Booking.com isn’t generic, but might find it hard to prove infringement

Booking.com B.V. v. U.S. Patent & Trademark Office, No.
17-2458 (4th Cir. Feb. 4, 2019)
In some ways, the biggest change in trademark law since the
Lanham Act was adopted was the shift of the courts from accepting prophylactic
rules to protect competition—limiting the registration/protection of trade
dress, territoriality, and numerous other rules—to prioritizing the idea that
all interests other than the protection against likely confusion should be
considered only in individualized circumstances.  Let putative owners claim a mark, the
reasoning goes, and any anticompetitive or speech-suppressing consequences can
be dealt with as defenses for individual defendants.  Wal-Mart
is the biggest counterforce, and it is about requiring a showing of secondary
meaning rather than a prophylactic exclusion from protection. This case about
genericity of top-level domains takes the same tack: the biggest reason not to
register BOOKING.COM is the power it gives the registrant to credibly threaten
competitors like hotelbooking.com even though its rights shouldn’t extend that
far.  The majority thinks that
case-by-case ajudication will protect potential competitors; the dissent thinks
forcing them to litigate is too dangerous. 
(It should also be noted that the disappearance of unfair competition as
a protection for unregistrable marks plays a role here—while the Fourth Circuit
previously recognized that unfair competition can fill in the gaps for marks
unregistrable due to lack of US use, the majority seems to think that
Booking.com’s only defense against truly deceptive imitation is the
protectability of BOOKING.COM as a mark, which is historically untrue.)
Booking.com lets customers book travel and hotel accommodations.
It applied for four registrations for the use of BOOKING.COM as a word mark and
for stylized versions of the mark with the USPTO. At issue here are Class 43
services, which include online hotel reservation services.  The TTAB affirmed the resulting refusals of
registration, concluding that BOOKING.COM was generic for the services because
“booking” generically refers to “a reservation or arrangement to buy a travel
ticket or stay in a hotel room” or “the act of reserving such travel or
accommodation”; “.com” indicates a commercial website; and “consumers would
understand the resulting composite BOOKING.COM to primarily refer to an online
reservation service for travel, tours, and lodging, which are the services
proposed in Booking.com’s applications.” In the alternative, the terms were
descriptive and lacked secondary meaning.
Booking.com appealed to the E.D. Va., which reversed and
ordered the registration of the marks, but also, following circuit precedent,
ordered Booking.com to pay the PTO’s expenses of over $74,000, including a
portion of lawyers’ salaries.  (At the
end of this opinion, the court expressed some doubt whether this precedent was
still good given a conflict with the Federal Circuit interpreting the same
language for patents and subsequent Supreme Court precedent on the necessity of
explicit statutory language to create departures from the American rule, but it
stuck with precedent.  If Booking.com wants
to roll the dice on en banc review or even Supreme Court review, it might do
well given that signal.)
The district court accepted Booking.com’s new evidence, a
Teflon survey indicating that 74.8% of consumers recognized BOOKING.COM as a
brand rather than a generic service. It further found that Booking.com
established secondary meaning, a ruling that the PTO did not challenge on
appeal. 
The court of appeals found that the PTO had the burden of
proving genericness, given the harsh consequences of unregistrability. (And a
generic term can’t become non-generic, even with subsequent secondary meaning.)  [Note that this creates a real opportunity for
arbitrage: if you attempt to register your borderline term, the PTO has to show
genericness so if the evidence is in equipoise you get your registration, and
then there’s a presumption of validity you can deploy against subsequent genericness
challenges, as there wouldn’t be if you didn’t register.  One might think this risk is minimal because
the burden of proof so rarely matters—but I think this case might be evidence
to the contrary.]
The key question is what booking.com primarily refers to,
which depends on public understanding, which can be determined by reference to
different sources, including “purchaser testimony, consumer surveys, listings
and dictionaries, trade journals, newspapers, and other publications.” The term
is considered as a whole, even when it’s a phrase: “the relevant inquiry is the
public’s understanding of the entire mark, not its understanding of the mark’s
separate components independently.”
Although the district court made several errors of law, it
ultimately didn’t err in finding that the PTO failed to meet its burden of
showing genericness.  (One such error:
the district court wrongly found trademark significance in the fact that a
domain name necessarily [in the current configuration of the internet] refers
only to a single source.) The key pieces of evidence were the absence of
evidence showing public use of “booking.com” as generic—the generic term is “booking
site”—and the Teflon survey. The court of appeals also rejected the PTO’s
argument that adding the TLD identifier .com to a generic term can never create
a non-generic term.
The PTO identified domain names containing booking.com, such
as “hotelbooking.com” and “ebooking.com,” as evidence of public understanding
of booking.com as a reference to online hotel booking services, but that wasn’t
good enough.  Although the inclusion of
the proposed mark in longer domain names was evidence, even strong evidence, of
genericness, consumer surveys also matter. Anyway, you can book a lot of things,
including theater and music tickets, so booking.com might not mean hotel reservation
services.  [This is trademark nonsense;
hotel booking is a subset of booking services, so it’s totally irrelevant that
there might be other things for which booking is also generic.]
“[T]he ultimate inquiry in determining whether a term is
generic is what the public understands the proposed mark to mean.” But the
survey was better evidence of that than the usage evidence. It’s true that
surveys aren’t relevant where a term was “commonly used prior to its association
with the products at issue,” in which case the survey can only demonstrate
legally useless de facto secondary meaning. But there’s no evidence here that
the term was commonly used, making survey evidence relevant.
The PTO argued that, like adding “company,” adding .com can
never convert a generic term to nongeneric. Goodyear’s Rubber Mfg. Co. v.
Goodyear Rubber Co., 128 U.S. 598 (1888), held that the addition of commercial
indicators such as “Company” to terms that merely describe classes of goods could
not be trademarked.  But Goodyear predated the Lanham Act by more
than half a century and didn’t apply the current primary significance test; the
