Transformative work of the day, admissions edition

Posted on March 26, 2018 by rtushnet

An eagle-eyed (no pun intended) student spotted this admissions video from Boston College with a distinctly Harry Potter flavor.  Or maybe that ought to be Hermione Granger.

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Reading list: consumer search parsimony

Posted on March 26, 2018 by rtushnet

Jia Liu & Olivier Toubia, Search Query
Formation by Strategic Consumers
More evidence, if more were needed, in the keyword wars:
given that consumers prefer shorter queries, and that they may assume that some
attributes need more search than others, we should expect that at least some
searches using trademarks are from consumers not actually looking for
trademark-only results.  This research
about strategic search behavior reinforces that conclusion.  Using examples from frequently-searched
food-related terms, for example, the authors explain that:
[A] consumer who is looking for
information on Kitchenaid and/or Cuisinart food processors[] may be better off
using the query “Kitchenaid food processor” rather than a longer query that
includes “Cuisinart.” This is because Cuisinart food processors are often
compared to Kitchenaid, and the shorter query will retrieve at least one search
result that contains all relevant terms. Including “Cuisinart” into the query
greatly increases the proportion of results that contain this term, but this
comes at the expense of other terms, in particular “Kitchenaid.” The shorter
query already performs better under our simple implementation of the
“Compensatory-Average” metric that weighs all terms equally, but the difference
would be more pronounced if the consumer were primarily interested in Kitchenaid
over Cuisinart. In that case, omitting “Cuisinart” from the query would ensure
that most results mention “Kitchenaid,” while some results still mention
“Cuisinart.”
In sum, our field data suggest that
consumers indeed stand to benefit from being strategic in query formation, as
shorter queries may be at least as effective at retrieving desired content,
compared to queries that contain all the terms the consumer is searching for.
The fact that consumers tend to prefer shorter queries makes these shorter
queries even more attractive….
But do consumers actually engage in strategic searching?  They also run some experiments:
To sum up, the behavior we observe
suggests that participants are able to strategically leverage activation
probabilities between words, at least to some extent. Because our study uses a
somewhat  artificial lab setting, we do
not claim that the extent to which consumers leverage activation probabilities
in the real world is the same as in our study. Instead, we view our results as
proof of existence that consumers have some ability to strategically formulate
queries that contain only a subset of the terms they are interested in, but
that are effective at retrieving the other terms….
Our fndings suggest that the
content that is of interest to consumers is not simply the content mentioned in
their search queries, but also the content retrieved by their search queries.

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Reminder that materiality is a matter of likely effect, not certainty

Posted on March 23, 2018 by rtushnet

E-Imagedata Corp. v. Digital Check Corp., No. 15-CV-658,
2018 WL 1411226 (E.D. Wis. Mar. 21, 2018)
The parties compete in the market for hardware/software
systems used to view microform on a screen and convert it into digital files. [Microform!  Good to know some things are still around.] The systems cost thousands of dollars and are sold to institutions like
libraries, universities, and businesses. Each party uses resellers who compete
directly for many sales through a process that often includes bidding,
in-person product demonstrations, and hands-on customer testing.Plaintiff
e-Image sells the ScanPro and defendant ST Imaging sells the ViewScan, allegedly
falsely advertising its optical zoom capabilities and camera megapixel
capabilities, as well as its UL certification; “UL did not certify any of the
ViewScan devices until December 2015—when it certified the ViewScan III—but
brochures for all 3 devices, published months and years earlier, indicate UL
certification.”  e-Image also alleged
that ST Imaging falsely or deceptively equated its ViewScan devices with
e-Image’s competing ScanPro devices.
e-Image also asserted claims arising out of a failed bid
protest that it lodged with the GAO after the National Park Service awarded a
contract for “one camera microfilm scanner” to an ST Imaging reseller. e-Image
argued that ST Imaging’s product did not meet the terms of the government’s
solicitation, which required that the scanner’s “camera have a ‘minimum 25
megapixels.’ ” The GAO rejected e-Image’s proposed interpretation as
unachievable by any commercially available product. The GAO made two relevant published
findings: (1) e-Image “knew that the ordinary convention in the industry was to
represent camera megapixels in terms of the camera sensor itself” and, thus,
(2) the “camera sensor resolution” for the ScanPro 3000 is “6.6 megapixels,”
not “26 megapixel[s],” as e-Image continues to assert. ST Imaging then emailed its
authorized resellers: “If you are in a bid and your prospect says that the
competition has a 26 megapixel camera, please use [the GAO’s decision] to show
that they only use a 6.6 megapixel image sensor.” e-Image alleged that ST
Imaging attacked its reputation by claiming that e-Image lies about its own
products’ specifications.
Materiality: e-Image was not required to “prove that a
specific commercial statement by ST Imaging actually affected a specific
purchasing decision by a specific customer.” Courts “generally only require a
likely, as opposed to an actual, effect on consumer choice.” A reasonable jury
could find materiality, given record evidence that institutions looking to
purchase microform systems commonly set requirements for bids, including
minimum requirements for a scanner’s “optical zoom lens” and “camera
megapixels,” and that the proposed product be certified as meeting applicable
product safety standards, like UL’s. ST Imaging’s resellers represented
compliance with these standards, at least in part, by submitting prefabricated
marketing materials from ST Imaging. This raised a genuine dispute on
materiality.
Injury: the only customers deposed testified that price was “a
significant, and perhaps the dominant, factor in many of the purchasing
decisions at issue here,” while ease of use also mattered. But “a reasonable
jury could find that ST Imaging was able to adopt lower prices by falsely
claiming that its products were certified by UL and had capabilities that they
lacked without incurring the usual costs of certification or product
development. Similarly, a reasonable jury could find that by deceptively
equating its products with e-Image’s products, ST Imaging was able, in many
cases, to mislead potential customers into making purchasing decisions based on
price alone.”  
e-Image sought partial summary judgment on liability for
literally false representations, such as ST Imaging’s claims that its ViewScan
devices were certified by UL. But materiality and injury could also be found
against e-Image.  “[T]he record suggests
that a substantial majority of the parties’ customers make their purchasing
decisions after in-person product demonstrations that typically last one to two
hours, which may mitigate or eliminate whatever influence ST Imaging’s
promotional statements might otherwise have on customers’ purchasing decisions.”  [I wonder if the court will let e-Image make
a bait and switch argument, which would be consistent with the reasoning above:
if ST Imaging only got in the door by falsely representing that its products
met the bid standards, then its ultimate persuasiveness—especially if the
initial falsehoods were never corrected—probably shouldn’t break the causal
chain.]

