can investigating claims bind you to arbitration?

LegalForce RAPC Worldwide, P.C. v. LegalZoom.com, Inc., 2018
WL 1738135, No. 17-cv-07194-MMC (N.D. Cal. Apr. 10, 2018)
LegalZoom, which advertises its ability to help people
register trademarks, allegedly makes “false comparisons to attorney led
services” and engages in the unauthorized practice of law. The court dismissed
Lanham Act false advertising claims because LegalForce (which offers “law firm
automation and free trademark search services through its website
Trademarkia.com”) failed to allege any injury proximately caused by the
allegedly false advertising.  LegalForce even
alleged that it “makes no revenue from [the] preparation and filing [of] U.S.
trademark applications.” The same problem doomed the California state claims,
there under the heading of “lost money or property.”
LegalForce RAPC Worldwide, P.C. v. LegalZoom.com, Inc., 2018
WL 1730333, No. 17-cv-07194-MMC (N.D. Cal. Apr. 10, 2018)
The court enforced LegalZoom’s arbitration clause against
LegalForce RAPC and an individual owner, though not against plaintiff/related
company LegalForce (see above), on various false advertising-type claims
because in the course of investigating LegalZoom’s conduct LegalForce RAPC
assented to its website TOS, which has a broad arbitration clause. 
LegalForce RAPC is a law firm that “practices patent and
trademark law before the USPTO [United States Patent and Trademark Office]” and
is the “sole provider of legal services through the website Trademarkia.com
with respect to trademark filings before the USPTO.”
LegalZoom allegedly “surreptitiously practices law,” as
demonstrated when plaintiffs filed two applications through its site and
“LegalZoom provided legal advice to [p]laintiffs by selecting [a trademark]
classification and modifying the goods and services description from [a]
template thereby applying specific fact to law.”  Further, with one application, “LegalZoom
provided legal advice as to which trademarks found in [a] search report may
conflict with [plaintiffs’ mark].” Plaintiffs also alleged that LegalZoom bought
law-related search terms such as “trademark attorney” and “trademark lawyer,”
and that the “advertising copy in the resulting advertisements is highly
misleading, causing a consumer to believe that he or she will be represented by
an attorney.”
Plaintiffs didn’t dispute that, in order for a customer to
use LegalZoom’s services on its website, the customer must agree to LegalZoom’s
TOS, whose arbitration agreement states:
LegalZoom and you agree to
arbitrate all disputes and claims between us before a single arbitrator. The
types of disputes and claims we agree to arbitrate are intended to be broadly
interpreted. It applies, without limitation, to:
· claims arising out of or relating
to any aspect of the relationship between us, whether based in contract, tort,
statute, fraud, misrepresentation, or any other legal theory;
· claims that arose before these or
any prior Terms (including, but not limited to, claims relating to
advertising); · claims that are currently the subject of purported class action
litigation in which you are not a member of a certified class; and
· claims that may arise after the
termination of these Terms.
It was undisputed that plaintiff Raj Abhyanker and LegalForce
RAPC employee Ryan Bethell assented to the terms, thus binding them both, even
if Ryan Bethell didn’t intend to bind LegalForce RAPC when he acted on its
behalf.  However, there was no showing
that LegalForce was an agent of Abhyanker or LegalForce RAPC as to the
transactions with LegalZoom, and thus LegalForce wasn’t bound.
The validity of the TOS was for the arbitrator; all the
claims were within the scope of the contract, including claims for declaratory
relief and the Lanham Act false advertising claim given the coverage of “claims
relating to advertising.”
So, it seems that doing online investigation of an alleged
infringement might send you to binding arbitration if the alleged infringer’s
site is set up properly.  Can this be
avoided by using an outside investigator? 
Courts will hold such investigators’ solicitation of copies to be
“unauthorized” when they’re sent by a copyright owner, but that doesn’t really
answer the question about agency; an independent contractor plausibly wouldn’t
bind the IP owner, but I wonder.

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1201 exemption hearing: filmmaking and ebooks

