Adding clickbait title isn’t false advertising or fraud on author

Posted on September 19, 2017 by rtushnet
Dankovich v. Keller, 2017 WL 4081852, No. 16-13395 (E.D.
Mich. Sept. 15, 2017)
Interesting dispute: the pro se litigant didn’t like the
editing of his essay, including the clickbaity headline added by the editors,
and sued for various fraud/false advertising claims. The magistrate judge
recommended denial of leave to amend/dismissal of various claims, and the
district judge agreed.
Dankovich wrote an essay about his experience as a young
prisoner in solitary confinement.  He
sent a draft to defendant Eli Hager, an editor at defendant The Marshall
Project, a non-profit news organization that focuses on the criminal justice
system. He called the essay The Riving, which dealt with “how quickly solitary
confinement can institutionalize and mess with the mind of an adolescent.” Hager
requested a few alterations and stated “[j]ust like last time, my higher-up
editor will have the final say, so I don’t want to make any promises. But I
definitely CAN promise that if you keep working on these pieces and future
submissions, you will definitely be published here.” He responded, and then
Hager sent him “the latest” version and said that it had moved to the top of
the queue for publication. The Marshall Project, in collaboration with
defendant VICE, published the essay under the title I’m Losing My Mind after
Refusing to Plead Insanity for Murdering My Mom. Dankovich also alleged other
changes to the text of his essay, including that he pleaded no contest to the
murder of his mother when he pleaded guilty, and that “around”—not “on” — his
eleventh birthday he was taken to the hospital for physical abuse by his
mother.  (The plea information was
apparently later corrected.)  Dankovich
objected to the published version but Hager told him that VICE Media wrote the
headlines and wouldn’t be changing this one.
Dankovich sued for copyright infringement (not addressed
here) and Lanham Act violations, and tried to amend the complaint to add fraud
claims.  The court agreed that Dankovich
couldn’t adequately plead fraud based on Hager’s statements to Dankovich about
the essay: none of Hager’s statements contained a representation that the essay
was returned to Dankovich in final version, and thus Dankovich couldn’t allege
reliance on a false statement.  The
statement, “My editor just informed me that she liked your piece (‘The Riving’)
so much that she’s moving it to the top of our production queue,” wasn’t a
statement that the piece would be published as submitted, nor was the statement
that “[a]ll of the different parts are still yours, but they’ve shifted around
a lot of lines to make things pack more of a punch” false in context, which
included Hager’s statements that he wanted Dankovich to see the edits “since
it’s your piece” but that “this kind of editing happens with all of our pieces.”
The statement “[a]ll of the different parts are still yours” was thus, in
context, not a representation about the published version would be “all his.”  Dankovich’s subjective interpretation was
wrong, but that didn’t make out a fraud claim.

Lanham Act claim: Initially, Dankovich only pled
§43(a)(1)(A) claims, but wanted to argue false advertising: “Defendants
continue to advertise a completely false statement which Plaintiff has never
written or uttered with Plaintiff’s name online, advertisement which furthers
The Marshall Project’s business and political goals.”  The initial complaint argued that the
headline was falsely attributed to him. 
Considered as false advertising, this fell short: there were no facts
alleging that any false statements were made in “commercial advertising or promotion.”
Even assuming implied falsehood, he didn’t allege facts showing that a
“substantial portion” of the 100,000 people who read the essay were deceived by
the title, other parts of the essay, or defendants’ attribution of the essay to
him, or facts showing materiality to a purchasing decision.  Also, Dastar
prevented any “origin”-based claim—an interesting entry into the trend of using
Dastar to resolve issues that also
might be Rogers v. Grimaldi type
cases of affirmative (alleged) misrepresentations of authorship.

