Today in likely unlicensed goods

These Joker fireworks:

And just because the typo is awesome–not a portmanteau word you see that often, or usually want to have go together:

“open cap to explose the fuse”

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NFL is advising ICE to seize obvious parodies, my FOIA suit reveals

When last I reported on this, the judge had ordered ICE to unredact materials showing company advice to ICE to seize parody merchandise, since such merchandise wasn’t counterfeit and there could be no legitimate law enforcement interest in keeping this advice from the public.  Indeed, ICE’s subsequent production showed that, like the NHL, the NFL has instructed ICE that obvious parodies/nonconfusing uses are counterfeit:

From NFL manual: Dallas Sucks shirt is counterfeit because “NFL licensed merchandise will never favor one Club over another or make derogatory use of another Club’s marks”

Another supposedly counterfeit shirt showing Minnesota player urinating on Green Bay Packers logo inside outline of Wisconsin

So, what do we know?  (1) Despite ICE’s initial claims to me via its spokesperson and a lawyer, ICE relies only on industry guides to identify counterfeits, not on any independent sources.  (2) Those industry guides identify what they don’t like, not what is within the scope of counterfeit goods.  (3) Most of what ICE seizes is truly counterfeit, but when it seizes parody merchandise, it implicates First Amendment interests in free speech.

What next?  (1) ICE should improve its guidance to agents, though I’m not sure how that is best to be accomplished.  (2) Industry guides should limit themselves to true counterfeits.  I will note that thus far it doesn’t seem that clothing brands, which also provided guides to ICE, overreached in the same way, so it can be done.  Calling the NFL/NHL!

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NFL is advising ICE to seize obvious parodies, my FOIA suit reveals

When last I reported on this, the judge had ordered ICE to unredact materials showing company advice to ICE to seize parody merchandise, since such merchandise wasn’t counterfeit and there could be no legitimate law enforcement interest in keeping this advice from the public.  Indeed, ICE’s subsequent production showed that, like the NHL, the NFL has instructed ICE that obvious parodies/nonconfusing uses are counterfeit:

From NFL manual: Dallas Sucks shirt is counterfeit because “NFL licensed merchandise will never favor one Club over another or make derogatory use of another Club’s marks”

Another supposedly counterfeit shirt showing Minnesota player urinating on Green Bay Packers logo inside outline of Wisconsin

So, what do we know?  (1) Despite ICE’s initial claims to me via its spokesperson and a lawyer, ICE relies only on industry guides to identify counterfeits, not on any independent sources.  (2) Those industry guides identify what they don’t like, not what is within the scope of counterfeit goods.  (3) Most of what ICE seizes is truly counterfeit, but when it seizes parody merchandise, it implicates First Amendment interests in free speech.

What next?  (1) ICE should improve its guidance to agents, though I’m not sure how that is best to be accomplished.  (2) Industry guides should limit themselves to true counterfeits.  I will note that thus far it doesn’t seem that clothing brands, which also provided guides to ICE, overreached in the same way, so it can be done.  Calling the NFL/NHL!

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a few misrepresentations aren’t commercial advertising or promotion

