false patent marking falls w/false advertising claim

Infinity Headwear & Apparel, LLC v. Jay Franco &
Sons, Inc., 2017 WL 3309724, No. 15-CV-1259 (S.D.N.Y. Aug. 2, 2017)
Infinity sued Jay Franco for patent infringement, false
marking, and false advertising.  Infinity
has U.S. Patent No. 8,864,544, “Hooded Blanket and Stuffed Toy Combination,”
directed to “a blanket having a hood comprising an ornamental surface, wherein
upon stowing the body of the blanket within an interior volume of the hood, a
stuffed toy is provided.”

(I personally think this is the stuff(ed animal) of nightmares.) Franco’s allegedly infringing product is a “[w]earable
[s]tuffed [a]nimal,” called “Janimals”:
The key question on patent infringement was whether the Jay
Franco product had the “blanket” limitation of the claims; the court denied
summary judgment to Infinity on the question of whether the accused products,
which Franco previously described as “full body ‘onesie’ type garments,” were
“blankets.”
False marking/false advertising: Franco’s products were
marked with the words, “Worldwide patent pending,” but that’s not true (despite
an early failed attempt to patent). To bring suit under the false marking
statute, a plaintiff must have “suffered a competitive injury as a result of a
violation” of the marking statute. A competitive injury is “[a] wrongful
economic loss caused by a commercial rival, such as the loss of sales due to
unfair competition; a disadvantage in a plaintiff’s ability to compete with a
defendant, caused by the defendant’s unfair competition.”
Infinity relied on testimony from Jay Franco’s president
that the false marking was important because it indicated exclusivity, which
was valuable in selling to retailers and created a market advantage.  However, the president’s personal belief in
potential market benefits was insufficient. Gravelle v. Kaba Ilco Corp., the
Federal Circuit recently concluded that such speculative testimony from a plaintiff was insufficient to establish
the causal nexus between false marking and competitive injury. No. 2016-2318,
2017 WL 1349278, at *4 (Fed. Cir. Apr. 12, 2017) (per curiam) (nonprecedential).
 The court here saw no difference in the defendant’s subjective belief.  Infinity must offer evidence “to support the
causal proposition, which is anything but obvious, that buyers actually
purchased the ‘patent pending’ [products] over [Infinity’s products]—or would
have bought [Infinity’s products] (as opposed to either [Franco’s] or someone
else’s) had [Franco] not falsely stated ‘patent pending.’ ”

The same analysis applied to proximate cause under Lexmark for the false advertising claim. 

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#1 is puffery, but 2-to-1 preference claims aren’t

Trex Co. v. CPG Int’l LLC, No. 17-cv-00005, 2017 WL 3272013
(W.D. Va. Aug. 1, 2017)
Trex sued defendant AZEK, its major competitor in the
wood-alternative decking industry, for false advertising.  Trex has the largest market share and largest
amount of gross sales in this industry, ahead of AZEK by a substantial margin.
With another two or three companiees, they comprise at least 85% of the market,
but there are also a number of smaller competitors. The wood-alternative
decking industry is apparently also known as the “premium decking” industry.
The court found that most of the challenged claims were
puffery, but that one was potentially misleading; a preliminary injunction was
denied for want of evidence of consumer deception.
AZEK claimed to be “the #1 in Premium Decking” and “Number
One in Premium Decking.” The paragraphs below the statements referenced “the
best high-performance building materials available,” AZEK’s “commitment to
technology and materials science innovation,” and “our dedication to inspiring
design and style.” AZEK advertised that “TimberTech Is the #1 Provider in
Design Preference,” following the question, “Looking to build your dream deck?”
in a Facebook ad.  AZEK’s CEO also stated
at a trade show and in a press release that AZEK is “the preferred premium
leader in the categories where we offer products.” AZEK likewise claimed to be
“the leader in performance, aesthetics, and innovation” and referenced “the
best warranties in the industry.” AZEK also advertised that TimberTech “is a
preferred choice 2-to-1 over the competition,” without specific reference to
sales volume or market share.   
The court first rejected Trex’s argument that the court
should consider all the statements together, as part of one ad campaign.  Instead, it evaluated each separately.  The #1 statements were puffery, even though
they identified the relevant industry; the use of “design preference” was just
an additional vague term and didn’t convert the puffery into a factual
statement.  The statements didn’t refer
to sales or come in a context referring to sales or any other specific measure,
and they didn’t provide an identifiable person or group who determined that
AZEK was #1.  Even the nearby presence of
AZEK’s claim that it is “#1 in performance trim,” where AZEK was apparently the
market sales leader, didn’t matter—the #1 statements were all “simply too vague
to be meaningful at all.”  So too with
the “leader” statements, which didn’t identify a measure in which the company
leads, such as warranty offerings, variety of products offered, or sales volume.
The “2-to-1” statements, however, were more specific.  Giving a ratio “implies that there is some
data to back up the claim,” making them “less vague and more empirical.” And
the ratio wasn’t so high that a consumer couldn’t reasonably rely on it. Although
sales wasn’t explicitly mentioned in the claim, “the use of the word ‘preferred
choice,’ especially when combined with the reasonable ratio given, states a
sufficient factual statement that can be false, or at least misleading.”

