What’s UpCounsel? LegalForce thinks it’s false advertising

Posted on January 15, 2019 by rtushnet

LegalForce RAPC Worldwide P.C. v. UpCounsel, Inc., 2019 WL
160335, No. 18-cv-02573-YGR (N.D. Cal. Jan. 10, 2019)
LegalForce’s litigation against various competitors in the
trademark registration world continues. 
UpCounsel “is an online marketplace for legal services that enables
users (primarily entrepreneurs and businesses) to find and hire attorneys via
its website.” LegalForce sued UpCounsel for false advertising and unfair
competition, including acting as an unregistered lawyer referral service.
Here, some of the false advertising claims were dismissed as
puffery, while others survived.
Law firm/virtual law firm: Exemplary statements included:
“We are the world’s largest virtual law firm for businesses of any size. We
allow businesses to get high-quality, cost-effective legal services. While our
lawyers serve as outside general counsel to many companies, we also assist with
specialized legal work like IP, immigration, commercial contracts, litigation,
and much more.” The “world’s largest” part was nonactionable puffery.  The “virtual law firm” part was not actionable
because of the context, which also introduced UpCounsel as a “startup” that enabled
others to “find” attorneys and thus indicated that UpCounsel was a platform
rather than a true firm.  I understand
the court to be reasoning that there are “tech platforms that enable individual
lawyers to communicate with clients” (Uber, but for lawyers) and there are “law
firms,” and because most of the challenged statements gestured at identifying
UpCounsel as a “platform,” all the rest of that understanding—including that
the lawyers would be individuals operating separately—would naturally follow.  On the one hand, seeking legal counsel does
require some care and attention from a reasonable consumer; on the other, (1)
the whole point of the service is to target people starting businesses fresh, who
may not know the ins and outs of the legal services market; (2) even experienced
nonlawyers may reasonably not know very much about the important differences
between a “law firm” and other means of getting legal services. Anyway, similar
statements were analyzed similarly, where there was mention both of a “virtual
law firm” and of independent contractors or a claim of “as good as using a law
firm.”
However, claims of the form “Top 5% of { Practice Area}  Lawyers in { City}” were not puffery.  LegalForce alleged that “[b]y indicating
‘5%’, UpCounsel implies that there exists an independent and publicly trusted
ranking system in each and every city and the attorneys that UpCounsel lists on
its city pages are chosen from the top 5% of such a list. In reality, no such
list exists.” It quoted a review by a customer of UpCounsel who said the reason
he selected UpCounsel was because he believed it was “a network for only the
most top notch legal reps in the area” and “[t]he attorneys offered with them
are at the top of their game and you will get what you pay for.” Another customer
wrote that he was deceived when he saw an advertisement on a search engine “[o]ffering
‘Business Legal Services On-Demand by Top Attorneys’” and thought that a disruptive
startup would be a good, cheaper choice for a disruptive startup to use. He
concluded: “I wish I had never used UpCounsel and I’m warning all startups,
business and companies out there to never make the same mistake!” [Which goes
to show that you maybe shouldn’t hire a lawyer the way you’d summon a Lyft.]
Lanham Act claims based on the claim of “Top 5% of Trademark
Attorneys” already survived a motion to dismiss on the basis of puffery. Challenging
similar statements pertaining to other types of attorneys, namely patent,
intellectual property, copyright, and startup attorneys, didn’t change the
analysis. UpCounsel cited Hackett v. Feeney, No. 2:09-cv-02075-RLH-LRL, 2011 WL
4007531 (D. Nev. Sept. 8, 2011) to argue that, in order to be actionable, the
statement must answer the “critical question ‘[Top 5%] as determined by
whom[?]’ ” But that case involved a “voted
#1 best show in Vegas!”; not only is #1  particularly puffy, but voting on a best show
is also puffier than specifying a specific category of attorneys. Specifying a
specific practice area meant that “[i]t cannot be said that no reasonable
consumer would rely on such an assertion.”
UpCounsel argued that Google made the challenged statements,
not UpCounsel, but this didn’t work at the motion to dismiss stage.  “Plaintiffs allege that the search results ‘republish’
statements originally made by UpCounsel. The issue of who actually made the
statements (i.e., the search results) is a factual issue to be resolved at
summary judgment.”
The same result happened with “The 10 Best { Practice
Area}  Lawyers in { State}  NEAR ME,” which was allegedly false because “individuals
listed in each resulting page are not usually near the customer who did the
search, and often not even in the same state.” 
“A reasonable consumer reading these statements could conclude that
UpCounsel attorneys are objectively and measurably superior to other ‘{
practice area}  lawyers in { state}’ near
the consumer.” [And even if not, they could reasonably conclude that those were
lawyers “near” them.]

