Doctor’s evaluation of another doctor’s treatment isn’t commercial speech

Posted on February 16, 2017 by rtushnet
Tobinick v. Novella, No. 15-14889 (11th Cir. Feb. 15, 2017)
Ultimately, despite a long battle, this is a relatively easy
case about “the medical viability of a novel use for a particular drug.”  Dr. Tobinick (plaintiff, along with related
entities) thinks his “unorthodox use for the drug etanercept” can be used to
treat spinal pain, post-stroke neurological dysfunctions, and Alzheimer’s
disease, though it isn’t FDA-approved for those conditions.  Dr. Novella, a neurologist, blogs about
various topics.  In response to an
article in the LA Times about Dr Tobinick’s novel treatments, Dr. Novella
discussed the Los Angeles Time article, the typical characteristics of “quack
clinics” or “dubious health clinics,” the key features of Dr. Tobinick’s
clinic, and lastly the plausibility of and the evidence supporting Dr.
Tobinick’s allegedly effective use of etanercept.
Dr. Novella also quoted a portion of the LAT article, which
reported that “[Dr. Tobinick’s] claims about the back treatment led to an
investigation by the California Medical Board, which placed him on probation
for unprofessional conduct and made him take classes in prescribing practices
and ethics.” A second article, filed after Dr. Tobinick filed his initial
complaint, detailed the lawsuit and provided Dr. Novella’s view that the
lawsuit was designed to silence his public criticism of Dr. Tobinick’s
practices, which he then restated in large part.   He
again mentioned the Medical Board of California (MBC)’s investigation,
explained that the MBC “filed an accusation in 2004, amended in 2005 and 2006,”
and listed the different allegations made in the 2004 Accusation. 
Tobinick’s claims were based on state law and the Lanham
Act.  As relevant here, the district
court granted Dr. Novella’s special motion to strike state law claims, applying
California’s anti-SLAPP law. The court of appeals affirmed, accepting that Dr.
Tobinick was a limited public figure, and agreeing that he hadn’t produced
evidence of actual malice that would allow a probability of prevailing.
California applies a subjective test in which “[t]here must
be sufficient evidence to permit the conclusion that the defendant in fact
entertained serious doubts as to the truth of his publication.”  Relevant factors include “[a] failure to
investigate, anger and hostility toward the plaintiff, [and] reliance upon
sources known to be unreliable or known to be biased.”  Tobinick primarily argued that Dr. Novella improperly
relied on the MBC’s 2004 Accusation, which had been superseded by a 2006 Second
Amended Accusation, and that the articles contained false statements such as
that Dr. Tobinick ran a “one-man institute.” However, Tobinick’s evidence was
insufficient to allow a reasonable jury to conclude that Dr. Novella had
serious doubts as to the truth of the content contained in his two articles.  For one thing, the evidence showed that Dr.
Novella consulted the 2006 accusation, and even referenced competing studies
(which themselves were referenced in a 2007 MBC decision with a stipulated settlement)
in his second article, admitting that “[t]here are small studies for disc
herniation showing conflicting results.” 
Alleged falsities and inconsistencies didn’t demonstrate
actual malice—awareness or recklessness as to falsity.  Indeed, Tobinick couldn’t show that many of
Dr. Novella’s statements were false. For example, Dr. Novella characterized
Florida—one of the states in which Tobinick worked—as a “very quack-friendly
state,” but this was plainly opinion. 
Other details in the articles didn’t go to their essential criticism of
Dr. Tobinick’s medical practices, and at most could show negligence.  For example, Tobinick argued that Dr. Novella
falsely implied that Tobinick’s clinics committed health fraud by putting the
first article into a website category labeled “Health Fraud,” but the article
itself never said Tobinick committed health fraud, and there was no evidence
that Dr. Novella decided what category to put the article into.  Also, as to the “one-man institute” phrase,
Tobinick failed to rebut Dr. Novella’s statement that he looked at Tobinick’s
websites and saw that the only physician named and profiled on the websites was
Tobinick.  “Dr. Novella’s statement is
reasonably held, as the name of Dr. Tobinick’s California clinic, ‘Edward Lewis
Tobinick, MD,’ further supports his belief that ‘Dr. Tobinick was a solo
practicioner[.]’”
The court noted that, although “[t]he failure to conduct a
thorough and objective investigation, standing alone, does not prove actual
malice,” the evidence of Dr. Novella’s investigation, “in which he looked to trustworthy
sources, demonstrates his lack of subjective belief that the articles contained
false statements.”  Before he wrote, Dr.
Novella consulted the LA Times article, many of Dr. Tobinick’s case studies,
the MBC’s accusations, and Tobinick’s websites. 
The Lanham Act claims then failed because the articles
weren’t commercial speech.  They weren’t
core solicitations, nor did they satisfy the Bolger test for non-core commercial speech. The articles weren’t
ads, nor could they reasonably construed as such. The first didn’t mention Dr. Novella’s
practice or medical services; the second did so only in providing context for
Dr. Novella’s criticism of the lawsuit as an attempt to suppress Dr. Novella’s critiques.
Indeed, Dr. Novella clarified that he primarily treats headaches, “thereby
distancing the types of medical services he provides from the services marketed
by Dr. Tobinick.”  The articles didn’t
discuss any products Dr. Novella sold, nor did they tout his practice.  References to the treatments Tobinick sold
weren’t themselves sufficient to make the speech commercial—Gordon & Breach held that product
reviews aren’t commercial speech, and so too here, even though the seller of
the reviewed product could convert the review into commercial speech by using
the review to advertise the product.  Dr.
Novella’s discussion “resemble[d] a medical peer review of a treatment’s
viability.”

