile, and that the beans are of the highest
quality.” By selling commodity coffee that did not contain much, if any,
genuine Kona coffee, MNS allegedly sold a product that failed to conform with
that statement of quality. The underlying complaint alleged that defendants
damaged the goodwill and reputation of Kona coffee precisely because a
“consumer who tries that inferior product, thinking it is Kona coffee, will
conclude that Kona coffee is not worth a premium price” and “will be unwilling
to pay a premium price for Kona in the future.” The alleged injury to the Kona
coffee farmers “flowed directly and unambiguously from the alleged failure of
MNS’s coffee products to conform with the quality expected of Kona coffee.”

MNS argued that “Kona” was merely a statement about the
origin or source of the product, rather than a statement of quality. But the
cited out-of-circuit district court decisions simply found, “in their own
unique circumstances, that statements of source were predominantly about the
provenance of products, rather than their quality.” (Citing cases about Native American
origin claims and reasoning that “similar logic could be said to apply whenever
a product is labeled as ‘Buy American’ or ‘Buy Local.’”) Although previously
the court followed the logic of GIs, now it says: “When vendors label a wine as
‘Burgundy,’ they are not seeking to avail themselves of the peculiar interest
of customers in supporting a region in central France; they mean to say to the
customer that the wine will possess the features of a high-quality, and
therefore more expensive, strain of the product.” [I often talk in class about
casual empiricism in judicial reasoning; this is a good example.]

The underlying lawsuit didn’t just allege sales diversion,
or that customers had a peculiar interest in paying premium prices to support
Kona farmers. “Its allegations were that ‘Kona’ bespoke high quality, and by
selling a product that failed to meet that standard of quality, MNS …
undermined the premium market for Kona coffee by unfairly leading consumers to
conclude that genuine Kona coffee did not meet the quality standard.
Allegations of this nature are not predominantly about the source of a product;
they are about the statement of quality that a vendor makes when it calls its
coffee ‘Kona.’” [They are both?]

Nor need a statement use “express” representations about
quality or performance to be excluded. “While the court recognizes that
exclusions must be construed narrowly, it cannot adopt a construction at war
with the language of the exclusion. And nothing in the language of the
failure-to-conform exclusion would support an artificial ‘magic words’
approach.”

MNS argued that the underlying plaintiffs’ alleged injuries
would exist regardless of the coffee’s quality; at least some of that is true
because of the alleged driving down of prices for Kona-labeled coffee, but the
court concluded otherwise. “If MNS … had sold coffee that conformed to the
quality standards of Kona coffee—which, according to the allegations in the [underlying]
lawsuit, they could only have done by selling the real thing—there would have
been no injury at all.” Even if, at trial, the underlying plaintiffs wouldn’t
have been able to prove the higher quality of Kona coffee, MNS did not identify
anything in the record of the underlying lawsuit indicating that the plaintiffs
there had abandoned or lacked the ability to prove their allegations about the
superior quality of Kona coffee. Indeed, two expert reports in the underlying
lawsuit “affirm[ed] that the use of the term ‘Kona’ reflected a statement of
quality.” One specifically opined “on how the geographical location of
production of a product … is intended to signal quality,” and further noted
that the Kona coffee “has historically carried a reputation for high quality.”

from Blogger http://tushnet.blogspot.com/2025/07/gis-can-be-indications-of-quality-for.html

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breast pump rules: Think Green’s trade dress claims against Medela proceed to trial

Think Green Ltd. v. Medela AG, 2025 WL 1826137, No. 21 CV
5445 (N.D. Ill. Jul. 2, 2025)

Think Green sued Medela for infringing its trade dress in its
breast pump, as well as false advertising claims that were quickly dismissed on
summary judgment because TG and Medela aren’t the only players in the market
and the advertising didn’t disparage TG, meaning that TG couldn’t show harm.
The trade dress claims, though they seem extremely weak to me (both in whether
there would be confusion and whether the trade dress is nonfunctional), survive
for a jury.

Think Green and Medela both sell manual, one-piece silicone
breast pumps. Think Green’s pump is on the left and Medela’s pump is on the
right within each image: 

Think Green claims trade dress rights in the “three-part
shield-collector-base configuration, wherein the collector is bulbous yet fits
underneath the outer diameter of the shield and contains an ornamental rib in
its top part, while the base flares out from the bottom of the collector bulb
to meet the surface upon which the whole unit rests.” Medela previously won
summary judgment on Think Green’s design patent claim.

Much of the opinion focuses on the expert reports around
secondary meaning and confusion. Think Green’s expert witness Harper opined that
(1) among the relevant universe of consumers, there is a likelihood of
confusion that Medela’s pump is sponsored or approved by Think Green due to the
allegedly infringing trade dress; and (2) the relevant universe of consumers
would likely ascribe secondary meaning to Think Green’s trade dress. Her
surveys were not among the “rare” ones where fundamental flaws render them
“completely unhelpful to the trier of fact and therefore inadmissible.”