Solmetex, LLC v. Dental
Recycling, Inc., No. 17-cv-860, 2017 WL 2840282 (S.D.N.Y. Jun. 26, 2017)
The parties compete
in the market for devices for removing particulate from dental office
wastewater. (Did I mention how much I love learning about market niches I never
even considered? This job is the best job.) The court here dismisses defendant
DR’s amended counterclaims against Solmetex. 
In 2009, DR entered into an exclusive marketing contract and licensing
agreement with the Michigan Dental Association and its subsidiary; MDA agreed
to promote DR’s product to its members. Solmetex, upon learning of a 2017
promotion, allegedly made two kinds of misrepresentations about DR’s product to
MDA and another third party.  Solmetex
allegedly told representatives from MDA that DR’s product hadn’t been tested by
a relevant organization, wasn’t compliant with safety standards, and couldn’t
replace Solmetex’s product, and repeated these statements in a C&D to MDA.  DR alleged that these statements were false,
but MDA nonetheless terminated its marketing and licensing agreements with DR
as a result.  Solmetex also allegedly contacted
an unknown representative of the dental distributor Henry Schein and stated
that DR’s devices “were not approved by the EPA …, and infringed a patent.”
In reality, the relevant EPA rule had been put “on hold” by the Trump
administration, and Solmetex had no patents on its devices, but DR lost at
least one sale as a result.
Solmetex sued DR for
allegedly unlawfully marketing its device as equivalent to Solmetex’s product, which
among other things produced counterclaims and then amended counterclaims.  The court found that DR didn’t sufficiently
allege “commercial advertising or promotion” for its Lanham Act claim—it didn’t
plausibly allege that Solmetex’s isolated misrepresentations were disseminated
to the wider purchasing public. Though DR alleged that Solmetex requested that
MDA disseminate the alleged misrepresentations to its members, it didn’t allege
that this actually happened.  So too with
similar allegations about Schein. 
Although DR could plead based on information and belief, “such
allegations must be accompanied by a statement of the facts upon which the
belief is founded.” DR’s sole factual support for alleging that the statements
were widely disseminated is that a single representative from Schein told a
single member of the purchasing public that DR’s product was not EPA-approved
and had infringed upon a patent. Even assuming that Solmetex was plausibly the
source of Schein’s misrepresentation, this allegation didn’t support the
inference that Solmetex conducted “a wide-reaching false advertising campaign
disseminated to the wider purchasing public,” as required.
The common law
unfair competition counterclaim also failed. 
In New York, that’s misappropriation. 
Product disparagement generally involves no misappropriation and
therefore must be plead as a claim for trade libel, which it was not here.  Alleged violations of Delaware and
Massachusetts consumer protection statutes also failed. Delaware’s Deceptive
Trade Practices Act required a “pattern [ ] of deceptive conduct,” not alleged
here; two instances of deceptive conduct weren’t enough.  Massachusetts Gen. Laws c. 93A requires that
the conduct “(1) fall within at least the penumbra of some common-law,
statutory, or other established concept of unfairness, (2) it must be unethical
or unscrupulous, and (3) it must cause substantial injury to a consumer or
another businessman.” But DR didn’t get past the first element because it hadn’t
successfully alleged another wrong.
Tortious interference:
DR alleged that Solmetex’s false representations caused MDA to terminate its
marketing and licensing agreements with DR, but didn’t allege that MDA breached
a contract by doing so. DR also failed to plead that Solmetex acted solely out of malice, or used dishonest,
unfair, or improper means, as required for a tortious interference claim. While
misrepresentations can constitute dishonest, unfair, or improper means, they
must rise to the level of an independent tort to do so.

Trade libel/slander:
disparaging DR’s product allowed only a claim for trade libel, not
slander.  The trade libel claim failed on
the merits.  Trade libel requires both
malice and special damages.  Special
damages requires the victim to name the individuals “who ceased to be
customers, or who refused to purchase,” and itemize “the exact damages.” The
counterclaims itemized damages only with regard to one lost sale as a result of
misrepresentations by Schein. Assuming that Solmetex was the source of these
false statements, DR didn’t plead allegations that the unnamed Solmetex
representative knew the statements were false, entertained serious doubts as to
the statements’ truth, or spoke solely out of spite or ill will, as required
for malice. DR admitted that the representation that its device was not
EPA-approved was true (albeit misleading), and didn’t allege that Solmetex’s
employees were generally familiar with the company’s patents (or lack thereof).
(An interesting variation on corporate knowledge or the lack thereof, since a
corporation can only act through its agents; if the right hand doesn’t know
what the left hand has patented, then apparently there can’t be malice.)

