In plagiarism/false attribution case, use was de minimis, fair, and protected by 1A

Posted on September 13, 2018 by rtushnet

Israel v. Strassberg, 2018 WL 4290394, No. 2:15-CV-741 (D.
Utah. Sept. 7, 2018)
Israel entered the Ph.D. Psychology program at the
University of Utah, which required a master’s thesis, and Strassberg was her advisor.
Israel’s master’s thesis turned on the concept of relying on viewing time to
measure a subject’s sexual interest. To carry out a study for her thesis,
Israel selected and arranged a set of images, wrote instructions and survey
questions, and created the syntax necessary for the study to be administered by
a computer program.  Strassberg felt that
her work was important to the field of study and, after the thesis was approved,
Strassberg submitted it for publication in an academic journal with his name
included as second author. Their relationship eventually became strained.
Strassberg was also defendant Rullo’s advisor, and he
allegedly shared Israel’s work with Rullo without authorization.  Rullo’s subsequent master’s thesis used
Israel’s study materials and methods, building on it by examining gay and
lesbian populations where Israel had only looked at heterosexuals.  Strassberg likewise submitted this thesis for
publication, where it included Strassberg as second author and Israel as third
author, allegedly without her consent.
Israel “left the University on contentious terms without
completing her Ph.D. program.” But Strassberg’s graduate students continued to
build on her original research.
Copyright infringement: Israel registered: (1) the
arrangement and compilation of the images used in the viewing time study; (2)
the written instructions and surveys included in the viewing time study; and
(3) the computer syntax, which allowed her to administer the study via
computer. Baker v. Selden instructs: “[W]hilst
no one has a right to print or publish his book, or any material part thereof,
as a book intended to convey instruction in the art, any person may practice
and use the art itself which he has described and illustrated therein.”  This was Baker
redux. Israel’s ideas—“the use of images of attractive individuals and scenery,
tracking viewing time as a measure of sexual interest, asking participants to
rate images on a scale, inquiring as to participants’ sexual orientation and/or
sexual interests and comfort levels, and other elements related to the process
and method of the study”—were free for all to use.
What about Israel’s specific expression of the ideas?  Rullo’s thesis allegedly copied the “substance”
of Israel’s literature review; explained the same stimulus and procedure as
Israel did; used her data; copied her methods; and recited her original ideas,
all while citing her numerous times.  None
of this constituted infringement of protectable elements.  There was direct copying of three sentences
from the registered works:
We would like you to rate each of
the following pictures in terms of how sexually appealing you find the picture
to be. Please make your ratings on a scale of 1-7 where 1 is “not at all
sexually appealing” and 7 is “extremely sexually appealing.” We are interested
in your rating of each picture, not how you believe others might rate the
picture.
This copying was not significant enough to qualify as infringement,
and even if it had been, it would be fair use. 
[Yay!  Separate analysis of the
two reasons!]  Fair use: (1) nonprofit
educational purpose; (2) the original was highly factual, not highly expressive;
(3) only a minimal amount was copied word for word and the qualitative
significance was low because the copying “merely explains a process used in
conducting the study”; and (4) unrestricted copying of the type Rullo engaged
in would not have a substantially adverse impact on the potential market for
the original.  Rather, “[a]cademic
studies and publications often flow from previous studies and publications.
Overlap and building upon research materials is critical to the advancement of
science.”  Even if Israel had registered
more of her work and could thereby claim more copying as infringement, that
copying too would be insufficient to infringe and also fair.
The same rationales also protected the published articles and
Rullo’s dissertation; specifically, the dissertation simply said that “the
stimuli and procedures in the present study were identical to those used with
the heterosexual” and cited Israel.  “A
description of the copyrighted materials” couldn’t create a factual issue on
substantial similarity, nor could use of Israel’s materials in conducting the
studies underlying the findings contained in other documents/publications.
Lanham Act: Israel argued that defendants falsely attributed
authorship to her in presentations and papers and failed to appropriately
attribute her authorship in [possibly other?] presentations and publications. Rather
than pointing to Dastar, the court
ruled that her name wasn’t used “in commerce” because the articles and presentations
at issue weren’t “commercial” but rather scientific and educational. “Academic
publications fall outside of the purview of congressional reach under the
commerce clause because they include non-commercial speech, which is entitled
to the highest levels of protection by the First Amendment.”  Even if the publications had paying subscribers,
that didn’t make individual articles into commercial speech subject to the
Lanham Act.  Plus, her name wasn’t
used/misused “in commerce” because including or excluding her name didn’t
provide any commercial benefit to defendants or to the publications.  [This is really “use as a mark,” but ok.]  Israel also provided no evidence that she
suffered a loss as a result.  Summary
judgment granted.
There was a state law false advertising claim, over which
the court declined to exercise its supplemental jurisdiction, though given the
First Amendment rationale of the Lanham Act result I might’ve gone a different
direction with that.