Harper’s secondary meaning online survey presented half of
the respondents with photos of Think Green’s trade dress, pictured immediately
below, and asked those respondents whether they associated the pump with one
particular company or brand, and if so, which brand and why. 

The control group saw a different pump and received the same
questions. 

Harper’s point-of-sale confusion survey showed the test
group an image of Medela’s pump, captured from the website buybuybaby.com,
which included the “MEDELA” brand name; the product’s name, the Medela®
Silicone Breast Milk Collector; its price; and an image of the pump that
included a lanyard and yellow stopper. 

The control group was presented with a similar image of a
different, “wearable” breast pump: 

The survey ultimately asked respondents whether or not “the
manufacturer or brand of the breast milk pump/collector [they] just reviewed …
is sponsored or approved by another manufacturer or brand.” If a respondent
answered yes, they were asked who and why.

Medela’s criticism of the control was that it was wildly
different from the trade dresses at issue. But, first, a secondary meaning
survey might not even need a control. As for the confusion survey, it contained
additional probes (why?), which the court thought helped (though the
psychological literature suggests that people are really bad at answering that
question), and anyway a bad control isn’t necessarily enough to kick out a
survey. Choosing a control is really hard, so a bad control should bear on
weight rather than admissibility.

Medela objected that the survey also didn’t reflect real-world
conditions of online purchase, including images of the pump’s packaging,
additional images of Medela’s “signature butter yellow,” a bullet point list of
the pump’s features, and the ability to click on the pump’s image to expand it.
Again, that went to weight; these were not core components of the shopping
experience.

There was also a post-sale confusion survey. [Here one real
issue is that unlike point of sale confusion, post-sale confusion’s theory requires
that the post-sale confusion negatively affect subsequent consumers—either
by causing them to think poorly about the plaintiff or by making the plaintiff’s
product seem too easily available to the hoi polloi. There’s no evidence of
this in the survey, and if you leave out that part of the theory you remove one
of its few constraints.] Harper’s survey first screened for respondents who
purchased a pump in the last year or who would consider purchasing one in the
next year then showed them four images of Medela’s pump, collected from
Medela’s online retail product pages, less Medela’s name, design elements, and
measurements. The control group saw the same control pump. 

control images

test images

The survey asked respondents what company, companies, or
brand(s) they believed put out the pictured pump, assuming they had an opinion
in that regard; why they had that belief; and whether they believed the pump
was affiliated with, or sponsored or approved by, any other company or brand. Although
there were more similar noninfringing pumps out there, the control pump was
also made of silicone, clear/white, and curved; whether the control was good
was for cross-examination and the jury.

Plus, Medela objected that most people won’t encounter other
people’s pumps in the wild, just like they mostly won’t encounter other people’s
underwear, making post-sale confusion unlikely. The court was offended on
behalf of those who pump in public, wash out/pour bottles in public, etc.

The survey also sufficiently isolated the claimed trade
dress, even though it included the “distinctive ridge around the breast shield”
visible in the test stimulus, which Think Green disclaimed as its trade dress. Again,
this went to weight rather than admissibility.  

Think Green’s objections to Medela’s expert Cohen were
equally unavailing. There’s a first time for every expert, so the fact that
this was her first trade dress survey didn’t require exclusion. Medela’s survey
showed Medela’s pump “as it had been displayed on the Amazon platform.” With
the stimulus picture still on the screen, respondents were asked open-ended
questions such as, “if you have an opinion, what company or organization makes
or puts out this breast milk collector” and whether the respondent “believe[d]
that this breast milk collector is affiliated with or sponsored by any other
company.” The court didn’t buy that keeping the stimulus on screen created
untoward demand effects. The court agreed that, because “[a] consumer would be
staring directly at the product, together with its packaging and description,
at the moment he/she made the decision to purchase (e.g., clicked ‘Add to
Cart’),” the methodology underlying Cohen’s survey sufficiently mimicked
marketplace conditions.

With that out of the way, there was enough evidence of secondary
meaning to avoid summary judgment on that ground. Along with the survey, there
was at least a minimal showing of Think Green’s volume and history of sales,
even with no contextualization of those sales or of its advertising
expenditures. As for intentional copying, “[c]opying is only evidence of
secondary meaning if the defendant’s intent in copying is to confuse consumers
and pass off his product as the plaintiff’s,” and whether that happened was for
the jury.

And for confusion, “[i]t is a rare trade dress case where
the ‘evidence is so one-sided that there can be no doubt about how the question
[of whether likelihood of confusion exists] should be answered.’” [This is
either trivial (a contested case generally means that both parties believe that
they have a shot) or wrong (TM cases aren’t actually all that special in terms
of evidence, much as we like to think TM is especially complicated). This claim
contributes to making TM doctrine worse in practice by making courts reluctant
to grant summary judgment—usually for the defendant—which has systematic
effects on who gets to do what.]