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Reading list: consequences of 1A protections for off-label promotion

Posted on September 18, 2017 by rtushnet

Patricia J. Zettler, The Indirect Consequences of Expanded Off-Label Promotion, Ohio State Law Journal, Forthcoming 

The U.S. Food and Drug Administration’s (FDA) policies have been a battleground for litigation about First Amendment protections for commercial speech. In the last five years, the FDA’s position that “off-label” promotion of approved prescription drugs—when a manufacturer promotes a drug for a use for which the FDA has not approved it—leads to violations of the Federal Food, Drug, and Cosmetic Act has been subject to successful legal challenges. Although the merits of these off-label promotion decisions are well traversed in the literature, this Article explores the potential indirect consequences of recently-recognized protections for off-label promotion. This Article demonstrates that—as suggested in the dissenting opinion in United States v. Caronia, a high-profile 2012 case regarding off-label promotion—protections for off-label promotion might affect the FDA’s decision-making in areas other than drug promotion, and analyzes precisely what those effects could be in light of the FDA’s current statutory authority.

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Reading list: the consumer in TM law

Posted on September 18, 2017 by rtushnet

Kimberlee G. Weatherall, The Consumer as the Empirical Measure of Trade Mark Law, The Modern Law Review, Vol. 80, No. 1, pp. 57-87, 2017


Although consumer responses to signs and symbols lie at the heart of trade mark law, courts blow hot and cold on the relevance of empirical evidence – such as surveys and experiments – to establish how consumers respond to alleged infringing marks. This ambivalence is related to deeper rifts between trade mark doctrine and the science around consumer decision‐making. This article engages with an approach in ‘Law and Science’ literature: looking at how cognitive psychology and related disciplines conceptualise consumer decision‐making, and how counterintuitive lawyers’ approaches appear from this perspective. It demonstrates how, especially when proving confusion, decision‐makers in trade mark demand the impossible of empiricists and are simultaneously blind to the weaknesses of other sources of proof. A principled divergence, without seeking to collapse the gaps between legal and scientific approaches, but taking certain small steps, could reduce current problems of proof and contribute to better‐informed, more empirically grounded decisions.

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Right of publicity question of the day

Posted on September 18, 2017 by rtushnet
Restaurant: Thelonious Monkfish

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SPIRE-inspired TM suit fails to enjoin noncompetitor

Posted on September 14, 2017 by rtushnet
Spire, Inc. v. Cellular South, Inc., 2017 WL 3995759, No.
17-00266 (S.D. Ala. Sept. 11, 2017)
Spire, a provider of natural gas fueling services, sought a
declaratory judgment against Cellular South, d/b/a C SPIRE, a wireless
telecommunications provider that also provides television and internet services,
for noninfringement/nondilution, and Cellular South sought a TRO/PI in
return. 
Cellular South began doing business as C SPIRE in late 2011.  In late 2012, the entity now known as Spire
chose the Spire mark and began using it for its natural gas stations, displayed
in a combination of gray, blue and white. 
In 2013, LXE and Cellular South entered into a coexistence agreement;
LXE used “Spire” for antennas for infrastructure, not sold to ordinary
consumers.  In 2014, now-Spire’s
rebranding as Spire spread, and Spire was registered for fueling stations and
used on a national website.  In a 2015
trademark search, now-Spire identified C SPIRE as one of the results in 596
pages of results; now-Spire considered it irrelevant because it wasn’t in the
same business.  There were over 150 active
registrations for Spire, including 15 in Alabama.  In 2016, Spire began rebranding most of its
operations under the Spire brand name, including for promoting, offering and
rendering natural gas marketing/fueling in Alabama, Mississippi, Missouri, and South
Carolina.  Cellular South then sent a
C&D and opposed Spire’s pending trademark registration.  Spire’s rebranding continued; as of August
2017, employees were wearing Spire hats and ID badges but had yet to get new
uniforms, and vehicles were being updated.
Cellular south cited 2016 and 2017 market surveys for
Mississippi indicating C SPIRE has a “high brand preference” and the general
health of the brand is “very strong,” with 88% brand awareness in that state.  The court found that the mark was at least
“well known” in Mississippi, but evidence didn’t support strength claims for
other states.  Spire submitted
significant evidence of competing uses in many states, rendering the term “heavily
diluted nationwide.” “Cellular South has not established a substantial
likelihood of showing that its mark is arbitrary and thus entitled to the
highest protection.” [Yes, this conflates conceptual with marketplace strength,
but it doesn’t seem to make a difference.]
Mark similarity: 
Cellular South’s witness testified that Cellular South’s logo will be
confused with Spire’s logo because “the average consumer driving down the road
at 55 miles per hour seeing a billboard will likely think Cellular South
altered its logo and changed its color to orange.” The court found that the
marks differed somewhat: Spire’s mark is orange, with block lettering in a
specific font, and has a symbol after the lettering (two staggered
semi-circles, representing a handshake). Cellular South’s mark is blue, with
rounded lettering in a different font, and has a symbol before the lettering (a
“c” with beams of varying lengths surrounding it). They were pronounced
differently: one versus two syllables, and one using “c” while the other didn’t.
Cellular South also made prior representations to the USPTO (in the Honeywell
agreement) that its use of the letter “c” in its logo sufficiently
distinguished it from another “spire” mark. 
The context was distinguishable (businesses involved in infrastructure,
not common consumers) but that argument was still relevant.  Overall, the colors differed, the fonts
differed slightly, the spacing differed slightly, and the art differed, making
the overall impression distinguishable. Similarity weighed slightly in Cellular
South’s favor.