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“One A Day” conveys that consumers need take only one a day, Cal. court holds

Posted on September 13, 2018 by rtushnet

Brady v. Bayer Corp., G053847, 2018 WL 4275356, —
Cal.Rptr.3d —- (Ct. App. Sept. 7, 2018)
Judge Bedsworth was not pulling any punches in this opinion.
I’ll probably quote too much but outraged rhetoric can be fun.  To summarize:
[W]hen consumers find a reputable
company offering them vitamins – a company with 75 years of brand recognition,
now owned by an international pharmaceutical company respected all over the
world – they can be expected to adhere to that company’s advice. And when that
company suggests, as it has with its products since 1949, that one vitamin pill
a day is sufficient, it cannot then rely upon individual consumers reading the
small – indeed miniscule – print on the back of its label to learn that instead
of ONE A DAY, they should be taking two.
There are two federal district court decisions that hold to
the contrary, but they don’t care as much about consumers as California courts
do.  I mean, they accepted “an untenable
proposition: that the market for vitamins is undifferentiated; that the
hypothetical ‘reasonable consumer’ would, as a matter of law, examine the
makeup of a daily vitamin supplement; that such a consumer would not rely upon
the expertise of pharmacologists and doctors but would instead analyze the
various concentrations of vitamins and minerals in each brand and draw a
personal conclusion about which ingredients he/she needed in a daily vitamin supplement.”
Despite the One A Day brand name, “Vitacraves Adult
Multivitamin” gummies require a daily dosage of two gummies to get the
recommended daily values; the plaintiff thus brought the usual California
claims. Here’s the bottle:

“While we cannot provide photos large enough to enable the reader to make it out, the line above the words ‘Supplement Facts’ (the listing of vitamins and­ minerals provided by each gummie) says – in the smallest lettering on the bottle, an ocular challenge even when the bottle is full-sized and held in good light – ‘Directions: Adults and children 4 years of age and above. Chew two gummies daily.’” That disclosure wasn’t enough to grant (the state law­ equivalent of) Bayer’s motion to dismiss.

The factual problem with Bayer’s reasonable consumer
argument was that it was reasonable to conclude that consumers rely on “the
expertise of One A Day.” One A Day’s marketing tells consumers “You will never
know as much about vitamins as we do, but you can rely on us,” and that may
well be true—except for the idea that “one a day” will provide the optimum amounts.  “And it appears the consumers of California
have concluded that One A Day is a company they can trust: You don’t hang
around for 75 years if people don’t buy your product.”  But Bayer was arguing that reasonable
consumers don’t trust it, but instead carefully read and analyze the amounts
shown on the labels.  
Even if the court were willing to buy that argument—and it
was skeptical—it could not do so on a demurrer/California equivalent of
12(b)(6). “Not all reasonable vitamin buyers can be said to be alike as a
matter of law…. [O]ther reasonable consumers will consider the daily dosages
recommended by Bayer and the FDA to be just fine – they might even consider
those numbers a safe way to avoid against any danger of ingesting too much –
and will rely upon the name they have come to trust.” As a matter of common
sense, “[i]f the label prominently displays the words ‘One A Day’ there is an
implication that the daily intake should be one per day.” In context, that statement
was literally false.
Sometimes the back of the package can help a defendant avoid
a falsity claim, but not here. Williams v. Gerber Prods. Co. (9th Cir. 2008)
552 F.3d 934, offered an “exceptionally perceptive” view of Califonria law,
reasoning that ingredient lists on the back can confirm material implied
representations on the front, but can’t lawfully contradict them. “[B]rand
names by themselves can be misleading in the context of the product being
marketed. That’s not surprising given that … marketing theory emphasizes the
use of descriptive brand names” that require little thought on consumers’ part
and little demand for explanation on producers’.
Bayer argued that consumers would have to look at the back
of the bottle because that was the only place to learn the serving side, the vitamins
at issue, or the amount in each gummy. But the product wasn’t called
Gazorninplat Gummies or Every Day Gummies. “The front label fairly shouts that
one per day will be sufficient.”  Bayer’s
idea that a reasonable consumer would ascertain precise amounts [and make the
requisite calculations] couldn’t be accepted as a matter of law.  It wouldn’t be “wishful thinking” for a
reasonable consumer to think that, in this day and age, a full day’s supply of
vitamins could come in one gummy.  Perhaps
the very sophisticated—judges and lawyers, for example—would do so, but “other
consumers – knowing they have very little scientific background – would rely
upon the representation of a known brand with 70 years of goodwill and
credibility behind it. We think it likely they would consider that known brand
– presumed to be the employer of doctors, biologists, and pharmacologists – to
be a better judge of what vitamins and minerals should be taken than they are.”  It was safe to assume that the market for
vitamins was at least heterogenous in this regard. And the very name of One A
Day was Bayer’s invitation for consumers to outsource their decisions about
which vitamins and how much to take. 
Bayer didn’t seem to target sophisticated consumers:
Not only are two different kinds of
sugars (glucose syrup and sucrose) listed as the most prominent ingredients,
but each gummie – depending upon flavor – contains one of three kinds of
artificial dye. That is not the sort of ingredient list that is likely to
appeal to skeptical consumers scrutinizing labels in a health food market.
These are mass-market products.
Nothing on the front of the label revoked the implicit
misrepresentation—the court imagined, for example, a front label stating: “One
A Day Brand Gummies: Get your classic one a day by chewing just two gummies.”
The court refused to assume that “the illegible little dot off to the bottom of
‘One A Day’ on the label – the ‘®’” was sufficient, as a matter of law, to warn
consumers that “One A Day” didn’t mean what it said; “[e]ven sophisticated
consumers who might recognize the trademark symbol as indicating a brand name
qua brand name still might take the brand name as indicating a promise about
the product’s content,” as with a brand using “Organics” in its name.
Similar reasoning rescued the warranty claim; the front of
the bottle implied a warranty that its contents were fit to last 100 days.