Emails among Medela employees were not convincing evidence
of passing off. “In at least some of the quoted emails, the employees discuss
their desire to avoid copying Think Green’s pump and—crucially—never evince a
desire to pass their pump off as Think Green’s,” the court concluded, citing
phrases like “I do not believe this is a winning strategy,” “[W]e need to be
more innovative,” and discussions of potential advantages of Medela’s pump over
Think Green’s. “Although other email excerpts appear to support Think Green’s
narrative, in asking the Court to interpret this entire body of emails as
unequivocal proof of Medela’s intent to pass off Think Green’s trade dress as
its own, Think Green is asking the Court to ‘choose between competing
inferences.’”

On functionality, once again a lower court relies on the
existence of alternative designs to deny summary judgment. The reason this is
supposedly consistent with Traffix is that, if utility is shown by other
means (in practice the only possibilities are patent claims, advertising that touts
utilitarian advantages, or maybe effects on quality/cost), then alternative
designs need not be considered, even though that’s not what Traffix says.
Thus, the court says “[a] design does not need to be the only, or the best, way
to do things to be considered functional: It only needs to represent one of
many solutions to a problem,” then immediately proceeds to disregard that
statement.

The court found that an international patent application involving
the pump was not dispositive. Although the Federal Circuit held that “an
applied-for utility patent that never issued has evidentiary significance for
the statements and claims made in the patent application concerning the
utilitarian advantages, just as an issued patent has evidentiary significance,”
the court didn’t think that rules for the TTAB were relevant to “a court’s
Lanham Act analysis.” [??? They are interpreting the same statutory language?
Why would you ever want the PTO and judicial analyses of functionality to
differ?] “A never-approved patent application … could include any number of
useless features that would never have passed muster with the Patent and
Trademark Office”; only approved or expired utility patents show functionality.
[This seems wrong, including as a matter of applicant estoppel; it would also
make evaluating the effect of foreign patents into a mini-trial on the relationship
between foreign and US patent law.]

Anyway, even considering the application, it wouldn’t
persuade the court that functionality was present. The court thought that there
was no evidence that the “central advance” application matched the “essential
feature” of the claimed trade dress. “And although the absence of a utility
patent does not preclude the functionality of a design, the lack of a
presumption of functionality does make it considerably less likely that
functionality can be determined on summary judgment.”

Medela’s expert Faltum opines that the shape of Think
Green’s design was ideally suited for the human hand, while other shapes are
“awkward to hold, difficult to manipulate, inferior in performance,” and less
effective at creating a vacuum seal: 

The court was skeptical; 3D pumps shouldn’t be likened to 2D
shapes, and this analysis disregarded “the prominent breast shield topping the
pumps.” Likewise, a jury should evaluate the claim that the bulb design was
more effective, based on a study Faltum conducted that tested how much water
various pumps could draw through a hose from a beaker when the bulb was
compressed and released. The court agreed with Think Green’s argument that the
study merely “demonstrate[d] that there is a statistically significant
difference in the efficiency with which liquid is collected by one-piece
silicone breast milk collectors as a consequence of their shape.” But it didn’t
evaluate other potential utilitarian features of a pump (such as adherence or
comfort), “whether this alleged difference in water-drawing efficiency
translates into a more effective vacuum ‘essential for these collectors’
remains a factual question.” [I really don’t get this logic—something doesn’t
have to be comprehensively better to be functional; tradeoffs are a thing, and
each solution within the solution space should not be monopolizable. If you’d told
me “this pump will be more efficient but be less comfortable,” I probably would
have gone for speed. Perhaps there’s more to the story, but the explanation
doesn’t persuade me.]

And Think Green sufficiently countered Medela’s claim that
the suction base is ideal for stability “by pointing to several other similar
pumps that use different types of non-suction bases to provide stability.”
[Alternative designs, in one of the factors that’s supposed to determine
whether alternative designs even need to be considered!]

Advertising didn’t unequivocally claim advantages to the
design, only of the breast shield and suction base. (E.g., “Available in two
larger capacities of 100ml and 150ml, and with a new suction base that sticks
to flat surfaces to prevent accidental spills, it is the easiest and most
simple way to express breast milk.”) That just meant that having a
suction base is good, nothing about its size or shape or overall design. [This seems particularly anti-Traffix — that suction base looks like the size and shape of a suction base you’d make if you wanted a suction base; a circle uses less material than anything else of the same size, and surely they shouldn’t be forced to use a different shape or cover up the suction base.] “In
short, none of these advertisements urge consumers to purchase the pump on the
strength of any particular utilitarian quality of the suction base’s design.”
[It would be interesting to see what consumers actually thought was being
claimed.]

different breast sizes

suction base claim

suction base claim

The court pointed to Think Green’s evidence of “numerous
successful, highly rated alternative silicone one-piece breast pumps that are
designed differently than, but function the same as, Think Green’s pump.” “Where
Think Green has presented evidence that other non-infringing designs are
available, a triable issue of fact exists on functionality.” [So much for Traffix.]

from Blogger http://tushnet.blogspot.com/2025/07/breast-pump-rules-think-greens-trade.html

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

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

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

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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