So too with “{ City} 
{ Practice Area}  Lawyers 5.0
***** Based on { X number of}  reviews,” e.g.,
“Cotati Intellectual Property Lawyers 5.0 ***** Based on 5450 reviews.” That
was allegedly false because “It is impossible for Cotati Intellectual Property
Lawyers to have 5,450 reviews on UpCounsel. Cotati is a small town in Northern California
with a population of 7,455. There are only 21 attorneys in the city of Cotati
licensed to practice law in California, and none of these 21 attorneys are
listed on UpCounsel.” (Among other things, one guy who allegedly never even
used the UpCounsel platform appeared as a “Top 5%” franchise lawyer in Santa
Rosa, California, “Top 5%” copyright lawyer in Coeur d’Alene, Idaho, and a “Top 5%” intellectual property
lawyer in Montgomery, Alabama, among other practice areas and cities.)  Invariably, LegalForce alleged, UpCounsel
would display a five-star rating, resulting from deceptively aggregating
reviews to make it seem as if the reviews came from actual customers in those
cities and states.” UpCounsel allegedly used code to “refresh” its reviews to
make them more attractive to Google.
UpCounsel argued that use of SEO techniques “as a means to
its advertising ends” didn’t state a claim under the Lanham Act because UpCounsel’s
“software code” wasn’t a statement that was seen or relied on by customers, and
that statements regarding five-star reviews were non-actionable puffery. The
first issue, whether the code is (or made) a statement that consumers saw and
relied on was a factual issue for summary judgment. The statements were not
puffery. [Among other things, that there were X number of relevant reviews is a
verifiable statement, even if the individual statements in the review might be non-factual.]
Similarly, LegalForce alleged that UpCounsel “intentionally
and purposefully, and in bad faith, attempts to deceive Google search crawlers
and the public that uses Google to search for legal services.” For example,
“UpCounsel’s tag for its 5450 fabricated reviews for attorneys in Cotati is
based on a fraudulent data field called ‘reviewCount’ which is printed on each
page,” and “UpCounsel’s page source for each of its tens of thousands of
reviews” includes code whose the sole purpose was to “trick search engines into
recognizing UpCounsel’s aggregate ratings as trustworthy.” Using this code
allegedly intentionally violated Google’s technical and content guidelines.
UpCounsel argued that its “software code” and HTML “page
source” weren’t statements that were seen and relied on by customers. Further, a
false advertising claim requires a false statement made by the defendant, so
UpCounsel argued that a claim couldn’t be based on search results that LegalForce
elicited from a search engine using words that LegalForce chose. The court
agreed that, standing on their own, the software code and HMTL page source weren’t
actionable statements. But LegalForce’s pleading “tied the software code and
HTML page source to specific actionable statements,” such that UpCounsel’s actions
caused search results to include false and misleading statements.  The software code and HTML page source were thus
allegedly evidence of intent to mislead consumers.
Next, LegalForce alleged that “UpCounsel deceives customers
by steering them to attorneys and non-attorneys who are not located anywhere
close to their city, or authorized to practice in their respective state” or in
any state. Among other things, UpCounsel listed patent agents as lawyers;
UpCounsel conceded that three examples cited in the complaint were in fact patent
prosecutors (among other things, a patent agent appeared as a “Top 5%”
immigration lawyer in Blackfoot Idaho and as an “Oregon Attorney[ ] &
Lawyer[ ] for Hire On-Demand” through UpCounsel). But UpCounsel argued that it didn’t
steer anyone to unlicensed attorneys and that nothing on its UpCounsel’s
website represents that these individuals are attorneys.
Comment: Google search results are answers to questions,
which thus could be false as answers—and potentially false advertising under
the right circumstances—even if they lack a true/false value standing alone. If
UpCounsel programs its site to respond to a search for lawyers with unlabelled nonlawyers
or lawyers outside the jurisdiction and use the headline “Top 5% of Patent
Lawyers in Oakland, California,” then the response can be as false as if I
asked for Diet Coke at a restaurant and was given undisclosed Diet Pepsi in
return (and though I am loath to admit it, the results for consumers could be
far worse).  There’s nothing inherently
false about Diet Pepsi; the falsity is in the use in response to a request for
something else. 
However, this formulation seems to foreground a §230 issue
that is not discussed in the opinion: does UpCounsel rely on what its (putative)
lawyer-contractors tell it?  Or does the
problem come from non-§230 protected decisions made by UpCounsel on how to
structure or label the website?  This formulation
also highlights that labelling may be the key here: there’s nothing wrong with
advertising an alternative to what the consumer is searching for, but even in
the comparatively more liability-happy area of trademark the courts have
understood that labeling is the key.  One
question is whether ultimately it should matter that, in the individual
description of the lawyer/patent agent on the page of “patent lawyers,” (1) that
description is provided by the user, or (2) the description is clear, which in
the case of the specific patent agent identified by the complaint it was not—he
offered “legal services” and “patent prosecution services” but didn’t disclose
that he was a nonlawyer, something another nonlawyer might not notice
especially among a page of lawyers offering similar services.  When I search Amazon I often get a set of results
that don’t make any sense (something to do with algorithmic manipulation
or something even
weirder?); is Amazon falsely advertising to me because of those bad results,
which come from seller-provided information? 
My sense is that the answer is no, but then again the fact that some of
the results are bad is much easier to determine when I’m looking for girls’
pants size 10; I also think that it is different for a platform to claim to
provide access to legal services in particular, which structures consumer
expectations when looking at specific entries.
One problem seems to be that UpCounsel structured its own
page/headline creation algorithm to be so overenthusiastic that it recommended
lawyers far outside their practice areas or states of licensure.  Unless that came from data entered by
individual participants checking boxes for those practice areas/states, I think
that §230 would not pose a barrier to liability for such structuring.
Anyway, the court concluded: “Accepting as true plaintiffs’
allegation that the search results ‘republish’ statements originally made by
UpCounsel, as the Court must in analyzing UpCounsel’s motion to dismiss,
UpCounsel cannot reasonably argue at this stage that it has not made false
statements by way of the search results.”
UCL claims:  Allegations
of lost business and decrease in business value, and allegations of wrongfully
denied business opportunities, sufficed to plead standing under the UCL’s
expansive standing doctrine.  But could LegalForce
bring claims based on violations of other laws that didn’t themselves provide a
private cause of action? Usually, yes; the limit is that plaintiffs may not
“plead around an absolute bar to relief” by recasting the cause of action as a
claim under the UCL: “[t]o forestall an action under the unfair competition
law, another provision must actually ‘bar’ the action….” by explicitly
precluding private enforcement or expressly providing immunity for the conduct
alleged.
Some of the other rules that LegalForce alleged UpCounsel
violated thus allowed a bootstrapping UCL claim, such as the provision of the California
Business and Professions Code section that bars unregistered attorney referral
services. This was not enforceable by private parties, but its violation could
be borrowed to create a remedy under the UCL. However, the California ules of
Professional Conduct expressly provide: “These rules are not intended to create
new civil causes of action.”  Their
violation couldn’t be borrowed for a UCL claim. As for federal USPTO rules of
professional conduct, the court found no binding or citable authority that the
claims were impliedly preempted.
The UCL unfairness claim also survived. As a competitor,
LegalForce had to use the more limited definition of “unfair”: they had to
plead “conduct that threatens an incipient violation of an antitrust law, or
violates the policy or spirit of one of those laws because its effects are
comparable to or the same as a violation of the law, or otherwise significantly
threatens or harms competition.” UpCounsel argued that this couldn’t be done without
pleading “a reduction of competition in the market in general and not mere
injury to their own positions as competitors.” The court didn’t agree that
LegalForce had to state an antitrust claim to proceed.  They sufficiently pled that UpCounsel’s
actions “otherwise significantly threaten[ ] or harm[ ] competition,” given
allegations that UpCounsel gave itself an unfair advantage over legitimate,
rule-following competitors.