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FilmOn’s chutzpah doesn’t pay off; labeling it a site of (c) infringement is protected by anti-SLAPP law

FilmOn.com v.
DoubleVerify, Inc., 2017 WL 2807911, No. B264074 (Cal. Ct. App. Jun. 29, 2017)
FilmOn, an
Internet-based entertainment media provider, sued DoubleVerify, a provider of
authentication services to online advertisers, for trade libel and related
claims for falsely classifying FilmOn’s websites under the categories
“Copyright Infringement-File Sharing” and “Adult Content” in confidential
reports to certain clients that subsequently cancelled advertising agreements
with FilmOn. The court of appeals affirmed the grant of DoubleVerify’s
anti-SLAPP motion.  DoubleVerify was
engaged in conduct in furtherance of its constitutional right of free speech in
connection with an issue of public interest, even though its information was
provided confidentially and not disseminated.
DoubleVerify argued that
its reports concerned matters of public interest because the prevalence of
adult content and copyright infringement online had received attention from
both the public and government regulatory agencies. DoubleVerify submitted,
among other things, press reports concerning numerous lawsuits filed by media
production companies against FilmOn, as well as complaints filed and
injunctions entered in a number of federal district courts against FilmOn for
copyright infringement.
The trial court
analogized DoubleVerify’s reports to more public media advisory efforts,
observing it was “not any different, really, than the Motion Picture
Association putting ratings on movies.”  Because of the “massive amount of attention”
paid to FilmOn’s relationship to copyright infringement, DoubleVerify’s reports
clearly concerned a matter of interest to the public. On the merits, the trial court
found FilmOn failed to establish a probability of success because the
undisputed evidence showed DoubleVerify’s statements were essentially true and
DoubleVerify did not make the statements with the intention to harm FilmOn’s
business.
On appeal, FilmOn
argued the statements at issue didn’t concern “a public issue” or “an issue of
public interest,” because (1) the reports contained only “[b]asic
classification and certification decisions” with “little to no analysis or
opinion”; and (2) the reports were made “entirely in private, to individual
companies that subscribe to [DoubleVerify’s] services.”  The anti-SLAPP statute doesn’t define the key
terms, but it should be construed broadly to protect free speech.  Thus, an issue of public interest is any
issue in which the public is interested, though mere curiosity isn’t
enough.  Moreover, the breadth of the
statute means that it covers even private communications about a public issue.
As for the claim
“[b]asic classification and certification decisions that contain little to no
analysis or opinion are not constitutionally protected activity within the ambit
of the anti-SLAPP statute,” the court of appeals examined All One God Faith,
Inc. v. Organic & Sustainable Industry Standards, Inc. (2010) 183
Cal.App.4th 1186 (OASIS).  In that case, a
commercial trade association sought to develop an “organic” certification for
use by its members with their personal care products. A nonmember competitor
sued, arguing the certification was contrary to federal standards for the term
“organic,” and thus using an “ ‘OASIS Organic’ ” seal would be false advertising.
The court of appeals affirmed the denial of an anti-SLAPP motion, reasoning
that the association wasn’t being sued for its opinion about what made a
personal care product “organic,” but for authorizing its members to use the
seal on their products in the market. While the former might be a matter of
public concern, “certification of commercial products—the activities that [the
plaintiff] seeks to enjoin”—didn’t further such speech, because the protected
conduct, articulating a standard, would be complete before any authorization
occurred.  Thus, the act of placing a
seal on a member product communicated nothing about the proper standards for
labeling a personal care product organic. 
However, FilmOn’s business tort and trade libel claims were based
entirely upon the message communicated by DoubleVerify’s “tags.” And
advertisers only abandoned FilmOn based on the tags because they believed that
the public would be interested in whether adult content or copyright infringing
material appears on a website. Thus, the claims were based on conduct in
furtherance of speech.
Also, the conduct
concerned issues of interest to the public. DoubleVerify showed that the
presence of adult content on the Internet generally, as well as copyright
infringing content on FilmOn’s websites specifically, had been the subject of
numerous press reports, regulatory actions, and federal lawsuits. The public
debate over legislation to curb children’s exposure to adult and sexually
explicit media content also showed that DoubleVerify’s reports identifying such
content on FilmOn’s websites concerned an issue of public interest.  Common sense also supported this conclusion.
Nor did the private
nature of the communications matter. 
It’s just not true that to qualify as speech in connection with an issue
of public interest, “the statement must itself contribute to the public
debate.”