Product/service similarity:  Cellular South argued that local and long
distance transmission of telecommunications was similar to Spire’s  “local and long distance transmission of gas”:
Cellular South has 7,000 miles of fiber cable underground and Spire supplies
natural gas through underground pipelines.  Also, “someone may move into a new home or
office and need to set up phone, internet, television and gas. In that case, he
or she could call C Spire for the first three and Spire for the last.”  Cellular South planned to expand into lighting
controls, thermostats, CO2 detectors, etc. for the household, and argued that
Cellular South was a utility like Spire.
The court disagreed. 
“Spire’s natural gas energy services are distinct and unrelated to Cellular
South’s telecommunication goods and services.” They don’t compete, and, as
Cellular South told the USPTO, its buyers sign up for phone or computer
services not “by mistake” nor “without full knowledge as to the source of those
services.”  
There was also no evidence of actual confusion.  Jacob Jacoby did a survey and concluded that
“it is highly unlikely that any consumers seeking telecommunications services
would call a natural gas company for such services, or think that one is linked
with the other – noting only 2.7% of consumers may think the businesses could
be associated.” The lack of relation between the parties’ services made
confusion less likely.  Most interesting
citation: General Motors Corp. v. Cadillac Marine & Boat Co., 226 F. Supp.
716 (W.D. Mich. 1964) (rejecting plaintiff’s theory that “public confusion
automatically follows the use of the trademark ‘Cadillac’ upon any other
product, no matter how unrelated it may be to Cadillac automobiles” and holding
“[w]hile Cadillac cars and defendant’s Cadillac boats are means for
transportation….they do not possess the same descriptive properties….This
differential makes them void of inherent confusing characteristics.”….).
Indeed, the court, continued, “[c]ase law also suggests that
direct or actual competition with the same or similar goods/services is
required for an infringement claim to survive.” 
V. interesting!  The court pointed
to dilution as the appropriate cause of action for unrelated
goods/services.  In terms of Cellular South’s
claim to its “zone of natural expansion” in services, “the senior user of a
mark cannot monopolize markets that neither his trade nor his reputation has
reached.”  Being utilities delivered
undergraound wasn’t sufficient similarity to weigh in Cellular South’s favor.
Similarity of customers and sales outlets between the
entities: Cellular South argued that it used all types of advertising you can
think of and sold to the general public, leading to inevitable overlap.  Spire responded that it didn’t use retail
stores (consumers have to call Spire or use its website to sign up) and that
the public couldn’t select from a long list of competing natural gas providers
as it can for telecom providers.  “Cellular
South’s advertising and sales argument is based on a faulty premise — that
Cellular South and Spire are using the same available channels of advertising
to compete against one another…. Further, apart from stating its customers are
homeowners and businesses, Cellular South has not shown how a cell phone or
internet customer is similar to a natural gas customer.”  [Well, they probably often are the same
person, but they could be thinking about different things for different
purchases.]
Similarity of advertising methods: the court found this
factor neutral, given Spire’s arguments that the content of its ads were very different, despite the similar
media.  “[W]hile both companies may use
the same or similar advertising methods and styles, because the companies are
not competitors in the telecom industry, they are necessarily communicating
distinct and different advertising messages to different audiences.”
Intent: Cellular South didn’t show that Spire had a
conscious intent to capitalize on its reputation/goodwill, was intentionally
blind, or otherwise manifested improper intent in adopting its mark.
Actual confusion: Cellular South’s confusion arguments were
linked to its future plans to “own the home” – it recently applied to register
its marks for home automation and security services (alarm services – alarm
systems, CO2 detectors, thermostats, garage door openers, lights, AC, door
locks, lighting controls, etc). But Spire has no plans to go into the telecom
and internet business.  And Cellular
South couldn’t show actual confusion; there were no instances of both companies
advertising in Alabama and Mississippi. 
Its survey found that, after viewing the company’s logos, “just shy of
37%” of consumers were confused, thinking Spire was affiliated with Cellular
South.  Spire criticized showing only the