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Truthful identification of performance defeats Illinois publicity claim

Posted on March 19, 2018 by rtushnet

Martin v. Wendy’s Int’l, Inc., — Fed.Appx. —-, 2018 WL
1225470, No. 17-2043 (7th Cir. Mar. 9, 2018)
“Guinness World Records lists Johannes “Ted” Martin as the
record holder for consecutive kicks of a footbag.” He sued Wendy’s
International and Guinness for urging families to play together and challenge
world records like Martin’s in a promotion. 
Each promotional kids’ meal, Guinness’s website explained, “will come
with one of six Guinness World Records record-breaking toys” that “provides fun
challenges and a chance for parents and kids to outdo each other for the title
of family’s best.” One of the toys was a footbag. Each kids’ meal also included
a link to a free Guinness World Records eBook, which provided “an exclusive
guide to records” for families to use. 
The words “Guinness World Records” were printed on the footbag and its
packaging. An in-store display showed the footbag, alongside the five other
toys, under the heading “Kids v. Parents” and the logos for Wendy’s and
Guinness. The text on the kids’ meal bag also referred to the six toys as
“record-breaking.” An instructional card with Guinness and Wendy’s logos asked
“Can You Break The Record?” The instructions included: “How many times in a row
can you kick this footbag without it hitting the ground? Back in 1997, Ted
Martin made his world record of 63,326 kicks in a little less than nine hours!”
Martin didn’t plausibly allege false endorsement:
No reasonable consumer would think
that Martin endorsed the footbags. The appearance of “Guinness World Records”
on the footbag might prompt a reasonable consumer to conclude that Guinness—not
Martin—is associated with the footbag. Martin’s name on the instruction card
simply identifies him as the holder of a record, not the endorser of any
product.
Nor was labeling the toys “record-breaking” false
advertising.  It was puffery. “[N]o
reasonable consumer would believe that free toys accompanying kids’ meals to
encourage intra-family play were the same types of items used to set world
records.”
The llinois Right of Publicity Act excludes the “use of an
individual’s name in truthfully identifying the person as the author of a
particular work or program or the performer in a particular performance.”
Martin argued that this exception didn’t apply because he didn’t perform in the
defendants’ promotion. “But Martin’s qualification is not in the statute. [The
statute] allows anyone to identify truthfully the performer of a particular
performance. And that is what the defendants did.”

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Sock puppet reviews aren’t literally false absent additional non-identity literal falsity, court rules

Posted on March 19, 2018 by rtushnet

Nunes v. Rushton, No. 2:14-cv-00627, — F.Supp.3d —-, 2018 WL 1271446 (D. Utah Mar. 9. 2018)

Every time I think I’ve seen it all, I’m reminded that humans are not only stranger than we imagine, they are stranger than we can imagine. Plaintiff sued defendant for copyright infringement, defamation, etc., mostly unsuccessfully except for the copyright claims, leaving for trial only the amount of the statutory damages award for copyright infringement.

Plaintiff published her novel A Bid for Love in 1998 and registered the copyright the same year. Defendant published a novel, The Auction Deal, between May and July 2014 by distributing between 80 and 90 free copies to reviewers and bloggers for promotional purposes. “With the exception of the addition of sex scenes, The Auction Deal is substantially similar to A Bid for Love and shares the same dialog, scenes, characters, themes, settings, and plot.”

