false advertising’s injury requirement causes reverse passing off claim to fail

Posted on January 7, 2026 by rtushnet

Kesters Merchandising Display International, Inc. v.
SurfaceQuest, Inc., — F.4th —-, 2026 WL 35198, No. 24-3112 (10th Cir. Jan.
6, 2026)

SurfaceQuest allegedly marketed its products with
photographs of its competitor Kesters’ competing product. Kesters sells “a
lightweight, seamless material used in architectural products” called
MicroLite, while SurfaceQuest mainly sells “architectural film that goes on
surfaces like MicroLite.” Indeed, around 2014, the parties jointly marketed
MicroLite samples wrapped in SurfaceQuest film. In connection with that, Kesters
supplied SurfaceQuest with products, specification guides, and photographs of
Kesters’ products. SurfaceQuest then applied its film to the products.

However, two years later, “SurfaceQuest decided to sell and
market its own lightweight beam wrapped in SurfaceQuest film. These marketing
efforts included advertisements using photographs of MicroLite.” Kesters
alleged that SurfaceQuest “published a video characterizing MicroLite as
SurfaceQuest’s product,” “published images from a grocery store renovation and
misrepresented them as depicting SurfaceQuest products,” “placed a SurfaceQuest
sticker on a MicroLite binder and falsely represented to a Kesters customer
that SurfaceQuest had manufactured MicroLite,” “put a SurfaceQuest sticker on a
MicroLite sample and falsely told Kesters customers that SurfaceQuest had
invented MicroLite,” and “allowed a SurfaceQuest dealer to advertise with an
image of MicroLite.”

Kesters lost its Lanham Act claim because “injury isn’t
presumed and the plaintiff has not presented evidence of an actual injury.”

Kesters had the burden of showing injury: either a direct
diversion of sales or a loss of goodwill. The court of appeals reasoned that a presumption
of injury exists when the plaintiff proves material falsity and the “plaintiff
and defendant are the only two significant participants in a market or
submarket.” But, even presuming literal falsity, Kesters failed to create a
genuine dispute of material fact regarding the presence of a limited market.

“[A] market is sparsely populated only when the other
participants are insignificant. Otherwise, the court can’t assume that the
plaintiff’s lost sales would go to the defendant.”  SurfaceQuest showed the existence of multiple
competitors. Kesters had a competing affidavit, but it only offered it in support
of its own summary judgment motion, not in opposition to SurfaceQuest’s summary
judgment motion, and it only offered the affidavit too late—in a reply brief.

Dipping its toes into antitrust reasoning (always a
dangerous move), the court of appeals reasoned that even considering the
affidavit wouldn’t have helped. “To determine the scope of the market, we
examine ‘cross-elasticity of demand,’ which measures the substitutability of
products.” The affidavit didn’t address cross-elasticity of demand, only
similarities between the products made by Kesters and SurfaceQuest. “But these
similarities didn’t necessarily affect the ability to substitute products,” and
“a single market may include companies making dissimilar products.”

Evidence of actual injury was also insufficient. Kesters
argued that it lost a bid for work on a grocery store’s health markets, but
there was no evidence that SurfaceQuest obtained those projects or that the
store had seen SurfaceQuest’s marketing materials, whether directly from SurfaceQuest
or otherwise. Thus, the district court couldn’t reasonably infer a causal
connection between SurfaceQuest’s false advertising and Kesters’ loss of the
bid.

from Blogger http://tushnet.blogspot.com/2026/01/false-advertisings-injury-requirement.html

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laches, once established, bars Lanham Act claims even during more recent periods

Posted on January 7, 2026 by rtushnet

Design Gaps, Inc. v. Distinctive
Design & Construction LLC, — F.4th —-, 2025 WL 3492373, No. 24-1860
(Dec. 5, 2025)

Super complicated
facts; I’ll try to focus on the Lanham Act laches part because of that. “[A]fter
a squabble developed over a cabinet and closet job for a luxury home in
Charleston, South Carolina, the parties went to arbitration. The arbitration
turned out well for the homeowners and the general contractor overseeing the
home renovations but badly for the cabinet maker.” The cabinet maker nonetheless
sued in federal court, including suing people that the arbitrator had held
could not be brought into the arbitration because they weren’t bound by the
agreement. The court of appeals nonetheless found that, because the disallowed
parties were in privity with entities validly in the arbitration, res judicata
and collateral estoppel precluded any claims against them based on the job.

Design Gaps “designs
and installs cabinetry in luxury homes,” and frequently worked with defendant Shelter,
“a general contractor engaged in homebuilding and renovation.” They had
disputes during their years of working together. “For example, Design Gaps
claimed from time to time that Shelter advertised Design Gaps’ cabinets without
attributing the work to Design Gaps.” These claims were not covered by the
arbitration, but they were still barred by laches.

The parties
accepted that South Carolina’s three-year statutes of limitations for fraud and
unfair trade practices supplied the analogous limitations period. Design Gaps
filed its lawsuit on January 13, 2023, meaning that any alleged Lanham Act
violations occurring before January 2020 presumptively were barred by laches.

Design Gaps argued
that it did not have sufficient information concerning Shelter’s violations
until arbitration commenced. But it sent a C&D in April 2018 about
Shelter’s unattributed uses of Design Gaps’ work specifically referencing the
Lanham Act in connection with its failure-to-attribute objections. While “mere
knowledge that [a trademark owner] might have an infringement claim at some
future date is not sufficient to trigger the period of unreasonable delay
required for estoppel by laches,” the inquiry is objective. And the objective
evidence was that “Design Gaps knew Shelter was using Design Gaps’ cabinet work
in its promotional materials and that Shelter was not attributing that work to
Design Gaps. Design Gaps had also stated in writing that it believed such
conduct was false and misleading as to the origin of the cabinet work and that
Design Gaps was being harmed. These facts are virtually identical to those
alleged to support Design Gaps’ Lanham Act claims in this lawsuit.”

Would laches also
cover continuing the same conduct during the presumptively not-lached period? Yes.
Here, the core “claim” remained the same, so the continuing violation doctrine
extended laches to the more recent period.

Design Gaps argued
that its delay was excusable based on Citibank, N.A. v. Citibanc Group, Inc.,
724 F.2d 1540 (11th Cir. 1984); there, Citibank should have known of the
defendants’ use of its name “prior to 1960, but did not file suit until 1979.”
“When [Citibank] first learned of defendants’ adoption of Citibanc as the name
of its holding company in 1972, [Citibank] wrote letters warning that it
regarded the use of” the name “as an infringement of [Citibank]’s rights.” But,
unlike Citibank, Design Gaps did not “sen[d] several other letters over the
next few years” before bringing suit. Moreover, in Citibank, the
defendants did “not rel[y] on the delay of plaintiffs in expanding their use of
the mark; indeed, they [ ] expanded their use while asserting their right to do
so, in the face of plaintiff’s constant complaints.” By contrast, the record here
didn’t indicate that Shelter asserted its belief that it had the right to
promote its work in the way it did to Design Gaps.

Design Gaps also
argued that settlement discussions excused its delay, but the record didn’t
support the existence of discussions, only that Shelter didn’t respond to the letter.