bare logos to participants, which the surveyor justified by arguing that Spire
wasn’t yet in the marketplace and that isolated logos are common (e.g., on a
headset or jumbotron). The surveyor also testified that there might be
confusion and inconvenience with customer call centers, and that a Spire
catastrophe could affect the image of Cellular South.  Jacoby responded that Cellular South’s expert
used the wrong universe (testing Spire’s customer base, not Cellular South’s),
wrong stimuli (logos without context), and wrong protocols (no control group!).
The court found no evidence of actual confusion, just conjecture
and speculation by Cellular South. “At most, the evidence, per Dr. Jacoby,
indicates that 15.3% of consumers thought a telecommunications business and a
natural gas business could be associated. Association, however, is not de facto
confusion.” On balance, there was no likely success on the merits.
Alabama and Mississippi Trademark dilution: 15 U.S.C. §
1125(c)(6) states that “[t]he ownership by a person of a valid registration …
on the principal register under this chapter shall be a complete bar to” a
state law dilution claim.  But Cellular
South is challenging the Spire registration. 
While that was pending, the court wouldn’t dismiss the state-law
dilution claims as preempted.
Both states protect marks that are “famous and
distinctive.”  Fame meaans “widely
recognized by the general consuming public of this state or a significant[ ] geographic
area in this state as a designation of source of the goods or services or the
business[ ] of the mark’s owner.”  For
Alabama, there was no evidence that the C SPIRE was “famous” in Alabama before
Spire’s first use of the “spire” mark in December 2013. For Mississippi, the
evidence of fame was from 2016, years after Spire’s first use of a version of
the “spire” mark in December 2013. However, since Spire used other versions of
the mark in 2016, there was “some” evidence of C SPIRE’s fame at that time.  “[E]ven assuming arguendo that the C SPIRE
mark was famous in Mississippi as of March 2016, Cellular South still has to
submit evidence showing that the public associates (or will likely associate)
the same mark with both Cellular South and Spire, and that such association
infringes on Cellular’ South’s rights ‘by preventing the mark to serve as a
unique identifier of the senior user alone.’” While it was a close case, the
court found that Cellular South hadn’t shown a substantial likelihood of
success on the merits.  (Could it be
a close case overall if the Spire registration might be valid?)
Irreparable harm: eBay
applied to trademark cases. Cellular South argued that the threat of lost
control over its reputation was irreparable harm.  But “Cellular South and Spire do not
produce/sell (or associate with) the same goods/services such that one would
logically (or necessarily) ‘be at the mercy’ of the nature and quality of the
goods/services of the other.”  Cellular
South’s evidence was speculative: e.g., “risk of a gas leak,” theoretical
“negative customer experiences,” “negative social posts” incorrectly linked to,
or associated with, Cellular South. But Cellular South also emphasized the
hundreds of millions of dollars and thousands of hours it has invested to to
create trust in its brand. Here’s a good quote for defendants in non-competing
goods cases: “The Court finds it incongruous for Cellular South to argue how
famous and well known its name is and how vested it is with its customers and
communities as a trusted brand, yet to simultaneously ask the Court to conclude
that Spire’s use of a mark – in a different industry, with a different
business, selling/providing different goods/services – is on the verge of
causing the imminent loss or destruction of all of those dollars and work hours
unless an immediate injunction issues.” 
Plus, Cellular South’s delay in seeking injunctive relief
argued against irreparable injury; it knew of Spire’s rebranding plans at the
latest in March 2016, when it sent a C&D. 
Then Spire sued for declaratory relief in June 2017.  Cellular South only moved for injunctive
relief in August 2017.  The potential for
a slow rollout of Spire’s rebranding didn’t justify disregarding the March 2016
letter, which “indicates that Cellular South thought the harm or injury was
actual or imminent at that time, not prospective, potential or possible, yet
failed to seek injunctive relief.” And in February 2017, Spire notified
Cellular South that it was already rebranding and that the process would finish
by the end of 2017.  Whether Cellular
South’s delay was a few months or 18 months, it undercut any urgency.
The balance of harms weighed in favor of Spire, given that
it had already started operating under that mark and it had invested substantially
in rebranding since 2016. Nor, of course, did the public interest favor an
injunction.