PROPOSED CLASS 1: Audiovisual Works—Criticism and
Comment—E-Books and Filmmaking
Michael C. Donaldson, FilmIndependent, International
Documentary Association, Kartemquin Educational Films, Inc., Independent
Filmmaker Project, University of Film and Video Association, The Alliance for
Media Arts+Culture (“Joint Filmmakers”): Discusses use of film as fair use in
other films, even nondocumentaries (like Jersey
Boys
).  Question: is that criticism
& commentary? [My answer would have been yes, and that the Jersey Boys court didn’t need to reach
that specifically because fair use is more capacious, but historical
verification and contextualization certainly counts as commentary for purposes
of fair use.]  Answer: Yes, the exception
is more limited than fair use but we will work with our clients to come within
its confines.  [CO questioner seems
focused on commentary; says Register said previously that developing a
character/situation isn’t inherently commentary and criticism.  Q: what is your best example of
fiction/multimedia ebook that’s used for comment and criticism?]
Heidi Tandy, Organization for Transformative Works:
Something we’d like to make. It’s possible to take content from DVD, Blu-Ray,
etc. and make a fanvid. The minute you want to make a linear, choose your own
adventure style in the format of a game, or ebook that includes different kinds
of content, such as video and stills.  Q:
would this be commercial or noncommercial? 
A: there isn’t a stable and perfect definition of what’s commercial.  If you have a Patreon, is that
commercial?  Hasbro’s guidelines don’t
consider that commercial, but others may disagree.  Trying to leave commerciality out of the
conversation.  Q: would be hard for CO to
say that commerciality isn’t part of fair use. 
A: But what’s your definition?  If
Google puts ads on the side of your work and you aren’t getting revenue, is
that commercial?  CO Q: Doesn’t want to
get away from fiction/nonfiction in this discussion.
Q: what is your best example?
A: things people want to create for mise-en-scene or to show
what happened in the past. Tech doesn’t make it easy but it is getting
there.  VR is also coming.
Q: we need to see concrete examples because we can’t
evaluate fair use in a vacuum.  People
who want to create for comment & criticism.
A: see prepared remarks/submission statement. Using the TV
show Supernatural, 14th season—the fictional world has a series of
novels.  My proposal was for a group of
fans w/in the world creating a YT series—using the show to illustrate things
that fans are creating. The only way right now is a video, not the ability to
scroll through to get the experience of being in the fandom—an ebook or PDF
would give a better ability to access, different visual and personalizable
experience.
Q: why is circumvention necessary?
A: to create the content necessary, I need some of the show
itself and some of the images in the DVDs of behind the scenes activity.
Q: why wouldn’t screencapture work?
A: the screencapture would be a static element.  Looks bad versus having the proper flow,
especially in VR.  Like in a wedding
slideshow, where an element is out of sync with the rest of the video—same with
newscasts. 
Q: why wouldn’t licensing work?
A: for larger scale shows, the owners don’t necessarily have
time or energy for someone to communicate with millions of fans. Sometimes
Hasbro gives a blanket license for certain things, but that’s not always the
case.  [In fact, it’s basically never the
case that they license use of the footage
rather than creative elements as such; I can’t think of an example other than
the limited BSG space-fight footage that BSG allowed specific uses of in a
contest.]  Some companies can’t do quick
turnaround—e.g., the Simpsons episode last week about the problem of Apu.  Even if I only had to wait a business day, I
wouldn’t be able to react within the news cycle.
J. Matthew Williams, Joint Creators II: Doesn’t believe he’s
heard about criticism and commentary. In his view, some of tthe examples seem
infringing (without knowing the context) and some not.  Clients are willing to do some licensing or
some no-action (which doesn’t mean that it’s not circumvention).  It’s difficult to do same-day licensing.  Doesn’t think that fan fiction as a class is
noninfringing.  Cases mentioned in
opposition—things like unauthorized prequels or sequels held to be
infringing.  No cases in record on
fanworks being noninfringing.  Not saying
that they are always infringing, there probably are some that aren’t. 
Q: you’re not necessarily disagreeing about license
availability.
A: no record showing unwillingness to license to
individuals. Fox testified it would issue licenses to individuals, but the cost
is a different question. Doesn’t know price and it would differ for different
uses. Might issue no cost licenses, as they do with education.  No record that someone came to his clients
and was denied.
Brianna Schofield, Authors Alliance: Jonathan Grey, Show
Sold Separately—critiques interaction of audience w/works based on prerelease
exposures to the work.  Available online
and uses video clips embedded in ebook. 
This goes beyond film analysis, which is one aspect of the
exemption.  Video Dubliners: a guide to
Joyce’s Dublin, uses film clips for context for understanding the book.
Q: were the clips licensed?
A: no first hand knowledge.
Blake Reid, Angel Antkers, and Susan Miller,
Samuelson-Glushko Technology Law and Policy Clinic
Jack Lerner (with students Brian Tamsut, Cristen Fletcher,
Jovan C. Ardy, Lauren Wertheimer, and Shaia Araghi), UCI Intellectual Property,
Arts, and Technology Clinic: The CO has already made presumptive determinations
to renew the existing exemption. Some of this discussion feels like an attempt
to relitigate the accepted record, in particular the notion of seeking out
licenses as a viable noncircumventing alternative. In both the video and ebooks
exemptions, the only requirement is that the person engaging in the
circumvention reasonably believes there’s not a noncircumventing alternative.
The idea that we need a lengthy record of folks seeking a license for every
clip goes beyond the existing rules and the record that led to them.
Tandy’s proposed project would clearly be w/in noncommercial
video. Where it would make more creative sense to distribute as an ebook, that
should be possible.  That’s why we want a
unitary exemption for this type of use.
Q: if the Register recommends an expansion for noncommercial
use, including fiction, would that be reasonable.
Reid: CO has already recommended multimedia ebook w/o such
limits.
Q: but if we added noncommercial fictional ebooks?
Reid: that’s better than nothing, but the Q the Office
should grapple with is how that impacts the fair use analysis. There are legit
fair uses out there—Jack Lerner can address that in more depth.
Lerner: criticism and commentary can’t be done as a living,
or as an incentive, under a noncommercial model. That’s not a good idea and the
vast majority of [litigated] fair use is commercial, not just in being on YT
but in being sold on the market.  What
you’d be doing is taking the incentive away from a large group of creators.
Williams: mischaracterizing our position.  Don’t require everyone to seek a license. But
don’t use the idea that my clients are unwilling to license without evidence.
[The evidence is among other things in the nondisparagement clauses that are in
every license we’ve seen, where such a license can even be acquired, and those
are in the record; the sites that the Opponents suggest people use are also
nightmares to navigate to even tell whether a licenses are available—take a
look at how often their poster site, Universal’s, throws up “unknown” results.  If one wanted to make an argument about
George Clooney, for example, Universal will determine whether a film in which
Clooney appeared is “available for licensing,” Jt. Creators Opp’n at 13, on a
blanket basis; if the film is not available for licensing, the critic is
apparently out of luck.  (Actually, given
the operation of Universal’s internal search engine, searching for George
Clooney will also return results for Rosemary Clooney, Curious George, and
George Burns, so the would-be licensor needs some time on her hands.  One will also encounter numerous works in the
database marked “unknown,” e.g.,
https://ift.tt/2qu5Wo6%5D  We also don’t think that fair use is
impossible in a fictional motion picture. 
The MPAA often asserts fair use. 
We just haven’t seen the standard met for large amounts of fair use
being suppressed.  Having a low budget
doesn’t make your use fair; if there’s a potential market and the © owner is
likely to exploit it, then there’s harm regardless of whether an individual
user says they can’t afford it.
Susan Miller: The SPN example: it’s a critique of the
characters often involving society as a whole—commenting on specific characters
& elements—that counts too.  Fan
fiction often critiques and comments on society as a whole—that should count
too.
Q: that’s the issue—does it need to critique & comment
on the work itself? That affects the first and maybe the fourth factor.  [BTW, Bruce Keller & I wrote a whole
article on this back in the day—there’s really never been evidence that ©
owners are more ready to license satirical uses than parodic ones; even the
tuggable “blanket” licenses with nondisparagement clauses let them reject uses
where they don’t like the context. Thus there’s no effect on the fourth
factor.] We’re looking for examples of criticism of the © work.  [But why? That formulation raises the problem
of why the CO has decided to exclude an entire kind of fair use.]
Tandy: goes into history of fanworks. How people started
writing (e.g., Frances Hodgson Burnett of Secret Garden/Little Princess fame
started with Sherlock Holmes). Inherently a commentary: if something wasn’t
missing from the original, you wouldn’t have written your version.
Q: that seems to encompass a lot of derivative works too.
Tandy: can see situations where, e.g., cosplay, might not be
making a commentary. Say you want to do a steampunk Justice League—the
costumes, content and structure would be different. But that’s not what we’re
talking about here. Focusing on an ebook/choose your own adventure, it’s
inherently a commentary where people are being given choices about how to read
the story.
Patricia Aufderheide, American University: You can
distinguish documentary and fiction, but that’s one of many ways to slice a
unitary form; virtually everything is shared between the forms—structure,
reenactments, audio/video and other aesthetics. Many kinds of fiction don’t
make criticism and then some do; then there are hybrids in which documentary
characters are real-life people who dream of being gangsters in a gangster
movie and stage a gangster movie.  It is
very hard to say “here’s an example” when people know they can’t add this stuff
without enormous complications. As someone who’s worked w/documentarians for 40
years, the complaints never stop about never hearing back from requests to
studios/potentially licensors. Beyonce’s Lemonade
is an example of a work that refers critically to many real
incidents/situations. It’s not hard to see parody/satire in SNL
skits—incorporating and referring to and creating commentary on real
copyrighted things.  There’s no reason we
shouldn’t be encouraging this.  Good Night and Good Luck and other
dramas—we should be able to show what they were describing when they quote the
description of TV as a “vast wasteland.”
Q: Not trying to make aesthetic judgments, but whether it’s
likely to be noninfringing use.  The last
rulemaking: there was enough of a record to say that it was likely to be
noninfringing for documentaries, and we’re now being asked to extend that to
all films.  Biopic as a line? Everyone
thought that was unsatisfactory before. 
How would that work for you?  Is
there a way to exclude types of films that are less likely to be fair use,
instead?
A: I don’t understand your task. You’re being pretty clear:
commentary and criticism of the thing itself. Wouldn’t it be up to the person
to be sure they’re coloring within the lines, and if not they pay the
penalty?  Letting people have the option
of using that across the form, where you’ve already said that an exception for
one part of the form (whose boundaries are themselves fuzzy) is
acceptable.  There are situations where a
documentary could infringe, which is why we do review and licensing where
appropriate.  There’s a whole explanation of which clips they
licensed for Refrigerator Mother and
which they didn’t and why.
Q: To opponents: wouldn’t a limitation to comment and
criticism then be sufficient?
Williams: Harder to see fair use in fiction. Showing what it
was like to be present in a moment in history is not commenting on that
footage.  [Why not?  The effect that it had on the people
experiencing it as reality is an important part of criticism and commentary.]    Fan fiction choose your own adventure ebook
example—that doesn’t involve criticism or commentary, even if involves
additional expression; Axanar and Salinger cases haven’t found such uses to be
fair.  Nor would noncommercial be ok.
Just the fact that something isn’t for sale doesn’t make it noncommercial,
because paying the customary price is part of the analysis so all kinds of
noncommercial uses would still cause harm. 
The examples I did see were very small. 
Showing Kennedy assassination reaction may be important to the story,
but that’s not criticism and commentary; they have been able to license some
clips, and if you have 60 clips of Cesar Chavez and pick the most engaging, the
fact that you don’t want to pay to license it doesn’t make it fair use.