Design Gaps also
argued that there was no prejudice. Prejudice can be economic or evidentiary.
For trademark, a defendant’s “assertion that it would suffer economic injury if
enjoined from using” a plaintiff’s mark, “without reference to any evidence
beyond the length of time it has used the mark, is simply insufficient to
establish economic prejudice.” In another false advertising case, the Fourth
Circuit found that “unreasonable delay prejudiced” the defendant “because of
[the defendant]’s continued use of the advertisement on all of its [products]
in over a dozen retail stores for years,” to the point that the plaintiff
alleged that the defendant “ha[d] been unjustly enriched by over $27 million.” The
record didn’t show that much here, but Shelter “demonstrated its continued
economic investment in promotional materials between 2015 and 2022.”

For evidentiary
prejudice, a defendant must “articulate how” intervening time “would prejudice
[its] defense specifically.” Indeed, a defendant “ha[s] an obligation to adduce
specific evidence of prejudice” to use this type of laches. Shelter relied on
the death of a Mr. Butler, one of its principals, who communicated with Design Gaps
about the challenged conduct. Design Gaps argued that it served interrogatories
and requests for production on Mr. Butler ten weeks before his unexpected death
and that Shelter’s refusal to answer discovery and deficient responses created
the prejudice Shelter claims to have suffered. “Design Gaps has not supported
this argument with citation to the record. Besides, written discovery responses
are no substitute for live testimony. Any responsibility for discovery issues
does not change the fact that Shelter has demonstrated some evidentiary
prejudice. When considered in the context of over four years of unreasonable
delay, we conclude that Shelter has carried its burden.” (Not entirely
sure why it’s Shelter’s burden given the presumption of laches, but ok.)

from Blogger http://tushnet.blogspot.com/2026/01/laches-once-established-bars-lanham-act.html

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what particularity is required when an ad campaign has zillions of possibly algorithmic variants?

Posted on January 7, 2026 by rtushnet

Ledesma v. Hismile, Inc., — F.Supp.3d —-, 2025 WL
3785960, No. 24-cv-03626-KAW (N.D. Cal. Sept. 23, 2025)

Blogging because it’s one of the first cases I’ve seen that has
to address questions raised by algorithmically modified ads that are different
for different users. Hismile allegedly engaged in fraudulent marketing of its
teeth whitening products, “which promise to deliver instant and dramatic
results.” Plaintiffs brought the usual
California claims. The judge grants the motion to dismiss, with leave to
amend (except as to a nationwide class for breach of warranty/unjust enrichment,
which is out for good).

Hismile allegedly advertises its products through social
media, particularly on TikTok, Instagram, and Facebook, with falsified
before-and-after images, misleading celebrity endorsements, deceptive/undisclosed
influencer marketing, and “customer reviews” by its own employees.

For example, ads for one product allegedly show the
product’s purple serum while it is still on the models’ teeth, giving an
illusion that the purple serum cancels out the yellow tones (consistent with
their advertising focusing on “color correction” and the “color wheel”), but “fully
rinsing off the product causes the color-correcting effect to disappear
entirely.” They also allegedly used unnaturally bright lighting and models who
already have very white teeth to exaggerate the before-and-after effect of
another product. Celebrities paid to endorse allegedly already have very white
teeth and are not bona fide users. They also allegedly made false claims of
clinical proof, in contradiction to the science indicating minimal
effectiveness.

Hismile’s primary argument was that plaintiffs failed to
identify the specific ads they saw sufficient to satisfy Rule 9(b). (I’m not
convinced that Rule 9(b) should apply to false advertising statutory claims,
which were designed to change all the key elements of common-law fraud, but most
courts routinely apply it.) The court agreed, but indicated its willingness to
accept a somewhat more detailed pleading.

Plaintiffs argued that it was enough to describe their
experiences and provide example ads. E.g., plaintiff Tanaka “relied on
before-and-after images and videos on Defendants’ Instagram and TikTok,
customer reviews, and customer reactions on Defendants’ website and on social
media.”  It’s true that “courts have
found that pleadings are insufficient where the complaint included a number of
representative advertisements, but it was unclear which specific advertisement
the plaintiff had seen and relied upon in making their purchase. Likewise,
courts have often found it insufficient to simply point to a particular
misleading and fraudulent statement or phrase that appeared in various
advertisements. Courts have also found it insufficient to merely provide
representative advertisements without stating that those were the same
advertisements that the plaintiffs saw and relied upon.”

However, plaintiffs argued that they alleged exposure to a
long-term advertising campaign, allowing their claims to proceed under In re
Tobacco II Cases, 46 Cal. 4th 298 (2009), which stated that when “a plaintiff
alleges exposure to a long-term advertising campaign, the plaintiff is not
required to plead with an unrealistic degree of specificity that the plaintiff
relied on particular advertisements or statements.” The circumstances of the
advertising campaign may make it “impossible” to identify the specific
advertisement that persuaded an individual to purchase a product.

The court reasoned that “this appears to be a case where
Plaintiffs could potentially allege a pervasive, targeted advertising campaign
over a period of time, all of which pushes the same message: that Defendants’
products will ‘instantly and dramatically whiten’ teeth.” They alleged a
multi-million dollar advertising campaign on social media; they also alleged
posts of fifteen or more advertisements per day. One plaintiff alleged seeing
approximately sixty advertisements before deciding to purchase the products; requiring
a plaintiff to “specifically identify each and every one of these sixty
advertisements hardly seems practical or practicable.”

This is especially true for modern social media advertising.
At the hearing (not in the pleadings, which is key), plaintiffs noted that the
ads include a “seemingly infinite variations of what the ads can look like,”
with multiple ads including the same video but in different orders. “One video
may include the yellow rubber duck clip followed by a scientist clip, while
another video may have the scientist clip come first followed by the yellow
rubber duck clip or a yellow banana clip. In short, the same yellow rubber duck
clip may be in hundreds of different of ads, making it difficult to identify
which advertisement an individual may have seen.” The realities of social media
exposure to “numerous 30-second or shorter advertisements, each of which may
have focused on demonstrating that whitening worked through color-correction
technology,” had to be taken into account.

Bottom line: “To find that Rule 9(b) requires a plaintiff to
meet such a high standard would be the same as insulating a defendant from
liability simply because they have created so many different types of
advertisements that are then repeatedly pushed onto social media users. This
would not be a fair result.”

However, the complaint wasn’t enough as currently pled. “Plaintiff
must still plausibly allege that this is the type of advertising campaign that
would not require them to identify the specific advertisements they viewed,”
with allegations about its duration or their exposure; allegations about the
strategy of using the same clip in multiple advertisements; and/or allegations
that defendants’ social media accounts include thousands of false
advertisements.  

Also, with respect to some categories of claims— “before or
after videos, videos with scientists and dentists explaining color theory, and
videos demonstrating color theory by wiping off purple paint from yellow
objects”—there was more specific information, but some plaintiffs alleged that
they relied on influencer endorsements without identifying who the influencer
was and what was stated:

Significantly, Plaintiffs do not
appear to allege that all influencer endorsements are false, such that every
influencer endorsement would constitute false advertising. Likewise, some
Plaintiffs relied on customer reviews, but do not specify who made these
reviews or what they stated. Again, Plaintiffs do not allege that all positive
reviews are fake, nor do they suggest that reviews from real customers would be
actionable. To the extent Plaintiffs intend to rely on influencer endorsements
or reviews, Plaintiffs will need to provide sufficient allegations to
demonstrate that the endorsements or reviews they relied upon were false.