Finally, Tobinick didn’t show economic motivation for the
speech sufficient to make it commercial. 
It didn’t matter whether the websites on which the speech appeared were
profit-seeking.  Tobinick’s complex
theory about how profits were “funnelled” from website-related revenue sources
to Dr. Novella “relies on such a level of attenuation that it fails to
demonstrate economic motivation in the commercial speech context.”  In World Wrestling Federation Entertainment,
Inc. v. Bozell, 142 F. Supp. 2d 514 (S.D.N.Y. 2001), the district court held
that the WWF could use the Lanham Act to sue a “concerned parents” council over
a public attack campaign about violence in wrestling, because the council
featured the attacks “prominently in a fundraising video,” in “fundraising
letters,” and in order “to raise the profile of [the council].”  None of that was true here.  The court of appeals also emphasized that “neither
the placement of the articles next to revenue-generating advertising nor the
ability of a reader to pay for a website subscription would be sufficient in
this case to show a liability-causing economic motivation for Dr. Novella’s
informative articles.” Those are standard features of magazines and
newspapers.  “Even if Dr. Novella
receives some profit for his quasi- journalistic endeavors as a scientific
skeptic, the articles themselves, which never propose a commercial transaction,
are not commercial speech simply because extraneous advertisements and links
for memberships may generate revenue.”

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Use of P’s photos to advertise D’s goods must be challenged via copyright, not Lanham Act, under Dastar

Posted on February 15, 2017 by rtushnet
Barn Light Electric Company, LLC v. Barnlight Originals,
Inc., 2016 WL 7135076, No.14–cv–1955 (M.D. Fla. Sept. 28, 2016)
Plaintiff BLE, owned by the Scotts, sells light fixtures to
consumers over the internet. Defendant Hi–Lite, owned by the Ohais, makes light
fixtures and sells to distributors, not to end users. In 2008, BLE became a
retail distributor for Hi–Lite and bought lighting components from Hi–Lite.
Hi–Lite provided BLE with photographs, line drawings, and other depictions of
its products, providing BLE a license to use its copyrighted photographs.
Hi–Lite designates its products by parts numbers.
BLE decided to begin making its own light fixtures patterned
after the fixtures sold by Hi–Lite. In 2012, Hi–Lite had a sales rep use BLE’s
website to order the “Barn Light ‘The Original’ Warehouse Shade” and the “Barn
Light Warehouse Pendent Shade.” The BLE website showed the products with the
parts numbers H–15116 and H–15116G, corresponding to Hi–Lite’s parts numbers,
and they were accompanied by pictures from Hi–Lite’s catalog. But BLE shipped
light fixtures bearing BLE’s logo that were actually manufactured by BLE. The
order confirmation for the sale included the Hi-Lite parts numbers.  Hi-Lite terminated the parties’ business
relationship and asked BLE to remove all photos and drawings of Hi-Lite
fixtures from BLE’s website.
After the relationship ended, defendant Ohai created defendant
Barnlight Originals, Inc., a retail seller of light fixtures. BLO sells Hi–Lite
fixtures. Ohai registered BARNLIGHT ORIGINALS and BARNLIGHT ORIGINALS, INC.,
the domain name http://ift.tt/2l8sGH8, and a logo with the United States
Patent and Trademark Office.  Hi-Lite
also sent BLE a C&D charging infringement of a pending patent application.
Hi-Lite counterclaimed for trade dress infringement of the
design of twelve of its light fixtures. Product design trade dress requires a
“high degree of proof” to show secondary meaning.  Hi-Lite lacked survey evidence, and the
representative of a Hi-Lite marketer couldn’t identify the source after being
shown thirty images of products from Hi–Lite (including those at issue), BLE,
and other third parties. For all of the fixtures he was shown, he testified
that there were multiple manufacturers that made the same or very similar
designs.  A previous BLE employee who now
operates his own retail company and sells Hi–Lite products likewise testified
that although he recognized photos of Hi–Lite’s alleged trade dress from its
catalogs, he would not be able to identify the products as manufactured by
Hi–Lite unless he looked at the hidden backing plate with Hi–Lite’s name
embossed on it.
Hi-Lite argued that BLE’s intentional copying and use of its
sales and advertising efforts showed secondary meaning. It also claimed use for
7-12 years and sales of thousands to tens of thousands of units, plus
“considerable” advertising expenses in its catalogs, in magazines, on the
internet, at trade shows, and in show rooms.  Intentional copying isn’t enough to show
secondary meaning, given the other possible motivations for copying and the
perfect acceptability of copying public domain designs. Nor do extensive sales
and advertising show secondary meaning, which requires the effective creation
of consumer recognition.  The court found
that Hi-Lite couldn’t show secondary meaning and granted summary judgment on
the trade dress claims.
Other Lanham Act claims: Hi–Lite alleged that BLE used
Hi–Lite’s photographs and parts numbers to sell BLE products on its own website,
violating the Lanham Act. BLE responded, “Dastar,”
and the court agreed.  Uncredited use of
another’s photos in connection with the sale of goods or services “must be
pursued as copyright claims.” Hi-Lite’s false designation of origin claim was “directed
to the same conduct that underlies its copyright infringement claims,” which
wouldn’t do.  Moreover, Hi-Lite’s claim
would only work if the images themselves were “source-identifying marks” for
Hi-Lite’s products, but the photos merely depicted Hi-Lite’s light fixtures,
thus requiring a protectable trade dress rights in the design and appearance of
the light fixtures, which Hi-Lite lacked. 
Similarly, Hi-Lite didn’t show that its parts numbers functioned as
marks.
False advertising: To the extent that this was merely a
restatement of the false designation of origin claim, it failed.  Even without Dastar, Hi-Lite lacked enough evidence to prevail on the
merits.  It failed to show that the
alleged deception—advertising Hi-Lite fixtures but delivering BLE fixtures—was
material.  The only evidence was the
Hi-Lite-induced purchase from the BLE site, but the sales rep wasn’t acting as
a consumer but rather as an agent on behalf of Hi–Lite. BLE’s
misrepresentations “could not have made a difference in his purchasing decision,”
and he wasn’t an expert qualified to opine on likely consumer confusion.