David Taylor: no real concrete examples, particularly in the ebook situation.
Sounds more like interactive games. 
That’s not an ebook, he thinks. Archival clips aren’t distributed on
protected DVDs.  [I think that’s
factually wrong in many cases, given the usual archival sources.  I don’t think he has a record on that, though
I may have missed something in the opponents’ submissions.]
Michael Donaldson: A few examples: In Search of Fellini,
about a woman obsessed with Fellini; clips shown to comment on the power of
Fellini’s films—w/o seeing the film you can’t see how impactful they are, and
recreating them doesn’t work.  Scripted
film about Christine, a Florida news anchor who shot herself on the news. The
commentary is: this is what the TV audience saw, not a redo.  [You can’t meaningfully comment on what they
saw by telling the story that surrounded it without access to what they saw;
your audience has no reason to believe your commentary unless they can compare
the recorded footage to what you’re saying about that footage.]
Low budgets: that isn’t why they don’t license.  Insurance companies put real skin in the game
even for these low budget films; they insure when they believe it’s fair use.
We’ve had pushback from insurers more on risk than on actual fair use,
especially for clips surrounding Trump where he’s perceived as litigious.
Lerner: criticism and commentary: you aren’t required to say
“here is my criticism and commentary.” 
Showing a reaction of a person to a contemporary event is
commentary.  Also, there hasn’t been a
previous limitation to “criticism and commentary about the work” and we shouldn’t put it in. Fair use cases include
the Wind Done Gone.  Also, the noncommercial remix exemption
includes fictional use; it is clearly a set of fair use works.
Also, 8 years after documentary exemption exists, lifting
the “documentary” limit clearly creates no real risk of infringement/piracy.
Q: would the licensing market be affected?
A: no, we’re talking about the market for fair use.  The © owner has no right to a license to a
fair use. What we have now is filmmakers who aren’t doing fair use that they
want to do, or they get licenses because they can’t access the material.
There’s no dispute that there is a large amount of fair use in the
nondocumentary context, but it may be licensed when it doesn’t need to be.
Q: any examples where 1201 caused licensing despite 107?
A: Nearly 70 different films where people wanted to make
fair use but didn’t.  Can supplement the
record further.  Also remember that
Register already said that needn’t opine on the fairness of any given use, but
rather that there is a class of works likely to be fair use.  There’s no real dispute that broad, robust,
burgeoning fair use exists in the nondocumentary context—the question is
whether it will be chilled/allowed to go forward.
Reid: this RM takes place every three years. 1201 makes the
creation of these films, where licensing and screencapture aren’t reasonable
alternatives, illegal, with the prospect of statutory damages and criminal
charges.  It’s understandable that people
aren’t coming out of the woodwork with scripts.
Q: we need to look at whether the market has changed; need
to tie it to what people would actually do. Difficult to say w/o looking at
tangible examples.  It’s been feasible
for prior class 1 categories.  [Welllll,
our examples had all been created under legal threat, until we got our first
exemption.  That seems undesirable.]
Reid: Then we do have specific examples, and then we’re
being asked to divide them by genre, prove they’re noninfringing, prove what
subgenre (e.g. biopic) they fall into. Sketching out real plans for 3 years in
advance is not what the statute requires.
Q: Why in ebook sense didn’t you go for the broader category
of mixed video or fan fiction/cosplay? 
Is it because the clips they’re using they’re lengthier and not very
edited?  The Digital Dubliner seemed like
a sophisticated blog.  Why do you really
need high quality?
Tandy: high quality is important across all media.  One reason we haven’t talked about fan
fiction/fanart is that doesn’t involve circumventing AV locks. This is the
other kind of fanworks. Fan films go back to the 1960s.  Now we have quality that no one could achieve
before, and if you want to participate in the conversation you need to match
the visual sophistication of the other participants.
Q: expanding what we thought an ebook was?
Tandy: yes, though it doesn’t necessarily include text in
the way we think about copying and pasting it—can be jpgs and video clips mixed
together, with the words embedded in the jpg to create a specific visual expression.
Q: if someone steps over the line, why can’t the Joint
Creators just sue? Why do we need more limitations?
Williams: Lerner says no infringement has resulted from
exemptions and thus no expansion will infringe. 
Our position is that there’s a lot of infringement; a lot of these
videos are infringing; we’ve identified examples we think are infringing. We’ve
chosen not to continue to oppose those exemptions b/c we’re not going to fight
City Hall, but that’s not a concession of no harm.  [No harm from
the exemption
?  They’ve never shown
any evidence of that, which I think was the point of the question.  As we’ve repeatedly noted—and I’m very happy
to hear the CO focus on this—1201 itself has virtually no effect on initial
creative behavior; most of this is about what will happen when you have to
interact with an institution like a school or a traditional publisher who has
less incentive to facilitate any given individual creative work, or when you
have to talk to a lawyer, whether it’s responding to a takedown or trying to
get insured.]  1201 created a new right
over and above 106. Saying that litigation should sort it out isn’t very
comforting because litigation is expensive.
Q: but if there’s a quantum of likely noninfringing films
with short portions etc., why isn’t that reasonable to go to 106?
Williams: it wouldn’t be one or two.  Seen very few noninfringing fictional
examples, and even in the nonfictional space. Digital Dubliners could have some
good fair use arguments, but he doesn’t know how the clips were selected. Would
be seen as CO endorsing a broad swath of content and endorsing misuse. The
Office has already said that it thinks a lot in the record is infringing, and
yet proponents keep saying the Office has already decided it’s infringing. 
Q: if we still had the comment & criticism, short
portion, etc. and added noncommercial, that’s not sufficient?
A: Noncommercial in & of itself is only a factor.  It has layers.  [I initially mistyped this as “it has
lawyers.”]  Do you pay the customary
licensing fee? If not, that’s commercial use. 
Does the CO intend to rely on case law meaning or lay meaning?  Either way, it’s just one factor, as is short
portion, and comment & criticism; but none of those add to slam dunk. Even Campbell remanded for analysis of fourth
factor in that specific instance.
Q: talk about licensing.
A: links in our comments to websites that provide easy
access to contact points for licensing. CNN: you can go on & say I’m
looking for a clip from X period of Y person. 
You can say “I want to use this in fiction” or education or documentary
and they give you different pricing and it pops up almost immediately.
Q: proponents’ reponse to licensing arguments?
Donaldson: It is easier to find out whether they claim to
own it, but not whether they will actually license it. Now it’s almost
impossible to get to a human, for example to negotiate the posted price for a
small film/niche film. 
Wertheimer: a lot of licensing agreements have
nondisparagement clauses—can’t make critical use of the clip. Even with a
license, that’s not fair use.
Q: Opponents, what have you to say about that?
Williams: you didn’t accept that before.  Not all © owners include nondisparagement
clauses—Warner Bros. didn’t have such clauses. 
[How nice of them.] A lot of them do. But there’s no examples of actual
criticism of the studio or any of the actors or really in this record of the
films themselves. Those wouldn’t prevent licensing of the works.  [You can’t speak for the licensors and what
they think of a use, can you, though?] These are more about disparagement of
the talent and he hasn’t heard anything about that.  [I’d love to see that contractual argument
tried by the licensee if the licensor declined to approve a use on grounds that
the licensor thought it was disparaging of something other than the actors.  Not that they’d explain their reasoning!  But of course we never get there anyway because
the license deters people from trying.]
Q: the Steve Jobs example, where the family didn’t like the
use—they rejected that.
A: Universal relied on fair use.
Q: that’s an example of license refusal, though.
A: sure, not going to claim that some © owners don’t like
criticism. 
Q: how is licensing a feasible alternative then?
A: it isn’t always. 
The examples of that in this record and all prior records are very few
and far between.  [And the justification
for denying the exemption is….] Has heard that it’s unacceptable to condition
exemption on those who’ve asked and been denied.  Proponents don’t want to go ask.
Q: You’ve said there’s no market for multimedia ebooks. If