In May 2014, defendant also created about fifteen “sock puppet” accounts on Google, Yahoo, Goodreads, and Facebook to post positive reviews of her previous two novels and negative reviews of plaintiff’s book. She also posted two negative Amazon reviews of A Bid for Love under her own name and two under sock puppet names.

After plaintiff learned of The Auction Deal, she attempted to obtain a copy by requesting it from one of defendant’s sock puppet accounts. In response, defendant sent plaintiff a series of disparaging comments, then pulled The Auction Deal from sale on Amazon after plaintiff contacted her. Other than copies she bought for herself, no other copies of the novel were ever sold.  Then defendant posted another negative review of A Bid for Love under her own name and nine more negative reviews of plaintiff’s books from sock puppet accounts. She also used sock puppets to give multiple one-star ratings of plaintiff’s books on Goodreads. On Facebook, her public comments about plaintiff accused her of “harassment.”

After plaintiff discovered defendant’s identity, she decided to sue and started a GoFundMe fundraiser to finance her lawsuit. Defendant posted several comments on the GoFundMe page using sock puppets, calling the solicitation a “fraud,” “hoax,” and/or “scam,” e.g., “This ‘fund me’ has got to be a hoax or scam. A publisher would be backing this if it were a real claim.”

In deposition, defendant conceded that her novel was substantially similar to plaintiff’s novel.  There was no factual dispute on her liability for copyright infringement, though there was enough to go to a jury on whether the infringement was willful, given that there was only circumstantial evidence of her state of mind when she infringed the copyright.  In an email, the defendant stated that, in her mind, she never published the book by selling copies to the public.  [Well, ok.  Seems kind of Trumpian to me, if she sent out review copies, but apparently she may argue that she was in a manic phase due to her bipolar disorder, so she lacked willfulness.]

The claim for actual damages failed. Plaintiff didn’t argue that the infringement caused the sales of her existing novels to suffer, and instead alleged that the copyright infringement caused her mental anguish and prevented her from writing two novels that she would have otherwise written during this timeframe. The court determined that “actual damages” as used in the statute didn’t include damages caused by the copyright owner’s emotional response to the infringement of a published work. “[T]he explicit provision for the recovery of the infringer’s economic profits in the Act strongly suggests that the copyright owner’s ‘actual damages’ must similarly be economic in nature,” and the case law agrees. Thus, only statutory damages remained for trial.

 The defamation/defamation per se claims failed because the online comments and emails were opinion about plaintiff’s books and personality traits, hyperbolic claims of “harassment,” “scam” or “fraud,” or unpublished communications sent only to plaintiff.  For example, in context, “readers would understand the use of the terms ‘fraud’ and ‘scam’ as exaggerated language expressing strong disapproval of Nunes’s efforts to raise money online, not as a charge of criminally fraudulent activity.”  As for “Ask your attorneys if in your quest to investigate and have people rally around you if you are guilty of harassment. I think the answer is yes,” that could be read to express a legal opinion, but even questionable opinions about the legal significance of plaintiff’s actions aren’t actionable as defamation.

 Some of defendant’s statements did contain false statements of fact, such as messages to book reviewers and bloggers claiming that plaintiff had given her permission to use elements of A Bid for Love or that plaintiff had co-written The Auction Deal with her. She also posted: “[Plaintiff] feels threatened because I told her I would be contacting my aunt, [apparently the CEO of plaintiff’s publisher], and letting her know how she is handling the situation—through reviewers and not through the author. [The publisher/a bookstore] are appalled at the way she is handling the situation.”  But the asserted facts weren’t defamatory: false claims about permission or collaboration don’t have a “tendency to injure a reputation in the eyes of its audience.” False claims about her aunt and of the bookstores’ alleged disapproval weren’t defamatory, even though they were likely intended to intimidate plaintiff; the statements weren’t about her, and “a falsehood concerning an opinion held by a third party is not sufficient to expose an individual to public hatred or ridicule.”

 False light claims failed for the same reasons as the defamation claims.

 Business disparagement/injurious falsehood: A business disparagement claim “concerns statements regarding the quality of the plaintiff’s product or the character of the plaintiff’s business,” and not “statements about an individual’s reputation.” Defendant disparaged the quality of plaintiff’s novels, giving them numerous one-star reviews and criticizing them for being “out of date” and “ridiculous.” These were constitutionally protected opinions, and defendant’s other online comments couldn’t be used to support her claim for the same reason the defamation claims failed.

 Tortious interference: Defendant allegedly interfered with plaintiff’s economic relations with the readers who purchase her books by way of two improper means: (1) posting defamatory comments on the internet and (2) infringing the copyright to A Bid for Love.  But the first wasn’t an improper means, given the result on the defamation claims, and the second was preempted by the Copyright Act.

 Plaintiff also alleged a violation of Utah’s electronic communication harassment statute. But the statute didn’t expressly create a civil cause of action, and the court wouldn’t imply one.