However, claims based on BLE’s alleged use of the BARN LIGHT
ORIGINALS word mark survived.

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Incontestability precludes non-listed defenses, court affirms

Posted on February 15, 2017 by rtushnet
NetJets Inc. v. IntelliJet Gp., LLC, No. 15-4230 (6th Cir.
Feb. 3, 2017)
NetJets is a private aviation company that specializes in
“fractional ownership” of private airplanes and related endeavors. NetJets’s
predecessor company developed a software program to “run [the company’s]
business,” and named the program IntelliJet. In 1995, it successfully applied
to register INTELLIJET in connection with the good of computer “software . . .
for managing the business of aircraft leasing and sales.” In 2002, the company
filed a “declaration of use and incontestability,” which was accepted by the
USPTO.
NetJets licensed the IntelliJet software to two external
companies, though one apparently stopped and the other was acquired by NetJets.
The company also uses the software to communicate with caterers and other
vendors. In early 2013, NetJets debuted an “owner’s portal,” allowing customers
to put their reservation requests directly into the IntelliJet software over
the internet; the portal features the INTELLIJET mark. NetJets discusses
IntelliJet on tours of the NetJets facility for customers and potential
customers, and in its own promotional literature, and the mark has been
mentioned in several trade press and general news sources.
 

Portal–see “powered by IntelliJet” at the bottom: good use?
IntelliJet was founded in 2005 and is primarily a broker for
private jet services, or helping customers buy or sell an aircraft. It offers
referral services for aircraft management and leasing services, but does not
perform these services itself. IntelliJet uses a sales-tracking software that
it has referred to as “IntelliShit.” In choosing the name, IntelliJet searched
the internet for other jet aircraft brokers, business names in Florida, and the
USPTO website. That last search turned up several registrations of
“IntelliJet,” including NetJets’s registration. IntelliJet’s principal Spivack
determined that the mark was “specifically for a software package,” and that
“being in the industry,” he knew the registered agent as “NetJets.” 
NetJets sued for trademark infringement and related claims;
IntelliJet counterclaimed for cancellation of NetJets’s trademark registration
on the grounds that NetJets abandoned it and that it was void ab initio. This
appeal was from the district court’s grant of summary judgment to
IntelliJet.  The district court reasoned
that NetJets’s mark was not incontestable and that the mark was void ab initio
because NetJets could not show that it was used in commerce at the time of its
registration. Nor could NetJets show that it had rights to the INTELLIJET mark
as a service mark under the Lanham Act or Ohio common law. Finally, the
district court also granted summary judgment on the basis that there was no
likelihood of confusion.
The court of appeals reversed the cancellation but otherwise
affirmed.
A mark may become incontestable if it is not successfully
challenged within five years of its registration. One requirement is continuous
use in commerce for “five consecutive years” subsequent to the date of the
registration, along with continued use in commerce. “Once incontestability is
established, only [the] . . . defenses enumerated in § 1115(b) can be
interposed in an action for trademark infringement.” Void ab initio, or non-use
at the time of registration, isn’t one of the defenses enumerated in § 1115(b).
 (And, unlike functionality, void ab
initio wasn’t implied from a “judicially created rule which predates the Lanham
Act”—even though use and nonfunctionality are both pretty important parts of
the common law.)  Thus, the court of
appeals held, it was not a proper defense to incontestability.  See University of Kentucky v. Kentucky
Gameday, LLC, 2015 WL 9906634, at *2 (T.T.A.B. 2015),(rejecting a void ab
initio claim because the claim was “not enumerated under Trademark Act Sec.
14(3), and is not available against a registration which is more than five
years old.”).
It seems to me that one could establish lack of continuous
use for any 5-year period at all over the life of the registration and defeat
incontestability; one simply can’t start with “void ab initio.”  It must be the case that it is valid to
challenge incontestability on the ground that the registrant failed to satisfy
the statutory requirements therefor; it’s just that distinctiveness is not one
of the statutory requirements, and apparently use at the time of registration
isn’t either—but five years of continuous use is.  Because §1064 barred IntelliJet’s void ab
initio challenge, the court of appeals said, it didn’t need to decide whether
the mark was actually incontestable under §1065; thus, the issue remains for
remand.
The court of appeals did affirm the district court’s
conclusion that IntelliJet wasn’t a service mark under Ohio common law, because
it was used as a mark for software as a good, not as a service mark. The
IntelliJet software is “the conduit through which NetJets provides its
services,” not the service provided by NetJets itself.
Likely confusion: IntelliJet is suggestive, and relatively
weak, “especially considering other federal registrations of the term and
additional third party uses of the same or similar terms.”  NetJets argued that incontestability made the
mark presumptively strong, but incontestability (if it existed) wouldn’t be determinative of strength.  The services were related but not directly
competitive.  Although the district court
reasoned that no one would confuse NetJets’s IntelliJet software with NetJets’s
aviation services, the question was about source confusion, not product/service
confusion.  Still, IntelliJet doesn’t
sell software that could be confused with NetJets’s software; relatedness
didn’t favor NetJets.  Similarity:
obviously favors NetJets.  There was no
evidence of actual confusion, which favored IntelliJet.  Marketing channels: both used the internet,
but the products were still marketed differently, and NetJets’s software wasn’t
marketed as a standalone product. 
Consumer care: the parties’ customers are highly sophisticated.
Intent: Use of a mark with knowledge of another’s rights can
be evidence of likely confusion.  But
here, IntelliJet knew of several
IntelliJet registrations, and there was no indication that it chose the name to
copy or compete with NetJets specifically. 
Likely expansion: Though NetJets argued that IntelliJet wanted to
compete with NetJets in areas such as chartering, leasing, and aircraft
management, it wasn’t appropriate to compare NetJet’s business as a whole with
IntelliJet’s services.  There was no
indication that NetJets intended to market its software separately, or that
IntelliJet intended to begin selling its own aviation software.

Based on this de novo review, the court of appeals found
confusion unlikely.