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“One A Day” conveys that consumers need take only one a day, Cal. court holds

Posted on September 12, 2018 by rtushnet

Brady v. Bayer Corp., G053847, 2018 WL 4275356, —
Cal.Rptr.3d —- (Ct. App. Sept. 7, 2018)
Judge Bedsworth was not pulling any punches in this opinion.
I’ll probably quote too much but outraged rhetoric can be fun.  To summarize:
[W]hen consumers find a reputable
company offering them vitamins – a company with 75 years of brand recognition,
now owned by an international pharmaceutical company respected all over the
world – they can be expected to adhere to that company’s advice. And when that
company suggests, as it has with its products since 1949, that one vitamin pill
a day is sufficient, it cannot then rely upon individual consumers reading the
small – indeed miniscule – print on the back of its label to learn that instead
of ONE A DAY, they should be taking two.
There are two federal district court decisions that hold to
the contrary, but they don’t care as much about consumers as California courts
do.  I mean, they accepted “an untenable
proposition: that the market for vitamins is undifferentiated; that the
hypothetical ‘reasonable consumer’ would, as a matter of law, examine the
makeup of a daily vitamin supplement; that such a consumer would not rely upon
the expertise of pharmacologists and doctors but would instead analyze the
various concentrations of vitamins and minerals in each brand and draw a
personal conclusion about which ingredients he/she needed in a daily vitamin supplement.”
Despite the One A Day brand name, “Vitacraves Adult
Multivitamin” gummies require a daily dosage of two gummies to get the
recommended daily values; the plaintiff thus brought the usual California
claims. Here’s the bottle:

“While we cannot provide photos large enough to enable the reader to make it out, the line above the words ‘Supplement Facts’ (the listing of vitamins and­ minerals provided by each gummie) says – in the smallest lettering on the bottle, an ocular challenge even when the bottle is full-sized and held in good light – ‘Directions: Adults and children 4 years of age and above. Chew two gummies daily.’” That disclosure wasn’t enough to grant (the state law­ equivalent of) Bayer’s motion to dismiss.

The factual problem with Bayer’s reasonable consumer
argument was that it was reasonable to conclude that consumers rely on “the
expertise of One A Day.” One A Day’s marketing tells consumers “You will never
know as much about vitamins as we do, but you can rely on us,” and that may
well be true—except for the idea that “one a day” will provide the optimum amounts.  “And it appears the consumers of California
have concluded that One A Day is a company they can trust: You don’t hang
around for 75 years if people don’t buy your product.”  But Bayer was arguing that reasonable
consumers don’t trust it, but instead carefully read and analyze the amounts
shown on the labels.  
Even if the court were willing to buy that argument—and it
was skeptical—it could not do so on a demurrer/California equivalent of
12(b)(6). “Not all reasonable vitamin buyers can be said to be alike as a
matter of law…. [O]ther reasonable consumers will consider the daily dosages
recommended by Bayer and the FDA to be just fine – they might even consider
those numbers a safe way to avoid against any danger of ingesting too much –
and will rely upon the name they have come to trust.” As a matter of common
sense, “[i]f the label prominently displays the words ‘One A Day’ there is an
implication that the daily intake should be one per day.” In context, that statement
was literally false.
Sometimes the back of the package can help a defendant avoid
a falsity claim, but not here. Williams v. Gerber Prods. Co. (9th Cir. 2008)
552 F.3d 934, offered an “exceptionally perceptive” view of Califonria law,
reasoning that ingredient lists on the back can confirm material implied
representations on the front, but can’t lawfully contradict them. “[B]rand
names by themselves can be misleading in the context of the product being
marketed. That’s not surprising given that … marketing theory emphasizes the
use of descriptive brand names” that require little thought on consumers’ part
and little demand for explanation on producers’.
Bayer argued that consumers would have to look at the back
of the bottle because that was the only place to learn the serving side, the vitamins
at issue, or the amount in each gummy. But the product wasn’t called
Gazorninplat Gummies or Every Day Gummies. “The front label fairly shouts that
one per day will be sufficient.”  Bayer’s
idea that a reasonable consumer would ascertain precise amounts [and make the
requisite calculations] couldn’t be accepted as a matter of law.  It wouldn’t be “wishful thinking” for a
reasonable consumer to think that, in this day and age, a full day’s supply of
vitamins could come in one gummy.  Perhaps
the very sophisticated—judges and lawyers, for example—would do so, but “other
consumers – knowing they have very little scientific background – would rely
upon the representation of a known brand with 70 years of goodwill and
credibility behind it. We think it likely they would consider that known brand
– presumed to be the employer of doctors, biologists, and pharmacologists – to
be a better judge of what vitamins and minerals should be taken than they are.”  It was safe to assume that the market for
vitamins was at least heterogenous in this regard. And the very name of One A
Day was Bayer’s invitation for consumers to outsource their decisions about
which vitamins and how much to take. 
Bayer didn’t seem to target sophisticated consumers:
Not only are two different kinds of
sugars (glucose syrup and sucrose) listed as the most prominent ingredients,
but each gummie – depending upon flavor – contains one of three kinds of
artificial dye. That is not the sort of ingredient list that is likely to
appeal to skeptical consumers scrutinizing labels in a health food market.
These are mass-market products.
Nothing on the front of the label revoked the implicit
misrepresentation—the court imagined, for example, a front label stating: “One
A Day Brand Gummies: Get your classic one a day by chewing just two gummies.”
The court refused to assume that “the illegible little dot off to the bottom of
‘One A Day’ on the label – the ‘®’” was sufficient, as a matter of law, to warn
consumers that “One A Day” didn’t mean what it said; “[e]ven sophisticated
consumers who might recognize the trademark symbol as indicating a brand name
qua brand name still might take the brand name as indicating a promise about
the product’s content,” as with a brand using “Organics” in its name.
Similar reasoning rescued the warranty claim; the front of
the bottle implied a warranty that its contents were fit to last 100 days.