court here declined to adopt a bright line rule. Nor was the mark nothing more
than the sum of its generic parts.  The
district court erred in finding that .com would itself usually bring source-identifying
significance (or at least descriptiveness) to a generic term.  “Such a rule would effectively make any
domain name distinctive, which oversteps the focus of our trademark
jurisprudence on a mark’s primary significance to the public.” But that primary
significance wasn’t necessarily derived by taking the separate dictionary
definitions for the component parts and adding them together. Where, as here,
the composite term was not previously commonly used, additional evidence like
consumer surveys was relevant.  Although
other cases have found generic.com terms to be generic (e.g., hotels.com), they’ve
considered consumer survey evidence in so doing and declined to create a bright
line rule.
The PTO argued that granting registration could prevent
other legitimate uses of marks incorporating BOOKING.  But trademark protection wouldn’t “necessarily preclude another company
from using, for example, carbooking.com or flightbooking.com.”  [Emphasis added. It just makes such use
risky, facilitating the plausible assertion of rights to deter potential
competitors or even noncompetitors.]  And
“the purported overbreadth of the mark can be addressed in proceedings
regarding the scope of the trademark’s protection,” since likely confusion must
be shown—“often,” indeed, plaintiffs must show actual confusion.  [News to me!] 
And here’s something that might be quoted in many other contexts: “Given
that domain names are unique by nature and that the public may understand a
domain name as indicating a single site, it may be more difficult for domain name
plaintiffs to demonstrate a likelihood of confusion.”  
[Should we be granting lots of registrations that are hard to infringe?  Is there a role for unfair competition instead?]
Judge Wynn’s partial dissent (he concurred on the attorneys’
fees part and much of the legal structure of the analysis) described this as “a
problem that Booking.com chose to bring upon itself.”  It chose to operate under a generic domain that
described the nature of its services, in order to “attract the wealth of
customers who simply search the web for that service.” But it should have had
to accept the tradeoff of foregoing “the ability to exclude competitors from
using close variants of its domain name.” The majority “allows Booking.com to
have its cake and eat it too.”  To Booking.com,
such a result was warranted to prevent “unscrupulous competitors [from]
prey[ing] on its millions of loyal consumers.” But if competitors were using
the terms “booking” and “.com” in ways that might confuse Booking.com’s customers,
“this is the peril of attempting to build a brand around a generic term.”
The dissent also wouldn’t have adopted a per se rule against
protecting generic.com. But such protections should be rare.  The dissent thought the district court’s
legal errors (finding that a TLD like .com “generally” has source significance)
infected its weighing of the evidence, leading it to adopt a mistaken
presumption of descriptiveness and to require less of Booking.com than the law
demanded.  The ultimate result “conflicts
with the determination that every other court has reached in cases, like the
instant case, involving the registration or enforcement of a proposed mark
composed of a generic Secondary Level Domain and a Top Level Domain.”  [So if the PTO wants to try its own luck with
cert, there’s that.  I’m not sure it gets
a different result at the Supreme Court, though there’s an outside chance of a
remand to the district court to do the analysis under the correct legal
standard.]
Until now, courts rejected the argument that “generic.com”
isn’t generic because consumers don’t explicitly call the relevant class of
websites “generic.com” websites.  Until
now, courts have indicated that the “rare” circumstances in which a generic TLD
will allow a generic term to become protectable involve things like double
entendres, e.g., tennis.net.  Rom.com for
romantic comedies might also work, but both those are “readily distinguishable
from the instant case.”  A correct legal
analysis would have focused on whether Booking.com was one of the rare outliers.  Instead, the district court’s faulty analysis
“upsets the careful balance the law has struck between assisting consumers to
identify the source of goods and preserving the linguistic commons.”
The real interest here is in preserving freedom against the
monopolization of language, even if a would-be monopolist briefly convinces
consumers that there’s secondary meaning in a generic term. “[N]o matter how
much money and effort the user of a generic term has poured into promoting the
sale of its merchandise and what success it has achieved in securing public
identification, it cannot deprive competing manufacturers of the product of the
right to call an article by its name.” Abercrombie & Fitch Co. v. Hunting
World, Inc., 537 F.2d 4, 9 (2d Cir. 1976).
The PTO correctly pointed out that no grocery business called
The Grocery Store could ever receive trademark protection because the name is generic,
regardless of secondary meaning. The majority, however, left in place the idea
that if consumers recognized an online grocery business called
“grocerystore.com,” that business would be entitled to trademark protection. “There
is no basis in law or policy for drawing such a distinction.” Online sellers
need freedom to use generic terms just as brick and mortar stores do.
The district court concluded that .com was different from
Company because only one entity can occupy a .com. But courts have long held
that “[t]he commercial impression created by ‘.com’ is similar to the
impression created by ‘Corp.’ and ‘Co.’, that is, the association of a
commercial entity with the mark.” Any difference came from functionality, and
functional features aren’t protectable even with secondary meaning.
Not correcting the district court’s legal errors “will
provide Booking.com with a weapon to freeze out potential competitors,” forcing
them to bear “the risk of a costly, protracted, and uncertain infringement
lawsuit.”  Descriptive fair use wasn’t
good enough for competitors using “booking” in their own domain names, given the
power to threaten provided by a registration. 
[Courts are very likely to accept the argument that use in a domain name
is “trademark use,” disqualifying the defendant from descriptive use as a
defense.]  Even if the defense remains
available, it’s a defense, not an immunity from suit, so not much help.  And the idea that car and flight booking sites
would be ok was “optimis[tic],” but even if true, not helpful to competitors
who want to use names like hotelbooking.com or ehotelbooking.com, “which
likewise describe such competitors’ services ‘as what they are.’” No class of services should be subjected
to this monopoly. 
As for the majority’s statement that infringement will be
hard to prove, maybe, but protecting booking.com would still chill competition
based on the expense and risk of defending a lawsuit.