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Spyware or spam?

Posted on February 15, 2017 by rtushnet
A new one on me:
Received spammy email claiming, “Hello Rebecca,
I hope you don’t mind a fellow Tushnet reaching out. I have
a permit which states that WW Express did some work at [your home].
Could you tell me how it went? … I’m helping a new homeowner
find a professional for her project, and I was hoping you could share your
experience with me before I make any recommendations….
Best,
Brooke Tushnet
Customer Success | VetMyPro
C: 23097051
BP: 55181251”

I am fairly sure that there is no “Brooke Tushnet” in the
world.  Instead, this message is creepily
and misleadingly leveraging our tendency to be more helpful to people “like
us.”  (On this and other tactics, Robert
Cialdini’s books Influence and Pre-Suasion are very good.)  To what end, I’m not sure, but I can’t help
feeling misused.  I even tried to find
this potentially long-lost relative, just in case!  Also, VetMyPro lacks any internet presence
beyond its own website.  Now I’m becoming
concerned about spyware!

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This is not NORML: court of appeals finds ISU violated First Amendment with TM licensing program

Posted on February 14, 2017 by rtushnet
Gerlich v. Leath, No. 16-1518 (8th Cir. Feb. 13, 2017)
Iowa State University (ISU) grants
student organizations permission to use its trademarks if certain conditions
are met. The ISU student chapter of the National Organization for the Reform of
Marijuana Laws (NORML ISU) had several of its trademark licensing requests
denied because its designs included a cannabis leaf.
 

The first shirt that became problematic

later rejected design

Two members of NORML ISU sued for violations of their First
and Fourteenth Amendment rights; the court of appeals affirmed a permanent
injunction with reasoning relevant to the pending Tam case: student groups’ use of ISU logos couldn’t possibly be
government speech because there are so many of them, including conflicting ones
like ISU Democrats and ISU Republicans. I get that argument for trademark registrations in general, but it seems
weaker here, because ISU’s logo is the logo of an arm of state government, and
I do think a government can reasonably say with its speech “we agree that X and
Y are in-bounds, while Z is out-of-bounds.” Allowing ISU Democrats and ISU
Republicans to use the logos but not ISU White Nationalists seems like the
state controlling its brand. This is not to say that the overall conclusion is
wrong, especially given ISU’s litigating position, but the district court’s
opinion did a far better job of explaining why that might be.
ISU has approximately 800 officially recognized student
organizations, including NORML ISU. Organizations can use ISU’s trademarks on
merchandise if ISU’s Trademark Licensing Office determines that the use
complies with ISU’s Guidelines for University Trademark Use by Student and
Campus Organizations.
In 2012, NORML ISU submitted a t-shirt design to the
Trademark Office that had “NORML ISU” on the front with the “O” represented by
Cy the Cardinal. On the back the shirt read, “Freedom is NORML at ISU” with a
small cannabis leaf above “NORML.” The Trademark Office approved this design. Then,
the Des Moines Register published a front-page article about legalization
efforts, in which it quoted NORML ISU’s president stating that “his group has
gotten nothing but support from the university. He even got approval from the
licensing office to make a NORML T-shirt …” The article also had a photo of the
T-shirt.
The person in charge of the trademark office provided ISU’s
PR office with a statement that ISU didn’t take positions on what student
organizations stand for. Thus, the statement continued, the claim that “his
group has gotten nothing but support from the university” was “a bit
misleading. He may be confusing recognition of the group as the university ‘supporting’
it.”
Then, an Iowa House Republican caucus staff person sent a
formal legislative inquiry to ISU’s State Relations Officer asking whether “ISU’s
licensing office approve[d] the use of the ISU logo on the NORML t-shirt”
pictured in the article. This led higher-ups to ask if they could “revoke” the
approval of the T-shirt design. Then, someone from the Governor’s Office of
Drug Control Policy emailed and called the head of ISU’s government relations
office about the article, indicating that he was “curious about the accuracy of
the student’s statement cited in the report, and perhaps the process used by
ISU to make such determinations.” The head of ISU’s PR office responded that
NORML ISU’s use of ISU’s trademarks was “permitted under the policies governing
student organizations.” The email went on to say, “[h]owever, this procedure is
being reviewed.”
Next, NORML ISU’s request for permission to use the design
for another shirt order was put on hold, which was unprecedented in anyone’s
memory. The ISU board decided to change the trademark guidelines, and ISU told
NORML ISU that they were concerned that the T-shirt caused confusion as to
whether ISU endorsed the group’s views regarding the legalization of marijuana.
Thus, the Trademark Office would not approve of any t-shirt design that used
ISU trademarks in conjunction with a cannabis leaf. They also told the group
that it needed prior review before submitting any designs to the Trademark
Office, again an unprecedented requirement. The new Trademark Guidelines
prohibited “designs that suggest promotion of the below listed items . . .
dangerous, illegal or unhealthy products, actions or behaviors; . . . [or]
drugs and drug paraphernalia that are illegal or unhealthful.”
After that, the Trademark Office rejected every NORML ISU
design application that included the image of a cannabis leaf, as well as
designs that spelled out the NORML acronym but replaced “Marijuana” with either
“M********” or “M[CENSORED].” The Office did approve designs without a cannabis
leaf that simply stated the group’s name and fully spelled out the NORML
acronym.
 