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court requires survey evidence in consumer protection case, importing Lanham Act doctrine

Posted on September 7, 2018 by rtushnet

Hughes v. Ester C Company, — F.Supp.3d —-, 2018 WL
4210139, No. 12-CV-0041 (E.D.N.Y. Sept. 4, 2018)
Ester-C dietary supplements contain a patented form of
vitamin C in the form of calcium ascorbate. Plaintiffs alleged that the advertising
for the supplements misleadingly represented that this provides a form of
immune system defense that protects users from illnesses, and decreases one’s
likelihood of getting or remaining ill. 
They brought standard consumer protection claims, including under
California law.
The court granted summary judgment because plaintiffs
provided no extrinsic evidence of how consumers actually interpret Ester-C’s
“immune support” representation in isolation, and also no evidence of actual
falsity in terms of “the immune benefits of vitamin C or lack thereof, the
ability or inability of vitamin C to treat or prevent the common cold or
influenza virus, or the relative bioavailability or absorbability of Ester-C
and other forms of vitamin C.”  Without
an expert, their cited evidence about vitamin C was just hearsay.
That could have been enough to get rid of the case, but the
court also found that the plaintiffs couldn’t prove that consumers received the
allegedly misleading messages.  In
another example of Lanham Act doctrines creeping into state consumer protection
doctrine, the court found that the reasonable consumer standard of state
consumer protection laws required plaintiffs to prove that the alleged claims “were,
in fact, conveyed to ‘a significant portion of the general consuming public …
acting reasonably in the circumstances.’” This requires “extrinsic
evidence—ordinarily in the form of a survey—to show how reasonable consumers
interpret the challenged claims.” 
A footnote noted that “California courts have held that
proof of deception does not require expert testimony or consumer surveys,” but
the court here reasoned that “in such cases, the plaintiffs were also clearly able
to substantiate their allegations with admissible evidence regarding the actual
material falsity or misleading nature of the implied statements and were able
to demonstrate named Plaintiffs’ reliance on such statements.” By contrast,
here plaintiffs didn’t prove the material falsity or misleadingess of the
statements on the supplement’s labeling, and the individual plaintiffs (after
denial of class certification) never testified that they saw or relied upon any
of the purported implied disease claims on the producer’s website.  Comment: saying that falsity and reliance is
required is a completely different thing than saying that survey evidence of consumer perception is
required.  This is how doctrine changes:
a shift of emphasis, and after a few rounds of judicial telephone, the elements
required to succeed are different.

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court requires survey evidence in consumer protection case, importing Lanham Act doctrine