Still, the court found the statement to be ambiguous.  Trex argued that “the competition”
necessarily means all of AZEK’s competitors in the alternative wood decking
industry, which would make the claim false. But if “the competition” referred to
only some of the minor players in the market, then it would be true. “While
this is a strained reading of the statement, and perhaps even an unlikely
interpretation, it is also technically true.” 
But ambiguity shouldn’t be found just because some “strained” readings
can be found—they should be at least equally plausible, according to the cases
that discuss similar strained readings. 
Anyway, no PI.

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#1 is puffery, but 2-to-1 preference claims aren’t

Trex Co. v. CPG Int’l LLC, No. 17-cv-00005, 2017 WL 3272013
(W.D. Va. Aug. 1, 2017)
Trex sued defendant AZEK, its major competitor in the
wood-alternative decking industry, for false advertising.  Trex has the largest market share and largest
amount of gross sales in this industry, ahead of AZEK by a substantial margin.
With another two or three companiees, they comprise at least 85% of the market,
but there are also a number of smaller competitors. The wood-alternative
decking industry is apparently also known as the “premium decking” industry.
The court found that most of the challenged claims were
puffery, but that one was potentially misleading; a preliminary injunction was
denied for want of evidence of consumer deception.
AZEK claimed to be “the #1 in Premium Decking” and “Number
One in Premium Decking.” The paragraphs below the statements referenced “the
best high-performance building materials available,” AZEK’s “commitment to
technology and materials science innovation,” and “our dedication to inspiring
design and style.” AZEK advertised that “TimberTech Is the #1 Provider in
Design Preference,” following the question, “Looking to build your dream deck?”
in a Facebook ad.  AZEK’s CEO also stated
at a trade show and in a press release that AZEK is “the preferred premium
leader in the categories where we offer products.” AZEK likewise claimed to be
“the leader in performance, aesthetics, and innovation” and referenced “the
best warranties in the industry.” AZEK also advertised that TimberTech “is a
preferred choice 2-to-1 over the competition,” without specific reference to
sales volume or market share.   
The court first rejected Trex’s argument that the court
should consider all the statements together, as part of one ad campaign.  Instead, it evaluated each separately.  The #1 statements were puffery, even though
they identified the relevant industry; the use of “design preference” was just
an additional vague term and didn’t convert the puffery into a factual
statement.  The statements didn’t refer
to sales or come in a context referring to sales or any other specific measure,
and they didn’t provide an identifiable person or group who determined that
AZEK was #1.  Even the nearby presence of
AZEK’s claim that it is “#1 in performance trim,” where AZEK was apparently the
market sales leader, didn’t matter—the #1 statements were all “simply too vague
to be meaningful at all.”  So too with
the “leader” statements, which didn’t identify a measure in which the company
leads, such as warranty offerings, variety of products offered, or sales volume.
The “2-to-1” statements, however, were more specific.  Giving a ratio “implies that there is some
data to back up the claim,” making them “less vague and more empirical.” And
the ratio wasn’t so high that a consumer couldn’t reasonably rely on it. Although
sales wasn’t explicitly mentioned in the claim, “the use of the word ‘preferred
choice,’ especially when combined with the reasonable ratio given, states a
sufficient factual statement that can be false, or at least misleading.”

Still, the court found the statement to be ambiguous.  Trex argued that “the competition”
necessarily means all of AZEK’s competitors in the alternative wood decking
industry, which would make the claim false. But if “the competition” referred to
only some of the minor players in the market, then it would be true. “While
this is a strained reading of the statement, and perhaps even an unlikely
interpretation, it is also technically true.” 
But ambiguity shouldn’t be found just because some “strained” readings
can be found—they should be at least equally plausible, according to the cases
that discuss similar strained readings. 
Anyway, no PI.

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Post-Star Athletica question: input sought

Is this shoe design copyrightable, yes or no?  Not just the arrangement of studs, but the overall design.