 Lanham Act false advertising: Plaintiff alleged that the use of multiple sock puppet accounts to post positive reviews of defendant’s books and negative reviews of her books constituted false advertising. First, defendant pretended to be an independent reader, not the author herself/the author’s competitor. Second, by using multiple sock puppet accounts, defendant allegedly created the false impression that multiple individuals liked her books and disliked plaintiff’s books.  Plaintiff didn’t submit evidence of actual deception, so she needed to show literal falsity.

The court relied on Romeo & Juliette Laser Hair Removal, Inc. v. Assara I LLC, 2016 WL 815205 (S.D.N.Y. Feb. 29, 2016), another case involving fake reviews.  There, the court found that fake bad experiences of non-existent customers were literally false because they described events that never occurred and fictitious customers that did not exist. But reviews posted under three separate pseudonyms by an owner of a competing business who was an actual customer of the plaintiff, claiming that the services was slow and that the plaintiff’s employees were rude, weren’t literally false because they were “largely matters of opinion and the plaintiff [had] not shown that they are actionable as false statements of fact.” But that’s not really the literal falsity part: the literal falsity is the misrepresentation about being someone else (and about having three separate experiences instead of one).  Whether that literal falsity is material is a separate matter, but it might well be so, and the FTC’s Endorsement Guidelines follow the principle that falsity/failure to disclose in these matters violates the FTCA even without other specific factual claims, because of the materiality of endorsers’ connections to the endorsee.  I certainly would find it highly material that the author of a review was a direct competitor, or was also the provider of the reviewed good/service.

 However, the court here found that the sock puppet reviews were just opinions: Defendant “did not misrepresent the essential characteristics of the books she reviewed. Instead, she claimed that her books were good while Nunes’s books were boring and outdated. Such statements are a matter of opinion and cannot be proven true or false.”

 Also, the Lanham Act claim failed separately because plaintiff didn’t show any damages or injury. Plaintiff offered the testimony of her expert that negative online reviews generally negatively affect book sales, and the lay opinion of a representative of Amazon, as evidence that she had been harmed. But the expert didn’t analyze her book sales and didn’t know whether her sales went up or down after defendant posted her reviews, nor could the expert assign a monetary value to the effect online reviews may have; her opinion was based on common sense. The Amazon rep also provided his lay testimony that bad reviews generally discourage sales.  [My understanding is that there is some research out there trying to quantify this, for those of you thinking about the future of these claims.]  Without evidence as to the specific effect that defendant’s online reviews had on plaintiff’s books, or about sales during the relevant period of time, or customer surveys or customer testimony, there was no proof to support the damages claim for lost sales. Damages caused by mental anguish also weren’t covered by the Lanham Act.

 Utah Truth in Advertising Act claims also failed; the law provides that a defendant who’s violated the law “shall” be enjoined, but also requires prior notice and an opportunity to correct the allegedly unlawful ad by the same media before injunctive relief is allowed.  Plaintiff’s prelitigation emails and a blog post complained about plagiarism and copyright infringement, not about the alleged violation of the Utah Truth in Advertising Act, and it didn’t provide defendant an opportunity to correct the record in order to avoid an injunctive relief action.  Damages failed for the same reason as they did for the Lanham Act claims.

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Pop goes the kitty? registration and infringement are separate inquiries, court points out

Posted on March 13, 2018 by rtushnet

SportPet Designs Inc. v. Cat1st Corp., No. 17-CV-0554 (E.D.
Wis. Mar. 2, 2018)
SportPet sued Cat1st for patent, trademark, and copyright
infringement and violations of Wisconsin’s Deceptive Trade Practices Act based
on its sale of pet products such as play structures for cats. SportPet alleged infringement of two registered trademarks: POP OPEN for collapsible containers
for household use [containers that … pop open?] and SPORT PET DESIGNS for pet
kennels, beds, and bedding and pet toys.
SportPet wasn’t assigned the POP OPEN mark until after it
brought this action, so it lacked standing to assert a claim for infringement. Even
if it could establish standing, the complaint didn’t plausibly suggest
infringement.  Not strengthening the
claim for the distinctiveness of the mark, the complaint alleged that “Cat1st
is violating SportPet’s . . . Pop Open trademark[]” by “using and advertising
the pop open design,” which “is a protectable mark.” But the word mark (if mark
it be) does not protect “the pop open design” (which presumably would have its own functionality issues if claimed as a mark).
The complaint also alleged that “Cat1st’s packaging and
advertising copies” language from SportPet, e.g., “pop open, sturdy and
lightweight, for travel, and convenient for carrying”—“almost word for word.”  That wasn’t enough here. Examples in the
complaint showed Cat1st’s use of similar terms to those used by SportPet—e.g., “sturdy,”
“lightweight,” “for travel,” and “for your carrying convenience”—none used the
specific phrase “pop open” (or a colorable imitation of it) in any way, much
less as a distinguishing and source-identifying mark.
SportPet’s second trademark claim did a lot better.  Here are the parties’ logos and packaging:
 