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9th Circuit upholds SF ordinance targeting false advertising by pregnancy centers

First Resort, Inc.
v. Herrera, 2017 WL 2766094, — F.3d –, No. 15-15434 (9th Cir. Jun. 27, 2017)
First Resort, a
nonprofit providing free pregnancy-related services, challenged San Francisco’s
Pregnancy Information Disclosure and Protection Ordinance, which targeted false
or misleading advertising by limited services pregnancy centers (LSPCs). The
court of appeals affirmed the district court’s ruling that the Ordinance was
constitutional and not preempted by state law.
First Resort’s
target clients are “women who are unsure how to proceed with unplanned
pregnancies, including women considering abortion.” It bought keywords such as
“abortion” and “emergency contraception”; its advertising competes with abortion
providers for viewers’ attention. 
Online, it advertised itself “as an unbiased and neutral organization
that provided ‘abortion information, resources, and compassionate support for
women’ with ‘unintended pregnancies’ who are ‘considering abortion,’” promised
to “equip [women] with the resources [they] need to make a well-informed
decision about [their] options,” and offered information about abortion
procedures and costs. “Notably, the website and advertising materials did not
mention First Resort’s anti-abortion stance or that it did not provide
referrals for abortions.”
Further background:
false and misleading advertising by pregnancy clinics is a well-documented
problem.  Some such clinics “frequently
fail to provide medically accurate information” and “the vast majority of
pregnancy centers” contacted during a federal investigation misrepresented the
medical consequences of abortion.  San
Francisco’s City Attorney sent First Resort a letter in 201 expressing his
“serious concerns” about First Resort’s misleading advertisements and asking
First Resort to “correct” its advertising “to clarify that the clinic does not
offer or make referrals for abortion services.”
The city’s ordinance
defined a “[p]regnancy services center” as “a facility, licenced or otherwise
… the primary purpose of which is to provide services to women who are or may
be pregnant, that either (1) offers obstetric ultrasounds, obstetric sonograms
or prenatal care to pregnant women, or (2) has the appearance of a medical
facility.” A limited services pregnancy center (LSPC) is a pregnancy services
center that doesn’t directly provide or provide referrals to clients for abortions
or emergency contraception.”
Under the ordinance,
(a) It is unlawful for any [LSPC], with intent directly or indirectly
to perform pregnancy-related services (professional or otherwise), to make or
disseminate or cause to be made or disseminated before the public …, in any
newspaper or other publication, or any advertising device or in any other
manner or means whatever, … any statement, concerning those services,
professional or otherwise, or concerning any circumstance or matter of fact
connected with the proposed performance or disposition thereof, which is untrue
or misleading, whether by statement or omission, that the [LSPC] knows or which
by the exercise of reasonable care should know to be untrue or misleading.
(b) It is unlawful for any [LSPC], with intent directly or indirectly
to perform pregnancy-related services (professional or otherwise), to make or
disseminate or cause to be so made or disseminated any such statement
identified in subsection (a) as part of a plan or scheme with the intent not to
perform the services expressly or impliedly offered, as advertised.
Before filing an
action, the City Attorney must provide the LSPC with written notice of the
violation and indicate that the LSPC has ten days to cure the violation.  If it doesn’t, the City Attorney can sue,
with penalties from $50-500 per violation.
First, the court of
appeals found that the ordinance was facially valid; it had a constitutional
application and it was not unconstitutionally overbroad or vague, but regulated
only unprotected false or misleading commercial speech.  (I might have gone with “apparent
professional speech” to bolster the commercial speech analysis; whether or not
the centers provide medical services in the ordinary sense, they seem to be
offering medical advice—at least in the limited way targeted by the ordinance.  The professional speech consideration is at
least implicit in the discussion of the services and marketplace at issue.)
First Resort argued
that the Ordinance regulated all advertising, not only false or misleading
advertising, and also that it regulated only noncommercial speech. First, the
Ordinance clearly limited itself to false or misleading speech.  As for commercial speech, “[w]here the facts