Posted on September 6, 2018 by rtushnet

Hughes v. Ester C Company, — F.Supp.3d —-, 2018 WL
4210139, No. 12-CV-0041 (E.D.N.Y. Sept. 4, 2018)
Ester-C dietary supplements contain a patented form of
vitamin C in the form of calcium ascorbate. Plaintiffs alleged that the advertising
for the supplements misleadingly represented that this provides a form of
immune system defense that protects users from illnesses, and decreases one’s
likelihood of getting or remaining ill. 
They brought standard consumer protection claims, including under
California law.
The court granted summary judgment because plaintiffs
provided no extrinsic evidence of how consumers actually interpret Ester-C’s
“immune support” representation in isolation, and also no evidence of actual
falsity in terms of “the immune benefits of vitamin C or lack thereof, the
ability or inability of vitamin C to treat or prevent the common cold or
influenza virus, or the relative bioavailability or absorbability of Ester-C
and other forms of vitamin C.”  Without
an expert, their cited evidence about vitamin C was just hearsay.
That could have been enough to get rid of the case, but the
court also found that the plaintiffs couldn’t prove that consumers received the
allegedly misleading messages.  In
another example of Lanham Act doctrines creeping into state consumer protection
doctrine, the court found that the reasonable consumer standard of state
consumer protection laws required plaintiffs to prove that the alleged claims “were,
in fact, conveyed to ‘a significant portion of the general consuming public …
acting reasonably in the circumstances.’” This requires “extrinsic
evidence—ordinarily in the form of a survey—to show how reasonable consumers
interpret the challenged claims.” 
A footnote noted that “California courts have held that
proof of deception does not require expert testimony or consumer surveys,” but
the court here reasoned that “in such cases, the plaintiffs were also clearly able
to substantiate their allegations with admissible evidence regarding the actual
material falsity or misleading nature of the implied statements and were able
to demonstrate named Plaintiffs’ reliance on such statements.” By contrast,
here plaintiffs didn’t prove the material falsity or misleadingess of the
statements on the supplement’s labeling, and the individual plaintiffs (after
denial of class certification) never testified that they saw or relied upon any
of the purported implied disease claims on the producer’s website.  Comment: saying that falsity and reliance is
required is a completely different thing than saying that survey evidence of consumer perception is
required.  This is how doctrine changes:
a shift of emphasis, and after a few rounds of judicial telephone, the elements
required to succeed are different.

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Using part of an “anticipated order” from a competitor’s supplier constitutes reverse passing off, despite Dastar

Posted on September 4, 2018 by rtushnet

OTR Wheel Eng’g, Inc. v. West Worldwide Servs., Nos.
16-35897 16-35936, 2018 U.S. App. LEXIS 20520 (9th Cir. Jul. 24,
2018)
OTR Wheel and West compete to sell industrial tires. “West
asked one of OTR’s suppliers to provide him with sample tires from OTR’s molds,
and he asked the supplier to remove OTR’s identifying information from the
tires.” This constituted reverse passing off.
Specifically, West asked the supplier, Superhawk, for 16 of
the relevant tires for testing by a potential customer. Superhawk said it would
take 50 days to make a mold for the tires. West responded, “I really need it
much sooner. . . .  Could you buff off
the [OTR] name on the sidewall or just remove the plate and let me get the tire
tested? … If we take out the nameplate and all the sidewall information, nobody
will know.”  It appears that spring
plates used with the molds were used to prevent imprinting of OTR’s mark
onto the tires, as the molds otherwise would have done.
A jury found West liable for reverse passing off and for tortiously
interfering with a contract between OTR and Superhawk, as well as
with related business relationships. West was not found liable for trade dress
infringement, trade dress counterfeiting, trade secret misappropriation, or
tortious interference with a contract between OTR and one customer, Genie.  The jury also found that OTR’s claim for
protected trade dress on its tire tread was invalid (either because the design
had functional, self-cleaning properties or because it lacked distinctiveness
from other tread designs) and that the trade dress registration had been
obtained through fraud on the PTO, though the last finding was set aside by the
trial court because of failure to meet the stringent standards for proving fraud
by clear and convincing evidence.  The
jury awarded OTR actual damages of $967,015.
West argued that Dastar
precluded the finding of reverse passing off, but the court held that, instead
of simply copying OTR’s design, West used tires from an “anticipated OTR order”
and passed those tires off as his own, meaning that the claim survived Dastar. 
This does strike me as troubling.  We have an underlying design that, per the jury’s
findings, is not itself protectable as trade dress.  Assume something more
standard, like a paper clip.  If reseller
X ordered a bunch of paper clips from a supplier who had previously only done
business with reseller Y, and thus “anticipated” more orders from Y, then it
would be ridiculous to think that X engaged in reverse passing off.  I don’t think it would change things if the
paper clip design had Y’s trademark automatically stamped on in the ordinary
course of production, such that the supplier had to change its production
methods to produce paper clips for X. 
Here, OTR claimed rights in the design, and West knew that and had to
cajole Superhawk into using the molds to make tires for it.  Nonetheless, OTR didn’t actually have rights.
In such circumstances, I would have found Dastar
to apply.