also rejected: Cy the Cardinal holding a marijuana leaf
The district court entered a permanent injunction against “enforcing
trademark licensing policies against Plaintiffs in a viewpoint discriminatory
manner and from further prohibiting Plaintiffs from producing licensed apparel
on the basis that their designs include the image of a . . . cannabis leaf.” The
university created a limited public forum “by opening property limited to use
by certain groups or dedicated solely to the discussion of certain subjects.” A
student activity fund is an example of a limited public forum, and so is ISU’s
choice to make its trademarks available for student organizations to use if
they abided by certain conditions.
Rejecting NORML ISU’s designs was impermissible viewpoint
discrimination, as evidenced by the “unique” scrutiny ISU imposed on NORML ISU
after the Des Moines Register article. ISU argued that it wasn’t unique because
the hockey club was also subject to additional oversight over its trademark
applications, but that was because the hockey club mismanaged funds and
misrepresented itself as an intercollegiate sport. Also, the hockey club was
not required to receive preapproval of its designs by two ISU senior vice
presidents, as NORML ISU was. No other student group was rejected for fear that
the university would be seen as endorsing a political cause. Defendants pointed
to six other rejections on anti-endorsement grounds, but four of those were
rejected because it appeared ISU was endorsing a corporate logo; another design
suggested that a club sport was an official athletic department sport; and
another was rejected because it appeared that ISU was endorsing the views of
the Students for Life club, but a minor change allowed it to be approved.
ISU implausibly argued that the political pushback it
received didn’t play a role in decisionmaking. But defendant Leath testified
that “anytime someone from the governor’s staff calls complaining, yeah, I’m
going to pay attention, absolutely,” and that “[i]f nobody’d ever said
anything, we didn’t know about it, it didn’t appear in The Register, we’d
probably never raised the issue.” Both individual defendants’ motives were
political in that they wanted to avoid controversy “in a state as conservative
as Iowa.” Defendant Hill told the Ames Tribune that the reason student groups
associated with political parties could use ISU’s logos, but groups like NORML
ISU may not, is because “[w]e encourage students to be involved in their duties
as a citizen.” But that statement implied that Hill believed that the members
of NORML ISU were not being good citizens by advocating for a change in the
law. The person in charge of approving student requests told NORML ISU that the
group’s design applications “do not further your cause as an advocate for
change in the laws or trying to change the public’s perception of marijuana.”
As the court of appeals wryly commented, “[t]here is no evidence in the record
of Zimmerman offering advocacy advice to any other student group.”
The administration of the trademark licensing regime wasn’t
government speech because it was a limited public forum. Even if it wasn’t a
limited public forum [and note the conceptual difficulties of calling a
non-physical space a “forum”], the government speech doctrine didn’t apply. Walker v. Confederate Veterans asked (1) whether the government has long
used the particular medium at issue to speak; (2) whether the medium is “often
closely identified in the public mind with the” state; and (3) whether the
state “maintains direct control over the messages conveyed” through the medium.
[So, is the medium the trademark? Or the trademark licensing regime?]
The court found that the first two factors didn’t apply,
which seems an odd characterization. If the medium is the trademark, then the
government has definitely used it to speak; if it’s the trademark licensing
regime, then the argument is weaker but not obviously weaker than that for
license plates, where as here the relevant regime produces the state’s symbol
coupled with the organization’s symbol. Both the trademark and the trademark
licensing regime seem likely to be “closely identified in the public mind” with
the state. But the court of appeals, as I noted in the intro, was compelled by
the fact that ISU allows approximately 800 student organizations to use its
trademarks, including groups with opposing viewpoints. The court did not
analyze the Supreme Court’s treatment of similar facts in Walker. Here’s the district court’s distinction, which is not bad:
Because American society regards
its universities as incubators for intellectual experiment and exploration, the
Court cannot conclude that observers would associate a student group’s message,
bearing an ISU icon, to represent the views of ISU. Rather, ISU’s myriad
student groups are rightfully understood to represent a jumbled mix of
interests, views, and opinions, some mainstream and others offensive to
conventional sensibilities, in the spirit of intellectual debate.

I will say, however, that ISU rejected a lot of shirts in
the past, mostly for sexual references but also for alcohol/firearms
references, and I’m not sure why those rejections don’t (1) establish a lot of
ongoing control over the licensing program, and (2) also now turn into
unconstitutional acts.
rejected “How the Health Are You?” for double entendre

rejected for sexual references

The ISU club for kayaking received a number of rejections

rejected, double entendre

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when is a law firm “national”? hub-and-spoke firm finds out