present a close question, ‘strong support’ that the speech should be
characterized as commercial speech is found where the speech is an
advertisement, the speech refers to a particular product, and the speaker has
an economic motivation.” These factors are not individually necessary,
however.  In American Academy of Pain
Management v. Joseph, 353 F.3d 1099 (9th Cir. 2004), the court of appeals held
that advertisements for paid medical services constituted commercial speech, as
to a California state law prohibiting doctors from advertising they were “board
certified” in certain circumstances.  The
advertising at issue related to a specific product, medical services, and the
advertiser had an economic motive: to solicit a patient base.
Here, the
ordinance’s purpose was similarly to regulate advertising related to medical
services, and the LSPCs had  “at least
one similar economic motive for engaging in false advertising: to solicit a
patient base.”  However, in American Academy, the patients were
paying clients, and here they were not. The court of appeals declined to limit American Academy to “circumstances where
clients pay for services.”  In this case,
soliciting patients “directly relates to an LSPC’s ability to fundraise and, in
turn, to buy more advertisements.” The joint statement of undisputed facts
included: “First Resort’s employees are encouraged to share client stories because
they are useful in fundraising,” and “[a] majority of First Resort’s
fundraising communications reference the benefit of its services to clients and
often include client stories.” Furthermore, successful advertising directly
affects First Resort’s employees’ compensation, as “[m]embers of First Resort’s
senior management team are eligible to receive bonuses based on criteria which
may include … the number of new clients.” Thus, LSPCs had an economic
motivation for advertising their services.
Moreover, an
economic motive for speech is not absolutely required to make the speech
commercial. The court of appeals pointed to Fargo Women’s Health Org., Inc. v.
Larson, 381 N.W.2d 176 (N.D. 1986), which upheld a preliminary injunction
preventing a “pro-life” pregnancy clinic from engaging in “false and deceptive
advertising and related activity [that] misleads persons into believing that
abortions are conducted at the clinic with the intent of deceptively luring
those persons to the clinic to unwittingly receive anti-abortion propaganda.” Even
though clients didn’t pay for services, the court explained that, “[m]ore
importantly, the Help Clinic’s advertisements are placed in a commercial
context and are directed at the providing of services rather than toward an
exchange of ideas.”  
So too here: the
ordinance is limited to “the pregnancy-related services an LSPC offers in a marketplace
for those services.” Indeed, the record indicated that First Resort viewed
itself as “advertising and participating in a competitive marketplace for
commercially valuable services.” The undisputed facts included First Resort’s
admission that it “views its online advertising as competing with that of
abortion providers for the attention of online viewers,” and that “[t]he
medical services offered by First Resort, such as pregnancy testing,
ultrasounds, and nursing consultations have monetary value.”
Nor was the
Ordinance void for vagueness.  (If it had
been, how could general prohibitions on false or misleading ads have
survived?)  The Ordinance specified that
its purpose was to prevent false or misleading ads about the nature of the
counseling and services provided by LSPCs. A person of ordinary intelligence
could understand what’s prohibited.
For basically the
same reasons, the Ordinance was valid as applied to First Resort.  First Resort’s regulated speech wasn’t
inextricably intertwined with its fully protected speech. First Resort’s
commercial speech about the limited medical services it provides can easily be separated
from its fully protected speech, that containing truthful information about
pregnancy, on its website.  As the City
Attorney’s letter explained, the clinic’s website included “detailed
information about abortion procedures offered at outpatient medical clinics”
and “implie[d] on its ‘Abortion Procedures’ page that First Resort perform[ed]
pregnancy tests and ultrasounds as a prelude to offering abortion as an
outpatient procedure, or referring clients to a provider who performs
abortions.” The Ordinance regulated only misleading aspects of the website,
which could easily be separated from other portions of the website, such as:
“If you have missed at least one period, you may be pregnant …. The only sure
way to know is by having a pregnancy test or pelvic exam.”