that’s true, how could there be an adverse effect on the clip licensing market?
David J.Taylor, DVD CCA: if you believe there is a market or
that one will develop, our argument is that it’s ours and should be licensed
just like documentaries are licensed.
Q: is it the studios’ view that this is a traditional,
reasonable, or likely to be developed market?
Williams: it’s potential/likely to be developed.  Simon Swart from Fox last cycle testified
they’d be willing to license multimedia ebooks, and Ben Sheffner from MPAA will
testify in LA on issues related to licensing as well as the importance of
access controls.
Josh Welsh, FilmIndependent:
Documentary/nondocumentary—there is a growing trend to blurring the lines.
These aren’t just one off but a growing hybrid genre.  A new award: the Heterodox award at a major
event to deal w/unclassifiable films. 
The Looming Towers—a mix of traditional documentary and scripted
fiction, where the elements play off each other.  Errol Morris’s Wormwood: scripted actors
intercut with documentary.
Q: are they comment & criticism?
Welsh: I’m showing why granting or denying an exemption
based on a genre is a bad idea given how porous the genre boundaries are. This
is an exciting growth area for film. Doesn’t make sense to limit by genre.
Aufderheide: has developed a category of thinking: imagination
foregone (see report
based on fair use-free Australia). What do you not do if you think something’s
prohibited?  Instance after instance of
people excluding entire categories of behavior, which is why she is concerned
about looking for current practices—a lot of people are not imagining
thinks.  Topical dramas like Roseanne,
Black-ish etc. can easily incorporated criticism and commentary.
Taylor: they just haven’t shown the need for a larger
exemption. The problem with going back to 106 is that the RM is tasked with
creating an exemption based on the evidence produced. [This seems like a carefully
misleading claim about the definition of “evidence.”  Evidence can include (as it does here) expert
testimony about the practices of the relevant creative communities, and about
the affordances of technology when it is or isn’t encumbered by 1201 without an
exemption.]
Bruce Turnbull, AACSLA: In the past, the focus was on the
much more elaborate nature of the ebook. None of what was promised 3 years ago
has actually appeared.  Also, the
platforms are limited. 
Q: trends about fictional works—proponents say the trend is
increasing. Is that enough for evidence?
A: you need the evidence for that. For the ebook, we have a
number of things 3 years ago that didn’t happen.  Discussion of platforms’ restraints—those
have inhibitions [I think this means they can’t use the tech?].  If the idea was noncommercial video/people
don’t view what they did as a “video,” it may be that is the place to look at whether something could be included to
facilitate some of the fan fiction kinds of things.
Williams: Donaldson identified a trend of people wanting fair
use in fictional films in his own practice. But his starting premise was that
people weren’t using clips in fictional films before that, and that’s not true,
e.g., Oliver Stone films.  Major studios
were probably licensing clips.
Tandy: defers to tech expert on the tech, but the widget
doesn’t let you get the effects.
Q: it doesn’t stutter, drop frames. What would you have seen
that you didn’t?
Tandy: I don’t know what was lost or how these clips were
created.
Q: does the eye lose anything?
Tandy: linking the content together [seamlessly?] you need
more capacity—you have to be able to obtain additional software, which people
may not be able to do.  Couldn’t do it in
Windows Movie Maker though maybe it’s possible in pro software. 
[The real ridiculousness of this is opponents’ contradictory
insistence that (1) the quality of (noncircumvention) screen capture is amazing
but (2) 1201 is super, super necessary to prevent piracy so exemptions should
be guarded like state secrets.  Both of
these things can’t be true, and they aren’t. 
The key reason people need to be able to use whatever makes sense to
them to make their fair use clips is that almost no one knows that this is
currently legally important. The main reason 1201 is a barrier is because when
you encounter a gatekeeper it can turn out what you’ve done is illegal even when it would have been perfectly
legal had you used a different program. Also, since we usually don’t know
whether any given program is
circumvention, the uncertainty created serves no valid purpose in limiting the
exemption to the class of noninfringing uses.
Turnbull: Screencap quality is accepted by Apple for
publication.
Q: would this be enough for a film festival/distribution?
Jim Morrissette, Kartemquin Educational Films,Inc.: Nope.
More gatekeepers than ever before. The current exemption works really well for
documentarians. Blu-Ray has made the difference for even using fair use any
more. Abacus, about a small bank in NY; wanted a clip from It’s a Wonderful
Life.  Blu-Ray enabled that.
Turnbull: Screencap limit is good because it prevents widespread
removal of TPMs.  [I’d love to see the
record evidence on that.]
Q: do you violate 1201 by using screencap?
Nobody is willing to answer that, because we don’t know.
Williams: there appear to be screencap that captures after
lawful description.  But I won’t answer
your question. The current exemption addresses the concern that people might
not know, so accidental circumvention isn’t illegal.  Basically gives proponents comfort and
encourages people to use only the tech that they need for the quality they
need.  [And here is the complete gap in
the evidence.  What’s the encouragement
effect?  If you-the-creator even know
about the exemption, you still have to deal with the uncertainty created by the
question of whether a court (or a copyright owner, even, in its threats and
allegations) would disagree with your assessment of needing to make the jump
from one kind of software to another for quality reasons.  There’s a good reason that courts prefer to shy
away from making aesthetic judgments and defer to creators on that question,
including the aesthetic judgment of just how sharp an image “needs” to be.
Adding that into the exemption creates a non-fair use related standard whose
main function would be to trip people up, if & when they encountered it.]
Q: but is there any specific tech that people are worried
about?  Apple allows screencap. Does the
current exemption with two stages serve a real purpose?
Peter Midgley, Brigham Young University: Provides zero
comfort, only confusion. Suggests screen cap is by default unlawful.
Q: would expanding the exemption increase infringing
distribution of works? Should we require them to put DRM on fictional uses?
Lerner: problematic—how do you define that?  More fundamentally, you’d be really requiring
people to change their straightforward fair use to additional restrictions on
access. When I make fair use, that’s my speech.
Reid: We’d object to a distribution scheme b/c it transforms
an exemption that’s supposed to look at the moment of circumvention (unless post
circumvention behavior is probative of intent) into a regulatory regime for
downstream distribution. Far beyond what Congress intended to delegate to CO.
Raises 1A concerns too—conditioning distribution of speech on further tech
restrictions.
A: Congress has said for 110 that tech protections are
required. Evidenced a willingness to go that far.
Reid: no evidence in the record. If you’re thinking about
that, we need more opportunity.
Midgley: we need to think about this but really shouldn’t
put a mini 110 in this exemption.  [Yeah,
no kidding.  110 is for uses that might
be otherwise outside the scope of 107 or need extra certainty because of the
institutional features of face to face teaching. This exemption isn’t sought to
implement 110, in which case compliance with 110 would be reasonable as a
requirement.  Instead the exemption is
sought to implement 107, and you actually have a right to distribute a fair use
(indeed, it’s hard to think of a fair use case that didn’t involve both
reproduction and distribution).]
Donaldson: See the negative effects of the current regime
heartbreakingly w/editors and directors who move from doc to not and want to do
what they did last month and all of a sudden it’s a criminal act.  It’s one thing to have a marketing definition
of a documentary. But acts legal in May are now illegal in June when the person
switches to a different project and that’s bad.
Antkers: will respond to the demo in LA.  [My reaction, not being able to comment on
quality given the fact that I was watching a YT stream of a camera recording of
a screen, is that the demo missed the most important step, which was the
creation of the clip in the first place; I’d sure like to know how exactly that
clip was created before it was incorporated into an ebook.]
Lerner: Bobbette Buster, client of UCI. Can confirm she’s
still working on her book. Others have personal delays, but evidence doesn’t
need to include examples for every possible issue. Evidence can also include
evidence from experts about creative practices. That’s more than sufficient to
meet our burden especially given the utter absence of concern about piracy or
increased unauthorized sharing as a result of changing the exemption.