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FDCA preempts arguments that structure/function claims in fact mislead about disease prevention

Posted on January 11, 2019 by rtushnet

Dachauer v. NBTY, Inc., — F.3d —-, 2019 WL 150016, No.
17-16242 (9th Cir. Jan. 10, 2019)
Defendants make vitamin E supplements that claim, on their
labels, to “support cardiovascular health” and to “promote[ ] immune function,”
“immune health,” “heart health,” and “circulatory health.” Dachauer alleged false
advertising, because the supplements do not prevent cardiovascular disease and
might increase the risk of all-cause mortality. The district court granted summary
judgment, and the court of appeals affirmed, mostly on the alternate ground of
preemption.

The FDCA distinguishes between “disease claims” and
“structure/function claims” for dietary supplements. A structure/function claim
“describes the role of a nutrient or dietary ingredient intended to affect the
structure or function in humans” or “characterizes the documented mechanism by
which a nutrient or dietary ingredient acts to maintain such structure or
function,” but “may not claim to diagnose, mitigate, treat, cure, or prevent a
specific disease or class of diseases.” A disease claim, conversely, “claims to
diagnose, mitigate, treat, cure, or prevent disease,” either explicitly or
implicitly. To make a structure/function claim, the manufacturer must have substantiation
that the statement is truthful and not misleading; the statement must contain a
prominent disclaimer that the FDA hasn’t evaluated the statement and that the
product “is not intended to diagnose, treat, cure, or prevent any disease”; and
the statement must not itself “claim to diagnose, mitigate, treat, cure, or
prevent” disease.
The FDA’s guidance states that structure/function claims may
use general terms such as “strengthen,” “improve,” and “protect,” as long as
the claims “do not suggest disease prevention or treatment.” It holds that, for
example, “supports the immune system” doesn’t imply disease prevention, even
though by any ordinary rules of communication it does.  The FDA further allows substantiation of
structure/function claims with evidence of an effect on a small aspect of the relevant
structure/function, rather than with evidence of an effect on the main disease
that consumers associate with that structure or function.  [A concise explanation of the extremely underregulated
features of supplement law, as compared to other fields.]
California law doesn’t allow private plaintiffs to demand
substantiation for advertising claims. The private plaintiff bears the burden
of producing evidence to prove that the challenged statement is false or
misleading.  [Though of course it could
be false or misleading by explicitly or implicitly claiming to have
substantiation that doesn’t exist.]
The FDCA expressly preempts any state law that establishes
“any requirement respecting any claim of the type described in section
343(r)(1) of this title made in the label or labeling of food that is not
identical” to FDCA requirements such as those for structure/function claims.
The argument that defendants’ structure/function claims were false because the
supplements don’t prevent cardiovascular disease were thus preempted.

