Needless markup: outlet stores’ pricing not deceptive

Posted on April 27, 2015 by rtushnet
Rubenstein v. Neiman Marcus Group LLC, 2015 WL 1841254, No.
CV 14–07155 (C.D. Cal. Mar. 2, 2015)
 
Rubenstein bought two items of clothing from the Neiman
Marcus Last Call Store (a discount store, as opposed to the usual upscale
Neiman Marcus store) that was purportedly sold for markedly lower than the
“Compared to” price that a consumer would pay at traditional Neiman Marcus
retail stores.  Outlet stores often sell discounted
clothes that are “after season” or clothing that had very little popularity and
did not sell, so consumers have allegedly become accustomed to seeing products
at outlet stores that once were sold at the traditional retail store.  Rubenstein alleged that the use of “Neiman
Marcus” in the name of the Last Call Stores caused her and other Last Call
Store shoppers to reasonably believe that the Last Call Stores are outlet
stores of traditional Neiman Marcus retail stores and that the Last Call Stores
sell “after season” and unsold products that were previously sold at
traditional Neiman Marcus retail stores.
 
Neiman Marcus labels its Last Call products with a tag that
shows a markedly lower price from the “Compared to” price, and Rubenstein
alleged that she and putative class members reasonably believed that this
“Compared to” price represented the price that the exact same product would be
sold at the traditional Neiman Marcus retail store. However, the Last Call
products were manufactured strictly for sale at the Last Call Stores, and
allegedly were of inferior grade and quality to the products sold at the
traditional Neiman Marcus stores. Because the products were never sold at
traditional Neiman Marcus stores, Rubenstein argued that they couldn’t be compared
to any price and that the insinuated discount (and the implied quality) was
false and misleading.
 
Members of Congress have complained to the FTC about this
practice: “it is a common practice at outlet stores to advertise a retail price
alongside the outlet store price-even on made-for-outlet merchandise that does
not sell at regular retail locations. Since the item was never sold in the
regular retail store or at the retail price, the retail price is impossible to
substantiate. We believe this practice may be a violation of the FTC’s Guides
Against Deceptive Pricing (16 CFR 233).”
In particular, “[u]nlike the use of the words ‘Compared to’
in the context of a regular retail store, where a price comparison might
suggest the price for similar product sold at a competing store, when used in
connection with Defendant’s Last Call outlet store, the words ‘Compared to’ can
reasonably be interpreted by reasonable consumers to be a price comparison with
the price of the exact same product when it was previously for sale at
Defendant’s regular retail store.” Even the name “Last Call” reinforces the
implication that the stores sell products previously available at Neiman Marcus
stores, and in that context, “Compared to” allegedly conveyed the message that
these products were formerly sold in regular Neiman Marcus stores for that
price, not just the message that goods of a like grade and quality were sold
somewhere else for that price.

That all seems plausible to me to state a claim for the usual California
claims, but not to the court.  The court
didn’t find the “Compared to” tag and “Last Call” name sufficient. It turned to
the FTC’s Guides Against Deceptive Pricing for help. The Guides distinguish
between “former price comparisons,” “retail price comparisons,” and “comparable
value comparisons.”
 
Former price comparisons indicate
that the retailer formerly offered the good at the listed price, and are
indicated by language such as “Formerly sold at $___” or “Were $10, Now Only
$7.50!” Other language to indicate a former price includes “Regularly,”
“Usually,” “Formerly,” or “Reduced to.” Retail price comparisons indicate that
the same article is sold by other merchants at a particular price, and are
indicated by language such as “Price Elsewhere $10, Our Price $7.50” or “Retail
Value $15.00, My Price $7.50.” Comparable value comparisons merely indicate
that merchandise of “like grade and quality” are sold by the advertiser or
others in the area at the listed price, and can be indicated by language such
as “Comparable Value $15.00.”
 
Rubenstein’s argument was contrary to the FTC’s
guidance.  There was no evidence that
Neiman Marcus affirmatively claimed that its Last Call stores sold merchandise
previously for sale at the flagship stores. “‘Last Call’ could just as easily
refer to the last call for merchandise from a prior season or the last call for
a third-party manufacturer’s clearance items.” (That seems tendentious—it’s
not just as easy to make the jump from Neiman Marcus to another store. Neiman
Marcus’s value proposition is its exclusivity, not that it dines on others’
scraps.) The “Compared to” tags “would most likely be interpreted by a
reasonable consumer as a comparable value comparison.”  Thus the complaint didn’t sufficiently allege
misleading advertising techniques or improperly advertising of a former price.