The court also commented, looking forward to an amended
complaint, that claims of “instant” and “dramatic” whitening might well be
non-actionable puffery; “[s]tatements that characterize the speed of an action
with terms like ‘fast’ are frequently held to be puffery.”

from Blogger http://tushnet.blogspot.com/2026/01/what-particularity-is-required-when-ad.html

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literal falsity can exist without bald-faced lies, 9th Circuit confirms

Posted on December 30, 2025 by rtushnet

InSinkErator, LLC v. Joneca Co., No. 25-286 (9th Cir. Dec.
29, 2025)

The court of appeals affirms the grant of a preliminary
injunction, previously
discussed, against Joneca’s advertising of its garbage disposals.
InSinkErator argued that Joneca’s horsepower designations were literally false
because they do not reflect the output power of the disposals’ motor, despite
Joneca’s argument that its designations accurately reflect the electrical power
drawn by its units.

“Joneca attributes its lower prices to various mechanical
advantages, like its use of direct current and the torque of its smaller
grinder turntable.” Horsepower is a unit of power; InSinkErator argued that consumers
necessarily understand references to “horsepower” to mean “output
horsepower”—the amount of power that a disposal’s motor can provide to the
disposal’s grinding mechanism—as opposed to “input horsepower,” the electric
power used by the system as a whole. The parties offered competing evidence, including
expert declarations; Joneca argued that input power was used for rating
disposal units under Underwriters Laboratories standard UL 430.

Was using input power ratings literally false in this
context? The district court held that “[t]he advertisement unequivocally claims
that a given machine has a specific horsepower, such as 1 HP, 1 1/4 HP, 3/4 HP,
or 1/2 HP.” And it accepted a definition introduced by InSinkErator from a
national retailer’s website that described horsepower for a disposal unit as
“[t]he total power output capability from the included motor.” What about the
UL guideline? It was “plainly a safety guide for ensuring that switches and
controls can safely handle the input current drawn by a motor,” which provided
for current input testing “regardless” of horsepower designations on the motor
or accompanying packaging.

Procedural issue: what kind of review should the appellate
court give to the district court’s finding of literal falsity by necessary
implication? Joneca argued for de novo review to determine the meaning of the
ad claims. The court of appeals declined to resolve the issue; even if ad
claims should be construed de novo like contract terms, “subsidiary factual
findings bearing on construction” are reviewed only for clear error. And those
were the factual findings at issue here. The district court found that Joneca’s
“input-based interpretation d[id] not seem reasonable.” When a court construes
“technical words or phrases” by reference to “extrinsic evidence” about usage,
that “factual determination, like all other factual determinations, must be
reviewed for clear error.”

Joneca argued, nonetheless, that input horsepower “more
closely correlates to the performance of the entire waste disposer system” as
it would be used by a consumer. But that wasn’t clear error. “The district
court considered battling expert opinions speaking to these questions alongside
a wide range of supporting resources, including industry resources and a
national retailer’s website.” (The district court also found particularly
persuasive correspondence from UL engineers that “UL 430 is a safety standard
for Waste Disposers and is not meant to be used to determine the horsepower
ratings of Waste Disposers.” This might be hearsay, but hearsay can be
considered on a preliminary injunction.)

It was not clear error to find that the horsepower claims
weren’t ambiguous in context. The district court found Joneca’s proposed
interpretation implausible, “explaining that UL engineers themselves refuted
Joneca’s use of UL 430, its sole supporting reference.” Joneca argued that the
consensus among engineers, or industry usage, wasn’t relevant, but the district
court did consider the audience when it found that “Joneca had no support for
its interpretation other than an inapplicable and non-consumer-facing safety
standard.” Meanwhile, the materiality evidence supported the finding of literal
falsity to consumers, including explanations from a national retailer’s website
that “[g]arbage disposal horsepower (HP) determines what the disposal is
capable of grinding” and evidence from yet another national retailer’s website
discussing that “higher . . . HP” would mean “[f]ood waste will be ground into
finer particles.” Thus, it was not clear error to find that Joneca’s horsepower
claims referred to output horsepower by necessary implication.

Was that literally false? Joneca argued that its claims were
not sufficiently unsubstantiated to meet the standard for literal falsity,
because a literal falsehood has to be “bald-faced, egregious, undeniable, over
the top,” or “completely unsubstantiated.” But those quotes came from
discussions of “per se” falsity, as opposed to discussions of literal falsity
that were “proved by evidence.” The latter category can also be literally
false, and involves considerations of context and audience. (The Seventh Circuit’s
“bald-faced” language is an invitation to err, and raises considerations
probably better dealt with as materiality issues.) “At least when literal
falsity is shown by evidence, a complete lack of substantiation for the
opposing position—or absence of ‘conflicting evidence,’ as Joneca puts it—is
not required.”

Materiality: The district court found that horsepower was
“an inherent part of” garbage disposals because of “the importance of
horsepower to the quality and characteristics of a garbage disposal.” In
addition, InSinkErator’s “market research” showed that “consumers ranked
horsepower as one of the top purchasing considerations for garbage disposals,” and
retailers organized disposals by horsepower in shelving those products, which
“signals that horsepower is an important—if not primary—distinction used by
retailers to market [disposals] to consumers.” Retailer websites also expressly
link horsepower to the effectiveness of disposal units, e.g., “[t]he higher the
HP, the better the disposal will run.”

The court of appeals didn’t have to rule on whether the
Second Circuit’s “inherent characteristic” language was appropriate; it
rejected Joneca’s request for a requirement of “direct evidence showing how
consumers would likely react to the alleged deception”—“like surveys and
consumer declarations”—to show that a deception is material. To the contrary,
“[c]ircumstantial evidence is not only sufficient, but may also be more
certain, satisfying and persuasive than direct evidence.” There was no clear
error in finding materiality.

Joneca argued that it submitted evidence that “consumers
prefer Joneca’s disposers because of their better performance.” But the quoted customer
reviews “primarily discuss how ‘powerful’ Joneca’s units are, indicating that
consumers do care about power.” It didn’t matter that consumers were satisfied
with their Joneca units; that didn’t show that they didn’t care about
horsepower when choosing a disposal. In particular, “[b]ecause retailers
display disposals to consumers by horsepower level, it was reasonable for the
district court to infer that a false claim about a disposal’s horsepower—i.e.,
a horsepower claim that causes a disposal that lacks even the horsepower to
qualify as Medium Duty to be displayed in the Heavy Duty section—would
materially affect whether and how consumers would compare the unit to competing
products.”

Injury: The court of appeals noted with approval the Second
Circuit’s statement that “in many cases the evidence and the findings by the
court that a plaintiff has been injured or is likely to suffer injury will
satisfy the materiality standard—especially where the defendant and plaintiff
are competitors in the same market and the falsity of the defendant’s
advertising is likely to lead consumers to prefer the defendant’s product over
the plaintiff’s.” The district court found that “horsepower—and thereby falsehood—is
prominently displayed at the point-of-sale in retail shops” and reasoned that
“horsepower is commonly used to differentiate garbage disposals.” It was not
error to find that, when “a false statement is prominently displayed on a
direct competitor’s product, and sold side-by-side at the same retailer as if
to compare products and value, there is a real likelihood” of “diverted sales
or diminished goodwill.”