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Brief notes on 1201 space-shifting exemption hearings

PROPOSED CLASS 3: Space-shifting
Keith Chatfield SolaByte: Electronic new media solution
developers: method for space-shifting based on licensed transactions, not
moving the files.  Support OmniQ’s proposal
on behalf of consumer—can convert content to more robust security, devices.
Future-proof content against platform obsolescence. Can watermark optical media
like DVD and Blu-Ray—can be used to disable disc in the field. These create the
capability to enable a controlled licensing transaction where you can trade in
a disc.  Allows consumer to move to new
media. Patent stage, now licensing it in the market.  It doesn’t involve TPM circumvention.  DVDs are sunsetting; 13 billion are in
circulation. We’d like to allow consumers to archive their content into a more
permanent library after we authenticate the disc.  OmniQ’s aim is similar with another type of
tech. 
John Mitchell OmniQ
Restore benefits of first sale, including the opportunity
for unlicensed resale. OmniQ’s process destroys the DVD while it transfers to a
hard drive w/one encryption key that the consumer has and we don’t.  There’s never more than one copy, as opposed
to previous technologies. 
They fought about the meaning of “copy” under the statute, Cablevision, etc.  Also about whether licensing was possible
given the size of the demands of guaranteed revenues up front/the variety of
content sources.

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Consumer class action fails for failure to survey on the exact statements challenged