from Blogger http://bit.ly/2WYFe6I

Advertisements
Posted in Uncategorized | Tagged , | Leave a comment

better bank battle: false use of (R) can’t support false advertising claim

San Diego County Credit Union v. Citizens Equity First
Credit Union, No. 18cv967-GPC(RBB), 2019 WL 446475 (S.D. Cal. Feb. 5, 2019)
SDCCU sued CEFCU, its competitor in the credit union market,
seeking a declaratory judgment of non-infringement and invalidity of the federally
registered mark CEFCU. NOT A BANK. BETTER. (issued 2011) and the asserted
common-law mark NOT A BANK. BETTER, as well as for false registration and
unfair competition.  SDCCU itself has a 2014
federal registration for IT’S NOT BIG BANK BANKING. IT’S BETTER. Several
third-party credit unions use similar trademarks such as “NOT A BANK –
BETTER!”, “BETTER THAN A BANK”, and “IT’S NOT A BANK.” [We
are running out of trademarks
.]
SDCCU’s customers are primarily located in Southern
California while CEFCU’s customers are primarily located in Peoria, Illinois
and Northern California. [CEFCU bought a credit union in Northern California in
2008, but didn’t start advertising its mark outside Illinois until 2011.]  In early 2016, a CEFCU employee saw the SDCCU
mark on a billboard in San Diego, and in May 2017, CEFCU filed a petition to
cancel the SDCCU registration based on its registered and claimed common-law
marks.
The complaint alleged that the CEFCU mark was more similar
to the third party marks than to the SDCCU mark, and that if CEFCU asserted
rights broad enough to encompass the SDCCU Mark, it therefore materially
misrepresented to the USPTO that the CEFCU Mark was not confusingly similar to
any of the third-party marks.  In the alternative,
its confusion claim was unjustified. 
Also, CEFCU allegedly uses ® on its common-law variant.
Under the Lanham Act, “Any person who shall procure
registration in the Patent and Trademark Office of a mark by a false or
fraudulent declaration or representation, oral or in writing, or by any false
means, shall be liable in a civil action by any person injured thereby for any
damages sustained in consequence thereof.” 15 U.S.C. § 1120. The alleged
falsities were (1) lack of use in interstate commerce, given that it wasn’t using
the mark outside Illinois when it declared the mark was being used in commerce
and (2) lack of confusion with preexisting marks such as the “IT’S NOT A BANK”
mark of Warren Federal Credit Union, “BETTER THAN A BANK” mark of ABNB Federal
Credit Union and “NOT A BANK-BETTER!” mark of United 1st Federal Credit Union.
This was sufficiently pled on a motion to dismiss—whether there
was actually use in commerce outside Illinois at the relevant time, or whether
use in Illinois by a federally regulated credit union was sufficient for “use
in commerce,” was not for the court to resolve on a motion to dismiss. Likewise,
though SDCCU can’t assert others’ rights, it sufficiently alleged that the
existence of those rights meant that CEFCU made a false statement in its registration
application.
SDCCU also alleged damages in the form of company resources
expended to fight the claim. The harm must be proximately caused by the
fraudulent registration; CEFCU argued that its rights were not dependent on the
date of the registration and that this dispute would be happening anyway, thus
there was no proximate causation.  That
again was a factual dispute not appropriate for a motion to dismiss.
The court also dismissed claims based on false use of ®.  As to the actually (but allegedly fraudulently)
registered mark, use of ® was literally true; SDCCU’s remedy was to be found in
§1120, not in a false advertising claim. 
As to the unregistered mark, the use might be literally false, but a ®
symbol didn’t relate to the “nature, characteristics, qualities or geographic
origin” of CEFCU’s services, as required.