The district court should have presumed irreparable injury
from likely success on the merits, but its error didn’t help Joneca. That court
independently found likely irreparable injury, which was not clearly erroneous.
It apparently credited InSinkErator’s account that a retailer had awarded shelf
space to Joneca instead of InSinkErator and that Joneca’s “fake value
proposition” of inflated horsepower at a low price would influence bidding that
was in process for “private label contracts with major retailers.” But, even if
Joneca’s story had more details than InSinkErator’s, it wasn’t clear error to
side with the latter.

from Blogger http://tushnet.blogspot.com/2025/12/literal-falsity-can-exist-without-bald.html

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court rejects politician’s slogan claim

Posted on December 29, 2025 by rtushnet

Cloobeck v. Villaraigosa, No. 2:25–cv–03790–AB (SK) (C.D.
Cal. Dec. 8, 2025)

Cloobeck, a 2026 California gubernatorial election candidate,
alleged infringement of the phrase “PROVEN PROBLEM SOLVER” by competing
candidate Villaraigosa. Cloobeck used “I AM A PROVEN PROBLEM SOLVER” in
connection with his gubernatorial campaign since March 2024; he applied to
register it in late 2024. Villaraigosa later began using the phrase “PROVEN
PROBLEM SOLVER” in connection with his campaign.

Obviously this is a bad claim. The difficulty is that
trademark has extended far beyond protecting source indication, but source
indication is the only thing that really involves a substantial government
interest in suppressing political speech. We could say that the Lanham Act is
only constitutional as applied to political speech when it addresses source
identification, and not other kinds of (immaterial) confusion, but courts
generally don’t want to do that and therefore end up having to make somewhat
less convincing distinctions.

First, the court says, the Lanham Act governs commercial
speech, not “purely political” expression. What about United We Stand Am., Inc.
v. United We Stand, Am. New York, Inc., 128 F.3d 86 (2d Cir. 1997) (not for
nothing, endorsed by the Supreme Court in JDI)? First, it’s not binding
in the Ninth Circuit. Second,

the defendant was a political
organization operating as an entity that provided membership, political
advocacy, and fundraising services to the public. By contrast, here
Villaraigosa is merely an individual gubernatorial candidate—he is not running
a political organization engaged in offering “services characteristically
rendered by a political party to and for its members, adherents, and
candidates.” In addition, in United We Stand, the court emphasized that the
defendant’s use of the mark was tied to soliciting contributions, memberships,
and event participation, activities with clear commercial characteristics under
the Commerce Clause.

Here, however, Villaraigosa’s use
of “PROVEN PROBLEM SOLVER” occurs in the course of political messaging,
debates, and campaign communications—not the sale or advertisement of goods or
services.

I tend to think this distinction is unpersuasive even though I accept the result in United We Stand. [Side
note: United We Stand was a default judgment, and so the facts are particularly unhelpful—I’m trying to
track down some images if they’re available.]

Political messaging and campaign communications also
routinely involve soliciting contributions, event participation, and even
memberships (donor’s circles!). They’re two different ways of saying the same
thing. Please note the “contribute” button on these screenshots from
defendant’s website, included in plaintiff’s complaint:

Which is to say, individual candidates promote services/participate
in commerce just as much as political parties. However, the role of a name
compared to that of a slogan can provide a meaningful difference: a name tells
you who is speaking in a much more direct and unambiguous way than a slogan. It
is a core source-identifier, where the interest in avoiding confusion is at its
highest.

The court here also distinguishes other political speech
cases like Browne v. McCain, 611 F. Supp. 2d 1073 (C.D. Cal. 2009),
which applied the Lanham Act to unauthorized use of a musical work in political
advertising as a sponsorship/approval case. The court said that the use of
“PROVEN PROBLEM SOLVER” here “does not implicate confusion over the origin or
sponsorship of goods or services, but rather falls within the heartland of core
political expression. Accordingly, while Browne recognized that the
Lanham Act may extend to certain political activities when there is a
significant risk of confusion, this Court is unconvinced the Lanham Act is
applicable to the political circumstances at bar.”

OK, but (1) if the issue is lack of confusion, no special
treatment for political speech is required; (2) if the issue is that political
speech requires us to tolerate more risk of confusion, that should be said
outright; (3) if the factual claim is that this kind of political speech is
just inherently less likely to cause confusion than two nearly identical
political party names or the use of famous songs by famous entertainers, then
that should also be said outright. To be clear, I think both (2) and (3) are
correct and also more helpful than just saying “these are different
situations,” because knowing why they’re different is useful. Why couldn’t one
politician endorse another? Brad Lander and Zohran Mamdani cross-endorsed in their primary—and
although if you’re reading this, you probably understand why that’s different,
most Americans have only a vague understanding of ranked-choice voting.

The court thought this case was more like Think Rubix, LLC
v. Be Woke. Vote, No. 2:21-CV-00559-KJM-AC, 2022 WL 1750969 (E.D. Cal. May 31,
2022), where the slogan “Be Woke. Vote” slogan was “inherently intertwined”
with social and political advocacy and therefore noncommercial under the Lanham
Act. “Both Think Rubix and the present case involve political and civic
engagement campaigns that use short punchy phrases as part of their political
messaging. In each, the marks’ purpose is to inspire individuals to vote, not
to identify or promote a commercial product or service.” “PROVEN PROBLEM
SOLVER” was also used in campaign materials and messaging to persuade voters, “not
to engage in commercial trade.”

[Political fundraising is apparently “commercial trade,”
though, at least when a party does it—this is not as good of a dividing line as
“name” for purposes of protecting political speech.] “Villaraigosa is not
selling goods or services or participating in the marketplace—he is seeking
votes from the public for his 2026 California gubernatorial campaign.” [We’ve
just stuffed the relevant considerations into the definition of “participating
in the marketplace,” though—was the McCain campaign “participating in the
marketplace” when it ran its allegedly infringing ad? If so, how was it doing
so differently than defendant here? Are political endorsements a relevant
“market”?]

Even if the Lanham Act did apply, there was no plausible
risk of confusion.

Voters understand that Cloobeck and
Villaraigosa are two distinct individuals and political candidates—they are
opponents in a high-profile gubernatorial election. They have separate and
distinct campaign websites, social media accounts, and both engage with the
public widely and separately through campaign speeches and messaging. No
reasonable person would believe Cloobeck and Villaraigosa are affiliated simply
because both use a descriptive phrase commonly used by political candidates for
their campaigns. Moreover, the [complaint] contains no allegations of
misdirected donations, mistaken identity, or any other indica of confusion.

“PROVEN PROBLEM SOLVER” was also generic for a desirable
political trait, not a source identifier. “When voters consider candidates for
public office, they naturally seek individuals who can solve the problems of
their communities.” Numerous politicians have used the phrase “proven problem
solver” in campaign materials “dating back decades. This signifier in politics
can be traced all the way back as far as 1989.” [So far back! /is old] “Granting
exclusive rights to a single candidate for such a common descriptor would
remove a phrase from ordinary political discourse and risk chilling core
campaign speech.”

Cloobeck analogized to political trademarks obtained by
other candidates, citing examples such as “MAKE AMERICA GREAT AGAIN,” “YES WE
CAN,” and “BUILD BACK BETTER.” But “those slogans were historically distinctive
and uniquely associated with a specific candidate or movement,” not merely
descriptive. [Ugh. The first two at least were very deliberately, intentionally
not new! If we want to protect political speech (we should), we need (a) a high
barrier for protecting political slogans as a factual matter and (b) a test
that is hesitant to impose liability on politicians’ speech. Both are useful,
(a) to prevent the use of political trademarks as a sword against political
speech and (b) as a shield for political speech even against non-politicians’
claims.]