Plaintiff and defendant logos

Plaintiff and defendant packaging

Cat1st argued that the issue was whether its logo infringed SportPet’s
standard text mark.  But that’s not so:
trademark cases evaluate the marks “in light of what happens in the
marketplace.”  [citing me!]  The court also rejected as outside the
pleadings Cat1st’s argument that its uses were all “from packaging for products
sold in Japan under an exclusive license agreement” between the parties, “where
Cat1st lawfully owns the trademark registration for ‘Sport Pet Japan.’” Likely
confusion was sufficiently pled.
SportPet’s copyright infringement claim failed because it
had’t sought or received registration. 
[And might have a Kirtsaeng
issue, if Cat1st’s claims about Japan are true.]
The court also dismissed a claim under Wisconsin’s Deceptive
Trade Practices Act alleging that Cat1st misrepresented “to the public . . .
that [it is] selling SportPet’s products” and “misrepresent[ing] to [SportPet]
that [it] only sold the infringing products in Japan.” Cat1st’s
misrepresentations to the public allegedly caused SportPet to lose sales due to
customer confusion and Cat1st’s misrepresentations about where it was selling
its goods allegedly allowed it avoid legal action as it snuck into the U.S.
market. The court found that SportPet didn’t plausibly allege that the
misrepresentations caused SportPet any pecuniary losses recoverable under the DTPA, because
misrepresentations to consumers didn’t materially induce SportPet itself to
act, as required.  And Cat1st’s alleged
misrepresentations to Sport Pet didn’t contribute to SportPet’s decision to buy
anything or otherwise enter into any commercial transactions as a consumer of
goods or services, also required by the DTPA.

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Use of photo beyond license window doesn’t create false endorsement claim

Posted on March 13, 2018 by rtushnet

Bovinett v. HomeAdvisor, Inc., No. 17 C 6229, 2018 WL
1234963 (N.D. Ill. Mar. 9, 2018)
Bovinett, a model and actor, participated in a photoshoot
for HomeAdvisor. Bovinett’s agent was allegedly assured that the photos would
be used in static form only (i.e., either in print media or as a static image
posted on a website), and would not be incorporated into any video. Two weeks
later, Bovinett’s agent signed a consent and release form stating that Bovinett
agreed to convey his rights in the photos to HomeAdvisor for use “in
advertising, promotions, and any other use, and in any media, desired by
HomeAdvisor in its sole discretion, including but not limited to display on the
HomeAdvisor website, in television commercials, and on the Internet.”
HomeAdvisor’s personnel allegedly assured Bovinett’s agent that notwithstanding
the consent and release language, HomeAdvisor would not put the photos to use
in any video format.  Then it did.
Fraudulent inducement: Claims involving a false statement of
intent regarding future conduct are generally not actionable under Illinois law,
unless they are “particularly egregious” or are part of a larger scheme. These
alleged misrepresentations weren’t particularly egregious, nor did Bovinett
allege a pattern; two different statements about non-video use could in theory
be a pattern, but Bovinett didn’t sufficiently allege the first statement with
specificity.  Nor was fraudulent
concealment properly alleged; this requires that the defendant concealed a
material fact when under a duty to disclose that fact, but some sort of
fiduciary or confidential or other special relationship is required and none
was alleged.
Lanham Act/Illinois Consumer Fraud and Deceptive Business
Practices Act/Illinois Uniform Deceptive Trade Practices Act:  Bovinett failed to allege any false
statement.  And the likely confusion
claims failed because there could be no confusion about Bovinett’s affiliation,
sponsorship, or approval of defendants and/or their activities and services. “Bovinett
admits he agreed to pose as a model for HomeAdvisor’s photoshoot with the
knowledge that HomeAdvisor intended to use those photos in advertising. … [T]he
allegedly tortious commercials might well leave viewers with the impression
that Bovinett endorses HomeAdvisor. But that impression is accurate, at least
as of the time Bovinett sold his rights in these photos, so the impression
cannot confuse anyone.”  The court doesn’t discuss the rump confusion theory that viewers would be
confused about whether he authorized video use—which could hardly be material
to anyone, even if for some extremely unlikely reason the matter occurred to them.

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Redbox’s claims miss release window for injunctive relief