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Needless markup: outlet stores’ pricing not deceptive

Posted on April 27, 2015 by rtushnet
Rubenstein v. Neiman Marcus Group LLC, 2015 WL 1841254, No. CV 14–07155 (C.D. Cal. Mar. 2, 2015)
 
Rubenstein bought two items of clothing from the Neiman Marcus Last Call Store (a discount store, as opposed to the usual upscale Neiman Marcus store) that was purportedly sold for markedly lower than the “Compared to” price that a consumer would pay at traditional Neiman Marcus retail stores.  Outlet stores often sell discounted clothes that are “after season” or clothing that had very little popularity and did not sell, so consumers have allegedly become accustomed to seeing products at outlet stores that once were sold at the traditional retail store.  Rubenstein alleged that the use of “Neiman Marcus” in the name of the Last Call Stores caused her and other Last Call Store shoppers to reasonably believe that the Last Call Stores are outlet stores of traditional Neiman Marcus retail stores and that the Last Call Stores sell “after season” and unsold products that were previously sold at traditional Neiman Marcus retail stores.
 
Neiman Marcus labels its Last Call products with a tag that shows a markedly lower price from the “Compared to” price, and Rubenstein alleged that she and putative class members reasonably believed that this “Compared to” price represented the price that the exact same product would be sold at the traditional Neiman Marcus retail store. However, the Last Call products were manufactured strictly for sale at the Last Call Stores, and allegedly were of inferior grade and quality to the products sold at the traditional Neiman Marcus stores. Because the products were never sold at traditional Neiman Marcus stores, Rubenstein argued that they couldn’t be compared to any price and that the insinuated discount (and the implied quality) was false and misleading.
 
Members of Congress have complained to the FTC about this practice: “it is a common practice at outlet stores to advertise a retail price alongside the outlet store price-even on made-for-outlet merchandise that does not sell at regular retail locations. Since the item was never sold in the regular retail store or at the retail price, the retail price is impossible to substantiate. We believe this practice may be a violation of the FTC’s Guides Against Deceptive Pricing (16 CFR 233).”
In particular, “[u]nlike the use of the words ‘Compared to’ in the context of a regular retail store, where a price comparison might suggest the price for similar product sold at a competing store, when used in connection with Defendant’s Last Call outlet store, the words ‘Compared to’ can reasonably be interpreted by reasonable consumers to be a price comparison with the price of the exact same product when it was previously for sale at Defendant’s regular retail store.” Even the name “Last Call” reinforces the implication that the stores sell products previously available at Neiman Marcus stores, and in that context, “Compared to” allegedly conveyed the message that these products were formerly sold in regular Neiman Marcus stores for that price, not just the message that goods of a like grade and quality were sold somewhere else for that price.
That all seems plausible to me to state a claim for the usual California claims, but not to the court.  The court didn’t find the “Compared to” tag and “Last Call” name sufficient. It turned to the FTC’s Guides Against Deceptive Pricing for help. The Guides distinguish between “former price comparisons,” “retail price comparisons,” and “comparable value comparisons.”
 
Former price comparisons indicate that the retailer formerly offered the good at the listed price, and are indicated by language such as “Formerly sold at $___” or “Were $10, Now Only $7.50!” Other language to indicate a former price includes “Regularly,” “Usually,” “Formerly,” or “Reduced to.” Retail price comparisons indicate that the same article is sold by other merchants at a particular price, and are indicated by language such as “Price Elsewhere $10, Our Price $7.50” or “Retail Value $15.00, My Price $7.50.” Comparable value comparisons merely indicate that merchandise of “like grade and quality” are sold by the advertiser or others in the area at the listed price, and can be indicated by language such as “Comparable Value $15.00.”
 
Rubenstein’s argument was contrary to the FTC’s guidance.  There was no evidence that Neiman Marcus affirmatively claimed that its Last Call stores sold merchandise previously for sale at the flagship stores. “‘Last Call’ could just as easily refer to the last call for merchandise from a prior season or the last call for a third-party manufacturer’s clearance items.” (That seems tendentious—it’s not just as easy to make the jump from Neiman Marcus to another store. Neiman Marcus’s value proposition is its exclusivity, not that it dines on others’ scraps.) The “Compared to” tags “would most likely be interpreted by a reasonable consumer as a comparable value comparison.”  Thus the complaint didn’t sufficiently allege misleading advertising techniques or improperly advertising of a former price.
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So, that happened: MPAA Creativity Conference

Posted on April 24, 2015 by rtushnet
The Motion Picture Association of America, in partnership
with Microsoft and ABC News
Creativity Conference
(File under: you invited me! 
Also, no surprise, the food was good and the perks nice—you could get
your photo made in a James Bond pose with the swirl around you, among other
things. Stormtroopers accompanied the MPAA intro: is that really the message you
want to send?)
 
Chris Dodd, MPAA: Film & tv industry = greatest
innovators of the country. 1.9 million jobs dependent on flim & TV
industry. More than 450 unique online services available for legally streaming
movies & TV, more than 100 in the US. 
MPAA created a website, wheretowatch.com, to find them. Tech &
content support and rely on one another (Microsoft).
 