Townsend v. Monster Beverage Corp., — F.Supp.3d —-, 2018
WL 1662131, No. 12–2188–VAP (KKx) (C.D. Cal. Mar. 20, 2018)
The Ninth Circuit remanded this case on UCL, FAL, and CLRA
claims insofar as they challenge four specific on-label representations of
certain Monster Rehab drinks, holding that even if they weren’t strictly false,
it was plausible that the statements were misleading.  The four statements were: “Hydrates Like a
Sports Drink”; “Re-hydrate”; Consume Responsibly—Max 1 can every 4 hours, with
limit 3 cans per day. Not recommended for children, people sensitive to
caffeine, pregnant women or women who are nursing.”; and “It’s an ideal combo
of the right ingredients in the right proportion to deliver the big bad buzz
that only Monster can.”
Plaintiffs argued that,“[t]o the extent that energy drinks,
including Monster Drinks, have any hydrating qualities, they do not hydrate
like a sports drink. Sports drinks contain water, salt and sugar, and are
designed to replenish the electrolytes and energy one’s body loses during
exercise.” In addition, the Hydrates and Re-hydrate statements were allegedly
misleading because “consumption of [Monster Rehab drinks] as prescribed on the
label could cause severe dehydration because the combination of caffeine and
guarana in energy drinks acts as a diuretic.” The consume responsibly/ideal
combo statements were allegedly misleading because of “potential health risks
associated with frequent consumption of Monster Drinks.”
Plaintiffs’ claims suffered numerous setbacks.  First, there was Stefan Boedeker, plaintiffs’
economic damages expert who conducted a consumer survey and choice-based
conjoint analysis to determine how much, if at all, the representations at
issue contributed to the price of the product.  However, with one exception, the phrases he
tested weren’t identical to the challenged statements and thus they were
unreliable/irrelevant.  He tested: (1)
“Long Lasting Energy;” (2) “RE–HYDRATE to Bring You Back;” (3) “Hydrates like a
Sports Drink;” (4) “Ideal Combo of the Right Ingredients in the Right
Proportion;” and (5) “Safe level of consumption incorrectly specified on label”
or “Safe level of consumption correctly specified on label.”
“In order for Plaintiffs to meet the Rule 23(b)(3)
requirement of predominance, they must show that the same representations were
specifically made to each class member. The exact wording of each statement is
thus critical to Plaintiffs’ claims and class certification.”  By substituting his own interpretations for
the exact wording, the expert rendered his tests unreliable.  For example, shortening “It’s the ideal combo
of the right ingredients in the right proportion to deliver the big bad buzz
that only Monster can” to “Ideal combo of the right ingredients in the right
proportion” wasn’t just eliminating the puffery part.  Whether that part was puffery was a legal
conclusion he wasn’t qualified to make, and the court didn’t accept his
conclusory assertion that he’d captured the essence of the claim, since his
expertise wasn’t in interpreting words and his survey didn’t measure
respondents’ understanding or interpretation of the statements. Moreover, the
second half of the statement was essential to understanding its meaning because
it informed the consumer what purpose the phrase “right ingredients in the
right proportion” serves. “Without the latter half of this statement, the
consumer is left guessing whether the ingredients are the ‘ideal combo’ for
energy, hydration, flavor, or any other possible attributes an energy drink
might tout.”
Similarly, by adding a reason to re-hydrate—“to bring you
back”—the survey became unreliable; the phrase became focused on energy rather
than hydration. “[A]dding language that confuses the re-hydrates and hydration
attributes with energy may be particularly critical to the analysis since Mr.
Boedeker’s survey shows that the energy attribute of a drink is a much stronger
market driver than the hydration attribute.”
The survey didn’t test “consume responsibly,” but rather described
in broad terms the type of statement that might be on such a label by providing
the options: “safe level of consumption incorrectly specified;” “safe level of
consumption correctly specified;” “no information on label regarding safe level
of consumption;” or nothing at all.  This
analysis was untethered to plaintiffs’ theory of liability. “Comparing the
price impact of a correct, rather than an incorrect, safety statement is
irrelevant; only a label perceived as being correct is at issue here. Further,
assigning a safety label the descriptor of ‘correct’ or ‘incorrect’ presumes
that a consumer is making this determination at all, as well as potentially
influencing such a statement’s weight.” And “safe consumption” was materially
different from “consume responsibly.” The survey thus didn’t assess the premium
paid for “consume responsibly.”
The court additionally excluded a survey that plaintiffs’
survey expert submitted in response to earlier criticisms; by providing new
data including a different survey population, not just re-analysis of existing
results, the survey became new evidence that needed to have been disclosed
earlier.
However, his earlier survey was not inadmissible just
because he didn’t ask survey participants about why they purchased Monster energy
drinks; he asked only their understanding of each statement. How reasonable
consumers perceive and interpret the statements was relevant to whether they’d
find their truth or falsity material.  One set of conclusions was unreliable,
however, because he accidentally omitted the word “bad” from the “big bad buzz”
portion of the ideal combo statement, and there was no way to tell whether this
made a difference to consumer responses. 
The specific representations are key in false advertising cases, and,
since the burden on plaintiffs was to show admissibility, they failed.
The court was equally rigorous as to defendant’s survey
expert, who was qualified to opine on the reliability/design of a consumer
survey about materiality, but not to opine on the quantitative analysis (which
he argued produced an unrealistically large damages number) because he lacked
the relevant statistical background.
The motion for class certification failed mostly because plaintiffs
failed to show that a presumption of reliance was justified. The admissible
parts of plaintiffs’ survey showed how respondents understood the Hydrates,
Re-hydrate, and Consume Responsibly statements, but didn’t provide insight into
their purchasing decisions; the survey didn’t even target people who bought
Monster branded energy drinks.  [No role
for common sense, apparently.]  “While a
challenged statement need not be the sole or even dominant factor in consumers’
purchasing decisions, a survey needs ‘to assess whether the challenged
statements were in fact material to [consumers’] purchases, as opposed to, or
in addition to, price, promotions, retail positioning, taste, texture or brand
recognition.’”
The conjoint analysis could potentially show materiality by
determining the statements’ value to consumers. But it was only admissible as
to the Hydrates claim.  And plaintiffs
didn’t show that the Hydrates statement had a common meaning.  The survey asked “What does the statement
that Monster Rehab is a ‘… triple threat that quenches thirst, hydrates like
a sports drink, and brings you back after a hard day’s night’ mean?” and “Does
the statement that Monster Rehab Energy Drink ‘Rehydrates’ or that it ‘…
hydrates like a sports drink’ say or suggest that Monster Rehab has the same
level of electrolytes as a sports drink?” But no question showed how consumers
understand the Hydrates statement alone.
Consumers’ responses also didn’t support the deceptiveness
theory.  For the first question, 24.2% of
respondents stated they understood the statement to mean “energizes;” 24.2%
said “rehydrates/aids rehydration;” 15.9% stated “thirst quenching;” 5.1%
replied “electrolytes mention/additives;” and 47.8% provided miscellaneous
responses. Plaintiffs’ misleadingness theory, that the Monster product does not
contain electrolytes like a sports drink, was only mentioned by 5% of
respondents.  Also, their answers didn’t
support any single common understanding of the Hydrates statement across the class;
“this indicates that claims related to this statement require an individual
inquiry.”
In response to a specific question asking consumers to compare
the electrolyte content of a sports drink versus a Monster Rehab Energy drink,
80.6% of respondents stated that Monster Rehab definitely or probably has the
same amount of electrolytes as a sports drink. Still, the court considered the
unprompted responses more important, and also it was unclear whether the
Re-hydrate statement or the Hydrates statement led consumers to this
conclusion. Answers to the open-ended questions indicated that electrolytes were
more often associated with the Re-hydrate statement than the Hydrates
statement.  
Nor did plaintiffs show that the Hydrates statement was
material to all class members. When their survey expert asked in an open-ended
format why respondents chose defendants’ energy drinks as opposed to another
brand, so few respondents listed hydration as a purchase driver that he didn’t
it as a quantifiable reason. Even when respondents were prompted, only 25.2% of
respondents selected hydration as a purchase motivator.  In Boedeker’s survey, only 7.3% of respondents
selected the Hydrates statement as a factor in their purchasing decision, out
of a list of 16 attributes.  Thus,
plaintiffs didn’t show the existence of a common answer to the question of
whether a reasonable consumer would consider any of the challenged statements a
material misrepresentation.
Plaintiffs also didn’t present a damages model consistent
with their theory of liability. They tried to rely on Boedeker’s model, but his
survey suffered from focalism bias, “rendering it useless for the purpose of
determining price premiums attributable to the challenged statements.”  In the list of 16 attributes driving
purchase, respondents chose flavor most often (42.8% of respondents); then
price (25.9%); then energy (25.3%); then brand (23.8%); Re-hydrates came in at 8.7%
and Hydrates like a Sports Drink at 7.3%. 
But in determining price premium, Boedeker examined only flavor, the
challenged statements, the ingredients label, and the price.  The court agreed that presenting the claims
out of context and failing to include other important attributes artificially
inflated the importance of the challenged claims. The court didn’t believe the
conclusion that “the attributes that ranked 8th, 9th, 10th, and 11th out of 16
attributes, with less than 10% of all survey respondents even mentioning each
attribute as important to their purchasing decision, constitute approximately
81% of the value of the overall product …. At the maximum price point …, the
challenged statements would constitute 52% of the value of the beverage. These
incongruous results support Defendants’ complaint that Mr. Boedeker’s survey
fatally suffers from focalism bias.” 
Plaintiffs failed to justify the selection of attributes; the court
suggested that the expert could have reproduced the conjoint analysis with
different variable attributes to see if the estimated price premium is
reliable, controlled for other highly-valued attributes, or tried to price
these other attributes.
Finally, the failure to show that Hydrates statement had a
common, deceptive meaning compounded the problem.  “In order to tie a damages model for a
misleading statement to a theory of liability, a plaintiff must show that the
price premium paid was for the attribute consumers believed the product
contained. In other words, Plaintiffs here would have to show that consumers
paid a price premium for a drink they believe contained electrolytes in order
for it to align with their theory of liability.”