Posted on March 13, 2018 by rtushnet

Redbox Automated Retail, LLC v. Xpress Retail LLC, 2018 WL
1240345, No.17 C 5596 (N.D. Ill. Mar. 9, 2018)
The parties compete in the market for DVD rental services
through automated vending machines called kiosks. “In early 2016, Redbox
learned that DVDXpress was using kiosks that were, like Redbox’s, entirely red
in color. Around the same time, Redbox also learned that DVDXpress was
advertising—on its kiosks, its website, and elsewhere—that customers could rent
movies through DVDXpress twenty-eight days before the same DVDs became
available through Redbox.”
Nearly a year later, one Redbox official wrote in an email,
“I think that’s false advertising[.] We are day and date for most,” then asked
the CEO whether DVDXpress’s red kiosks infringed Redbox’s “trademarks or other
IP.” The CEO replied: “No it does not. We have looked at [sic] many times.
Nothing we can do except get these locations.” Four months later (15 months
after learning of the comparative advertising) Redbox sent a C&D.  More than three months after that, Redbox
sued. 
Given this recitation of the facts, you won’t be surprised
to learn that a preliminary injunction was denied due to Redbox’s delay.  The court didn’t even consider whether eBay changed the Lanham Act presumption
of irreparable injury (it does) because the delay would rebut any presumption.
Redbox argued that, at first, only lower-level employees
knew of DVDXpress’s alleged infringement. “But that assertion is not backed by
evidence in the record, and in any event Redbox does not explain why it would
be relevant to determining when it, as a company, learned of the infringement.”  The email from the CEO stating that the
company had already looked “many times” into the matter of DVDXpress’s red
kiosks and concluded that there was no infringement was only icing; it showed
that Redbox was “well aware of [its] rights and had concluded that they were
not violated.”
Redbox argued that it didn’t delay in bringing the false
advertising claim because it sought relief based only on DVDXpress’s
advertising regarding DVDs released between December 2016 and July 2017. But
the content of DVDXpress’s advertising—“Rent it here first 28 days before …
Redbox”—hadn’t changed since early 2016. 
Redbox argued that DVDXpress’s comparative advertising was only
“partially false” in early 2016, and that Redbox brought suit when the
advertising became false as to more DVDs through new agreements with Warner
Bros., Fox, and Universal Pictures decreasing the delay between a DVD’s release
and its availability at Redbox kiosks.  If there had been a 28-delay for all such
films in early 2016, then waiting to sue would have been a good idea.  But of the 24 recent movies Redbox claimed to
have available within 28 days, only 8 were distributed by these studios.  There was no evidence that DVDXpress’s
advertising as to those studios’ DVDs was any less false in early 2016. And
even as to those studios, Redbox was releasing some DVDs from them earlier—five
out of the 8 it named were distributed before the new agreement. Thus, the
comparative advertising couldn’t have converted to “substantially false” as a
result of those agreements.  Indeed, the
emails showed that people at Redbox believed the advertising was false in early
2017.
Nor would the court stop the clock when Redbox sent its
C&D. “If the letter had led to negotiations with DVDXpress, then Redbox
perhaps could not be faulted for waiting to see if the dispute could be
resolved out of court. But DVDXpress never answered the letter, and Redbox
proceeded to wait a further three months before filing suit.” That delay “severely
undermines any sense of urgency that might otherwise have attached to Redbox’s
request for preliminary injunctive relief.”

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Pod save the claim: “sportspods” competition leads to false advertising, TM claims

Posted on March 9, 2018 by rtushnet

Anthem Sports, LLC v. Under the Weather, LLC, 2018 WL
1175406, No. 17cv596 (D. Conn. Mar. 6, 2018)
Anthem and UTW compete in the market for “sportspods,” small
tents for viewing outdoor sporting events during inclement weather. I won’t
discuss the claims for declaratory relief against potential violations of UTW
patents.
Anthem initially distributed UTW products online under an
exclusive distribution agreement, until the relationship collapsed and UTW
turned to Dick’s Sporting Goods for distribution. “Anthem subsequently located
a different manufacturer and “began offering all weather personal enclosure
products under the trade names UnderCover™ and SportPod™, including SoloPod™,
Action Pod™, TeamPod™, and BugPod™.” UTW then allegedly began using “the mark
‘Sportspod’ to refer to multiple goods” that it offered for sale.  UTW also allegedly threatened Anthem, its
supplier, and customers with patent infringement claims.
On Facebook, when customers leave comments indicating a
desire to purchase Anthem Pods on Anthem’s Facebook page, UTW’s representatives
allegedly respond (i) that the “only place to get [Anthem Pods] is
undertheweatherpod.com,”; (ii) that the Anthem Pods “are illegal knockoffs and
very poor quality,” and that the “legal ones are only available at
undertheweatherpods.com”; and (iii) that the Anthem Pods were “[Pescovitz’s]
idea and patent”; (iv) and that the Anthem Pods are “complete knock offs.” (Couldn’t
UTW’s reps just be blocked?)
Based on this conduct, Anthem brought a false designation of
origin claim, a false advertising claim, and a trademark infringement claim.
Guess which survived!
For false designation of origin, the court found that Anthem
hadn’t properly alleged a reverse passing off claim.  Misrepresentations of inventorship aren’t
actionable under Dastar.  The alleged claims that Anthem pods could
only be bought from UTW were really statements that the Anthem pods were are “knockoffs”
or of “inferior quality,” and that the only place to get legal “pods” was from
UTW’s website. These comments couldn’t plausibly be interpreted to suggest that
UTW sold Anthem Pods but rather presents UTW as an alternative.
False advertising: The “knockoff” and “poor quality”
statements were mere statements of opinion, not fact.  The “illegal” and “patent infringing”
statements were also nonactionable layperson statements of legal opinion.  “Complete knockoffs” was both opinion and
puffery via subjective hyperbole.
Trademark: claims based on UTW’s use of SportsPod and
Anthem’s claimed SportPod mark survived. 
[Since the judge in this case identified the products at issue as
“sportpods,” I foresee a problem with this term as a mark for the products.]
Anthem also sufficiently alleged tortious interference (and
common law unfair competition) from UTW’s allegedly disparaging statements on
FB, including an allegation that UTW made these comments with full knowledge of
the lack of “any legitimate basis” for them and in “bad faith to unlawfully
stifle competition.”  Instead of
identifying specific lost customers, what was required was facts demonstrating
“that, except for the tortious interference of the defendant, there was a
reasonable probability that the plaintiff would have entered into a contract or
made a profit.” The complaint alleged that various potential customers have
expressed interest in purchasing Anthem Pods on Anthem’s Facebook page, and the
majority of the disparaging comments were aimed at customers who had expressed
enthusiasm for Anthem’s products. 
Targeting “enthusiastic potential customers” made it plausible that some
of them didn’t buy Anthem pods due to UTW’s statements.
Connecticut’s unfair trade practices law, CUTPA, also
allowed a state coordinate trademark infringement claim, but not a false
advertising claim for the reason discussed above.  Anthem also alleged that UTW violated CUTPA
by “inducing Anthem to invest significant resources and efforts in marketing
and selling the UTW Personal Enclosures by promising Anthem that it would be
the exclusive distributor for such products other than UTW and then selling the
UTW Personal Enclosures to Dick’s Sporting Goods for resale.”  UTW argued that, even if accepted as fact,
these allegations established little more than breach of contract.  However, “although “a simple breach of
contract would not be within the criteria for a CUTPA claim, substantial
aggravating circumstances attending the breach would sustain such a claim,” and
Anthem alleged sufficient aggravating circumstances by adding to the alleged
breach trademark infringement and baseless infringement threats against Anthem
when the company attempted to sell its own products in lieu of those from UTW.