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Twitter news

Posted on September 13, 2017 by rtushnet

An enterprising law student is livetweeting from the ABA’s Trademark Day at the PTO, @stemlak 

Also, I’m now Twitter verified, which has yet to change my life, but I have hopes.

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“Next Up In Apple/Samsung Smartphone Wars: Design Patent Remedies Following The SCOTUS Decision”

Posted on September 13, 2017 by rtushnet
Panel at the National Press Club
RT: Huge debt to Sarah Burstein’s work, the best and most
scholarly work on the subject—says things that aren’t clearly on either “side”
of the present dispute, but I find persuasive.  Her conclusion based on the history and early
caselaw: article of manufacture is a concept distinct from “machines” or “compositions
of matter,” and the phrase “article of manufacture” should be interpreted to
refer to a tangible item made by humans that has a unitary structure and is
complete in itself for use or for sale, as long as it isn’t also a machine or
composition of matter. The relevant question is whether anyone manufactures, uses, or sells that kind of item separately.  For example, outer shells are typically the
articles of manufacture, not the entire car or other machine.  I strongly recommend her recent articles on
the article of manufacture in 1887
and today,
especially her description of the temptation to “aggregate different design patents
into a single Frankenclaim,” which may be at issue here.  She also suggests that the article of manufacture
at issue in any given case is primarily a legal question to be determined by a
judge in a way similar to a Markman hearing.
Howard Hogan, Gibson Dunn & Crutcher: Filed amicus brief
for Nike on neither side.  SCt decision
took a lot of legal community by surprise b/c of its narrowness.  Unanimous court, narrow holding rejecting
claim that design patent statute has a rule that the article of manufacture
must be the complete device as sold.  Now
to figure out the alternative: unlike the Lanham Act, which has an explicit
burden-shifting provision, the design patent damages statute says “total
profits on the article of manufacture … to which the infringing design has been
applied.”  Apple +at least two other
cases: courts are wrestling with burden and definition of article of
manufacture.
Carl Cecere, Counsel, Hispanic Leadership Fund and the
National Grange: amicus of coalition of rural/minority interest groups.  Clients recognized potential for weaponizing
design patent damages as threat to competition and innovation.  Clarity is important. Apple’s proposed test
is designed to ensure it gets the profits it got in the first trial, but the
factors are too squishy for predictability: proposes a test that includes
factors such as how the defendant sells the product and how it accounts for the
profits internally, as well as visual contribution of patent to design as a
whole.  [That’s the Frankenclaim aspect
in this case, given the different patents in suit and the findings of
infringement that differed per phone.] 
Designers will tell you that cupholders are part of the overall design
and flow into it/contribute to it—but Apple’s test would encourage the
cupholder patent holder to claim profits from the whole.  For the phone: no one would buy the phone if
it didn’t make phone calls etc; it can’t really be the whole thing.  Relatedly: the problem of partial claiming: a
curve, the bezel. The designer is in the driver’s seat.  If they claim less than the whole, they think
there’s functionally severable pieces; when you partially claim, you shouldn’t
get the entire product, just the attached article.  Apple’s proposed test adopted most of the gov’ts
proposed SCt test, but omitted the first factor: what is the design patent
claiming?   If they really want to claim
the entire design, they should do so, but if they do less than that, the risk
of multiple awards for the same thing—3 different patents covering the front
face of the phone.  Apple suggests that
an award of triple Samsung’s total profit would be appropriate (at least in
theory) and that makes no sense.