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we said the meal was a “value,” we just didn’t say to whom

Killeen v. McDonald’s Corp., 2018 WL 1695366, No. 17 CV 874
(N.D. Ill. Apr. 6, 2018)
Courts will only rarely protect consumers against their
inability in the moment to do math; this is not one of those times. Killeen
alleged that some of McDonald’s “Extra Value” meals were actually more
expensive than ordering the same items separately, and that this was deceptive.
For example, Killeen bought a Sausage Burrito Extra Value Meal at a Chicago
McDonald’s for $5.08 when she would have paid only $4.97 had she ordered the
individual items a la carte. “[C]ommon experience favors her assertion that
consumers expect to pay less for items bundled together and billed as a ‘value’
package than they would pay if they purchased the items separately.” But there
can be no deception where other information is readily available to dispel the
tendency to believe in savings:
[A]nyone familiar with fast-food
restaurants such as McDonald’s surely knows that prices are typically displayed
on menus located near the registers. Understandably, plaintiff may not have
wished to take the time to compare prices, but there is no question that doing
so would have dispelled the deception on which her claims are based.
Accordingly, this is not a case in which consumers would have to consult an
ingredients list or other fine print to determine whether prominent images or
labels a defendant uses in connection with its product accurately reflect the
product’s true nature or quality.

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Recent acquisitions: really bad court decisions edition

Tarkay and Patricia Govezensky posters, from Romm Art Creations v. Simcha Int’l, Inc., 786 F.Supp. 1126 (E.D.N.Y. 1992), an absolutely terrible decision finding that the “Women and Cafes” style was inherently distinctive and thus had secondary meaning and high strength because they were artistic and imaginative (sigh); they were also therefore presumptively nonfunctional.  Defendant was enjoined.  If you ever wonder why Wal-Mart rejected so much of Taco Cabana, this case is a good reminder.

P.S. I ended up with a few extra Patricia posters, if anyone wants one for their own display purposes.

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The truth is out there, but it might violate the right of publicity

Scott v. Citizen Watch Co., No. 17-cv-00436-NC, 2018 WL
1626773 (N.D. Cal. Apr. 4, 2018)
This case would be the poster child for the need for a true
reckoning between modern right of publicity law and the modern First Amendment,
but the poster would probably violate plaintiff David Randolph Scott’s rights
under the reasoning of this case.  The
court found factual disputes about the applicability of various exceptions to
California’s right of publicity and the Lanham Act, including a reading of
nominative fair use that makes it a dead letter/a defense only when confusion
is unlikely (cf. KP Permanent). The
only things that got kicked out were Scott’s emotional distress claims.
Scott is a retired astronaut and the mission commander for
NASA’s 1971 Apollo 15 voyage, on which Scott spent three days on the moon,
including over 18 hours outside the main spacecraft. Before the mission, Bulova
representatives gave Scott two Bulova timepieces to use in space. He wore a
chronograph to the moon and auctioned it off for $1,625,000 a few years ago.
In 2014, Bulova began the Lunar Pilot Chronograph (the “Moon
Watch”) based on the original chronograph that Scott wore to the moon. Many of Bulova
and Kay’s ads and promotional materials referred the original chronograph that
Scott wore on the moon, and include Scott’s identity in various forms,
including: (1) online promotions, including descriptions of the watch, photos
of Scott, and a video that contains an audio clip of Scott’s voice (2 seconds where
Scott can be heard saying, “We have a roll program” from a 79-second video
depicting the Apollo 15 mission); (2) a promotional booklet packaged along with
the Moon Watch; and (3) other public and internal communications by Bulova and
Kay.  Apparently one of the astronauts in
the spacesuits shown in the advertising is Scott, though his helmet is
apparently not see-through in the photos. 
(I can’t judge all this for myself and neither can you because,
appallingly, big chunks of the exhibits are sealed even though they are the
allegedly infringing materials.  The
court doesn’t explain why (1) internal materials could ever violate Scott’s
right of publicity or (2) it is
permissible to seal (and redact descriptions of, in the attached affidavit)
allegedly infringing materials that were in fact public.  I started out with a joke about the breadth
of Scott’s claims, but this isn’t a joke.)
 

Bulova website

Kay website (from Archive.org) with reference to Scott in text

The court found disputed facts existed over whether the use
of Scott’s identity was incidental. “The rationale underlying this doctrine is
that an incidental use has no commercial value, and allowing recovery to anyone
briefly depicted or referred to would unduly burden expressive activity.” Relevant
factors include: “(1) whether the use has a unique quality or value that would
result in commercial profit to the defendant, (2) whether the use contributes
something of significance, (3) the relationship between the reference to the
plaintiff and the purpose and subject of the work, and (4) the duration,
prominence or repetition of the likeness relative to the rest of the
publication…. Even if the mention of a plaintiff’s name or likeness is brief,
if the use stands out prominently within the commercial speech or enhances the
marketability of the defendant’s product or service, the doctrine of incidental
use is inapplicable.”
Scott offered evidence that his identity was used “repeatedly
and in a manner intended to take advantage of Scott’s reputation.” His name and
Apollo 15 “mission commander” title appeared or appear in many of the marketing
materials, including the descriptions on Bulova’s and Kay’s websites, the
promotional booklet, marketing copy for online and third-party retailers, a
press release, an interview between a Baselworld reporter and Bulova’s CEO,
website advertisements, employee training materials, and internal communication
documents about marketing strategy. [How internal documents can violate the right
of publicity is a bit beyond me.]  For
example, an introductory power point to a third party retailer stated, “The
Moon Pilot Chronograph is based on the design of the Bulova watch worn on the
moon by Astronaut David R. Scott during 1971’s Apollo 15 space mission.” Another
statement repeated frequently in Bulova and Kay’s advertising: “After Apollo
15’s mission commander made lunar history—while wearing his personal Bulova
chronograph—we’re making history again.”  