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unauthorized sale of model’s photos leads to internally inconsistent TM/ROP ruling

Posted on March 9, 2018 by rtushnet

Passelaigue v. Getty Images (US), Inc., 2018 WL 1156011, No. 16-CV-1362 (S.D.N.Y. Mar. 1, 2018)

Elodie Passelaigue is a professional fashion model who sued under the Lanham Act, Washington state law, and New York law against Getty, Bill Diodato Photography, and Bill Diodato (no stranger to IP litigation) for unlawfully licensing and selling images of her that were eventually used to advertise synthetic beauty products. The court dismissed some claims but allowed others to continue.

As part of one advertising campaign in early 2004, Clinique arranged for a test photo shoot in New York, and hired Diodato to take the photos. After the test shoot, Diodato allegedly “asked Ms. Passelaigue if he could use photos from the test shoot for his portfolio and professional website simply as an example of his work.” He allegedly “showed her a form document titled ‘Model Release,’ representing to Ms. Passelaigue that if she was willing to allow him to use the photos only for his portfolio and website, she just needed to sign the Model Release form.” Passelaigue allegedly agreed to allow him to use the photos for his website “[a]s a professional courtesy.” The Release she signed allegedly didn’t have some important information, including photographer or witness signatures, a “Description of Shoot,” or an attached copy of a photo ID or “Visual Reference.”

In 2009, Passelaigue was hired to model for a photo shoot in New York for Spiegel, and Diodato photographed that shoot. Diodato allegedly took about a dozen headshots of Passelaigue without Spiegel’s consent, and told Passelaigue the headshots were “precautionary, in case Spiegel later decided it wanted to use the images for the cover of a catalog.” Passelaigue didn’t sign anything at the 2009 Spiegel photo shoot.

In 2014, Passelaigue learned for the first time that her headshots were being used for an advertising campaign for Botox and on an Allergan website, http://www.skinmedica.com.  The webpages allegedly falsely suggest that Passelaigue was at least in her 40s.  Allergan allegedly continued to use Passelaigue’s images in its advertising campaigns until 2016.  Passelaigue’s agent investigated, and eventually Getty provided a copy of the Release containing a handwritten date of “6-11-09” under her name, and the phrase “Clinique Underwater Shot [sic] & Spiegel Beauty” on the line designated for “Description of Shoot,” both written by someone else. This Release also included two sample headshots, one from each shoot.  Getty eventually identified the photographer as “Adrianna Williams,” who was selling other models’ photographs through Getty, but other models hadn’t heard of her either, and Passelaigue determined that the photographer was in fact Diodato.

The court found the release binding as to the 2004 Clinique shoot only, since Passelaigue conceded that she signed it; the plausible allegations of “doctoring” the release sufficed to continue the case for the 2009 photos.  Passelaigue argued that she was fraudulently induced to sign the original Release because
Diodato orally promised her that he would only use her photographs in his portfolio and on his website.  However, the release language was two paragraphs of super-broad language allowing the photographer to distribute the images “for editorial, trade, advertising, packaging or other purposes in any manner or medium … throughout the world, in perpetuity.”  It further said, “I understand Photographer may contract with a stock agency and that the images may be included in stock files. I further understand and agree that the images may be modified, altered, cropped and combined with other content such as images, video, audio, text and graphics.”  Because the alleged misrepresentations conflicted with the terms of the Release, “there can be no reasonable reliance as a matter of law.”