Charles Duan, Public Knowledge: Patents affect a lot of
people, not just tech/pharma. SCt has a tradition of rejecting Fed. Cir.’s
patentee-friendly rules; is there a systemic reason?  Seems unlikely it’s just b/c the Fed. Cir. keeps
making mistakes; Fed. Cir. thinks patent ought to be strict rules, while SCt
goes back to more foundational, flexible concepts.  History plays a role: SCt has gone back to
historical sources for patent law, e.g., Impressions v. Lexmark, TC Heartland.
Josh Landau, CCIA: design patent claim serves as notice to
public.  Apple says jury should decide
what the article is; how does that correspond to the notice function?   Balancing defendant’s intention & other
factors makes it harder to figure out what the article of manufacture is in
advance.
CC: yes, also confuses parts of the test—what role does this
part play in the entirety of the product?
RT: I want to emphasize that Apple’s premise has clear support
in the caselaw, that the article described or illustrated in the patent does
not limit the article to which an infringing defendant may apply the patented design (from that, Apple concludes
that you should not look at what the design patent claims to determine the
article of manufacture, a conclusion that is not logically entailed by the premise, especially where the parties
are competitors). Though it’s not vitally important to the outcome here because
the parties are in fact competitors, this is an interesting and important
argument for two reasons: (1) design patents are currently granted on known
designs applied to new objects: a rubber ducky USB.  If you get a design patent on a rubber ducky
USB, should that allow you to bring an infringement claim against a
manufacturer of ordinary, tub-time rubber duckies?  If the answer is no, then the
novelty/anticipation inquiries should probably be very different: you shouldn’t
get the design patent just for deciding to put a rubber ducky around a USB core.  (2) 2D designs, such as the icons on the
screen, can be fully reproduced by many forms of reporting, including
newspapers and online news sources. 
Unlike ©, patent has no fair use doctrine.  Did the NYT infringe when it printed a
newspaper showing the design patent Samsung was found to infringe?  If yes, we have a number of problems, not
least of them a free speech one; if no, we have to somehow adapt the claim
about the breadth of potentially infringing articles.
Hogan: The NYT wouldn’t infringe b/c it’s not a design
applied to an article of manufacture.
RT: According to what test for article of manufacture?  The paper is definitely sold to me.
Duan: That’s the problem with overlapping IP. This is
basically a © type issue.  Recently, © is
even more likely to apply to these types of things—Star Athletica—you have ©,
TM and patent overlapping.
CC: Samsung’s test could deal w/the NYT problems—look for a
severable component.  Apple’s patents don’t
cover any possible application of the 16 icons everywhere—just for a screen.  Profits attributable to NYT putting design
into the paper are also minimal. The squishier/more subjective the test, the
more troublesome it becomes.

Hogan: other tests protect the interests described here:
there’s examination and enforcement—requires novelty/lack of anticipation.  Pretty exacting test.  Test for infringement is identical to the
obviousness/anticipation test. Whether a reasonable observer would think they’re
buying the same item. [but partial claiming] 
There’s a difference b/t the point of novelty entitling one to the design
patent and the article at issue—appropriate to look at design patent to
determine the article: here a screen with a layout like Apple’s.  Might weigh against saying a newspaper can
infringe.  SCt wants courts to wrestle
with these issues.  Why design patents
exist: to encourage design—overlapping is ok, as in the rest of the
industrialized world. Most of the rest of the world has separate industrial
design.  Design patent is less protective
of investment/IP.  We haven’t seen the
parade of horribles from design; the current statute was in reaction to a SCt
case that limited damages recovery.