images from the  pamphlet with the watch

In the prior Yeager case,
the court reasoned that the plaintiff’s name and identity were “unique and
non-fungible” because he was known for breaking the sound barrier for the first
time, and “[t]he use of his name and identity link[ed] defendant’s new
technology to plaintiff’s name and accomplishments” to create positive
associations in customers’ minds about the AT&T brand. “The same logic
applies here,” even though Bulova happens to be reciting facts, not making an
analogy (which should have been ok too, but at least didn’t suppress a truthful
account of the past).  A jury could find
that the ads “deliberately invoked Scott’s name and historical significance as
one of the first humans to walk on the moon in order to increase the Moon
Watch’s marketability and appeal.”
There were also disputed factual issues on the public
interest exception to the common law right/the statutory “public affairs”
exception, both of which protect “publication of matters in the public
interest, which rests on the right of the public to know and the freedom of the
press to tell it.’ ”  These ads were
commercial speech, thus “subject to reduced free speech protection relative to
non-commercial speech.”  [Yes, but that
reduced protection isn’t just applied as a discount to any advertisement’s free
speech value.  Specifically, the court should
apply Central Hudson: substantial
government interest, actual advancement of that government interest, and
suppression of no more speech than necessary (though not narrow tailoring).  It does not.]
In balancing publicity against newsworthiness, courts must
consider “the nature of the precise information conveyed and the context of the
communication.” “Apollo 15 and space exploration certainly implicate some
degree of public interest,” but the context was too commercial.  “The determinative inquiry for whether the
public interest exception applies to commercial speech is whether a defendant’s
use of a plaintiff’s identity is the commercial product itself, or is instead
used to promote some other tenuously related product.”  The former is protected and the latter is
not, and this case was more like the latter, because defendants’ product wasn’t
speech, but a watch, and the [truthful] references to history and space
exploration simply helped to sell it. 
True, Scott actually wore a Bulova watch to the moon. But a “fine
line … must be drawn between the historical event that was Apollo 15 and the
person that is David Randolph Scott.”  [It
must?  Why, under Central Hudson?]  So Bulova
has “greater” license to boast about its connection to the Apollo 15 mission,
but that doesn’t “automatically” make Scott fair game.  The court pointed to the differences between the
second and third versions of Bulova’s online description for the Moon Watch. The
second online description “strongly” evoked Scott’s success by stating: “After
Apollo 15’s mission commander made lunar history—while wearing his personal
Bulova chronograph—we’re making history again.” The third online description said
instead: “Bulova made space history on August 2, 1971—during the Apollo 15
mission, a moon pilot chronograph, customized for lunar conditions by Bulova
engineers, was worn on the moon.” This moved away from Scott and toward
Bulova’s own involvement in the historical event.  “Somewhere in that continuum there is a line.
While Bulova may legally showcase its legitimate connection to Apollo 15, the
Court cannot say as a matter of law that Defendants’ advertisements do not
cross the event horizon into the black hole of misappropriation.”
 

initial Bulova description

first revision

second revision

[I believe this test crosses the event horizon into inappropriate
vagueness.  Also, since California common
law protects identity, why doesn’t “was worn on the moon,” along with being
awkward and terrible phrasing, still evoke the astronauts’ identities?  Is it just that it doesn’t hint at who did
the wearing?  Given the other information
available—and wait for the Wikipedia bit—why wouldn’t that equally identify
Scott, especially given the various reviews of the watch (below)?]
But no: “Scott the astronaut, as distinguished from the
Apollo 15 mission or space exploration more generally, bears too tenuous a
connection to the non-speech commercial Moon Watch for the public interest
exception to shield Defendants from liability on summary judgment.”
Defendants argued that the marketing booklets included with
the watch’s packaging, the online watch descriptions, and the 79-second
advertising video contained significant transformative elements, making them
exempt from liability. They also argued Scott wasn’t “readily identifiable” in
the photograph of him on the moon.  The
court found that these weren’t sufficient grounds for summary judgment because
Scott identified other allegedly infringing materials.  And the court didn’t assess whether summary judgment
ought to be granted as to those uses,
which would seem to be the next logical question; the court said that the
result would be the same no matter what, but the result on what goes to the
jury would be very, very different, so this seems to me to be very different.
As for the other uses, Scott provided evidence that defendants
used his name and identity in interviews, press releases, internal
communications such as training materials, public Wikipedia page edits [are
these commercial speech now?], and a certificate of authenticity issued along with
the watch.
Likewise, the Lanham Act false endorsement claims involved disputed
material facts.  Scott’s most compelling
evidence was that “at least some consumers knew of Scott and his role in Apollo
15, were excited to buy the watch because of its connection to Scott, and may
actually have believed Scott endorsed the product.”  That last bit, by the way, is pure
extrapolation.

consumer reviews mentioning Scott

One consumer review on Bulova’s website reads, “[I] found out
[t]hat other than the NASA Swiss watch, one other watch had been worn on the
[m]oon by [t]he Commander of Apollo 15 ‘Dave Scott’ on EVA 2. The watch in
question was the Bulova 96B251 Moon Watch.” Similarly, a Facebook user referred
to the Moon Watch as the “Dave Scott Re-Edition.” “[I]t is entirely reasonable
to infer that Defendants’ reference to the Moon Watch, Apollo 15, and Scott in
the same breath could confuse consumers about Scott’s role in the Moon Watch’s
marketing,” especially since they used his exact name, title, and likeness. Also,
Bulova may have actively sought Scott out to serve as a “brand ambassador,”
suggesting intent.
Nominantive fair use was factually disputed for one really
bad reason and one unfortunate, but case-law-consistent, reason.  Bad reason: New Kids said that the test applies only “where the defendant uses
a trademark to describe the plaintiff’s product, rather than its own,” but defendants
used Scott’s identity to describe their own product, not Scott’s. That’s not an
accurate description of the New Kids
rule, in which the defendant’s product was a
poll about the New Kids
: talking about their own product meant talking about
the plaintiffs.  So too here.  The use is purely referential: this is the
watch that Dave Scott wore.  The use of
Scott is thus in reference to Scott himself, rather than trying to create a
different Scott mark (compare the analysis in the Grand Theft Auto/Play Pen case, where the court found no reference
to the plaintiff Play Pen).
Unfortunate reason, deepening the incoherence in case law:
Factor three of New Kids was disputed
because of evidence supporting a likelihood of confusion finding. “Scott offers
evidence that consumers may have believed Scott endorsed or sponsored the Moon
Watch, referring to it as the ‘Dave Scott Re-Edition’ and retelling in
favorable online reviews the story of Scott taking his personal Bulova
chronograph to the moon. Whether Defendants’ advertisements suggests sponsorship
or endorsement by Scott is a highly factual matter and not suitable for summary
judgment.”  But that’s not what factor
three started out as, even though other courts have done the same jiu-jitsu.  Factor three started out as whether the
defendant did anything else to suggest sponsorship, as in saying “official” or “authorized.”
 If likely confusion means that factor
three isn’t satisified, then New Kids
is neither a replacement for the ordinary confusion test (the formal 9th
Circuit characterization) nor a defense (because, as with KP Permanent, a defense that only works when there’s no confusion
isn’t actually a defense).
Also, Scott’s false advertising claim involved disputed
material facts.  Scott argued that the
characterization of the Moon Watch as a “replica” was false because the
internal components of the Moon Watch differ from the original chronograph and thus
the watch wasn’t a “100%” replica according to Bulova’s own witness. Scott testified
that he had been injured by being associated with a watch that he would not
endorse, and submitted an expert declaration that Scott has lost potential
income from future endorsement deals.  [The problem here isn’t injury, but injury causation: the lost income from future
endorsement deals, if any, isn’t plausibly connected to the falsity of any “replica”
related claims.]
However, Scott’s evidence of emotional distress was merely
his declaration stating, “I have suffered emotionally because people may now
believe I have abandoned my private life in favor of commercially promoting
products which is not how I wish to be perceived by the public,” and, “I feel
humiliated, embarrassed, and mentally distressed because of the new public
persona Bulova and Kay’s have forced upon me; an Apollo astronaut that endorses
products, let alone a cheap and deceptive product.” This wasn’t enough because “it
describes at worst discomfort with a social image Scott fears he may have,” not
distress that no reasonable person can be expected to endure. There was also no
evidence of intentional or reckless disregard by the defendants.

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