There was “ample” evidence that vitamin E supplements, taken in the doses that defendants
sell, fail to prevent cardiovascular disease. Plaintiff’s expert argued that “no
metric except the absence or presence of cardiovascular disease can measure
heart health,” but this was a rejection of the two separate FDCA categories and
thus not an acceptable conclusion because it would impose a non-identical
requirement on supplements that claim to promote heart health.  [I think this is the right result under the
law, which highlights that the current law has nothing to do with truth or truthful
communication.  One could have a regime
that allowed more specific claims—taking supplements with this ingredient is
associated with improved indicator X, which itself may be associated with a
lower risk of heart disease—but that’s not the system we have, which allows the
manufacturer to skip all the qualifications and inherently imply broad-based
efficacy by using the approved structure/function formulation.] The same was
true for defendants’ claim that their supplements promote immune health, even
if the supplements fail to reduce all-cause mortality.
However, the misleadingness claim based on the argument that
the supplements increase the risk of
all-cause mortality was not preempted. FDCA regulations say that a label “shall
be deemed to be misleading if it fails to reveal facts” that are “[m]aterial
with respect to consequences which may result from use of the article” under
normal conditions of use or the conditions of use that the label prescribes. “In
other words, if a supplement’s label recommends taking one capsule per day, and
that dose actually causes an increased risk of death—a material fact ‘with
respect to consequences which may result from use of the article’—the FDCA
would deem it misleading not to reveal that fact on the label.”  That would also violate California law.
However, the record lacked evidence that vitamin E supplements were actually
harmful, as opposed to simply useless at reducing all-cause mortality (which
they do not claim to reduce). At best, the record showed a “small” correlation
between high-dose vitamin E supplements and an increased risk of all-cause mortality.
The meta-analyses showing this correlation didn’t conclude that vitamin E
supplements caused an increased risk
of all-cause mortality. That wasn’ enough to create a genuine issue of material
fact.

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Claims in contracts aren’t “advertising or promotion”

Posted on January 11, 2019 by rtushnet

Segerdahl Corp. v. American Litho, Inc., No. 17-cv-3015, 2019
WL 157924 (N.D. Ill. Jan. 10, 2019)
This opinion deals with Lanham Act/coordinate state law counterclaims
by American Litho against Segerdahl. The parties compete within the direct mail
service market, a subset of the printing and marketing industry. American Litho
challenged statements on Segerdahl’s website:
Our ability to handle your sampling
program from start to finish under one roof means greater security, better
quality and shorter turn-time.
We specialize in digital, web and
sheetfed offset printing-all housed within our single campus network to provide
a level of flexibility not found anywhere else.
Our integrated campus and
end-to-end capabilities allow us to easily maintain control of your most
intricate projects.
We are the only facility that can
execute your entire sampling program on one campus-providing greater security,
faster time to market, tighter quality and inventory control.
American Litho also challenged Segerdahl’s statements in its
contracts with three of its customers, agreeing to perform all printing
services in-house despite subcontracting portions of the work without their
customers’ knowledge.  The statements in
those contracts weren’t “commercial advertising or promotion.”  Statements to current customers aren’t “communicated
for promotional purposes.”
Website statements: These were puffery. American Litho argued
that Segerdahl’s website misled potential customers to believe that all
printing jobs are handled on-site, but the statements were either exaggerated or
so vague that they couldn’t be proven or disproven. American Litho focused on
the phrase “from start to finish under one roof,” but the entire statement
merely “brags on Segerdahl’s ‘ability’ to handle printing jobs that results in ‘greater
security, better quality and shorter-turn time.’” Other similar statements were
tied to claims about Segardahl’s generalized awesomeness. “Does American Litho
suppose that customers are comparing with all industry rivals to verify whether
Segerdahl truly offers ‘a level of flexibility not found anywhere else?’ The
Court is doubtful…. One would expect these types of subjective nonquantifiable
statements to be posted on a company’s website. That is the very purpose of
advertisement.” [Ugh. I liked it when the purpose of ads was to convey actual information.]
 Ultimately, these were “nonactionable
highly subjective claims.”