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Allegedly disingenuous “not for human consumption” label can’t avoid supplement false ad. claims

Posted on September 12, 2017 by rtushnet
Nutrition Distribution LLC v. PEP Research, LLC, No.
16cv2328, 2017 WL 3972509 (S.D. Cal. Sept. 7, 2017)
Plaintiff sells natural supplements, specifically for
bodybuilding.  It alleged that its
natural supplements directly competed with PEP’s “Research Chemicals.”  PEP allegedly falsely advertised its “research
peptides and chemicals,” including prescription-only drugs such as Sildenafil
Citrate (brand name Viagra), Selective Androgen Receptor Modulators (‘SARMS’)
and synthetic peptides. PEP allegedly mislabeled these products as “not for
human consumption” and intended for laboratory research only.  SARMs allegedly pose significant health and
safety risks to consumers, which PEP didn’t disclose, nor the fact that SARMs
are specifically prohibited for use in sporting events by the World Anti-Doping
Agency and the U.S. Anti-Doping Agency, even though PEP marketed its products
to bodybuilders, competitive athletes, and other similar consumers for personal
use.  [Interesting falsity question: if
the falsehood is “not for human consumption,” but you’re not supposed to
believe that, can there be any reliance on the falsehood?  It wouldn’t be a problem under California “unlawful”
jurisprudence, but under the Lanham Act? 
Or is the relevant falsity the alleged implication that these can be
safely and legally consumed by humans? The complaint seems a little cagey,
claiming that consumers were likely to be deceived “into believing that they
are purchasing a product with different characteristics,” and also relies on
failure to disclose the serious risks of using the substances.]
PEP allegedly advertised that its “research chemical”
Sermorelin was commonly used as a “doping substance in sports,” and assures
consumers of the product’s safety for personal use: “Sermorelin alone or
combined with GHRP-2 and GHRP-6 is a harmless and efficient way to stimulate
and enhance your body’s growth hormone production.”  Similarly, PEP advertised, “Clenbuterol has
been popularized in the public mind recently by media potrayals of off-label
use for fat loss, as well as some professional athlete doping scandals
involving the drug.”  A contest for a
free bottle ended with a bottle given to a fitness instructor—not a researcher
(query whether winning your research substances in a contest is a
valid/reproducible method).
PEP challenged standing, but the court accepted the
plaintiff’s argument that PEP’s customers “have little incentive to use
Plaintiff’s natural nutritional supplements until they are hurt or the
‘Research Chemicals’ are taken off the market.”  The “we really are competitors” argument seems quite sensible, given the allegations.
The court also declined to apply the primary jurisdiction
doctrine.  Determining whether PEP’s ads
were false and misleading because they market “research chemicals” for personal
use and consumption despite also labeling the products as “not for human
consumption” would not require the FDA’s technical and policy expertise.

The RICO claims failed because they were RICO claims.

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Panel on design patent remedies, Sept. 13

Posted on September 7, 2017 by rtushnet
“Next Up In Apple/Samsung Smartphone Wars: Design Patent
Remedies Following The SCOTUS Decision”
Wednesday, September 13th
9:00am – 10:30am
The National Press Club
Zenger Room
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False indication of Hawaiian origin might violate consumer protection law, not warranty

Posted on September 5, 2017 by rtushnet
Broomfield v. Craft Brew Alliance, Inc., No. 17-cv-01027, 2017
WL 3838453 (N.D. Cal. Sept. 1, 2017)
“Hawaii is a state as well as a state of mind. When adults
want to escape the mainland, they can go to their local grocery store, purchase
a package of Kona Brewing Company beer, and feel as though they are transported
to the beaches of Hawaii. This case is about the importance of where that beer
actually is brewed.” Defendant CBA, d/b/a Kona Brewing Co., allegedly intentionally
misled consumers into believing that Kona Brewing Company beer was exclusively
brewed in Hawaii.  The court granted in
part and denied in part CBA’s motion to dismiss the resulting claims.
The Kona brand includes a variety of beer that references
Kona’s Hawaiian origins, including “Longboard Island Lager,” “Big Wave Golden
Ale,” “Fire Rock Pale Ale,” “Wailua Wheat Ale,” “Hanalei Island IPA,” “Castaway
IPA,” “Lavaman Red Ale,” “Lemongrass Luau,” “Koko Brown,” and “Pipeline
Porter.” Kona has a Hawaiian brewery that makes its draft beer sold in Hawaii, but
all of its bottled and canned beer, as well as its draft beer sold outside of
Hawaii, are brewed in Oregon, Washington, New Hampshire, and Tennessee.  Despite this, on the top of the box for
twelve-packs of Kona beer there is an image of a map of Hawaii which marks the
location of the Kona Brewing Co. Brewery on the Big Island. The packaging also
includes the statement: “We invite you to visit our brewery and pubs whenever
you are in Hawaii.” An image of the Hawaiian island chain and the phrase “Liquid
Aloha” are embossed on the front of each bottle, and each variety’s packaging
has its own Hawaiian-related images, including orchid flowers,
volcanoes, palm trees, surfers, canoes, waterfalls, and hula dancers. The
bottom of the package for the six-pack includes the image of a Hawaiian island,
such as Oahu, the Big Island, or Molokai. Plaintiffs alleged that the only
address listed on the packaging was “75-5629 Kuakini Highway, Kailua-Kona,
Hawaii 96740,” though CBA indicated that its Island Hopper Variety twelve-pack
included a list of five brewing locations next to the address in Kona.