from Blogger http://bit.ly/2RVn2XL

Posted in Uncategorized | Tagged , | Leave a comment

Allegedly rigged “review” site was commercial speech, but falsity still not pled

GOLO, LLC v. Higher Health Network, LLC, No. 18-cv-2434-GPC-MSB,
2019 WL 446251 (S.D. Cal. Feb. 5, 2019)
GOLO sells a weight loss program and a proprietary
supplement to help promote weight loss. HHN defendants published a review of this
supplement, allegedly with inaccuracies, misleading statements, and blatant
falsehoods, which led to this lawsuit. HHN moved to dismiss and moved to strike
the state law trade libel claim under California’s anti-SLAPP law. The court
granted the motion to dismiss but denied the special motion to strike because
HHN make a prima facie showing that GOLO’s claim arose from an act in
furtherance of HHN’s right of petition or free speech in connection with a
public issue.
HHN (and its founder Shanks) allegedly compete with GOLO in
the diet and weight-loss industry. Shanks specializes in SEO, and he and HHN
allegedly bought and created dozens of information websites that generate
revenue exclusively through advertising sales. One such website, SupplementPolice.com,
claims to be a “product review website” aiming to introduce “honesty and
transparency to the world of online reviews” through “detailed reviews of
popular products.” Supplement Police states that it “doesn’t currently accept
affiliate income from any company in exchange for favorable reviews – instead,
it makes it money exclusively from [Google] AdSense revenue.”
GOLO alleged that the reviews were “predominantly bogus,”
not based on any testing or analysis conducted by Supplement Police, biased,
and designed solely to benefit HHN rather than the public. Supplement Police
allegedly promotes and links to products the defendants are affiliated with,
manufacture, and/or sell. Specifically, Supplement Police positively reviewed SilaLive
Silica, giving it “an overall score of 4.6 out of 5” and said that it is “clearly
a product that works for a lot of people.” 
SP provided multiple links to the SilaLive website, which offers the
product for sale, but doesn’t disclose that Shanks and HHN are affiliated with,
and manufacture, distribute, and/or sell SilaLive, and own and/or operate the
SilaLive website. Further, the review allegedly contains false statements,
including that SilaLive is “formulated with the greatest quartz crystals” and
that its main ingredient will help fight common health problems “from the
inside,” giving a healthier more permanent solution that artificial cures
cannot promise.
SP’s GOLO review allegedly inaccurately describes how GOLO
was created, as well as what GOLO “promises,” and allegedly falsely states that
the supplement should be taken “30 minutes before a meal” in order to “enjoy
health benefits while also purportedly normalizing your insulin levels.” It
further says: “Out of all of the ingredients listed [in the Release Supplement],
only Salacia bark has been linked to reduced diabetes symptoms…Meanwhile,
none of the other ingredients in Release have been linked to weight loss or
normalized insulin levels.” And its bolded headlines allegedly “pose misleading
questions which would cause readers to doubt GOLO’s effectiveness and/or decide
not to purchase GOLO.”
Lanham Act claims: The specific falsities alleged were as
above—non-obviously, GOLO alleged that it was false to say GOLO made any “promises”
to consumers.  The court found that Rule
9(b) applied and that GOLO failed to plead why these statements were false and
misleading. GOLO didn’t explain how GOLO was actually created or why it was
false to say they made “promises,” nor about why it was false to make the
statements about recommended intake time or about the ingredients.  As for the bolded headlines, “GOLO – Insulin
Resistance for Weight Loss?” and “How Does GOLO Claim to Work?” the court found
it unlikely that a question could be an actionable “statement,” but even if it
could be, the complaint didn’t plead how those specific questions would mislead
or confuse consumers, rather than simply framing the review.
As for the SilaLive review, GOLO likewise didn’t adequately
allege the falsity of  “formulated with
the greatest quartz crystals” or “will help you fight [common health] problems
from the inside and thus give you a healthier, more permanent solution that
artificial cures cannot promise you.”
Standing: Under Lexmark,
“a plaintiff must allege an injury to a commercial interest in reputation or
sales” proximately caused by violations of the Lanham Act. HHN argued that this
claim failed because SilaLive is not a weight-loss product and does not compete
with GOLO; nor does the GOLO review mention SilaLive. But Lexmark makes direct competition unnecessary. The complaint alleged
competition between the parties in the diet & weight loss industry
generally, and alleged that SilaLive was promoted as a supplement that could “help
detox or kickstart[ ] a diet.” It also sufficiently alleged “economic or
reputational injury flowing directly from the deception wrought by the
defendant’s advertising” including foregone sales. Although the GOLO review, in
fact, called the GOLO diet a “cost-effective” program, the court nonetheless
accepted GOLO’s allegations of lost sales as factual for purposes of the motion
to dismiss—which is a take on plausibility that not every judge would have.
Was the GOLO review commercial speech?  HHN argued that the review didn’t mention
SilaLive or direct readers to the page hosting the SilaLive review.  So was it a consumer review or an ad? GOLO
alleged that the review was “surrounded by advertisements and links to products
and websites unrelated to but, in many cases, in direct competition with GOLO,”
and that Supplement Police was affiliated with and/or received compensation
from sales of “some or all” of the linked products.  Moreover, the positive review of SilaLive
also allegedly generated sales/diverted sales from GOLO.  Thus, GOLO successfully alleged that defendants’
speech was an ad for competing products, and that the review was meant to
discourage use of GOLO products and use products defendants promoted instead.
GOLO, LLC v. HighYa, LLC, 310 F. Supp. 3d 499 (E.D. Pa.
2018), dismissed a claim that GOLO reviews were commercial speech, but the
court here found HighYa
distinguishable. First, in that case, when the plaintiff objected to the
review, the defendants amended the review and advised its readers that changes
to the review were made based on additional information provided by GOLO. Under
those circumstances, the facts didn’t plausibly support an inference that the
review was meant to create an economic advantage for competing products.  Here, however, defendants removed the GOLO
review after receiving a C&D, without attempting to correct the alleged
misrepresentations. [Ugh. Talk about creating seriously bad incentives. Plus, I
just don’t see how this connects to commerciality. Why isn’t “wanted to avoid
the hassle of litigation”/ “had its speech chilled” at least as plausible as “wanted
not to say anything nice about the competition,” especially given that the
review doesn’t seem to have been particularly harsh in the first place?]
Also, “defendants disclosed a commercial relationship with
another fitness product negating any indication that it was engaged in covert
competition.”  But covertness has never been an element of the commercial speech
test.  A clear ad should not deceive
about whether it is an ad, and that’s
important (and indeed where the only alleged falsity is the appearance of lack
of financial interest, disclosure may be all that’s needed to avoid liability),
but we still need to know whether it is
an ad
.  Anyway, the court also found
it important that Supplement Police allegedly doesn’t disclose the identity of
its owners and actively hides its association with SilaLive. HighYa said that “liability can arise
under the Lanham Act if websites purporting to offer reviews are in reality
stealth operations intended to disparage a competitor’s product while posing as
a neutral third party.” This was sufficiently alleged.
The trade libel claim failed for want of sufficient
allegations of special damages, which usually requires identification of
specific lost sales/customers or (in Pennsylvania, whose law GOLO sought to use)
really clear evidence of a sales decline traceable only to the disparagement,
including allegations about sales for a substantial period before the
challenged publication and sales after. The same falsity problems as with the
Lanham Act claim also justified dismissal of this claim as well.
The anti-SLAPP laws of California differ from those of
Pennsylvania (transferring district) and Delaware (another potentially
interested state).  California’s law is
broader, and California has a strong interest in protecting its speakers. “ ‘California
would appear to object strongly to the absence of a robust anti-SLAPP regime.’ On
the other hand, Pennsylvania’s or Delaware’s interests would be less harmed by
the use of California law.” So the court applied California’s law, but it still
didn’t help HHN.
An “act in furtherance of a person’s right of petition or
free speech under the United States or California Constitution in connection
with a public issue” triggering anti-SLAPP protection includes “any written or
oral statement or writing made in a place open to the public or a public forum
in connection with an issue of public interest.” HHN argued that the reviews
were a matter of public interest because GOLO itself described its product as a
“leading weight loss and wellness program,” “the top-searched diet on Google in
2016,” and “endorsed, and even used by, multiple doctors.” In Wong v. Jing, 189
Cal. App. 4th 1354 (2010), the court reasoned that a negative review of a
dentist’s services on the rating website Yelp.com constituted an issue of
public interest because “consumer information that goes beyond a particular
interaction between the parties and implicates matters of public concern that
can affect many people is generally deemed to involve an issue of public
interest for purposes of the anti-SLAPP statute.”
The court distinguished Wong
because “it dealt with the more general issue of the effects of dentists’ use
of certain products, not just a highly critical opinion of a particular
dentist.” It implicitly dealt with the more general issues of whether it was ok
to use nitrous oxide and mercury in dental treatments for children, and wasn’t
just about one dentist.  Also, “[i]t is
well established that commercial speech that does nothing but promote a
commercial product or service is not speech protected under the anti-SLAPP
statute.” Consumer Justice Ctr. v. Trimedica Int’l, Inc., 107 Cal. App. 4th 595
(2003) concluded that “speech about a specific product was not a matter of
public interest because the speech was not about herbal dietary supplements in
general, but about the specific properties and efficacy of a particular
product.” So too here. Even if GOLO was popular, it’s not true that “simply
because a lawsuit affects a large number of consumers and involves a
life-threatening illness, it will satisfy the public interest requirement of
the statute.” Scott v. Metabolife Int’l, Inc., 115 Cal. App. 4th 404 (2004). HHN
thus failed to make a prima facie case that the GOLO’s suit arose from an act in
furtherance of its rights of petition or free speech.