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false advertising claim needs to talk about asterisks to plead with particularity

Posted on January 8, 2019 by rtushnet

Anthony v. Pharmavite, 2019 WL 109446, No. 18-cv-02636-EMC
(N.D. Cal. Jan. 4, 2019)
Despite generally favorable substantive rulings for
plaintiffs, the court dismisses the complaint for false advertising of a nutrition
supplement for failure to plead with particularity under Rule 9(b),
specifically for failing to discuss the asterisks on the claims at
issue.
Pharmavite represents that its biotin supplements “may help
support healthy hair, skin and nails.” Each health benefit representation on a
label includes either an asterisk and obelisk (*†) or two obelisks (†‡), which
I will shorthand as asterisks. The relevant references are to a disclaimer on
the back of a label that says: “Biotin may help support healthy hair, skin, and
nails in those that are biotin deficient” 
or “May help support healthy hair, skin and nails in those deficient in
biotin.”  This is allegedly misleading
because “most people obtain more than enough biotin from their daily diets, so
biotin supplements are unneeded, superfluous, and will provide no health
benefits. Only a minuscule percentage of individuals with biotin deficiencies
could potentially benefit from biotin supplements.” Allegedly, “[o]nce there is
sufficient biotin in the body, any additional supplements are superfluous and
the body ultimately excretes them.” The only benefits would come to people with
 “exceedingly rare conditions that cause
… biotin deficiencies—less than [0.00138] percent of the population.”
Whether a reasonable consumer would be misled by the
labeling could not be resolved as a matter of law, given the prominence of the claim
to “help support healthy hair, skin and nails.” “A reasonable consumer, representing
a significant portion of the population, could understand this representation
to mean that there is a possibility that he/she will experience benefits to
his/her hair, skin, and nails from using the Biotin Products.”  [It is extremely unlikely that “may” moderates
this much if at all.]  As alleged, the vast
majority of the population can’t benefit, so “for virtually all consumers, the
term ‘may’ overstates the chances of obtaining any benefit.” Qualifying words
like “may” may be relevant to the reasonable consumer’s understanding [cases
cited, but not consumer research—plaintiffs might be well advised to plead that
“may” doesn’t matter!] but that could still be misleading. “A reasonable
consumer could understand ‘may’ to mean a reasonable possibility or a
reasonable probability, rather than merely a vanishingly small possibility on
the order of 0.00138 percent.” 
As for the deficiency disclaimers, there was a question of
fact about whether a reasonable consumer would notice it and continue on to the
disclaimer. The Ninth Circuit has rejected the premise that “reasonable
consumers should be expected to look beyond misleading representations on the
front of the box to discover the truth from the … small print on the side of
the box.”  There was a separate question
about whether the substance of the disclaimer was any use. “For instance, the
disclaimer does not state that the Biotin Products would not benefit those who
are not biotin deficient. Nor does it explain that exceedingly few people are
in fact biotin deficient. A reasonable consumer, experiencing hair, skin or
nail problems, might plausibly believe he or she has a biotin deficiency or
would otherwise benefit from the product.” [Cf. the old
Geritol case, where Geritol advertised that it could alleviate fatigue
caused by iron deficiency—much more clearly making the relevant disclosure than
here.  This was nonetheless misleading
because most fatigue wasn’t caused by iron deficiency, so many consumers were
buying a product that wouldn’t help them with the problem for which they sought
relief, given that Geritol’s ads targeted the general, fatigued population.]
Thus, the disclaimer was not so unambiguous and express that a reasonable
consumer couldn’t be deceived as a matter of law.
However, the complaint still flunked 9(b) because it didn’t
discuss whether plaintiffs saw the asterisk; whether they read the corresponding disclaimer; and if they did read it, how the disclaimer affected their purchasing decision. It didn’t mention the asterisk or disclaimer at all. Dismissed without
prejudice.
The injunctive relief claim was dismissed with prejudice because
plaintiffs didn’t allege an imminent or actual threat of future harm absent an
injunction. The claim was “predicated on the premise that, as a matter of
scientific fact, biotin supplements ‘are unneeded, superfluous, and will not
provide any benefits’ to anyone without a biotin deficiency.” Thus, plaintiffs
wouldn’t desire to purchase such supplements in the future if truthfully
advertised.

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False claims of “original” status don’t support public interest in disseminating art for anti-SLAPP purposes