Fred Humphries, Microsoft: Industry is sustaining America’s
global competitiveness. Microsoft invests more than $10 billion in R&D each
year. Devoted to empowering 300 million young people.  (Wonder about the young people they’re not
devoted to empowering …)  Need policies
and programs to enable us to do more—gov’t, entertainment, and tech sectors
discussing future of growth.
 
Tom Sebroski (sp?), ABC News: ¾ of consumers about to own
smart device.  We don’t want to be left
out.  Will we be surfing 500 channels or
telling our fridge to play Scandal?  ABC News now available on the Apple Watch and
X-Box. We are learning how to tell stories in 6 seconds; storytelling is the
heart of the endeavor. Instantly we’re all storytellers w/power of social media
w/ability to curate and form our own narratives with one click.  Charleston, SC footage as example.
 
Cathy McMorris Rodgers, House Republican Conference Chair
Interviewed by John Carl, White House correspondent for ABC
News
Rodgers: our office looks a lot like a startup, because we
want to encourage that culture.  (Oh, for
Evgeny Morozov commenting on this.) 
Carl: did fictional portrayals of Washington inspire you?
Rodgers: American history, biographies.  (I guess the answer is no.)
Carl: portrayals of Washington are so dark right now—Scandal, House of Cards.
Rodgers: that is a concern; people ask about it.  (Earlier she jokingly blamed House of Cards for Congress’s low
approval ratings.) Congress is based on relationships, getting to know each
other and finding common ground. People are hungry to get things done.  (Like the TPP, I guess?)
Carl: what’s necessary for creativity to prosper?
Rodgers: Americans taking the risk to fail.  Smart, creative people with ideas for
positive impact.  (Wow, this is more
anodyne than I thought it could be.) 
Sometimes the status quo stamps down any new approach on Capitol Hill.
Potential to improve federal gov’t delivery of services—Veterans
Administration.  A private company
knocked on my door and said it could help. 
App providing appointments for doctors that accept your insurance.  The VA gives lots of reasons it can’t do
that.  Need to embrace new tools.  (For a very small fee.)  Need to start embracing the ideas of these
companies w/in the gov’t. Education, encouraging blended learning.  Bringing tech into the classroom—a student
spends a portion of time one on one w/teacher, a portion in a small group, and
a portion on the computer, watching a video or getting curriculum from
different perspective & taking a test. 
Kids love it!
 
Carl: Trade and the TPP.
Rodgers: I’m optimistic it will pass. 
Carl: you are giving President authority to make the deal.
Rodgers: in the negotiations, this is different than past
years. Congress laid out a long list of criteria, and has the committees of
jurisdiction allowed to vote up or down if it meets our intent. That provides
more oversight.  I’m hopeful.  Good vote on Ways & Means.  Washington is the most trade-dependent state
in the country.  We want to make it here
and export it there.
 
Jim Williams, FAA manager. 
Unmanned aircraft. We figured out how to approve these aircraft, but
can’t grant exemption to everyone at once—has to be individual companies.  Movie companies were attractive model.  (Now we get a drone demo. I think this is also
the Star Wars music playing, which again makes me a tad nervous.  I don’t have a lightsaber to fend the drones
off.)
 
Aerial mob drone guy: drones allow continuous motion across
360 degrees, allowing new film angles, movement along path. Low-altitude aerial
cinematography: crane shots, etc. can be gotten and combined: we can fly
through a front window and out the back door of a building, which is the only
way to get that shot.  New creativity,
budget savings—a lot faster to set up. 
Not just a creative tool—used for many different jobs.  We’re very proud that we’re creating new
things with our hands.  Can be used to inspect
power lines, turbines, oil pipelines; security robots to monitor a facility;
labor resource.  (He’s talking about
creating new jobs but the description is of technologies that will allow
employers to shed jobs.  That’s not to
say these innovations are bad, but query what jobs they create.)  We feel very creative in that we’re
developing new businesses. 
 