Posted on February 14, 2017 by rtushnet
Cochran Firm, P.C. v. Cochran Firm Los Angeles, LLP, 2016 WL
6023822, No. CV 12-5868 (C.D. Cal. Aug. 18, 2016)
Previous 9th Circuit opinion affirming earlier
unclean hands ruling discussed
here. This case began with a legal partnership turned sour. In 1999,
McMurray (principal of The Cochran Firm Los Angeles) joined The Cochran Firm’s
(TCF’s) Los Angeles office. McMurray claimed to have received a letter from TCF
principals Johnnie L. Cochran (now deceased), Givens, and Cherry,
congratulating him on his elevation to named partner. In 2007, McMurray
acquired TCF’s Los Angeles office, assuming all of its debts and obligations. He
organized the office under a partnership called The Cochran Firm Los Angeles (TCFLA),
formed with other parties Dunn and then adding Barrett.
TCFLA remitted a cut of its monthly case fees to TCF. Things
soured, and McMurray was allegedly shut out of the TCFLA partnership. TCF sent
a C&D to McMurray seeking to terminate his right to use the Cochran name.
Dunn allegedly took over the remains of TCFLA’s practice, changing its name to
The Cochran Firm California. TCF filed suit against McMurray and TCFLA. It
initially obtained a preliminary injunction, but the Ninth Circuit remanded for
consideration of whether TCF had unclean hands. The district ultimately
dissolved the preliminary injunction after determining that TCF had unclean
hands in the use of its trademark “because it improperly held itself out as a
national law firm.”
Here, the court gets rid of a bunch of TCFLA’s tortious
interference claims, but finds that a reasonable jury could find that TCFLA
parties had standing to seek cancellation of TCF’s registered mark “THE COCHRAN
FIRM.” Even though McMurray wasn’t currently using THE COCHRAN FIRM mark, and
testified that he had no present intent to do so, he also testified that he “may
change that depending on the outcome of this case.” McMurray established “a
real and rational basis for his belief that he would be damaged by the
registration sought to be cancelled, stemming from an actual commercial or
pecuniary interest in his own mark.” TCF’s mark “prevented McMurray from
advertising his relationship with Johnnie Cochran to the public.”
Lanham Act counterclaim: This counterclaim was based on TCF’s
website, which featured statements such as “America’s Law Firm,” “Experience
Trial Lawyers Who Deliver Results,” “With offices nationwide and a team of some
of the country’s most experienced and aggressive personal injury attorneys and
criminal defense lawyers,” and “While The Cochran Firm is a national law firm
with multiple attorneys, we handle each case we take with equal dedication and
tenacity. Your attorney may draw on the collective experience of his or her
partners, but will continue to work personally with you throughout all legal
proceedings,” and included a list of offices from around the country.
The court found that these statements were literally false;
no further evidence of consumer deception or materiality was required. Though TCF
“market[ed] itself as a traditional, national firm with regional offices around
the country,” the firm’s structure more closely resembled a network of several
partnerships, connected only through their relationship with TCF. “Semantic
quibbling” over the prospect that national might not mean “single” was
unpersuasive.
The McMurray parties also provided sufficient evidence of
damages: McMurray testified that, despite having retained TCF’s original Los
Angeles telephone number, he now receives significantly less of the types of
cases that he typically got at TCFLA. Though this was “quite weak” evidence,
given that a new law firm might reasonably get a lot less business than an old
one, that was enough to show a triable issue on injury.
However, the court rejected counterclaims against the Dunn
parties (TCF-CA) based on statements such as “Welcome to The Cochran Firm,
Founded over 40 years ago by Legendary attorney Johnnie L. Cochran, Jr.,” “The
Cochran Firm has grown to encompass 27 offices in 16 states around the country,”
and “The Cochran Firm Los Angeles has been in the same location for 25 years,
and remains committed to upholding Johnnie’ vision of ‘a diverse law firm which
reflects society and is capable of handling cases throughout America.’ “ These
claims weren’t literally false, and they were “much vaguer and more ambiguous”
than the literally false claims by the other parties.
To show deceptiveness, the McMurray parties offered multiple
court records in which former clients sued both TCF and a TCF-affiliated
regional office for judgments owed, and an expert report analyzing those court
records. The court found this evidence probative of deceptiveness, since it
showed that, in multiple instances, former TCF clients attempted to collect
monies owed from both TCF and an affiliated regional office under the
assumption that they were one and the same. However, the McMurray parties
failed to show materiality. Though there was evidence that consumers were
deceived into believing that TCF was a “national” firm, there was no evidence
that a consumer would choose TCF-CA over another law firm such as McMurray’s
new law firm “out of some misplaced belief that TCF-CA had Johnnie Cochran’s
imprimatur.”
McMurray also counterclaimed for violation of his right of
publicity because TCF or TCF-CA used his image and biography on websites
without his consent, using it to draw business. However, the court found no
evidence of injury, as required to recover [note that courts will usually
double-count benefit to the defendant as injury to the plaintiff where the
plaintiff is a celebrity]. Broad statements by McMurray that he believed he’d
been injured weren’t enough to show injury.

California UCL: Although the underlying conduct above could
found a UCL claim, the only available remedy was restitutionary (since the
McMurray parties weren’t seeking injunctive relief). And the evidence of
economic harm—possibly lost clients—didn’t support a claim for restitution. Such
damages were “exactly the sort of damages that cannot be achieved via a UCL
claim.”

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pool party: lawsuit raises survey and TM priority issues

Posted on February 14, 2017 by rtushnet
Solar Sun Rings, Inc. v. Secard Pools, 2016 WL 6138294, No.
EDCV14-2417 (C.D. Cal. Jan. 20, 2016)
Illustrating the principle that those who sue competitors should be sure to have their own house (or in this case, pool) in order: The parties compete in the market for heated pool covers. SSR
sued Secard for trademark infringement, leading to false advertising/unfair
competition counterclaims based on SSR’s allegedly false statements about the
effect of “mini magnets” used on its products and the water and chemical
savings caused by its products. The “coverage calculator” on SSR’s website also
allegedly deceived consumers into thinking that choosing SSR’s products would
be cost-effective because it falsely advised consumers to purchase less product
than they would eventually need to heat their pools.
The court found that, even assuming falsity, there were
disputed issues about materiality and harm. Secard’s expert report opined that
3.33% of SSR customers were deceived by SSR’s allegedly false statements and would
have purchased Secard’s competing product had the false statements not been
made. Although Downey, the expert, had 35 years’ experience in the swimming
pool industry, he had no other expertise about consumer behavior and related
fields. Still, that was okay because he had relevant experience catering to the
preferences of pool product consumers. He conducted discussions with “swimming
pool industry leaders” and estimated that roughly twelve percent of consumers
are familiar with SSR’s product, while roughly one percent of consumers were
familiar with Secard’s product. He then conducted phone and personal
conversations with “leaders in the swimming pool industry, people who work in
swimming pool stores, mass distributors and manufacturers, industry legal
counsel, pool service technicians, pool builders, buying groups and pool
remodeling companies.” He estimated that roughly 40% of consumers who bought
from SSR had been diverted from competing products, such as Secard’s, yielding
3.3% diversion. Survey evidence “should ordinarily be found sufficiently
reliable under Daubert” because “unlike
novel scientific theories, a jury should be able to determine whether asserted
technical deficiencies undermine a survey’s probative value.” This survey might
be “technically lacking,” given that “his sample size is limited and it is not
entirely clear how he derives his estimates from the data he provides,” but the
court declined to exclude it.
Solar Sun Rings, Inc. v. Secard Pools, No. EDCV14-2417, 2016
WL 6139615 (C.D. Cal. Jan. 13, 2016)
This is a trademark ruling in the same case. SSR began
selling passive solar heating products for pools and spas under the name “Solar
Sun Rings” in 2003. Secard has been selling pool products since 1958. In 2011, Secard’s
CEO created Solar Sun Squares, which he designed to compete with Solar Sun
Rings, and registered solarsunsquares.com. In 2013, SSR caught wind of Secard’s
intent and attempted to register a trademark for “Solar Sun Square,” then sent
Secard a C&D that prompted Secard to change the name of Solar Sun Squares
to “Solar Heat Squares.” SSR then began selling Solar Sun Squares the month
after Solar Heat Squares launched in 2014.
Solar Sun Rings