[Side note that the court calls the phrase at issue a
“descriptive, generic” slogan, and TM law would say there’s a big difference
between the two in terms of theoretical protectability—but it doesn’t matter
here, and also the PTO understandably requires more evidence of distinctiveness
if something is highly descriptive/bordering on generic, so the court’s
instincts here make sense.]

from Blogger http://tushnet.blogspot.com/2025/12/court-rejects-politicians-slogan-claim.html

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no abuse of discretion in PI requiring advertiser to terminate liens that it told homeowners weren’t liens

Posted on December 24, 2025 by rtushnet

People v. MV Realty PBC, LLC, 2025 WL 3719896, B341121 (Cal.
Ct. App. Dec. 23, 2025)

Blogging more in my property law prof hat, but with false
advertising. MV Realty recorded liens on its customers’ properties, but assured
homeowners that these were “notices” and not “liens.” The court of appeals affirmed
a preliminary injunction requiring, inter alia, that MV Realty terminate its
recorded liens.

MV Realty’s “Homeowner Benefit Program” sold “Forward
Listing Contracts” to California homeowners. “The program offered a cash
payment to homeowners, of approximately .27 percent of their home value, in
exchange for the homeowners granting MV Realty the exclusive right to sell
their home.” MV Realty marketed the program as a “one-of-a-kind, innovative
program that allows homeowners the chance to receive an immediate cash payment
by agreeing that [MV Realty] will be your Real Estate agency if and when you
decide to sell your home in the future” with “no credit check,” “[no]
[r]equirement to [s]ell [y]our [h]ome,” and “no obligation to repay the money
….” This requirement applied if the homeowner sold the home within the next
40 years; if they didn’t use MV Realty, they were required to pay a three
percent penalty of either the sale price or of the home’s initial valuation by
MV Realty, whichever was higher, the “Early Termination Fee.”

The agreement stated that the homeowner’s “obligations
hereunder shall constitute covenants running with the land” and granted MV
Realty “a lien and security interest” in the property as security for the
homeowner’s obligations under the contract. MV Realty promised to “consider in
good faith any request from [the homeowner] to facilitate such refinancing or
new mortgage by subordinating the lien of this [a]greement to the refinanced or
new mortgage.”

Unsurprisingly, “[i]nternally, MV Realty referred to the
memorandum as a lien and promoted it to investors as a security feature of a
future revenue stream. Externally, underwriters, prospective lenders, and
escrow officers treated the memorandum as a lien on the property.” But prospective
customers heard a different story. “On its website and in its marketing
e-mails, MV Realty stated it would not record a lien on the homeowner’s home;
it would record only a memorandum to serve as public notice of the homeowner’s
obligations under the agreement. MV Realty trained its telemarketers to tell
homeowners it would not record a lien on their homes.”

The People sued for violations of the UCL
and FAL. The People argued that MV Realty’s fraudulently placed liens
caused ongoing harm to over 1,400 California homeowners who, as MV Realty
explained in an investor presentation, are “unable to convey clean title
without receiving a lien release from MV Realty.” The People “submitted
declarations from over a dozen homeowners who contracted with MV Realty, and
several more from declarants whose family members contracted with the company.”
Homeowners stated that they never would have entered into the agreement if MV
Realty had explained that there was a lien to them.

A few explained how the lien became
an obstacle to their later obtaining a loan secured by the property, and they
eventually gave up on refinancing. Others stated they were forced to pay the
Early Termination Fee, which was ten times the amount of the consideration they
had received from MV Realty, before they could secure refinancing. Many shared
their views that MV Realty lied to them, that they no longer trusted MV Realty
to sell their home, and that they felt trapped by the agreement. Almost all homeowner
declarants stated they had not seen the 12-page agreement until a notary, who
could not explain the terms of the agreement, brought the document to their
home to be signed.

MV Realty submitted 51 declarations from California
customers who stated that they were not misled by MV Realty and that they were
aware that “MV Realty ha[d] the right to record th[e] [m]emorandum on my
property records to provide notice of the agreement.” Its own spreadsheet
showed that it did not provide the agreement to 80 percent of California
homeowners who signed it until the moment a notary presented it to them. MV
Realty admitted homeowners had difficulty refinancing because of the memorandum;
there was evidence that some lenders rejected MV Realty’s offers to subordinate
the memorandum. Its own document, “Termination of Memorandum of MVR Homeowner
Benefit Agreement,” explained that the memorandum was an “encumbrance.”

The trial court found that “[MV Realty] knew the memoranda
operated as liens, represented this to their investors, but materially
misrepresented the effect of the memoranda to the Homeowners.” Thus, it granted
the preliminary injunction, including the requirement to remove the liens.

The UCL and FAL are “broadly enforced to protect the public,
including “extraordinarily broad” remedial power to enjoin prohibited business
practices “in whatever context they may occur.”

Under California law, “[w]here a governmental entity seeking
to enjoin the alleged violation of an ordinance which specifically provides for
injunctive relief establishes that it is reasonably probable it will prevail on
the merits, a rebuttable presumption arises that the potential harm to the
public outweighs the potential harm to the defendant. If the defendant shows
that it would suffer grave or irreparable harm from the issuance of the
preliminary injunction, the court must then examine the relative actual harm to
the parties.” An injunction in such circumstances is only appropriate if the
trial court concludes, balancing (1) the degree of certainty of the outcome on
the merits, and (2) the consequences to each of the parties of granting or
denying interim relief, that an injunction is proper. The standard of review is
abuse of discretion.

First, the court of appeals found there was no error on likely
success on the merits. MV Realty argued that it “properly disclosed to
homeowners that the memoranda would be recorded with the county recorder’s
office,” so it made no material misrepresentations to homeowners, and that the “memorandum”
wasn’t legally a “lien.” The court of appeals understandably disagreed. The
evidence demonstrated that “[MV Realty] knew the memoranda operated as liens,
represented this to [its] investors, but materially misrepresented the effect
of the memoranda to the Homeowners.”

MV Realty argued that a lien has to be “a legal claim
against a property to secure the payment of a debt” and the memorandum was a
mere “notice disclosing its contract rights,” such that MV Realty could
file a lien for 3% of the value of the property upon sale or transfer if the
consumer breaches the agreement and does not use MV Realty in the real estate
transaction.

Not so. “A lien is a charge imposed in some mode other than
by a transfer in trust upon specific property by which it is made security for
the performance of an act.” The documents called it “a lien and security
interest.” More than once! MV Realty called it a lien when talking internally
or to investors, and “[u]nderwriters who analyzed the memorandum instructed
their agents to treat it as a lien or a mortgage.” There was substantial
evidence of likely success on the merits.

What about balancing the harms? The trial court stated that
it was “not persuaded that [MV Realty has] shown grave or irreparable harm to
warrant denial of the preliminary injunction,” though it accepted MV Realty’s
contention that if the preliminary injunction issued, it would “essentially
[be] force[d] … to cease business in California and require[d] … to
terminate thousands of [m]emoranda, which it ha[d] already provided consumers
consideration for.” The court also accepted MV Realty’s contention that it
would be put “ ‘in a state of financial disarray.’ ” Nonetheless, even if the
district court wrongly found no grave or irreparable harm, MV Realty was not
prejudiced and there was no clear error because the trial court acceptably balanced
the harms to the parties. (And of course that’s one completely coherent way to
read the statement that MV Realty didn’t show harm to warrant denial of the
PI.)

“At this stage of the analysis, no
hard and fast rule dictates which consideration must be accorded greater weight
by the trial court. For example, if it appears fairly clear that the plaintiff
will prevail on the merits, a trial court might legitimately decide that an
injunction should issue even though the plaintiff is unable to prevail in a
balancing of the probable harms.” The goal is to minimize the harm that would
be caused by an erroneous interim decision.