from Blogger http://bit.ly/2SJSInC

Posted in Uncategorized | Tagged , , | Leave a comment

Allegedly rigged “review” site was commercial speech, but falsity still not pled

GOLO, LLC v. Higher Health Network, LLC, No. 18-cv-2434-GPC-MSB,
2019 WL 446251 (S.D. Cal. Feb. 5, 2019)
GOLO sells a weight loss program and a proprietary
supplement to help promote weight loss. HHN defendants published a review of this
supplement, allegedly with inaccuracies, misleading statements, and blatant
falsehoods, which led to this lawsuit. HHN moved to dismiss and moved to strike
the state law trade libel claim under California’s anti-SLAPP law. The court
granted the motion to dismiss but denied the special motion to strike because
HHN make a prima facie showing that GOLO’s claim arose from an act in
furtherance of HHN’s right of petition or free speech in connection with a
public issue.
HHN (and its founder Shanks) allegedly compete with GOLO in
the diet and weight-loss industry. Shanks specializes in SEO, and he and HHN
allegedly bought and created dozens of information websites that generate
revenue exclusively through advertising sales. One such website, SupplementPolice.com,
claims to be a “product review website” aiming to introduce “honesty and
transparency to the world of online reviews” through “detailed reviews of
popular products.” Supplement Police states that it “doesn’t currently accept
affiliate income from any company in exchange for favorable reviews – instead,
it makes it money exclusively from [Google] AdSense revenue.”
GOLO alleged that the reviews were “predominantly bogus,”
not based on any testing or analysis conducted by Supplement Police, biased,
and designed solely to benefit HHN rather than the public. Supplement Police
allegedly promotes and links to products the defendants are affiliated with,
manufacture, and/or sell. Specifically, Supplement Police positively reviewed SilaLive
Silica, giving it “an overall score of 4.6 out of 5” and said that it is “clearly
a product that works for a lot of people.” 
SP provided multiple links to the SilaLive website, which offers the
product for sale, but doesn’t disclose that Shanks and HHN are affiliated with,
and manufacture, distribute, and/or sell SilaLive, and own and/or operate the
SilaLive website. Further, the review allegedly contains false statements,
including that SilaLive is “formulated with the greatest quartz crystals” and
that its main ingredient will help fight common health problems “from the
inside,” giving a healthier more permanent solution that artificial cures
cannot promise.
SP’s GOLO review allegedly inaccurately describes how GOLO
was created, as well as what GOLO “promises,” and allegedly falsely states that
the supplement should be taken “30 minutes before a meal” in order to “enjoy
health benefits while also purportedly normalizing your insulin levels.” It
further says: “Out of all of the ingredients listed [in the Release Supplement],
only Salacia bark has been linked to reduced diabetes symptoms…Meanwhile,
none of the other ingredients in Release have been linked to weight loss or
normalized insulin levels.” And its bolded headlines allegedly “pose misleading
questions which would cause readers to doubt GOLO’s effectiveness and/or decide
not to purchase GOLO.”
Lanham Act claims: The specific falsities alleged were as
above—non-obviously, GOLO alleged that it was false to say GOLO made any “promises”
to consumers.  The court found that Rule
9(b) applied and that GOLO failed to plead why these statements were false and
misleading. GOLO didn’t explain how GOLO was actually created or why it was
false to say they made “promises,” nor about why it was false to make the
statements about recommended intake time or about the ingredients.  As for the bolded headlines, “GOLO – Insulin
Resistance for Weight Loss?” and “How Does GOLO Claim to Work?” the court found
it unlikely that a question could be an actionable “statement,” but even if it
could be, the complaint didn’t plead how those specific questions would mislead
or confuse consumers, rather than simply framing the review.
As for the SilaLive review, GOLO likewise didn’t adequately
allege the falsity of  “formulated with
the greatest quartz crystals” or “will help you fight [common health] problems
from the inside and thus give you a healthier, more permanent solution that
artificial cures cannot promise you.”
Standing: Under Lexmark,
“a plaintiff must allege an injury to a commercial interest in reputation or
sales” proximately caused by violations of the Lanham Act. HHN argued that this
claim failed because SilaLive is not a weight-loss product and does not compete
with GOLO; nor does the GOLO review mention SilaLive. But Lexmark makes direct competition unnecessary. The complaint alleged
competition between the parties in the diet & weight loss industry
generally, and alleged that SilaLive was promoted as a supplement that could “help
detox or kickstart[ ] a diet.” It also sufficiently alleged “economic or
reputational injury flowing directly from the deception wrought by the
defendant’s advertising” including foregone sales. Although the GOLO review, in
fact, called the GOLO diet a “cost-effective” program, the court nonetheless
accepted GOLO’s allegations of lost sales as factual for purposes of the motion
to dismiss—which is a take on plausibility that not every judge would have.
Was the GOLO review commercial speech?  HHN argued that the review didn’t mention
SilaLive or direct readers to the page hosting the SilaLive review.  So was it a consumer review or an ad? GOLO
alleged that the review was “surrounded by advertisements and links to products
and websites unrelated to but, in many cases, in direct competition with GOLO,”
and that Supplement Police was affiliated with and/or received compensation
from sales of “some or all” of the linked products.  Moreover, the positive review of SilaLive
also allegedly generated sales/diverted sales from GOLO.  Thus, GOLO successfully alleged that defendants’
speech was an ad for competing products, and that the review was meant to
discourage use of GOLO products and use products defendants promoted instead.
GOLO, LLC v. HighYa, LLC, 310 F. Supp. 3d 499 (E.D. Pa.
2018), dismissed a claim that GOLO reviews were commercial speech, but the
court here found HighYa
distinguishable. First, in that case, when the plaintiff objected to the
review, the defendants amended the review and advised its readers that changes
to the review were made based on additional information provided by GOLO. Under
those circumstances, the facts didn’t plausibly support an inference that the
review was meant to create an economic advantage for competing products.  Here, however, defendants removed the GOLO
review after receiving a C&D, without attempting to correct the alleged
misrepresentations. [Ugh. Talk about creating seriously bad incentives. Plus, I
just don’t see how this connects to commerciality. Why isn’t “wanted to avoid
the hassle of litigation”/ “had its speech chilled” at least as plausible as “wanted
not to say anything nice about the competition,” especially given that the
review doesn’t seem to have been particularly harsh in the first place?]
Also, “defendants disclosed a commercial relationship with
another fitness product negating any indication that it was engaged in covert
competition.”  But covertness has never been an element of the commercial speech
test.  A clear ad should not deceive
about whether it is an ad, and that’s
important (and indeed where the only alleged falsity is the appearance of lack
of financial interest, disclosure may be all that’s needed to avoid liability),
but we still need to know whether it is
an ad
.  Anyway, the court also found
it important that Supplement Police allegedly doesn’t disclose the identity of
its owners and actively hides its association with SilaLive. HighYa said that “liability can arise
under the Lanham Act if websites purporting to offer reviews are in reality
stealth operations intended to disparage a competitor’s product while posing as
a neutral third party.” This was sufficiently alleged.
The trade libel claim failed for want of sufficient
allegations of special damages, which usually requires identification of
specific lost sales/customers or (in Pennsylvania, whose law GOLO sought to use)
really clear evidence of a sales decline traceable only to the disparagement,
including allegations about sales for a substantial period before the
challenged publication and sales after. The same falsity problems as with the
Lanham Act claim also justified dismissal of this claim as well.
The anti-SLAPP laws of California differ from those of
Pennsylvania (transferring district) and Delaware (another potentially
interested state).  California’s law is
broader, and California has a strong interest in protecting its speakers. “ ‘California
would appear to object strongly to the absence of a robust anti-SLAPP regime.’ On
the other hand, Pennsylvania’s or Delaware’s interests would be less harmed by
the use of California law.” So the court applied California’s law, but it still
didn’t help HHN.
An “act in furtherance of a person’s right of petition or
free speech under the United States or California Constitution in connection
with a public issue” triggering anti-SLAPP protection includes “any written or
oral statement or writing made in a place open to the public or a public forum
in connection with an issue of public interest.” HHN argued that the reviews
were a matter of public interest because GOLO itself described its product as a
“leading weight loss and wellness program,” “the top-searched diet on Google in
2016,” and “endorsed, and even used by, multiple doctors.” In Wong v. Jing, 189
Cal. App. 4th 1354 (2010), the court reasoned that a negative review of a
dentist’s services on the rating website Yelp.com constituted an issue of
public interest because “consumer information that goes beyond a particular
interaction between the parties and implicates matters of public concern that
can affect many people is generally deemed to involve an issue of public
interest for purposes of the anti-SLAPP statute.”
The court distinguished Wong
because “it dealt with the more general issue of the effects of dentists’ use
of certain products, not just a highly critical opinion of a particular
dentist.” It implicitly dealt with the more general issues of whether it was ok
to use nitrous oxide and mercury in dental treatments for children, and wasn’t
just about one dentist.  Also, “[i]t is
well established that commercial speech that does nothing but promote a
commercial product or service is not speech protected under the anti-SLAPP
statute.” Consumer Justice Ctr. v. Trimedica Int’l, Inc., 107 Cal. App. 4th 595
(2003) concluded that “speech about a specific product was not a matter of
public interest because the speech was not about herbal dietary supplements in
general, but about the specific properties and efficacy of a particular
product.” So too here. Even if GOLO was popular, it’s not true that “simply
because a lawsuit affects a large number of consumers and involves a
life-threatening illness, it will satisfy the public interest requirement of
the statute.” Scott v. Metabolife Int’l, Inc., 115 Cal. App. 4th 404 (2004). HHN
thus failed to make a prima facie case that the GOLO’s suit arose from an act in
furtherance of its rights of petition or free speech.

from Blogger http://bit.ly/2SJSInC

Posted in Uncategorized | Tagged , , | Leave a comment

Neighboring farmers have Lanham Act standing where false ads allegedly prompted pesticide use