Posted on January 8, 2019 by rtushnet

Coker v. Sassone, — P.3d —-, 2019 WL 117467, 135 Nev.
Adv. Op. 2, No. 73863 (Jan. 3, 2019)
In the course of interpreting the Nevada anti-SLAPP law, the
Nevada Supreme Court says some things about the relationship between counterfeits
that might easily be taken out of context and applied to any copies; I hope future
applications heed its careful language.
Sassone is an artist and painter who has created numerous
works of art, but never made original, signed lithographs. When he saw such
advertised, he sued Coker, alleging that the copies being sold were counterfeit
and that his signature was forged. Coker filed a special motion to dismiss
under NRS 41.660, the state anti-SLAPP law, arguing that dissemination of
artwork to the public is expressive conduct and is in the public interest. The
district court denied Coker’s motion, finding that Coker failed to demonstrate
that his conduct was “a good faith communication that was either truthful or
made without knowledge of its falsehood,” one of the statutory requirements for
anti-SLAPP protection. The Supreme Court affirmed, conducting a de novo review.
Under Nevada law, district court considering a special
motion to dismiss must undertake a two-prong analysis. First, it must
“[d]etermine whether the moving party has established, by a preponderance of
the evidence, that the claim is based upon a good faith communication in
furtherance of … the right to free speech in direct connection with an issue
of public concern.” At that point, “the burden shifts to the plaintiff to show
‘with prima facie evidence a probability of prevailing on the claim.’ ”
Only the first part was at issue here.  An anti-SLAPP movant  “need only demonstrate that his or her conduct
falls within one of four statutorily defined categories of speech, rather than
address difficult questions of First Amendment law.”  One such category is: “[c]ommunication made in
direct connection with an issue of public interest in a place open to the
public or in a public forum … which is truthful or is made without knowledge
of its falsehood.”  The truthful/good
faith part was the problem here. Coker relied on his declaration that he bought
the lithographs from a bulk art supplier and never personally created any
copies of the artwork.  However, Sassone
clarified that his complaint was based on Coker’s representation of the
lithographs as originals. To take advantage of this category, “Coker would need
to provide evidence persuading this court that at the time he advertised and
sold the lithographs online, he believed that they were originals and, thus,
advertised them as such. Tellingly, Coker has made no such statement. Nor has
he provided this court with any evidence suggesting that he believed that the
lithographs were, in fact, originals.” Thus, Coker failed to make the requisite
showing.
In addition, Coker argued that his conduct was in direct
connection with an issue of public interest, “widespread access to creative
works.” However, Sassone wasn’t challenging “the mere dissemination of his
artwork, but Coker’s description of the counterfeit works as originals. In this
respect, Sassone acknowledges that had Coker copied Sassone’s works and sold
the copies while disclosing them as such, Sassone would have no basis for his
suit. We find this distinction imperative
in concluding that Coker’s conduct was not made in direct connection with an
issue of public interest” (emphasis added).
Under the governing law, which is statutory and not
constitutional, and which is guided by similar California law, (1) “public
interest” isn’t the same as mere curiosity; (2) a matter of public interest
should be “of concern to a substantial number of people”; (3) there should be “some
degree of closeness between the challenged statements and the asserted public
interest—the assertion of a broad and amorphous public interest is not
sufficient”; (4) the focus should be the public interest “rather than a mere
effort to gather ammunition for another round of private controversy”; and (5) communicating
something to a large number of people doesn’t alchemize it into a matter of public
interest.
Here, (3) was lacking, as Coker failed to demonstrate how
false advertising and the sale of counterfeit artwork was “sufficiently related
to the dissemination of creative works.” 
Stretching (4) out of its origin (to address the libel law scenario in
which people are saying nasty things back & forth), the court also found
that Coker failed to show that the focus of his conduct “was to increase access
to creative works or advance the free flow of information. Without evidence
suggesting otherwise, we conclude that his focus was to profit from the sale of
artwork, and that increased access to creative work was merely incidental.”  [This is very troubling standing alone: a lot
expressive activity, including online, is done for profit, and its content
could easily be called “incidental”—at the very least, this idea should be
rejected where a profit-seeking movant says that the content was deliberately chosen
as content that deserved dissemination, though Coker apparently didn’t do that
here.]  The conclusion was still limited:
“we cannot conclude that selling counterfeit artwork online, while advertising
it as original, is related to the asserted public interest of dissemination of
creative works.”
Maloney v. T3Media, Inc., 853 F.3d 1004 (9th Cir. 2017), was
not to the contrary. Maloney upheld
the grant of a media company’s anti-SLAPP motion after the company was sued for
distributing unlicensed photographs of NCAA student-athletes. The Ninth Circuit
held that the activity was in the public interest “because the photographs
memorialize cherished moments in NCAA sports history, and California defines
‘an issue of public interest’ broadly.” But Coker didn’t explain how sports memorabilia
related to art. And Maloney didn’t
justify extending the definition of “an issue of public interest” to include “the
advertisement and sale of counterfeit artwork as original.” Whether this was
expressive activity under the First Amendment was not relevant to the interpretation
of the anti-SLAPP act.

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Announcing the Fourth Edition of Advertising & Marketing Law: Cases & Materials by Tushnet & Goldman

Posted on January 7, 2019 by rtushnet

Eric Goldman has all the details here.  Preview:

 It is available for purchase in the following formats:
* A DRM-free PDF file. Price: $12
* A DRM-free ePub file for mobile devices. Price: $12
* In Kindle. Price: $9.99
* A print-on-demand book from Amazon. Because of the book’s length, we publish the hard copy in two volumes: Volume 1(covering chapters 1-8) and Volume 2 (covering chapters 9-17). Price is $20 for each volume ($40 for the set) plus shipping and tax. The hard copy 4th edition is cheaper than the 3rd edition by 10%, plus the book should now qualify for free Amazon shipping, Also, we offer a free PDF or ePub file to buyers of the hard copy version; all they have to do is email me a copy of their receipt showing which edition they bought, and I’ll promptly email the electronic file.
As usual, if you are a professor, or are hoping to teach the course, and would like a free evaluation copy, please email me (egoldman@gmail.com).
A sample chapter, Chapter 13 (on publicity rights and endorsements), is available as a free download.
We’ve discussed the book’s background and our goals as authors in this essay.