The trial court didn’t clearly err when it found there would
be imminent, irreparable harm to homeowners bound by the agreement if the
preliminary injunction did not issue because each homeowner would be bound by
terms they never would have knowingly accepted. Not one of the roughly 70
homeowners who submitted declarations stated that a cloud on marketable title “was
something they willingly bargained for in exchange for the .27 percent of their
home value they received as consideration.” (Yeah, I noticed that about the
quote from MV Realty’s declarations too.) 
“Even when MV Realty offers to subordinate its lien, as the evidence
shows it has done in the past, many lenders will not accept the subordination.
A homeowner who wishes to refinance or take a home equity loan, therefore, must
pay the Early Termination Fee to clear the title.” Thus, there was no abuse of
discretion in balancing the harms.

MV Realty proposed that instead of
ordering it to terminate all memoranda, the trial court could order it to:
provide notice to every customer, title company, and lender that the memoranda
is not a lien; subordinate when requested to do so by a lender; and terminate a
memorandum if a lender rejects the subordination. None of these suggestions was
a deviation from what MV Realty represented was its contemporaneous practice to
assist homeowners with refinancing. The People submitted evidence that homeowners
nevertheless continued to suffer harm as they struggled to get in touch with
the company to request subordination and complete the lengthy process of
clearing title.

There was no abuse of discretion in finding these steps
insufficient.

from Blogger http://tushnet.blogspot.com/2025/12/no-abuse-of-discretion-in-pi-requiring.html

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“monk fruit sweetener” plausibly should have more than 1.15% monkfruit

Posted on December 22, 2025 by rtushnet

Grimbaldeston v. Saraya USA, Inc., 2025 WL 3677857, No.
25-cv-05649-RFL (N.D. Cal. Dec. 17, 2025)

Grimbaldeston brought the usual
California claims based on allegations that Saraya deceptively overstated
the amount of monk fruit in its sugar substitute. The court mostly declined to
dismiss the case.

The back label describes the benefits of monk fruit and
lists the ingredients: “Erythritol, Monk Fruit Extract.” Grimbaldeston alleged
that testing confirmed that the Sweeteners contain 1.15% monk fruit extract,
and that the remaining 98.85% is made up of Erythritol.

This was adequate to plead deception.  

In text that is more than twice as
large as any other text on the front label of the product, the Sweeteners’
front label describes the product as “MONK FRUIT SWEETENER,” while the words
“WITH ERYTHRITOL” are approximately one third of the size and written in a
lighter color. The back label describes the health benefits of monk fruit,
which it calls a “superfood” and “The Immortals’ Fruit.” The back label does
not discuss Erythritol, other than listing it as an ingredient. At the pleading
stage, Grimbaldeston has alleged that the amount of monk fruit extract in the
Sweeteners is de minimis, and that a reasonable consumer would expect the
Sweeteners to contain more than a de minimis amount of monk fruit, given the
front label and the back label discussion.

Nothing on the label indicates the ingredient proportions, and
the ingredient list reflects that the product contains more erythritol than
monk fruit. “But even taking the ingredient list into account, it is plausible
that a reasonable consumer would believe that a product prominently labeled ‘Monk
Fruit Sweetener,’ and extolling the benefits of the fruit, would contain more
than 1.15% monk fruit.”

Saraya argued that purchasers would know that a sweetener
made “mostly of monk fruit” would be “cloying[ly] sweet,” and that “such
products must contain a larger proportion of less-sweet ‘sugar alcohol’ ” to be
a “one-to-one sugar replacement.” “While bee pollen collection is undisputedly
common knowledge, it is plausible that an average consumer of sugar
replacements would be unaware of the relative sweetness of monk fruit, even if
they are aware of the supposed health benefits of monk fruit and specifically
sought out a monk fruit product.” Also, even if so, “a reasonable consumer
might plausibly have expected that the Sweetener was not primarily monk fruit
while also expecting the product to have a non-negligible amount of monk fruit.”

Saraya also argued that because the “back label discloses
that for a serving size of 8 grams, there are 8 grams of sugar alcohol
(erythritol) … [it] fully discloses that approximately 8 grams of each 8-gram
serving is erythritol, not monk fruit.” But the word “erythritol” is not part
of the “sugar alcohol” disclosure. A reasonable consumer plausibly wouldn’t
know that only erythritol—and not monk fruit extract—contains sugar alcohol, or
wouldn’t “connect the dots” to determine that nearly all of the Sweetener is
comprised of erythritol.

The CLRA claim was, however, dismissed to provide the proper
pre-suit notice.

 

from Blogger http://tushnet.blogspot.com/2025/12/monk-fruit-sweetener-plausibly-should.html

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trademark law firm loses trademark lawsuit

Posted on December 19, 2025 by rtushnet

LegalForce RAPC Worldwide P.C. v. MH Sub I, LLC, No. C
24-00669 WHA, 2025 WL 3675365 (N.D. Cal. Dec. 18, 2025)

LegalForce, a law firm “specializing in trademark law,” sued
online referrer to law firms MH for infringing two service marks. The court ruled
for MH after a bench trial. CEO Raj Abhyanker served as trial
counsel, reminding me of the old adage about an attorney who serves as his own
lawyer.

LegalForce uses the service name LegalForce and legalforce.com,
and owns a search engine for trademarks that primarily has used the service
name Trademarkia and the website trademarkia.com. “The search engine has
attracted visitors looking for trademarks and has converted some into paying
clients for the law firm.”

LegalForce uses a composite mark with a parallelogram
colored orange, with two rounded corners and two sharp, with LF inside and the
stylized words “Legal Force” alongside. The composite is registered for “law
firm services” as well as services “providing general information in the field
of legal services via a global computer network.” Sometimes, LegalForce uses
just the symbol portion, and it registered that separately in anticipation of
this litigation. (Note: “Plaintiff failed to submit certified copies of the
above registrations before our October 2025 bench trial and had no acceptable
excuse for the failure. Instead, plaintiff … submitted certified copies after
the trial record closed.… This is emblematic of the way plaintiff has
prosecuted this entire case. Nevertheless, this order will treat the
certificates as having been proven.”)

Composite mark

symbol only

MH isn’t a law firm, but offers referrals. “People having
legal problems have been attracted by advertising to http://www.lawfirms.com, where
some have filled out an interest form. Defendant has packaged the resulting
client ‘leads’ and provided them to paying lawyers, including lawyers listed on
online directories defendant also owns,” including avvo.com. Lawfirms.com initially
used a mark that also had an orange parallelogram with two sharp comers; nested
inside was a white Roman column. A stylized word to the right read:
“LawFirms.com.”

accused mark

Soon after litigation began, and consistent with the court’s
suggestion trying to spare both sides the cost of litigation, MH changed the
symbol to crimson and changed the corners so that the tops were sharp and the
bottoms rounded. The column and stylized word remained.

replacement mark

LF continued the case, seeking only injunctive relief as to
the original composite.

There was no evidence of actual confusion. MH didn’t market
its services using the composite mark in the same places where LF markets its
services using either of its marks, “so there has been and will be no occasion
for consumers to see both services’ marks and to confuse one versus the other.”

Both parties have used keyword marketing but “no single web
search has returned or will ever likely return both plaintiff’s and defendant’s
websites showing their marks.” There was no evidence that the parties have or
would bid on the same keywords for the websites at issue (as opposed to other
sites like avvo.com). For SEO, there was “no credible evidence that defendant
has undertaken any effort to appear in search results for the same searches as
plaintiff, or ever would…. No credible evidence showed even that the service
names have appeared alongside each other.” Likewise, “no credible evidence
proved that anything about the websites themselves was confusing.”