The court of appeals reasoned that it didn’t have to decide whether simple use
of the OTR mold would create a mere copy or a “genuine” OTR tire. Instead, West
passed off “actual OTR tires” because West asked Superhawk to make tires “to
fill an anticipated order” for OTR’s partner and to hold most of the tires
until the order was actually placed; West then wanted to take ten of the tires
to provide to West’s potential customer. 
“The jury could therefore conclude that the development tires were taken
from part of an anticipated OTR … order and were genuine OTR products, not just
copies.”  I think this doesn’t really
distinguish the case from my paper clip hypothetical because all of that could
have happened with standard paper clips too, even if it was only economical to
do a full production run and hope/expect that Y would buy the rest of the paper
clips.  Still, the panel purports not to
create a conflict with Kehoe Component Sales Inc. v. Best Lighting Products,
Inc., 796 F.3d 576 (6th Cir. 2015), in which the manufacturer continued to use the
same molds that it used for one customer to make additional units that it sold
in competition with the customer. Dastar
precluded a reverse passing off claim in that case, but there “the manufacturer
did not pass off products that had been produced as part of the customer’s
order. West did. ‘The right question, Dastar
holds, is whether the consumer knows who has produced the finished product.’ Here,
the product was produced for OTR, and West attributed it to himself.”  This seems to be playing linguistic games
with “produced for”—based on the timing, the product was produced when it was
produced for West, not for OTR, even
if OTR was a but-for cause of the production. 

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Using part of an “anticipated order” from a competitor’s supplier constitutes reverse passing off, despite Dastar

Posted on September 4, 2018 by rtushnet

OTR Wheel Eng’g, Inc. v. West Worldwide Servs., Nos.
16-35897 16-35936, 2018 U.S. App. LEXIS 20520 (9th Cir. Jul. 24,
2018)
OTR Wheel and West compete to sell industrial tires. “West
asked one of OTR’s suppliers to provide him with sample tires from OTR’s molds,
and he asked the supplier to remove OTR’s identifying information from the
tires.” This constituted reverse passing off.
Specifically, West asked the supplier, Superhawk, for 16 of
the relevant tires for testing by a potential customer. Superhawk said it would
take 50 days to make a mold for the tires. West responded, “I really need it
much sooner. . . .  Could you buff off
the [OTR] name on the sidewall or just remove the plate and let me get the tire
tested? … If we take out the nameplate and all the sidewall information, nobody
will know.”  It appears that spring
plates used with the molds were used to prevent imprinting of OTR’s mark
onto the tires, as the molds otherwise would have done.
A jury found West liable for reverse passing off and for tortiously
interfering with a contract between OTR and Superhawk, as well as
with related business relationships. West was not found liable for trade dress
infringement, trade dress counterfeiting, trade secret misappropriation, or
tortious interference with a contract between OTR and one customer, Genie.  The jury also found that OTR’s claim for
protected trade dress on its tire tread was invalid (either because the design
had functional, self-cleaning properties or because it lacked distinctiveness
from other tread designs) and that the trade dress registration had been
obtained through fraud on the PTO, though the last finding was set aside by the
trial court because of failure to meet the stringent standards for proving fraud
by clear and convincing evidence.  The
jury awarded OTR actual damages of $967,015.
West argued that Dastar
precluded the finding of reverse passing off, but the court held that, instead
of simply copying OTR’s design, West used tires from an “anticipated OTR order”
and passed those tires off as his own, meaning that the claim survived Dastar. 
This does strike me as troubling.  We have an underlying design that, per the jury’s
findings, is not itself protectable as trade dress.  Assume something more
standard, like a paper clip.  If reseller
X ordered a bunch of paper clips from a supplier who had previously only done
business with reseller Y, and thus “anticipated” more orders from Y, then it
would be ridiculous to think that X engaged in reverse passing off.  I don’t think it would change things if the
paper clip design had Y’s trademark automatically stamped on in the ordinary
course of production, such that the supplier had to change its production
methods to produce paper clips for X. 
Here, OTR claimed rights in the design, and West knew that and had to
cajole Superhawk into using the molds to make tires for it.  Nonetheless, OTR didn’t actually have rights.
In such circumstances, I would have found Dastar
to apply.

The court of appeals reasoned that it didn’t have to decide whether simple use
of the OTR mold would create a mere copy or a “genuine” OTR tire. Instead, West
passed off “actual OTR tires” because West asked Superhawk to make tires “to
fill an anticipated order” for OTR’s partner and to hold most of the tires
until the order was actually placed; West then wanted to take ten of the tires
to provide to West’s potential customer. 
“The jury could therefore conclude that the development tires were taken
from part of an anticipated OTR … order and were genuine OTR products, not just
copies.”  I think this doesn’t really
distinguish the case from my paper clip hypothetical because all of that could
have happened with standard paper clips too, even if it was only economical to
do a full production run and hope/expect that Y would buy the rest of the paper
clips.  Still, the panel purports not to
create a conflict with Kehoe Component Sales Inc. v. Best Lighting Products,
Inc., 796 F.3d 576 (6th Cir. 2015), in which the manufacturer continued to use the
same molds that it used for one customer to make additional units that it sold
in competition with the customer. Dastar
precluded a reverse passing off claim in that case, but there “the manufacturer
did not pass off products that had been produced as part of the customer’s
order. West did. ‘The right question, Dastar
holds, is whether the consumer knows who has produced the finished product.’ Here,
the product was produced for OTR, and West attributed it to himself.”  This seems to be playing linguistic games
with “produced for”—based on the timing, the product was produced when it was
produced for West, not for OTR, even
if OTR was a but-for cause of the production. 