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Y/S/H Junior Faculty Forum, June 5-6 2019 Request for Submissions (including IP)

Posted on January 4, 2019 by rtushnet

Yale/Stanford/Harvard
Junior Faculty Forum

June 5-6, 2019, Yale Law School

Yale,
Stanford, and Harvard Law Schools announce the 20th session of the Junior
Faculty Forum to be held at Yale Law School on June 5-6, 2019.

The
Forum’s objective is to encourage the work of scholars recently appointed to a
tenure-track position by providing experience in the pursuit of scholarship and
the nature of the scholarly exchange. Meetings are held each year, rotating
among Yale, Stanford, and Harvard. Twelve to twenty scholars (with one to seven
years in teaching) will be chosen on a blind basis to present their work at the
Forum. One or more senior scholars will comment on each paper. The audience
will include the participating junior faculty, faculty from the host
institutions, and invited guests. The goal is discourse both on the merits of
particular papers and on appropriate methodologies for doing work in that
genre. We hope that comment and discussion will communicate what counts as good
work among successful senior scholars and will also challenge and improve the
standards that now obtain. The Forum also hopes to increase the sense of
community among American legal scholars generally, particularly by
strengthening ties between new and veteran professors.

TOPICS: Each year the Forum
invites submissions on selected legal topics. For the upcoming 2019 meeting,
the topics will cover the following areas of the law:
– Antitrust
– Bankruptcy
– Civil
Litigation and Dispute Resolution
– Contracts
and Commercial Law
– Corporate
and Securities Law
– Intellectual
Property
– International
Business Law
– Private
Law Theory and Comparative Private Law
– Property,
Estates, and Unjust Enrichment
– Taxation
– Torts

A jury of accomplished
scholars, with expertise in the particular subject area, will choose the papers
to be presented. There is no publication commitment. Yale, Stanford, or Harvard
will pay presenters’ and commentators’ travel expenses, though international
flights may be only partially reimbursed.

QUALIFICATIONS:
Authors who teach law in the U.S. in a tenured or tenure-track position and
have not been teaching at either of those ranks for a total of more than seven
years are eligible to submit their work. American citizens or permanent
residents teaching abroad are also eligible provided that they have held a
faculty position or the equivalent, including positions comparable to junior
faculty positions in research institutions, for less than seven years and that
they earned their last degree after 2009. We accept jointly authored
submissions, but each of the coauthors must be individually eligible to
participate in the Forum. Papers that
will be published prior to Forum are not eligible. There is no limit on the
number of submissions by any individual author. Faculty from Yale, Stanford,
and Harvard Law Schools are not eligible.

PAPER SUBMISSION
PROCEDURE: Electronic submissions should be sent to Katherine Pothin (katherine.pothin@yale.edu)
with the subject line “Junior Faculty Forum.” The deadline for submissions is February
1, 2019. Please remove all references to the author(s) in the paper. Please
include in the text of the email a cover note listing your name, the title of
your paper, any coauthors, and under which topic your paper falls. Each paper
may only be considered under one topic. Any questions about the submission
procedure should be directed both to Christine Jolls (christine.jolls@yale.edu) and
her assistant, Katherine Pothin (katherine.pothin@yale.edu).

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

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Y/S/H Junior Faculty Forum, June 5-6 2019 Request for Submissions (including IP)

Posted on January 4, 2019 by rtushnet

Yale/Stanford/Harvard
Junior Faculty Forum

June 5-6, 2019, Yale Law School

Yale,
Stanford, and Harvard Law Schools announce the 20th session of the Junior
Faculty Forum to be held at Yale Law School on June 5-6, 2019.

The
Forum’s objective is to encourage the work of scholars recently appointed to a
tenure-track position by providing experience in the pursuit of scholarship and
the nature of the scholarly exchange. Meetings are held each year, rotating
among Yale, Stanford, and Harvard. Twelve to twenty scholars (with one to seven
years in teaching) will be chosen on a blind basis to present their work at the
Forum. One or more senior scholars will comment on each paper. The audience
will include the participating junior faculty, faculty from the host
institutions, and invited guests. The goal is discourse both on the merits of
particular papers and on appropriate methodologies for doing work in that
genre. We hope that comment and discussion will communicate what counts as good
work among successful senior scholars and will also challenge and improve the
standards that now obtain. The Forum also hopes to increase the sense of
community among American legal scholars generally, particularly by
strengthening ties between new and veteran professors.

TOPICS: Each year the Forum
invites submissions on selected legal topics. For the upcoming 2019 meeting,
the topics will cover the following areas of the law:
– Antitrust
– Bankruptcy
– Civil
Litigation and Dispute Resolution
– Contracts
and Commercial Law
– Corporate
and Securities Law
– Intellectual
Property
– International
Business Law
– Private
Law Theory and Comparative Private Law
– Property,
Estates, and Unjust Enrichment
– Taxation
– Torts

A jury of accomplished
scholars, with expertise in the particular subject area, will choose the papers
to be presented. There is no publication commitment. Yale, Stanford, or Harvard
will pay presenters’ and commentators’ travel expenses, though international
flights may be only partially reimbursed.