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A few more ICE tidbits courtesy of FOIA

As the result of ICE’s continued production, I’ve been able to review more from the sample of incidents we sought.  The key takeaways so far have already been covered–TM owners are the source of guidance, and they overreach, but most merchandise that’s seized is not parodic.

You’re not even trying, buddy: this counterfeit authenticity claim is so incoherent that one wonders why they bothered.  Accept no substitute, indeed:

Previously redacted NFL claim that parody/disparaging shirts are counterfeit:
Also, the relevant industry organization, CAPS, claims that counterfeit clothes pose health risks, as evidenced by this picture.  I”m not saying this is attractive storage, but it is in plastic, and I take my clothes into the bathroom (not even wrapped in plastic) all the time:
(CAPS also makes the claim on its website, which represents the NBA, NFL, MLB, NHL, and collegiate liceonsors, that derogatory, lewd, or offensive uses are counterfeit.)
This series of before and after pictures indicates some selectivity in seizures, which is good.  I note that my Dr. Seuss Slammed I Am T-shirt (which I had, coincidentally, for a number of years before I brought this case) was not seized:
before

before

before
after

seized

after

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Reading list: worthwhile terms of service?

Abstract:
Not all digital fine print
exculpates liability: some exhorts users to perform before the
consumer relationship has soured.
We promise to choose strong passwords (and hold
them private); to behave civilly on
social networks; to refrain from streaming shows
and sports; and to avoid
reverse-engineering code (or, worse, deploying deadly bots).
In short: consumers are apparently
regulated by digital fine print, though it’s
universally assumed we don’t read
it , and even if we did, we’ll never be sued for failing
to perform.
On reflection, this ordinary
phenomenon is perplexing. Why would firms persist in
deploying uncommunicative
behavioral spurs? The conventional answer is that fine
print acts as an option, drafted by
uncreative, guild-captured lawyers. Through
investigation of several sharing
economy firms, and discussions with a variety of
lawyers in this space, I show that
this account is incomplete. Indeed, I identify and
explore examples of innovative fine
print that appears to really communicate with and
manage users.
These firms have cajoled using
contracts by trading on their brands and identities, and
by giving up on certain exculpatory
defenses common to digital agreements. I argue
that the result is a new form of
relational contracting, taking on attributes of both mass
market adhesion contracts and more
long-term deals.
A fascinating piece, especially for me (because I
participated heavily in drafting the Terms of Service for the Archive of Our
Own, where we had similar human-readability/user-friendly goals though a
nonprofit, noncommercial commitment). 
Hoffman concludes that ToS can communicate with users when they are
brand-congruent, but I would have put it differently: people are more likely to
learn the actual contents of the ToS when the site promotes knowledge of the
terms as part of its interactions with users (maybe even part of its branding).  The examples he uses also often involved soliciting
feedback from users, which itself is a form of disclosure/communication that
goes beyond normal promulgation of the ToS/use of checkboxes.

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The South (Butt) remembers

Via Mark Lemley. How should this fare? Better than the Starks, one hopes.

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Seen around town(s), TM and right of publicity issues

From Cambridge:

Cola scented stickers in Coke-shaped bottle

Pies that make even the tiniest hands feel huge

 Also, I didn’t manage to grab a picture of the “Legally Brunette” shirt in the Law School Coop, but I wonder about that one too.

And eagle-eyed correspondent DM sent this one in from NYC:

F*ck Amazon, Fishs Eddy is prime! with prime in Amazon font/arrow

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Seen around town(s), TM and right of publicity issues

From Cambridge:

Cola scented stickers in Coke-shaped bottle

Pies that make even the tiniest hands feel huge

 Also, I didn’t manage to grab a picture of the “Legally Brunette” shirt in the Law School Coop, but I wonder about that one too.

And eagle-eyed correspondent DM sent this one in from NYC:

F*ck Amazon, Fishs Eddy is prime! with prime in Amazon font/arrow

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When life gives you Lemonade: court preserves copyright complaint against Beyoncé