At trial, LF offered a theory of AI chatbot confusion.
However, it offered no admissible evidence in support of such a theory.

The parties have used the service marks at issue in social
media, but not on the same social media platforms. LF used its symbol on
LinkedIn, but “LawFirms.com,” unlike LF, does not target businesspeople. “It is
not the service name of a standalone business with its own employees.” Instead,
defendant markets on Instagram, Facebook, and TikTok, where there was no
evidence of LF having marketed. There was no evidence that MH marketed or would
market at any conference or physical location. “LegalForce and LawFirms.com are
not marketed in the same places in part because they do not offer the same
services.”

There wasn’t even evidence that prospective lawyers buying MH
referrals would see the accused mark. While avvo.com has listed some trademark
lawyers, lawfirms.com “almost always has attracted and referred individuals
having personal problems”: car accidents, worker’s compensation, and divorce. “It
has presented all comers with a general webform. Some (very few) who have
completed the form have indicated in it that they had trademark needs.” Revenue
for each personal injury lead has been about $85, while revenue for each
trademark lead has been about $46. For all the relevant periods, lawfirms.com collected
and distributed fewer than 25 total trademark leads to trademark lawyers,
representing less than $1,000 in revenues, a small fraction of all leads and
revenue, and none of those came during the period when it used the accused
mark.  

Meanwhile, LF has never provided legal services for personal
injury, employment issues, or family law, received any appreciable number of
inquiries from any persons seeking any such services, or systematically made
referrals of any kind to any other lawyers or law firms. Although it asserted an
intent to do the first and third of these, the court found this not credible. “Plaintiff
has had more than a decade to broaden its legal practice and/or to begin making
referrals systematically to other lawyers and it has failed to do either.”

The customers are moderately careful: “They are more
mentally alert than someone grabbing a lemon-lime soda. They would not be
likely to confuse the two marks even if the marks were seen side by side.”
Although one of plaintiff’s experts testified that LF offered relatively less
expensive trademark registration services, “suggesting but expressly not
concluding that they may be relatively less sophisticated and take relatively
less care,” relatively less care was not no care — “especially if being
compared to the care taken for more expensive legal services.” “Protecting a
business’s reputation is important, even if it is on average more important to
be made whole after the kind of bodily injury that prompts a person to seek a
lawyer.”

The senior marks weren’t strong, despite the composite mark’s
incontestability. LF had “barely” used the two marks at issue, focusing instead
on “Trademarkia,” including in the header for legalforce.com. There was no credible
testimony or documentary evidence of any paid advertisement using LF’s
“LegalForce” service name or marks. LF did not even prove that its own law firm
clients know the name “LegalForce.”

Conceptually, LF’s marks “comprise common features arranged
in a common way, with limited distinctions.” A squat parallelogram with some
rounded corners and some unrounded ones is “shared by other marks in commerce.”
There were many other orange parallelograms already in use, although the
gradient added a slight distinction. Bolding one but not both words “distinguished
the stylings from other marks somewhat.” The choice of a “horizontal stack”
with the symbol on the left and the word on the right was not arbitrary, but
rather “a common and functional choice to fit well at the top of a website.” Thus,
there was neither commercial nor conceptual strength.

There was no intent to confuse: “Defendant had no reason to
ride plaintiff’s coattails, nor even to step on them: Plaintiff’s marks were
not well known. Plaintiff and Defendant were not proximate or expanding.” MH
chose a squat parallelogram “because it presented well on websites in
conjunction with words.” It chose its colors, fonts, and stylings to complement
one of its existing logos (Avvo blue): “designers treat those colors as
complementary.” MH then chose the sizing and stacking to match its existing
logos, so that its mark could be configured to appear clearly at the top of its
website.

“The worst that could be said was that defendant neglected
to do a trademark search before settling on a mark that assembled common
elements in a common way. … The failure to conduct a trademark search before
selecting the original mark did not result from bad faith. A trademark search
was not required by law.”

Nor were the parties’ marks very similar. The column
distinguished them; the initials “LF” do not suggest the same thing as the
Roman column. While each set of letters in the words includes the capitalized
letters L and F, they spelled different words. The senior mark bolds only the
first word, “Legal,” but not the second, “Force,” while the junior mark bolds
both words “LawFirms.” “In meaning, the senior mark describes one legal force,
while the junior mark uses the generic term for many or all law firms.” As a
whole, they were arranged in a “common, functional” way for a mark designed to be
displayed at the top of a web page. “No credible evidence proved that when
viewing the marks as a whole this horizontal stacking itself was important to
any consumer impression or to any association with any service.” Indeed, “the
differences stood out in the overall consumer impression.”

LF’s survey showed respondents ead-to-head comparisons of
the composites and asked: “If you saw the logos [below] on two different
websites [whe]n searching for law firms, would you think they are connected,
affiliated, or associated in any way?” Thirteen percent answered “Yes.” Nineteen
percent said “maybe.” (The expert initially grouped these together as 32%; the
court was not pleased.)

“The survey question posed a scenario that was not specific
and that did not reflect any scenario proven to exist or to be likely to exist
in commerce.” It didn’t even show what the websites would look like. There was
no control. (Indeed, LF ran a survey with a control, showing no real difference
between the test and control cells, so it dropped the control and re-ran the survey;
“[o]ther methods to reduce bias were known to plaintiff but not followed in the
re-crafted survey.” The questions “incorporated false premises, were
ambiguously worded, and/or were reported to the Court with at first material
omissions.”

Defendant’s better survey showed consumers the junior mark
on lawfirms.com, then asked if they believed the services were put out by,
affiliated with, or approved by some other business, whose marks or name they
might recall and then write in. “No one responded with LegalForce, Trademarkia,
Raj Abhyanker, or anything similar. This survey was run with likely consumers
of plaintiff’s services and with likely consumers of defendant’s services. The
answer was zero for either cohort.”

The court had other criticisms of Abhyanker in his roles as
CEO and trial counsel. E.g., he “testified misleadingly under oath to having
spent $10 million advertising the mark. On cross-examination it was revealed
that zero of that $10 million had been spent buying ads showing the actual
marks at issue.” On the other hand, the court found that discovery was “marked
by failures by counsel on both sides.”

The only legal conclusion of note is the court’s recognition
that incontestability doesn’t add actual market strength. “[E]ven if
incontestable, a mark that remains conceptually and commercially weak cannot be
asserted to exclude from its designated market other trademarks that are
unlikely to be confused with it.”

from Blogger http://tushnet.blogspot.com/2025/12/trademark-law-firm-loses-trademark.html

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license agreement termination might be invalid transfer in gross without a new partner for licensor

Posted on December 17, 2025 by rtushnet

Form Portfolios LLC v. Food52, Inc., 2025 WL 3638165, No. 24-cv-07690
(NCM) (CLP) (E.D.N.Y. Dec. 16, 2025)

Form designs consumer products, partnering with other
companies that license those designs. Food52 sells cookware and other homegoods
under the brand Dansk. This dispute arises from their former collaboration.

Dansk is known for products
designed by Jens Quistgaard, a Danish designer…. After Quistgaard was no longer
Chief Designer for Dansk, Quistgaard continued to develop designs for
kitchenware on his own. … In 1992—long before defendant acquired Dansk—Dansk
and Quistgaard entered into a contractual arrangement) for Dansk to have the
opportunity to purchase designs that Quistgaard continued to invent. … Quistgaard
retained all rights for designs not accepted by Dansk. The 1992 Design
Agreement provided Dansk with a limited license to utilize Quistgaard’s
distinctive and famous name, signature, biographical data, photograph and/or
likeness on the accepted designs.