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Trader Joe’s truffle flavored oil was too cheap for reasonable consumers to think it real

Posted on September 4, 2018 by rtushnet

Brumfield v. Trader Joe’s Co., 2018 WL 4168956, No. 17 Civ.
3239 (LGS) (S.D.N.Y. Aug. 30, 2018)
Brumfield alleged that Trader Joe’s “Black Truffle Flavored
Extra Virgin Olive Oil” contains no actual black truffle, but instead contains 2,4-dithiapentane,
a petroleum based synthetic injection that imitates the taste and smell of
truffles, in violation of New York and California law as well as the Magnuson-Moss
Warranty Act. “Truffles are a very rare and expensive type of fungus, which
have sold for as much as $100,000 per pound.” 
[They are also delicious.]  All
the claims were dismissed for failure to allege an actionable misrepresentation.
“Black truffle” is printed in large black letters on the
product; “flavored” and “extra virgin olive oil” are printed in smaller cursive
letters underneath.

The court found that the product was clearly labeled “Black
Truffle Flavored,” which didn’t necessarily entail the use of actual black
truffles.  [I’m not sure I agree that this is particularly clear.  The best argument is that the EVOO label is also in that font, so a consumer who wanted to make sure that it was olive oil would have to read it all.] Given the rarity and cost of
truffles, a reasonable consumer wouldn’t expect the $4.99 bottle of olive oil
at Trader Joe’s to contain actual truffles.  Plaintiffs didn’t reach plausibility by
alleging that “Trader Joe’s sells numerous products labeled ‘X-flavored’ that
actually contain the referenced flavor as an ingredient,” because “reasonable
consumers are not so naïve
as to believe that including actual ‘X’ in the product is the only way to make
the product ‘X-flavored.’” Nor did it help to allege that Trader Joe’s “is
renowned for selling gourmet products at relatively low prices,” and consumers
are unlikely to know how expensive truffles are or how much truffle is required
to make real truffle oil.” “A hypothetical reasonable consumer of truffle
flavored oil would know something about the expense and rarity of truffles,
signaling that the $4.99 price for Trader Joe’s truffle flavored oil is too
good to be true for actual truffle infused oil.”

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Sony’s claim that Michael Jackson performed songs on album was just its opinion