In re Dicamba Herbicides Litig., MDL No. 2820, 2019 WL
460500 (E.D. Mo. Feb. 6, 2019)
Plaintiffs, twenty-one soybean farmers from eight states (Arkansas,
Illinois, Kansas, Mississippi, Missouri, Nebraska, South Dakota, and Tennessee),
alleged that their soybean crops were damaged by the herbicide dicamba when
neighboring farmers planted genetically modified dicamba-resistant seeds and sprayed
that crop with dicamba. USDA permitted the sale of the dicamba-resistant seeds
in January 2015, but the plaintiffs argue that commercial sale was wrongful
because the EPA hadn’t yet approved a dicamba herbicide for use over the top of
crops grown from those seeds. (The seeds could allegedly tolerate other
herbicides, like Monsanto’s Roundup.)  Allegedly,
the amount of dispersal of an herbicide varies and there are other herbicides
that wouldn’t have drifted in the same way; dicamba had previously been a
problem because of its volatility and propensity to drift, sometimes taking
other herbicides with it. In 2017, the EPA approved new low-volality dicamba
herbicides for over-the-top crop use during the growing season, XtendiMax and
Engenia.
However, the plaintiffs alleged that the new herbicides are “unsuitable
for in-crop use because they too, like the earlier versions of dicamba, are
volatile and prone to move off-target and damage nearby, sensitive crops.” This
is allegedly a further win for defendants insofar as it
induces farmers to defensively purchase dicamba-resistant seed to avoid
damages.
I’m here for the Lanham Act claim, though the other claims
are also interesting. On causation, Monsanto argued that it wasn’t the source
of the old, pre-2017 herbicide, but the causation theory was that “Monsanto
marketed and sold its dicamba-resistant seed to third-party farmers knowing
that they would spray dicamba that may harm nearby, non-resistant crops.” The
only reason to buy and plant the seeds, the plaintiffs alleged, was to use it
with dicamba herbicides, whether new or old. 
The manufacturer of the herbicide wasn’t the key to causation.
Defendants challenged plaintiffs’ Lanham Act standing. The
alleged false advertising was that the Xtend seeds could be safely employed
utilizing over-the-top application of dicamba herbicides and that the dicamba
would not drift.  Lexmark requires a plaintiff to plead: (1) an injury within the
“zone-of-interest,” that is, “to a commercial interest in sales or business
reputation,” (2) that was “proximately caused by the defendant’s
misrepresentations.” Plaintiffs need not be defendants’ competitors to state a
claim. The plaintiff must be a commercial actor suffering commercial injuries
instead of being a “consumer who is hoodwinked into purchasing a disappointing
product.” That was sufficiently pled here: the plaintiffs were commercial
actors, not consumers of defendants’ products, and thus they fell within the Lanham
Act’s zone of interest.
Monsanto argued that there was no standing for 2016 claims
because it was illegal for third party farmers to use dicamba herbicides with
its Xtend seeds in 2016, so the intervening criminal conduct severed the causal
chain connecting Monsanto’s misrepresentations to any wrongdoing. That is not an
automatic Article III rule; standing was sufficiently alleged.
Proximate cause: Monsanto argued that the plaintiffs were at
best indirect victims of the allegedly false advertising. But consumer
deception is always an intervening step before the harm materializes in a false
advertising case (and in a Lanham Act case it materializes to a third party,
usually the competitor who’s lost a sale as a result, even if it also
materializes as harm to the consumer). Monsanto argued that there had to be harm
to a consumer for there to be proximate cause, but the court recognized that
this made no sense.  (The Lanham Act should
be triggered where there is false advertising that changes consumer behavior—if
the plaintiff’s product was exactly the same as the defendant’s and exactly the
same price and there was nothing better on the market, a misrepresentation of
superiority that diverted purchasers to the defendant wouldn’t necessarily harm
those purchasers in a tangible way, setting aside the moral disrespect of fraud,
but it distorts the competitive environment and harms other market actors, who
are the targets of the Lanham Act’s solicitude per Lexmark.)  Even if the direct
victims of Monsanto’s fraud ended up with crops that were fine, plaintiffs
still alleged commercial injury because Monsanto’s misrepresentations caused
third parties to use dicamba that destroyed plaintiffs’ crop, so plaintiffs had no soybeans to sell.
Interestingly, the fact that plaintiffs successfully pled a
Lanham Act claim seemed to comfort the court in concluding that they couldn’t
bring tort claims based on ultrahazardous activity—that concept usually involves
only the actual use of the product in question, not promotion of its use.  “Ultimately, plaintiffs’ claim is that
“lying” about the safety of an ultrahazardous activity—the spraying of
dicamba—is itself an ultrahazardous activity. That claim is certainly
actionable, but not under the ultrahazardous activity doctrine.” 
So too with trespass and nuisance—Monsanto’s extensive seed
licensing agreement with farmers did not allow it to terminate the agreement
for misuse of dicamba, so they didn’t control whether the dicamba particles migrated
to plaintiffs’ land. There was no “ongoing” promotion, aiding, abetting,
assisting, or contributing to the trespass/nuisance, and no need to hybridize a
cause of action using trespass/nuisance plus misrepresentation theories. 
Failure to warn claims/consumer fraud act claims under the
laws of Illinois and Nebraska: Monsanto argued that FIFRA preempted these
claims.  Plaintiffs argued that FIFRA
preempts labeling-based claims, but that their claims were based in part on
non-labeling material, such as in-person discussion and websites (Facebook,
Twitter, Instagram, YouTube, Snapchat, Pinterest, and Linked In).  (Today I learned that Monsanto or its agents
allegedly use Snapchat.)  Though a few
cases hold otherwise, the court approved a more literal reading of the preemption
statute, limiting its reach to labeling and packaging.
Second, plaintiffs argued that they weren’t seeking requirements
that are “in addition to or different from” FIFRA, as required for preemption. FIFRA
bars “misbranding,” which occurs if a label contains a “false or misleading”
statement or if it “does not contain adequate instructions for use, or if its
label omits necessary warnings or cautionary statements.” Although FIFRA doesn’t
provide a private cause of action for misbranding, states are allowed to do
so.  The state law requirement need only
be substantively identical; it need not be phrased in the identical language.  To the extent that plaintiffs alleged that
the labels failed to contain instructions that would, if followed “prevent harm
to the environment,” that did go beyond FIFRA, which only requires instructions
that will, if followed, prevent “unreasonable harm,” so their claim was
preempted to a tiny extent, but there was still room for their failure to warn
claims.
The court reached a similar result on Nebraska Consumer
Protection Act and Illinois Consumer Fraud Act claims. However, the court
dismissed the Nebraska statutory claim because of its regulatory state harbor.
Both states’ laws have safe harbors; Illinois says: “Nothing in this Act shall
apply to any of the following: (1) Actions or transactions specifically
authorized by laws administered by any regulatory body or officer acting under
statutory authority of this State or the United States.”  Although Monsanto’s advertising claims were
submitted to the EPA as part of EPA registration procedures, “exemption is not
available for statements that manage to be in technical compliance with federal
regulations, but which are so misleading or deceptive in context that federal
law itself might not regard them as adequate.”

However, Nebraska’s exemption was broader: “the Consumer Protection Act shall
not apply to actions or transactions otherwise permitted, prohibited, or
regulated under laws administered by the Director of Insurance, the Public
Service Commission, the Federal Energy Regulatory Commission, or any other
regulatory body or officer acting under statutory authority of this state or
the United States.”  Being “regulated” is
enough, rather than being “specifically authorized.” Thus plaintiffs’ statutory
claim failed. I think this reading doesn’t make much sense, insofar as the FTCA
and other federal statutes regulate pretty much any commerce you can think of;
in this interpretation, the only commercial transactions covered by Nebraska’s
consumer protection law would be those that did not arise “in commerce” for
purposes of allowing the federal government to exercise its Commerce Clause
authority—what is likely a null set even after the ACA case.  I have my doubts that Nebraska could have meant
to negate its law entirely in this way.  But
since EPA regulates pesticide ads under FIFRA, Monsanto’s conduct was within
the safe harbor.  [What about seed ads? I
thought those were the real problem.]
The Illinois Consumer Fraud Act protects “any person who
suffers actual damages as a result of a violation of the Act.” Non-consumers
“may sue under the ICFA if they allege (and ultimately prove) the nexus between
the objectionable conduct and the consumer injury or harm.” A non-consumer has
standing to sue under the ICFA where the “conduct involves trade practices
addressed to the market generally or otherwise implicates consumer protection
concerns.” The allegedly unfair and deceptive conduct—the publishing of false
information to cause farmers to defensively buy dicamba-resistant seed—sufficiently
implicated consumer protection concerns.  The complaint also satisfied Rule 9(b), whether
or not that was required for all ICFA claims.
Breach of warranty claims met varying fates depending on the
state. In Kansas, a non-purchasing, non-using third party can only recover for
breach if they’re (1) “expected to use, consume or be affected by the goods,”
and (2) “injured in person by breach of the warranty.” That didn’t happen
here.  Arkansas, South Dakota, and
Tennessee gave effect to defendants’ prominent disclaimers of implied
warranties of fitness and merchantability, even though plaintiffs, as
nonpurchasers, couldn’t have read those disclaimers. “[T]o give the non-purchasing
plaintiffs more rights than purchasers themselves would have is an untenable
result.”
The Magnuson-Moss Warranty Act prohibits disclaimers of
implied warranties when an express warranty is provided, but only applies to
consumer products, not agricultural products.
Also, Missouri has a law protecting crops, who knew?  It is unlawful for anyone intentionally to
cause the loss of any crop. Further, “any person or entity who knowingly
damages or destroys any field crop product that is grown for personal or
commercial purposes…shall be liable for double damages.” A claim under this law
was properly alleged, as was a design defect claim.