Nor did the
Ordinance discriminate based on viewpoint. Whether the Ordinance applies
depends on the services offered, not on the particular views espoused or held
by a clinic. Even if an LSPC chooses not to offer abortions or abortion
referrals for reasons that have nothing to do with their views on abortion,
such as financial or logistical reasons, it’s covered.  Further, the Ordinance regulates LSPCs “because
they engage in false or misleading speech, irrespective of their viewpoints.”  Applying only to the service providers that
presented this “grave threat to women’s health” wasn’t viewpoint-based and
didn’t restrict them from expressing their views.  The motivation
for LSPCs’ false or misleading advertising might be anti-abortion views, but
the Ordinance didn’t target the motivation, only the threat to women’s
health.  Similarly, there was no equal
protection problem based on the Ordinance’s use of a classification based on
the speaker’s identity; rational basis review applied and was satisfied.
Separately, the
Ordinance wasn’t preempted by California’s FAL (a matter that one of the
judges, concurring, would have certified to the California Supreme Court).  “[A]bsent a clear indication of preemptive
intent from the Legislature,” California courts presume that a local law in an
area of traditional local concern “is not preempted by state statute.” However,
preemption applies “if the local law ‘duplicates, contradicts, or enters an
area fully occupied by general law, either expressly or by legislative
implication.’ ” “Local legislation is ‘duplicative’ of general law when it is
coextensive therewith.”  But California
courts have mostly confined duplication preemption to penal ordinances, because
when local and state offenses are duplicative, “a conviction under the [local]
ordinance will operate to bar prosecution under state law for the same
offense.”
The Ordinance here
was civil and created no double-jeopardy bar to a state criminal prosecution for
the same false advertising, and First Resort failed to show that the Ordinance
would interfere with the enforcement of state law.  At least, the lack of a penal component
weighed against finding preemption. 
Also, the laws didn’t bar “precisely the same acts.” The Ordinance,
which only applies to LSPCs and to statements about pregnancy-related services,
was narrower in scope than the FAL in both covered parties and topics.  But First Resort didn’t show that the FAL
covered all acts barred by the
Ordinance—the Ordinance barred untrue or misleading statements whether through
affirmative statements or by omission, while the FAL’s text didn’t mention
omissions.  The Ordinance also regulated
services “expressly or impliedly offered,” while the FAL didn’t mention implied
offers. In addition, the Ordinance barred LSPCs from makng untrue or misleading
statements about pregnancy-related services with the “intent not to perform”
those services “as advertised.” By contrast, the FAL barred untrue or
misleading statements about property or services with “the intent not to sell” them
as advertised. Thus, the Ordinance covered false advertising concerning the
performance of services, regardless of whether those services were  offered for sale.  The enforcement schemes were also entirely
different, with the Ordinance lacking a criminal component that the FAL has.
Judge Tashima’s
concurrence pointed out that many of the things the majority opinion said about
the FAL weren’t really true—for example, the FAL covers omissions where affirmative
statements become misleading because of the omission, which is pretty obviously
the situation targeted by the Ordinance.

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Reading list: unregistered marks in the EU

Verena von Bomhard & Artur Geier, Unregistered Trademarks in EU Trademark Law, Trademark Reporter, May-June, 2017 Vol. 107 No. 3

Abstract: The European Union (“EU”) trademark system is based on registration. Nevertheless, the laws of the EU Member States also protect unregistered rights, and these can be held against the use and registration of later EU trademarks. The article provides an introduction to unregistered trademarks in the EU and their enforcement in proceedings before the EU Intellectual Property Office. 

Excerpt: “[T]he law relating to unregistered trademarks is vastly different from one Member State to another. Some Member States do not recognize unregistered marks at all (beyond Article 6bis Paris Convention); others require varying degrees of market recognition or goodwill to protect trademarks based on use, while Denmark alone within the EU provides protection based on simple use.”

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