Quistgaard died in 2008; his heirs set up an entity that
entered into a new agreement with Dansk, providing it a right of first refusal to
certain archival designs and again provided Dansk a limited license to utilize
Quistgaard’s name, initials, signature, biographical information, and likeness
for promotional materials for the additional accepted designs. This agreement
expired in 2022.

The parties then entered into an agreement allowing Dansk to
make and sell products based on certain designs owned or managed by Form. Dansk
also asked Form to act as an intermediary with the Quistgaard Family because of
Form’s expertise working with the heirs of designers. The Quistgaard family
granted Form the exclusive right to negotiate a new agreement with Dansk,
including provisions making Form its legal representative. The parties then entered
into a new license, which said it superseded all previous licenses.

The new agreement stated, among other things, that “[a]ny
trademark, other than [defendant]’s house mark or brand, that is adopted by
[defendant] in marketing Licensed Products in addition to a Licensed Trademark
that becomes associated exclusively with any or all Licensed Products as a
result of such marketing, shall revert to [plaintiff] upon termination of this
Agreement for any reason,” including “the name of the designer in question,
their likenesses, signatures, logos and initials for use in connection with the
promotion, advertising, marketing and sale of Licensed Products.”

Then a dispute developed and Dansk allegedly unilaterally
ceased making payments to Form. But it allegedly continued to sell products
covered by the new agreement and to use various trademarks, including the Jens
Quistgaard name and the Kobenstyle registered trademark.

Form sued for trademark infringement under Section 32 of the
Lanham Act and false association, false advertising, and trademark dilution
under Section 43.

Section 32: Kobenstyle is a specific line of cookware. The
parties agreed that this trademark was initially owned by Dansk in 2013, but Form
argued that the license agreement transferred it to Form when the license was
terminated, implicitly arguing that the Kobenstyle trademark was not “[Dansk]’s
house mark or brand.”

First, the court found that summary judgment was the right
place to make the argument that the agreement’s reference to “revert” meant
that the agreement only covered marks Form previously owned; it never owned
Kobenstyle. At the motion to dismiss stage, though, the court accepted the
argument that the only things exempt from “reverting” are Dansk’s “house mark
or brand.”

Dansk then argued that, regardless, this section would fail
to actually transfer ownership because it was a prohibited “in gross” transfer
of trademark rights.  “[F]or a trademark
transfer to be valid, the transfer must include the underlying trademarked
commercial undertaking in some meaningful respect.” It was true that no aspect
of defendant’s business has changed hands, but Form argued that a trademark can
be validly transferred even without transfer of the underlying business so long
as the recipient continues or intends to continue producing similar goods. “The
fundamental requirement for a valid transfer of trademark is continuity of the
underlying product or business.”

However, the complaint didn’t plead that Form intends
to produce or market Kobenstyle products within a reasonable timeframe or
partner with a different collaborator to do so. Thus, the section 32 claim
failed.

43(a)(1)(A) false association: Form alleged that Dansk’s use
of Jens Quistgaard’s name, initials, signature, biographical information, and
likeness was actionable. Form properly alleged standing: its interests were
within the zone of interests, which for 43(a) doesn’t require trademark
ownership, and it sufficiently alleged that its re-licensing rights were being
harmed by Dansk’s competing uses.

Dansk argued that it was using Jens Quistgaard’s name and
initials only in a descriptive and factual sense—to convey to consumers that
defendant is selling goods that were, in fact, designed by Quistgaard. But this
doesn’t work on a motion to dismiss because descriptive fair use is a
fact-intensive inquiry. (Could this be reframed as a Dastar defense that
would work?)

However, the 43(a)(1)(B) claim was dismissed as duplicative
with the unregistered trademark infringement claim. T The idea that consumers
will falsely believe that defendant is authorized to sell trademarked goods
does not sufficiently entail or imply a false statement that “go[es] beyond
mere claims of false association.”

Dilution: of course not; Form didn’t even bother to defend
it.

from Blogger http://tushnet.blogspot.com/2025/12/license-agreement-termination-might-be.html

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Reading list and comments: Doctrine, Data, and the Death of DuPont

Posted on December 15, 2025 by rtushnet

Thomas Reichert, Doctrine, Data, and the Death of DuPont 

 Abstract:

For fifty years, courts have claimed to apply a comprehensive thirteen-factor test for trademark confusion. They are lying, or at least deeply mistaken. Using AI-powered analysis of 4,000 decisions, this Article proves what practitioners have long suspected: the test has collapsed to just two factors. 

 Using a large-language-model to extract scored findings for all thirteen factors from approximately 4,000 TTAB inter partes decisions (2000-2025), the study applied statistical models to predict case outcomes. Mark similarity (Factor 1) and goods/services relatedness (Factor 2) alone achieve 99.37% accuracy. Adding the remaining eleven factors increases accuracy to only 99.79%, which is a mere 0.42-point improvement with no practical significance. More striking still, a simple categorical rule predicting confusion if and only if both factors 1 and 2 favor confusion achieves 99.52% accuracy, outperforming the regression models. Further analysis confirms that most secondary factors either repeat information already captured by the core two factors or contribute nothing meaningful to outcomes. 
 These findings confirm at scale what prior scholarship has suggested: in determining trademark confusions, courts pay lip service to comprehensive multi-factor analysis while actually deciding cases based on just two considerations. The results also reveal concrete harms from this doctrinal gap: parties spend substantial resources litigating factors that do not influence outcomes, case results become harder to predict in advance, and adjudicators exercise broad discretion without meaningful constraints. 
 The Article explores how these findings might inform doctrinal reform, how reforms would center the two determinative factors and limit secondary considerations to narrow tiebreakers in genuinely ambiguous cases. Finally, it advances a broader “multifactor collapse” hypothesis and outlines a research agenda for testing whether other legal balancing frameworks exhibit similar patterns where doctrinal complexity masks simpler underlying decision-making.

My comments: Empirical support for John Welch’s mantra,
which turns out to be understated—mark and goods don’t predict 95% of the
outcomes of 2(d) appeals to the TTAB, they predict 99%!

A small point: I think the article understates Beebe’s findings
on the importance of intent, which is the factor that he finds to be important
that this analysis doesn’t. This may be related to the big point: You can’t directly
compare registration inquiries, which are conducted in the abstract, to infringement
inquiries, which consider all the relevant context. Actual confusion is
especially unlikely in 2(d) inquiries, and so is intent evidence.

This paper could be very useful, but without attention to the
differences between 2(d) and infringement, it will not reach its potential and
might serve to confuse people who aren’t already conversant in trademark law. This shows up already in the abstract, which starts off with “courts” but then discusses the TTAB. Likewise, on p.44, right after saying clearly that the results are about the
TTAB, the paper says “Some readers may object that courts must have reasons for
discussing all thirteen factors. This objection conflates rhetoric with
reality. Courts discuss Factor 8 (concurrent use) because doctrine requires it,
not because it changes outcomes.” But the TTAB is not a court. This also means
that, e.g., claims about litigation costs aren’t comparable; the proper figure
is estimates for costs of opposition, which AIPLA collects separately from
litigation costs in its surveys.

The results also have fascinating implications for the
question of crowding on the register. If crowded fields rarely matter, that
gives existing registrants even more of an advantage than the crowding
literature might suggest, even as 2(d) refusals seem to be rising.

from Blogger http://tushnet.blogspot.com/2025/12/reading-list-and-comments-doctrine-data.html

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