from Blogger http://bit.ly/2SKSDzV

Posted in Uncategorized | Tagged , , , | Leave a comment

Alkaline water false advertising claim is unappetizing, court rules

Weiss v. Trader Joe’s Co., No. 8:18-cv-01130-JLS-GJS, 2018
WL 6340758 (C.D. Cal. Nov. 20, 2018)
Trader Joe’s sells Alkaline Water, whose label includes:
• “pH 9.5 +”
• “Our Alkaline Water + Electrolytes is ionized to pH 9.5+.”
• “pH is the measure of acidity and alkalinity. The higher
the pH, the greater the alkalinity.”
• “ionized to achieve the perfect balance”
• “refresh & hydrate”
• “hundreds of plus symbols” on the label
Trader Joe’s flyer touting Alkaline Water said:
• “Whether you’ve just eaten an abundance of corn or
cranberries (foods high in acid); or you’ve been sweating profusely; and/or
you’ve been reading this Flyer (because obviously that would make you thirsty)
our Alkaline Water + Electrolytes is a drink that can satisfy.”
• “The mineralized water is purified through reverse
osmosis, then run through electric currents (electrolysis), which changes the structure
of the water and raises the pH to 9.5+ (neutral pH of water is 7).”
• “Trader Joe’s Alkaline Water + Electrolytes is water and
then some.”
Weiss alleged that the label misled her to believe that the
Water was a “superior source of hydration” and could help “balance pH
internally.” She further alleged that the Alkaline Water does not actually have
a 9.5 pH balance and that “the actual pH at the time of purchase and
consumption was far less on the pH scale.” She brought the usual California
claims.

The court found that this was all puffery except the “not 9.5 pH” part, and
that wasn’t sufficiently pled, a holding I find dubious.
Initially, some of the complaint alleged lack of
substantiation of the purported health benefits, which isn’t actionable by
private parties under California law. The label and marketing also didn’t make the
health claims she identified, because it was mostly mere puffery. E.g., “refresh”
was “a vague, generalized assertion incapable of being proved false or of being
reasonably interpreted as a statement of objective fact,” as were the plus symbols.
Nor did the label claim to be a superior source of hydration, just a source. The
“ionized to achieve the perfect balance” claim didn’t claim that consumers
would become perfectly balanced or tout any health benefits from the perfect balance.
As for the flyer touting the water as good “[w]hether you’ve
just eaten an abundance of corn or cranberries (foods high in acid); or you’ve
been sweating profusely,” there was still no health benefit claim.  I think this ignores the effects of implicature.
Why would it be relevant to whether you should choose this water that you’ve
been eating foods high in acid?  There’s
no reason to mention that other than to imply that the water you drink should “balance”
your acidity (an impossible task in my case, I fear). But because the flyer
finished by claiming to “satisfy,” it was mere puffery. As for “water and then
some,” it followed the description of the water as containing 0.1% “minerals
(electrolytes), harvested from the lake region of Utah.”
The 9.5 pH claim was factual and falsifiable. However, Weiss
failed to plead with particularity “how she came to believe that the
representation is false.” That’s a diversion, mostly corrected in the court’s
ultimate analysis. We really don’t care how she came to believe that it’s
false, or even if she did come to believe that—her belief in falsity is not an
element of her claim. We care whether the statement was false. 
And as with so many Twiqbal
issues this is all about the court’s common sense: pleading that the pH was not
9.5 is a factual allegation. Is that plausible? Sure, why couldn’t water not
have pH 9.5?  Apparently much water
doesn’t, according to TJ’s itself. However, the court wants a “basis” for the
assertion of falsity. “Even assuming that viewing videos on the internet or personally
testing the pH balance of the Water is enough to support her claim,” that
wasn’t in the complaint, and the complaint needed to specify when the pH wasn’t
9.5—at bottling, at purchase, or at consumption.  In a footnote, the court warned: “The Court seriously
questions Plaintiff’s decision to bring this suit if the only support she has
for this claim is what she has seen on the internet, or her own rudimentary
testing. Further, the Court reminds Plaintiff’s counsel that attorneys are
subject to sanctions under Rule 11 when they present ‘factual contentions
[that] have [no] evidentiary support or … will [not] likely have evidentiary
support after a reasonable opportunity for further investigation or
discovery[.]’”

from Blogger http://bit.ly/2MZ4rJH

Posted in Uncategorized | Tagged , , , | Leave a comment

WIPIP 2019, Plenary (designs)