Estate of Barré v. Carter, No. 17-1057, 2017 WL 3188489
(E.D. La. Jul. 25, 2017)
Plaintiffs alleged that they owned in the copyright in two
YouTube videos created by Anthony Barré, a performance comedian and music
artist from New Orleans whose voice “was a unique instrument and inextricably
linked to his performance art.” 
Defendants released the song “Formation,” which used three phrases from
Anthony Barré’s works, “What happened at the New Orleans,” “Bitch I’m back, by
popular demand,” and “Oh yeah baby. I like that.”  Barré’s voice, performance, and words were
also allegedly “used and exploited” during the “Formation World Tour,” for example,
“Oh yeah baby, I like that” was used during the introductory performance of
“Formation,” and defendants allegedly utilized other performers to imitate
Anthony Barré’s voice and cadence in saying, “Bitch I’m Back by Popular Demand”
before defendant Carter appeared onstage. 
Plaintiffs sued for copyright infringement, false endorsements under the
Lanham Act, violations of the Louisiana Unfair Trade Practices Act (“LUTPA”),
and unjust enrichment under Louisiana law. 
Here, the district court understandably refuses to dismiss the copyright
claim on the pleadings, and inexplicably refuses to dismiss the other claims as
preempted/precluded by Dastar/barred
by the First Amendment.
Defendants argued that their purpose was transformative,
using the short clips to “create the tone, mood, setting and location of the
New Orleans-themed ‘Formation.’ ” 
Defendants disagreed that this could be transformative, and that the
original work wasn’t altered as in previous “appropriation” art cases where
fair use is found ((a) hunh? (b) taking little bits and mixing them with others
is alteration in my book, (c) I wouldn’t call this an appropriation art
case unless you want to merge that subset with transformative use cases in general).  Other bobbles aside, the court
concludes that enough has been pled to go forward on the question of
transformativeness and of fair use.  And
it correctly rejects plaintiffs’ bizarre idea that fair use doesn’t apply in
sound recording cases because of Bridgeport
Films
.
False endorsement: Plaintiffs pointed to Facenda v. NFL
Films, arguing that the court allowed a false endorsement case over use of a
voice “ when the promotional video and video game at issue were used for
commercial purposes.”  [Here we see part
of the problem of the chaos of false endorsement/publicity claims: the
plaintiff, however misleadingly, gets to ignore the distinction between
advertising and non-advertising uses.] 
The court found that such a claim could be viable. [But that’s not the
relevant question.  False endorsement is
a potentially viable claim; the question is, however, whether copying an
author’s work, especially outside an ad and as part of another creative work,
can itself constitute the relevant act supporting a false endorsement claim.  Dastar and
other cases indicate that it can’t.  It’s
also worth noting that the Copyright Act deliberately allows imitation of sound
recordings, which isn’t within the scope of the sound recording reproduction
right, so allowing a claim based on soundalikes not used in advertising (as
alleged here) also creates a direct conflict with the Copyright Act.]  The court held that it was enough to allege
that Barré’s voice and words were distinctive and recognized by consumers and
the media, which “caused consumer confusion regarding involvement or approval
of his estate” in “Formation,” the “Lemonade” album, and the “Formation World
Tour.”
The court distinguished Oliveira v. Frito-Lay because
plaintiffs alleged (1) that defendants imitated Barré’s voice, and (2) that
defendants used Barré’s voice in a way that created consumer confusion about
endorsement.  (2) of course merely
restates the theory rejected in Oliveira and doesn’t distinguish the case at
all; (1) doesn’t really address why a performance can be a trademark for
itself, which is the basic problem of such claims—again, especially as applied
to non-ad uses (which just multiplies the copyright conflicts).
Defendants correctly noted that, under Rogers, only an explicitly misleading non-advertising use escaped
First Amendment protection, and that explicit means explicit.  The court disagreed with the latter part of
this argument.  “For example, Plaintiffs
allege in the amended complaint that the ‘conduct of Defendants has been
willful from the inception of the creation of “Formation” and “Lemonade.”’ ” [That’s
not what “explicit” means.  It is not a
synonym for “intentional.”  Otherwise Rogers would have come out very
differently.  “Explicit” means falsely
claiming authorization, not remaining silent, which at most could be an
implicit claim.]  The allegations that
defendants “intentionally and unlawfully copied the unique and original voice
and words of Anthony Barré” to use as the “defining introduction of the song
‘Formation,’ ” “used and exploited” Anthony Barré’s voice and words during the
live performances by having another person imitate his voice and cadence, and “failed
to give credit or compensation in an ‘unethical, misleading, false, unfair and
deceptive’ manner” somehow substituted for explicitness.
Given this ruling, it’s not surprising that the Louisiana
Unfair Trade Practices Claim also survived, though of course it also has
copyright preemption/First Amendment problems that match up with the Dastar/Rogers problems of the federal claims.  Plaintiffs alleged misappropriation that went
beyond copyright because defendants acted “unethically, wrongfully and
fraudulently.”  [The “going beyond” alleged
consists entirely of the copying and its inherent effects.  “Profit” isn’t an extra element, nor are all
those adverbs, and the alleged misrepresentation is again based solely on the
copying as misrepresentation.] 
An unjust enrichment claim was dismissed as duplicative.

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