Solar Heat Squares
Solar Sun Squares

Secard argued that, as the senior user of Solar Heat
Squares, it couldn’t infringe on Solar Sun Squares. However, SSR argued that it
should be able to tack its rights and claim priority. This is usually a matter
for a jury. Given that Solar Sun Rings and Solar Sun Squares were written in
the same font and the same color, on the same sized package, over the same four
images encased in the shape described in the mark, and that the products were
identical except for shape, a jury could find that the marks had the same
connotation. Plus, a jury could find that the “aural appearance” of the marks –
“three short, alliterative words (two of which are the same word) – evoke the
same mental reaction.” (Of course, to the extent that tacking occurs on the
basis of visual elements of the mark, the similarity inquiry will also have to
take visual elements into account.)
There was also enough evidence to go to the jury on likely
confusion, given the similarity of the products and the purchasers. The court
gave a very broad reading to the intent factor, ruling that “[a] jury could
reasonably infer that Secard intended to confuse consumers by improving upon
Plaintiff’s pre-existing product with a similarly-named product.”

However, Secard got out of the trade dress infringement
claim. SSR argued that its infringed trade dress was its color scheme, characterized
by “a sequence of several colors (red, yellow and orange) depicted against the
distinct blue backdrop of SSR’s products, and displayed in a highly distinct
dot-matrix style of color printing and color shading.” SSR alleged that Secard’s
use of a sun design bolstered its infringement claim. But “Secard was already
using the allegedly infringing color scheme along with an image of a sun in
1993, well before Plaintiff went into business in 2003.” Without priority of
use, SSR couldn’t win. “To hold otherwise would allow a junior user to employ
litigation as a means of forcing a senior user to abandon a trade dress which
predates the junior user’s existence.” [Interesting conceptual question: if the
trade dress was in use but hadn’t developed secondary meaning, and the junior
user then came along and developed secondary meaning, what then? Of course, the
junior user’s ability to develop secondary meaning would itself suggest lack of
confusion with the existing trade dress, whether or not that prior trade dress
could be the foundation of any affirmative rights.]

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Juxtaposition is transformative for RoP purposes, divided court rules

Posted on February 14, 2017 by rtushnet
Daniel v. Wayans, No. B261814 (Cal. Ct. App. Feb. 9, 2017)
Pierre Daniel, an actor, worked as an extra for a day in A
Haunted House 2. Marlon Wayans co-wrote, produced, and starred in the movie.
Daniel sued Wayans and others, alleging that he was the victim of racial
harassment because during his one day of work on the movie he was compared to a
Black cartoon character and called “ ‘[n]igga,’ “ and also alleging violation
of his right of publicity. Wayans moved to strike Daniel’s claims against him
as a SLAPP suit; the trial court agreed and the court of appeals affirmed.
Over a dissent, the court of appeals agreed that the conduct
at issue was part of the “ ‘creative process’ “ inherent in making the movie,
and thus involved free speech/an issue of public interest. Wayans also tweeted
about Daniel’s appearance, comparing him to the Simpsons’ Cleveland Brown. Given
that Daniel was an extra on the film, which was made by a popular producer and
was a sequel to a successful film, advance information about the film was a
topic of public interest. The post “contributed to the public ‘debate’ or
discussion regarding the film by giving fans and those interested a glimpse of
someone in the film.”
 

screencap of tweet
Daniel’s claims for statutory and common law
misappropriation of name and likeness were based solely on the tweet; again,
over a dissent, the court of appeals held that he couldn’t show a probability
of prevailing, as necessary to overcome the anti-SLAPP motion. First, he failed
to overcome evidence that he waived his claims when he signed a broad release
consenting to the use of his image in connection with the movie. Second, the
use was transformative. The court called the test “straightforward”: “whether
the celebrity likeness is one of the ‘raw materials’ from which an original
work is synthesized, or whether the depiction or imitation of the celebrity is
the very sum and substance of the work in question.” New expression alone is
sufficient; it need not convey any “ ‘meaning or message.’ “ Though Wayans used
two unaltered images, he juxtaposed them and added “arguably humorous” comedy,
adding “an element of caricature, lampoon, or parody.”
[Just to be clear, the implication is that tweets that aren’t
transformative, and don’t involve juxtapositions, may infringe the right of
publicity. Consider that the next time you see a brand tweeting something
related to recent celebrity news.]
Daniel’s false light claim failed because the tweet referred
only to Daniel’s physical resemblance to the Cleveland Brown cartoon character.
It was a combination of an “expression of an opinion by Wayans that Daniel
looked like Cleveland Brown and an accurate photographic comparison.” That wasn’t
offensive enough, and it didn’t imply any further comparison to Cleveland
Brown.
Judge Liu, whom I respect a great deal, unfortunately
dissented; he would not have found the use transformative as a matter of law:
Wayans used Daniel’s photo not as
raw material for an original work, but as a literal depiction of Daniel’s
appearance and a literal depiction of the appearance of cartoon character
Cleveland Brown. Wayans simply repackaged the two images together and added a
caption remarking upon the resemblance of the two. This was not a
transformation that was primarily Wayans’s own expression.

Sigh. Among other things, what does that mean for a
republisher of a transformative work, which isn’t the republisher’s “own
expression”? This inability to agree on relatively simple situations shows the
instability of “transformativeness” in the right of publicity context.