Whole Designs, Sarah Burstein
What is a “design for a useful article”?  TLDR: it’s a whole article.  Egyptian
Goddess
said the infringement test has to be sameness of appearance. Must
appear substantially the same to the ordinary observer.
Worst design patent claim ever: Caffeinate Labs v. Vante:
multitool shaped like a monkey; the accused design is not shaped like a monkey.
(Withdrawn when D correctly filed a motion for sanctions.)  Richardson v. Stanley works: claimed &
accused designs were hammer tools w/things in the same places but didn’t look
the same.  We don’t have fragmented
literal similarity as in ©; you have to look at the design as a whole.
But: the whole what?  Three long-recognized types of designs.  A design for the shape of an article of
manufacture, like a dryer ball shaped like a hedgehog.  A design for the surface ornamentation of an
article.  Or a combination of both (grab
bars covered with leopard spots).
Then came Zahn,
where the CCPA said that the old rule of claiming the whole was out; the design
is whatever the patentee says it is. 
Dotted lines disclaim portions of a complete design.  Now you can claim anything, including daisy
chaining so you keep an application pending and target what your competitors
are doing.  Apple had a bunch of
noninfringed whole shape patents that it didn’t assert against Samsung; you can
also claim components; you can claim fragments. There’s at least three types:
intact fragments, where only the part in solid lines is claimed—never exists separately
in real life, such as the rounded edge of one side of a laptop.  Apple has mastered this—there are still
pending applications from the original iPhone at the PTO.  There are also fragments that are voids:
holes.  Apple claims the hole where you
plug in your Lightning connector.  There
are also variable fragments (she wanted to call them mutilations) where you can’t
see them by looking at the product. 
E.g., a pink interior with dotted lines around the round holes in the
interior.  Is that claiming an interior
with no holes?  With star-shaped holes?  No one knows.
Fragment design conflicts w/ the statutory text, which
refers to “an article of manufacture” not multiple articles.  [This would be a good issue to try to get
cert on at this particular juncture in time.] Conflicts w/long-standing
practice.  It distorts the total profits
remedy, making a not great situation worse. 
And it provides protection for minor, immaterial, and/or functional
parts.  Creates doctrinal incoherence: if
everything is a design, then it is difficult to apply the other rules about, e.g.,
prior art and how to deal with parent/child applications. Anticompetitive.
As a design school graduate, was trained that design is the
whole—it’s not just shape but color and all other elements.  Not simply a hodgepodge of discrete elements
but a cohesive and integrated whole. 
Also there is positive space/negative space in art theory: when you draw
on a piece of paper, there is a part that is perceived as ground/empty
space.  Even when it’s colored and the figure
is not colored, you perceive the background as negative space and the figure as
positive space.  This is important
because negative space is as important as positive space in creating the
design. 
A new theory: a configuration design for an article of manufacture
would be a design that dictates the entire shape of that article, including
positive and negative spaces; a surface design would dictate the entire
surface, including positive and negative spaces; and a combination design would
be both.  Thus a single image for fabric
would be a different design than that image repeated multiple times in a
pattern on fabric. 
If a piece is made and sold separately, that can be a separate
design.  So there can be handle design
patents.
Lemley: what happens to dotted lines under your proposal? 
A: have served different purposes over time—not the same
meaning in the 19th c.  Do we
protect designs per se or tether them to a particular product?  It can’t be in the abstract, but the Fed.
Cir. might screw it up. The key is that the uncertainty adds more complexity.
Lemley: then we need a standard that is something other than
infringement standard that uses dotted lines for something. When you have a
swirl for the screw top of a bottle depicted in solid lines and dotted lines to
indicate the rest of the shape of the bottle, right now courts say that the
accused design has to have some kind of a bottle shape; you wouldn’t be able to
win an infringement claim for a similar screw top configuration on a car.
A: under my rule you just don’t use solid lines for that
purpose.  [I guess under her rule at
least you could try to get the grooves as part of a design for a bottle cap, to
the extent that’s a separate article; maybe a bottle cap can go on many
different things, but the problem would be diminished and you wouldn’t be
worried about dotted lines.]
The Laws of Design, Christopher Buccafusco:
Legal and nonlegal mechanisms that promote or fail to
promote disabled access in the environment. Fits into non-IP motivations for
innovation. There’s lots of important work on access and innovation, including
in access to texts, access to the internet, deafness/blindness.  Will focus on physical environment and opportunities
to move around in it.
1920s/30s after WWI, medical innovation lets people
w/serious spinal cord injuries survive when they wouldn’t have before. That
creates a new population, further affected by polio epidemic which also increases
portion of population that survives into adulthood w/a major disability.
Medicalized, rehabilitationist model of disability: how to be productive
laborers in society, which typically involves lots of things disabled people
don’t actually have as goals. 
Institutionalization v. preferences for independence. GI Bill then
provides a not inconsiderable amount of $ to buy accessible technology; March
of Dimes and similar things also increase ability to pay/demand side.  Oldsmobile Valiant: a car driveable with two
arms and no use of legs. But veterans’ payments only allowed them to buy a
certain set of cars, e.g., a regular Chevy, then sell it and buy the Valiant.  A huge amount of user innovation is going on.
Users’ language of inventorship seems to provide ways to claim continuing
community membership.
Case study: wheelchair development.  One company dominated the market; it had
patents that helped. In addition, as the patents began to expire, they began to
engage in anticompetitive practices such as deals w/foreign companies to prevent
imports. Same wheelchair cost $400 in US in 1975$, but cost $100 in England.
Worked with Medicare/VA to specify which chairs would be insurable, and those
just happened to be the Everest & Jennings chair and no others. Disabled
people begin to protest the increased prices and depressed innovation. Nader
& his raiders took on the company and began to publish findings. Eventually
Justice Dep’t began an antitrust case, which was settled in 1979. Almost
immediately the market expanded, though not a ton.  OTA in 1984 studied the market and found some
innovation but many of the new manufacturers suggested they were anxious about
producing new innovation b/c they were worried about products liability law if
they did more than tweak the Everest & Jennings chair.  Whether this is true or not, we see a claim
about innovation drivers.
VA/Medicare as buyer has other problems: if the buyer is not
the user, that skews things. VA/Medicare cared more about initial cost than total
operational costs, for example. Ralf Hotchkiss, wheelchair innovator, argued
against patents as inhibiting progress/access in the area.
Once wheelchairs spread, people start to notice that the
built environment is hostile to them and thus to their users. That changes the
site of innovation—from innovation at the individual/product level to
innovation at the environment level. Section 504 of the Rehabilitation Act of
1973 produces a civil rights/antidiscrimination approach that has a demand-forcing
effect, creating willingness to pay on the part of institutions.
Lessons: innovation regulation is really complicated; when
users aren’t purchasers, incentives can be skewed.
Grynberg: cognitive access?
A: deliberately focused so far on physical access.
Q: FDA piece should be a bigger part: there are regulations
for wheelchairs and for wheelchair accessories [shades of the phone and the
Hush-a-Phone].
Ebrahim: firms w/different strategies?
A: user innovation sometimes gets users to start
commercializing; sometimes firms buy out the innovation but sometimes they get
shut down.  Federal gov’t encouraged accessible
buses when GM wasn’t making accessible buses and had 85% market share.  GM just ran out the clock until Reagan took
over and kept its market share.
Q: each of these stories can be its own paper.
A: rather tell them together—focused on a product and wants
to tell the story of that product.  [The
recent book Temp by Louis Hyman is an
interesting example of how to bring together narrative threads in a really
productive way, though I’m not sure you could do exactly the same here.]
Privacy When Form Doesn’t Follow Function, Roger Ford
Design patent: for stuff that’s seen.  Taco Cabana: designs and shapes are
protectable if nonfunctional. Privacy law does something very different: “privacy
by design,” which is about process. Building privacy into design specs from the
beginning, to get better results. 
For physical design, people learn to infer functionality
from particular features, e.g., olive oil bottles are dark because the oil will
deteriorate in light otherwise, so dark bottles are likely to contain sensitive
liquids.  Things with multiple spikes on
them may dig down into dirt.  Security
cameras signal surveillance and thus send messages; even one-way mirrors affect
the design of space. Because companies know consumers make these inferences, online
they use those signals to send messages: e.g., the image of a padlock and a secure
website. But this signal is also manipulable b/c the connection b/t form and
function is not as tight.  Or phone apps
can track your movements without telling you that’s happening.  This will be a bigger problem over time.  Now there are padlocks that look like padlocks
but are run by software and not physical keys; consumers can be misled by the
form they recognize about how easy it is to open, so one of these broadcast its
key unencrypted and anyone with the right software could open it, while another
was secure at the software level but had screws that could simply be opened w/a
screwdriver.  22 services track you on
USA Today’s homepage, but nothing on the browser/URL line shows anything to
make you think that there’s anything other than a link b/t you and the USA Today
server.  
Williams Sonoma case: zip code as personally identifiable
information—that’s a legal rule designed to solve the mismatch b/t perception
and reality: the law is designed to deal w/the fact that retailers are asking
the info in a context that looks like it’s for security purposes but is really
for marketing purposes.  When Apple does
the same thing, though, the court said security is more important online so it’s
ok, without inquiring whether Apple was actually using the info for security or
marketing. Thus he thinks the courts/ regulators should look more at intentional
attempts to exploit consumer expectations.
Said: Compliance as a goal might be a different framing than
design: external constraints as something you better be designing towards. 
A: Compliance oriented might avoid unexpected problems but
doesn’t necessarily avoid expected problems—manipulation of what the consumer
would expect based on the design.

from Blogger http://bit.ly/2SOWBYx

Posted in Uncategorized | Tagged , , , , | Leave a comment