Posted on August 30, 2018 by rtushnet

Serova v. Sony Music Entertainment, — Cal.Rptr.3d —- ,
2018 WL 4090622, No. B280526 (Ct. App. Aug. 28, 2018)
[This case says a bunch of stuff that’s way too broad for
the facts; people who are concerned about things like attribution rights, and
the right of publicity, should probably be paying attention.]
Serova sued defendants for marketing a posthumous Michael
Jackson album, Michael. The album
cover and a promotional video allegedly misrepresented that Jackson was the
lead singer on each of the 10 vocal tracks on the album, when in fact he was
not the lead singer on three of those tracks. 
Serova brought a fraud claim against some defendants, alleging knowing
misrepresentation.  The trial court
concluded that the album cover, including statements about the contents of the
album, and a promotional video for the album were commercial speech that was
subject to regulation under the UCL and the CLRA. 
The court of appeals reversed because the claims about
Jackson’s performance “did not simply promote sale of the album, but also
stated a position on a disputed issue of public interest.”  That dispute was that some Jackson family
members, and others, publicly claimed that Jackson wasn’t the lead singer, and
Sony disputed that claim.  [Nice work if
you can get it, to create a disputed issue of public interest by making the statement
that’s being attacked.] “The identity of the lead singer was also integral to
the artistic significance of the songs themselves.” Thus, statements about the
identity of the artist were not simply commercial speech, and couldn’t be the
subject of actionable unfair competition or consumer protection claims, and
Sony was entitled to succeed on its anti-SLAPP defense.
Although music ads are not categorically covered by the
anti-SLAPP law, the “commercial speech” amendment that was designed to curb
abuses of the anti-SLAPP law by commercial advertisers does exclude ads for
expressive works.  [Meaning that this
decision isn’t as broadly significant as it might sound—ordinary advertisers
can’t take advantage of the “create a public controversy” way out; indeed, this
case is an example of exactly why the legislature amended the anti-SLAPP law to
exclude most advertisers.]  If an ad
falsely claimed that an album contained a particular song, that “mundane
commercial misrepresentation” wouldn’t be automatically covered by the anti-SLAPP
law.
So the question was whether the challenged conduct had some
connection to a “public issue” or an “issue of public interest.” [Of course,
the mundane commercial misrepresentation could rise to that level!]  “[P]rominent entertainers and their
accomplishments can be the subjects of public interest for purposes of the
anti-SLAPP statute.”  The complaint
itself described the controversy over the performances. “Facts concerning the
creation of works of art and entertainment can also be an issue of public
interest for purposes of the anti-SLAPP statute.”
Was this noncommercial speech?  Under Nike
v. Kasky, the speaker and the intended audience both suggested a commercial
purpose.  But the content was “critically
different from the type of speech that may be regulated as purely commercial
speech under Kasky” for two reasons
[one terrible, one not]. First, the statements “concerned a publicly disputed
issue about which [Sony] had no personal knowledge,” and second, “the
statements were directly connected to music that itself enjoyed full protection
under the First Amendment.”  [Note that
if reason number one is sufficient, then this decision is much broader than it
says it is, because it would cover a lot of advertising claims for
non-expressive products and services.]
Personal knowledge: “Kasky
ascribed great significance to the fact that, ‘[i]n describing its own labor
policies, and the practices and working conditions in factories where its
products are made, Nike was making factual representations about its own
business operations” and “was in a position to readily verify the truth of any
factual assertions it made on these topics.” [Except that Nike was making
representations about its subcontractors’
business operations, and part of the dispute was its limited opportunity to
verify all that—even if you think that “Nike” is capable of having “personal
knowledge” of anything.  Nike was in a better position to verify the truth of
its factual assertions than its audience, but that relative position is not the
same as having personal knowledge.  If you
engage in speech promoting your own products or services, you are responsible
for the claims you make.  If you can’t
verify their truth, then you shouldn’t be making those claims.  See also: substantiation.]
Here, Serova alleged that another set of defendants, not
Sony, “jointly created, produced, and recorded the initial versions” of the
Disputed Tracks and knew that Jackson didn’t perform them.  According to Serova’s allegations, Sony was
itself deceived and thus “lacked the critical element of personal knowledge
under the Kasky standard.”  Because Sony lacked actual knowledge, it could
“only draw a conclusion about that issue from [its] own research and the
available evidence. Under these circumstances, Appellant’s representations
about the identity of the singer amounted to a statement of opinion rather than
fact.”  The lack of personal knowledge
also meant that regulating the speech here had a greater risk of a chilling
effect, given that the UCL and CLRA create liability without intentional or
willful conduct.
Sony’s PR statements directly addressing the public
controversy were noncommercial, and the statements on the album cover and promo
video “also staked out a position in that controversy by identifying the singer
as Michael Jackson. The fact that those statements were made in the context of
promoting the album does not change their constitutional significance.”
The court of appeals was unwilling to force Sony to either
provide disclaimers about the singer’s identity or omit the disputed tracks
from the album.  And in another instance
of disturbingly broad language, the court of appeals thought that it would be
constitutionally problematic to compel commercial speech of this type, citing Nat’l
Inst. of Family & Life Advocates v. Becerra (2018) ––– U.S. ––––, 201
L.Ed.2d 835. Although commercial speech disclosures can mandate “purely factual
and uncontroversial information,” the compelled disclosure here wouldn’t be “uncontroversial”
because there was controversy around the performer of the tracks, and it wouldn’t
be “purely factual” from Sony’s perspective, as it had no personal knowledge of
the facts.  [That’s … not what “purely
factual” means.  You’re entitled to your
own opinion, but not to your own facts.]
[This analysis hints at one reason why commercial speech
doctrine has persisted despite assaults on it: all the other ways we have of
making distinctions between ok and not ok false speech that seeks to sell a
product are much worse. If “controversial” is independently meaningful (and it
shouldn’t be if a disclosure is factual), then it’s easy enough for a large entity
to generate the necessary “controversy” by taking a stand, no matter how stupid
and disprovable that stand is. Likewise with a requirement that a corporate
entity have “personal knowledge” of the falsity of its claims—my understanding
is that this has royally messed up securities law and consumer protection law
went to strict liability for very solid reasons.]
Second, the statements at issue described and promoted an
album that was fully protected by the First Amendment. “The identity of a
singer, composer, or artist can be an important component of understanding the
art itself…. [W]hether Michael Jackson was actually the lead singer of the
songs on the Disputed Tracks certainly affects the listener’s understanding of
their significance.”  Thus, the
statements at issue here were “unlike the purely factual product or service descriptions”
in other cases, such as Kwikset and
the representation that products were manufactured in the US. [Look, I might
even agree with this outcome, but this distinction is profoundly
disingenuous.  Kwikset is very much about specific definitions of “Made in the USA”
that are subject to contestation, and consumers are extremely unlikely to have
a definition of the term specific enough to make the distinctions that the
actual regulators have to make.]
Not all ads promoting an artwork are noncommercial speech; “mundane
or willfully misleading” claims might not be protected, such as a statement
falsely stating that a particular song is included in an album. But “where, as
here, a challenged statement in an advertisement relates to a public
controversy about the identity of an artist responsible for a particular work,
and the advertiser has no personal knowledge of the artist’s identity, it is
appropriate to take account of the First Amendment significance of the work
itself in assessing whether the content of the statement was purely commercial.”
Indeed, a footnote suggested that even representations about the identity of
the artist could be regulated, at least if the identity of the artist wasn’t an
issue of public interest [in which case no materiality] and the defendants had
personal knowledge of the issue.

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Amicus seeking rehearing in Honey Badger case

Posted on August 28, 2018 by rtushnet

Mark Lemley, Mark McKenna, and I wrote a brief in support of rehearing.  Here’s hoping!

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