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Lexmark’s harm requirement shields XYZ’s comparative claims

Posted on February 13, 2017 by rtushnet
Verisign, Inc., v. XYZ.com LLC, No. 15-2526 (4th Cir. Feb.
8, 2017)
Verisign sells internet domain names and operates the
popular .com and .net top-level domains. In 2014, XYZ launched “.xyz,” a new
top-level domain. As part of its marketing push, XYZ, and its CEO Daniel Negari,
touted the popularity of the .xyz domain and warning of a scarcity of desirable
.com domain names. Verisign for false advertising, and here the court of
appeals affirmed the district court’s grant of summary judgment.  Verisign couldn’t show that XYZ’s
self-promoting statements caused it harm, and its statements about the
availability, or lack thereof, of  .com
domain names weren’t shown to be false or misleading.
XYZ made “a series of affirmative statements about .xyz,
promoting .xyz’s popularity and touting its high registration numbers.” For
example, by August 2015, XYZ had secured over one million .xyz registrations.  Although this was literally true, Verisign
argued that it was false or misleading because the numbers included not only
registrations bought and paid for by consumers – indicating actual consumer
demand – but also 375,000 registrations given away for free through an
agreement between XYZ and Web.com.
Also, Verisign challenged statements such as, “All of the
good real estate is taken. The only thing that’s left is something with a dash
or maybe three dashes and a couple numbers in it.” Another statement was that
“nine out of ten .com searches show up as unavailable.” A YouTube ad compared a
new Audi with a .xyz license plate to a dilapidated Honda with a .com plate,
and stated, “With over 120 million .coms registered today, it’s impossible to
find the domain name that you want.”
“[A] Lanham Act claimant may not mix and match statements,
with some satisfying one Lanham Act element and some satisfying others.”  Verisign argued that XYZ used deception to
create the appearance of a “gold rush” for .xyz domains, including claiming
that NPR had dubbed it the “next .com.”  The court of appeals affirmed the rejection of
these claims based on Verisign’s failure to prove “an injury flowing directly
from the challenged statements”—hellooo, Lexmark.  Verisign’s harm expert was excluded because
her methods were “questionable” and her conclusions were “not reliable,”
primarily because her analysis failed to distinguish between correlation and causation.
 Her testimony was properly excluded;
that left Verisign with nothing.  While
her report showed that Verisign experienced a drop in .net registrations after
.xyz – along with other new top-level domains – became available, it didn’t
show “anything other than a temporal link between XYZ’s statements and the
drop-off.”  This failure wasn’t
surprising, since “XYZ’s boasts about its registration numbers and NPR
interview were distributed to a narrow audience, comprised mostly of readers of
XYZ’s blog and a small percentage of registrars.”  This gave them “limited potential to influence
the domain-name market, particularly at a time when hundreds of new top-level
domains were clamoring for attention in a newly competitive market.”
The court of appeals then agreed that claims that “all of
the good [.com] real estate is taken,” or that it is “impossible to find the
domain name that you want” were nonfactual opinion or puffery.  The statement that it is “impossible to find
the domain name that you want” wasn’t verifiable, in part because of “the indefinite
nature of the referenced ‘you.’” 
So too with the claim that “[a]ll of the good real estate is
taken,” because what a “good” domain name is, is a matter of opinion. Verisign argued
that the next sentence in the relevant interview – “The only thing that’s left
is something with a dash or maybe three dashes and a couple of numbers in it” –
was literally false, because there were at least some available .com names that
didn’t include dashes and numbers. But in context, the overall message was an
opinion that the available .com names weren’t “good” because they involve
dashes and numbers. 
While XYZ’s CEO claimed that these were the “only” .com
names left, “that is precisely the kind of puffery or bluster on which no
reasonable consumer would rely,” especially in a spoken statement, which might
be offered more casually than a written statement.  In such statements, “we must take care not to
label as ‘literally false’ what really is no more than a colloquial
exaggeration, readily understood as such.” 
In a footnote, the court of appeals pointed out that Verisign argued
that the relevant market was registrars who purchase domain names and then
resell them to end users, making it “especially unlikely that these savvy
industry players would construe XYZ’s claims about .com availability as factual
statements and rely on them accordingly.”

The claim that “99% of all registrar searches today result
in a ‘domain taken’ page” was verifiable, but verifiably true. Verisign argued
that this number was a “naïve” metric of unmet demand because it included automated
searches undertaken by registrars looking for high-demand, previously
registered domain names. The court of appeals wasn’t convinced—given that
registrars were battling “fiercely and on a daily basis over a limited supply
of desirable .com names,” the statistic seemed to convey the difficulties of
registering a .com name.  Anyway,
Verisign didn’t provide a consumer survey about reactions to this claim, nor
did it provide any other evidence of deceptiveness.

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Challenging materiality when literal falsity is conceded

Posted on February 13, 2017 by rtushnet
Smart Vent, Inc. v. USA Floodair Vents, Ltd., 193 F.Supp.3d
395 (D.N.J. 2016)
Smart Vent alleged patent infringement and false advertising
related to competitor Floodair’s flood vents, which it allegedly falsely
claimed to be certified by various bodies. 
The regulations at issue, however, requried only certification, not
certification by specific parties; the real question was whether Floodair falsely
or misleadingly described its product as certified in accordance with a
standard known as TB-1. 
As a matter of law, the court determined that TB-1 called
for an individual certification different from that provided by Floodair. Thus,
the court granted partial summary judgment on falsity, but refused to find materiality
or harm to Smart Vent without further evidence. 
“While there is a reasonable inference that USA Floodair’s
misrepresentation that its product complies with TB-1 led to increasing its
sales and decreasing Smart Vent’s sales, that inference is unavailable to Smart
Vent as the movant in its summary judgment motion.”  The parties also agreed that appropriate
certification decreases flood insurance premiums, which “creates at least the
impression that certification-related statements would influence purchasing
decisions,” but that still left a triable issue.  Floodair provided some evidence that other
aspects of its product, such as cost effectiveness and ease of maintenance,
could also drive sales. 

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