QUALIFICATIONS:
Authors who teach law in the U.S. in a tenured or tenure-track position and
have not been teaching at either of those ranks for a total of more than seven
years are eligible to submit their work. American citizens or permanent
residents teaching abroad are also eligible provided that they have held a
faculty position or the equivalent, including positions comparable to junior
faculty positions in research institutions, for less than seven years and that
they earned their last degree after 2009. We accept jointly authored
submissions, but each of the coauthors must be individually eligible to
participate in the Forum. Papers that
will be published prior to Forum are not eligible. There is no limit on the
number of submissions by any individual author. Faculty from Yale, Stanford,
and Harvard Law Schools are not eligible.

PAPER SUBMISSION
PROCEDURE: Electronic submissions should be sent to Katherine Pothin (katherine.pothin@yale.edu)
with the subject line “Junior Faculty Forum.” The deadline for submissions is February
1, 2019. Please remove all references to the author(s) in the paper. Please
include in the text of the email a cover note listing your name, the title of
your paper, any coauthors, and under which topic your paper falls. Each paper
may only be considered under one topic. Any questions about the submission
procedure should be directed both to Christine Jolls (christine.jolls@yale.edu) and
her assistant, Katherine Pothin (katherine.pothin@yale.edu).

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

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Parody as evidence of fame?

Posted on January 1, 2019 by rtushnet

I was skeptical about the idea that the National Geographic golden frame was recognizable as a mark on its own, but parodic use (in conjunction with “society,” so not entirely on its own) seems to me to be evidence to the contrary:

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Actual confusion provides evidence of irreparable harm

Posted on December 27, 2018 by rtushnet

Home Comfort Heating and Air Conditioning, Inc. v. Ken
Starr, Inc., 2018 WL 3816745, No. 18-cv-00469-JLS-DFM (C.D. Cal. Jul. 24, 2018)
Home Comfort Heating & Air Conditioning provides HVAC
services in Los Angeles County and the surrounding area; it asserted rights in
marks “wholly or partially comprised of the word elements ‘HOME COMFORT,’ ” including
“HOME COMFORT SERVICES,” and “HOME COMFORT HEATING AND AIR CONDITIONING.” It
had some registrations.  Ken Starr Inc. subsequently
began operating an HVAC business under the name “Home Comfort USA” in Southern
California, including Los Angeles County and the surrounding area.
Notable findings: The court found strong evidence of
confusion from negative online reviews, including one negative Yelp review, and
oral complaints with regard to products and services that were supplied by KSI.
In the prior year, Home Comfort received five attempts by customers seeking to
return products purchased from KCI, two refund requests arising out of KCI’s
services, thirty inquiries about KCI’s special pricing offers, and forty
inquiries about available services from customers who saw KCI’s ads. A few of
the voicemails were generic requests for quotes, but the majority reference
specific accounts, appointments, and issues with prior work done by KCI.
The district court applied the 9th Circuit’s
screwed-up “can you determine the product just from knowing the mark?” test to
determine that the marks were suggestive. 
Twenty-six HVAC businesses around the nation that use some combination
of the terms “home” and/or “comfort” in connection with their services didn’t
diminish the strength of the mark, especially without more evidence of use and
given that “HVAC customers will, necessarily, seek a local source for these
products and services.” Of the three businesses that did serve California, each
used other distinguishing words as well: “Stephan’s Home Comfort Services,”
“Engineered Comfort,” and “US Comfort.” Nor did Home Comfort’s addition of “Heating
& Air Conditioning” to its marks, KCI’s slogan “Call the Comfort Guys,
We’re There!” or the parties’ different colors deminish the likely confusion.
The word marks “Home Comfort” and “Home Comfort USA” were essentially
indistinguishable and adding generic words didn’t create a meaningful
distinction “from the perspective of a consumer.” The stylized marks included
“Home Comfort” as their dominant portion and had a depiction of a house and
appeared substantially similar; the colors and the slogan weren’t how consumers
would make a primary identification.
Purchaser care was neutral because almost everyone needs
HVAC services, making the target market average, but they tend to be expensive,
increasing consumer care.
Given that the factors favored a finding of likely
confusion, was there irreparable harm? The rule is that “[e]vidence of loss of
control over business reputation and damage to goodwill could constitute
irreparable harm,” and the court found that the actual confusion shown here
satisfied that standard.  However, delay
works against a finding of irreparable harm, and Home Comfort delayed 20 months
after discovery of the problem to seek relief. 
The court found that the delay was sufficiently explained by Home
Comfort’s oppositions to KCI’s trademark registration applications and
extensive settlement discussions. In addition, the dates of the voicemails
indicated that confusion was increasing over time, making delay less probative.
 With that, the other requirements for
injunctive relief were easily satisfied.

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