Nor was the Release voidable because, “for a high-end fashion model, the limitation of $500 in damages, as well as the prohibition on any objection to unflattering, embarrassing, or otherwise objectionable uses, are unconscionable terms.” Although the allegations in the complaint suggested “some deceptive tactics,” they didn’t rise to the level of depriving Passelaigue of “meaningful choice,” as required for unconscionability.  “The Release is short—one page—and afforded Plaintiff with the opportunity to easily disprove Diodato’s alleged oral promises that he would only use the photographs for his portfolio.” Passelaigue didn’t allege that her bargaining power, experience, and/or education were limited, or that she was under any sort of duress or pressure to sign the release without reading it, and she admitted that she signed it as a “professional courtesy.” Thus, there were no allegations that Diodato did anything so as to effectively deprive Passelaigue of a meaningful choice.

The same arguments disposed of her fraud claim.

Continuing on with the 2009 photos, the court turned to her NY right of publicity claim.  Defendants argued that the photographs weren’t used “for purposes of advertising or trade” under Section 51 because they were merely making the images themselves available for license.  But an image for sale by an online image distributor is exempt from Section 51 liability only so long as it was “for use in a manner lawful under this article.” Because Passelaigue plausibly alleged that the sale of images was not in fact “for use in a manner lawful under” Section 51 by virtue of the fact she did not knowingly authorize their use, and she also adequately alleged that sale of the images themselves was “for purposes of advertising or trade.” 

The court also disposed of defendants’ First Amendment defense.  “The photographs here are entirely commercial in nature. They were commissioned by companies seeking to use them in advertising campaigns, and any artistic expression added by Diodato as the photographer was incidental.” Nor was Section 51 preempted by §301 of the Copyright Act, because of the additional element of use of the image for advertising or trade purposes without written consent.

Passelaigue’s Lanham Act claims mostly failed.  Her allegations were that defendants violated the Lanham Act by (1) misrepresenting that Getty had the right to license or sell photographs of her; (2) using the fictitious name of Adrianna Williams as the name of the photographer, which was likely to cause confusion as to the origin of the images; and (3) contributing to Allergan’s use of her image in a way that falsely associates her with synthetic cosmetic products.

However, Passelaigue had no rights to the photos themselves.  “[H]er only plausible claim can be based on harm to her image, and its false association with another product.” Thus, alleged misrepresentations (1) and (2), as well as allegations that Diodato contributed to Getty’s acts, failed to state a claim; even if she did have rights to the photos, Dastar would bar those claims.

Turning to claims based on false affiliation with Allergan and with the pseudonym Adrianna Williams, the court noted that “the misappropriation of a completely anonymous face could not form the basis for a false endorsement claim, because consumers would not infer that an unknown model was ‘endorsing’ a product, as opposed to lending her image to a company for a fee.” However, Passelaigue’s allegations she is an “internationally-renowned fashion model” might establish that her mark is strong enough to cause a likelihood of consumer confusion.  In addition, the sale of images of Passelaigue on Getty’s stock photo website and its listing under the work of photographer “Adrianna Williams” were affiliations that are covered by the text of the Lanham Act. [How could this possibly be material to anyone?  Also, if Diodato really did take the pictures, why can’t he use a pseudonym without violating the Lanham Act? Are other pseudonyms also violations of the Lanham Act?  Also also, why isn’t this conduct, which is to say a false designation claim repled as “affiliation” with Getty or Williams, covered by Dastar too?]

As for contributory infringement, Passelaigue failed to sufficiently allege that defendants intentionally induced non-party Allergan to violate the Lanham Act, as required. She alleged that Diodato was aware that, by selling the images to Getty, that Getty would “use the images commercially, advertising them for sale or license to others, such as Allergan,” and that Getty “knew or should have known that professional models such as plaintiff … would not have agreed to convey rights to their images to Diodato, Getty, or ultimately one of Getty’s clients.” She further alleged that Getty should have known how Allergan would use the image because it licensed that image. None of this was sufficient to allege intentional inducement. (Citing Tiffany v. eBay.)

Anyway, the NY unfair competition claims were analyzed just as the Lanham Act claims, except that NY also requires bad faith.  But Passelaigue’s allegations of defendants’ responsibility for the unauthorized use by Allergan would show bad faith.  [Wait one second: weren’t those the allegations just found insufficient to allege contributory infringement?  If NY law is the same as federal law, how can this be the case?]

As for NY consumer protection law under Section 349, allegations that Getty misrepresented its right to license were too conclusory to state a claim, or explain how the alleged misrepresentation actually targeted or harmed consumers.

The court refused to dismiss class allegations at this stage of the case.

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