Plaintiffs also allged that CBA misrepresented Kona as “craft
beer” when it isn’t, though they argued that this claim went to CBA’s intent to
deceive rather than to a deception that they relied upon.
First, CBA argued that the words and images on the packaging
were “mere puffery,” and that no reasonable consumer would be misled into
believing that the Kona beer he or she purchased was brewed exclusively in
Hawaii. The court disagreed. 
Deceptiveness is usually a question of fact.  CBA argued that none of its “references” to
Hawaii was “ a specific and measurable factual statement about where the beer
is made.” The labels disclosde five locations where the beer is brewed, only
one of which is Hawaii, so representations on the six- and twelve-pack
packaging couldn’t amount to actionable misrepresentations. While “pictures of
surfboards and the vague phrase ‘Liquid Aloha’ on the beer packaging” would be
insufficient, the fact that the only listed address on the outer packaging was
Hawaiian, the image of the Hawaiian map identifying the location of Kona’s Big
Island Brewery, and the invitation to visit “our brewery” whenever you are in
Hawaii were “specific and measurable representations of fact that could deceive
a reasonable consumer into believing that the six- and twelve-packs of Kona
beer were brewed in Hawaii.” “[M]erely referencing Hawaii and its culture on
the packaging is not enough on its own to confuse a reasonable consumer regarding
the origin of the beer” (citing Pernod Ricard USA, LLC v. Bacardi U.S.A., Inc.,
653 F.3d 241 (3d Cir. 2011)).  But the
address, map, and invitation went beyond those references to spirit or style.
CBA argued that the disclaimer on the labels of Kona beer was
enough to contradict the representations on the outer packaging. But reasonable
consumers are “not required to open a carton or remove a product from its outer
packaging in order to ascertain whether representations made on the face of the
packaging are misleading.” There was no disclaimer identifying Kona’s brewing
locations on the packaging except on the Island Hopper Variety twelve-pack.  Plus, the disclaimer on the beer label listed five
locations, including “Kona, HI, Portland, OR, Woodinville, WA, Portsmouth, NH,
and Memphis, TN” which encompass “all locations where the beers are brewed.” “A
list of multiple locations on a product label does not amount to an explicit
statement that the beer is brewed and packaged at a particular location.” A
reasonable consumer could easily think that the beer was brewed in Kona—and plaintiffs
alleged that no bottled or canned beer bearing the Kona label was actually
brewed in Kona. Thus, even consumers who read this “vague” disclaimer could be
deceived.
 

Label, with locations listed on left side
While the consumer protection claims survived, the express warranty
claims failed because the representations weren’t “an unequivocal statement or
promise to the consumer that Kona beer is brewed exclusively in Hawaii.” The
implied warranty claim also failed without an affirmative misrepresentation;
the factual claims on the label were true, albeit potentially misleading.

Injunctive relief claims were dismissed for lack of standing
(noting that, even if plaintiffs would be willing to buy properly labeled beer
in the future, they alleged they wouldn’t have bought it at Kona’s price/they
paid extra for beer they thought was from Hawaii.)

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