Howard Lukk, Indie Filmmaker and Uber Geek: Most of the
stuff in Back to the Future 2 is
here, except for the flying cars.  (He
left out the other part of the quote: “The future
is already here. It’s just not very evenly distributed.”)
Sidhant Gupta, Researcher, Microsoft: What inspired him
growing up was Stargate: SG1.  (One of us!) What tech do they have, what’s
next?
Juju Chang, Co-anchor of ABC News Nightline: lifelong Star Trek fangirl.  Engineers are often inspired by creative
works.
Lukk: Engineering is a creative field.
Chang: then take the tech and infuse it into the creative
process.
Lukk: historically it took 10-15 years for technology to
become commercial (film, radio, TV).  But
the creative side doesn’t change in terms of storytelling: that’s still the
core.
Hollywood is wrestling with VR—changing the passive
experience of what the filmmaker wants us to see. VR = look around and see new
things, not just the actors.  Audience
can have control. How do we get the story across?
Gupta: in video games, you still have cut scenes with
director controlling. Still trying to figure out how to let the viewer run the
show.
Lukk: most of the time the audience isn’t interested in
selecting its own ending.  Game design
and filmmaking are likely to merge.
Gupta: in a game if you don’t do well you criticize
yourself; in a film you criticize the director.
Haptic technologies: trying to use bursts of air so that it
feels like you get feedback from the physical world, e.g. when you hit a curb
in a game. Trying to detect gestures without putting a camera everywhere.
Lukk: computational cinematography: use multiple cameras to
capture different parts of a scene, allowing sophisticated visual effects.  (That is very cool.)
Gupta: we are moving towards making medical devices to
diagnose cancer by sensing in the same way.
 
Daniel H. Marti, U.S. Intellectual Property Enforcement
Coordinator, Executive Office of the President: IP industries accounted for
over 60% of US exports.  Recorded music,
software, etc. over $156 billion dollars. That’s why it’s so important to
protect IP and open foreign markets to US creative content.  This year’s IP Day theme is “Get Up! Stand
Up!” for music, invoking Bob Marley’s song—an anthem for human rights. Tap into
this spirit/call to action to speak up for artistic communities the world over.
Respect right to make a living off artistic labor, and reject those who believe
that theft of creative output is acceptable.
 
Creativity = human expression, building communities. Sharing
brings communities together and helps create common identities.  (Well, it depends on what you pay, I
guess.)  We need to build a safe, secure,
and stable internet.  Fostering
multistakeholder processes in which all participants—government, private
sector, civil society—can marginalize antisocial/criminal activity. Stakeholder
responsibility promotes environment conducive to creativity. Promote innovation
in those in the business of connecting creators and consumers. Respecting IP
promotes tech for communicating creativity. Desire to tell stories to wider
audiences has long chain of innovation, creating new industries along the way—print,
film, radio, TV.  (Interesting how all of
those industries have an early and sometimes extended history of copying w/out
paying that enabled them to get off the ground. 
Sauce for the goose?)  (Also I am
a little creeped out that he just straight-up introduced a Microsoft ad for its
holotechnology, as if he worked for Microsoft and not for the US
government.  Truth in advertising?)
 
U.S. Representative Karen Bass (CA-37): “I represented Fox
when I was in the state legislature.”  Upside
of redistricting, I got Fox back.  (So
she is literally the representative from Fox?) 
Stories and characters once thought unmarketable have been catapulted to
fame: 12 Years a Slave.
 
Nancy Utley, President, Fox Searchlight Pictures: some
interesting stuff about getting films at film festivals—you could see why she
got into this business.  Also discussed
that her movies aren’t very effects-driven/tentpole, and screens are pretty big
at home, so they need to get people to go to theaters/not wait for Netflix.
Sometimes it’s a star, sometime it’s participating in a cultural conversation,
sometimes it’s just very different (Black
Swan), or awards; it’s easier for older people who don’t mind going out as
much.
 
Juju Chang, ABC Nightline (chair)
Lori McCreary, Executive Producer, “Madam Secretary,” and
President, Producers Guild of America
Barbara Hall, Creator & Executive Producer, “Madam
Secretary”
Evan Ryan, Assistant Secretary of State for Educational
& Cultural Affairs, U.S. Department of State: In Egypt, met with high
school students: one asked “do you see drag races every day?”—his impression of
US was determined by Fast and Furious
films—people who haven’t visited the US think of the US as being its films. No
way to overstate the impact of our media globally.  The
Interview of course; House of Cards
is popular among the Chinese leadership, who thinks it’s reality-based.  It would be great if film & TV portrayed
other countries/the people of other countries as more complex and human in
their aspirations.
U.S. Representative Rosa DeLauro (CT-3): don’t trivialize
the hard work of these jobs; women don’t get as many bites at the apple as men
do in these jobs. So don’t make them frivolous characters.
This discussion was mainly interesting because of how
ego-boosting it was for non-Hollywood types in DC—what did the shows get right
and wrong—and for Hollywood from DC’s perspective—how important and influential
they are. It’s the entertainment/political/industrial complex.
 
Nancy Pelosi, House Democratic Leader: Culture, creativity,
good jobs.  I had a depressing
realization during her conversation with Chris Dodd: Sarah Palin is probably
not even two standard deviations away from regular politicians on the word
salad scale.  Pelosi finished with: you
wouldn’t steal a sweater, so you shouldn’t steal movies because they are
property—it’s in the Constitution.

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So, that happened: MPAA Creativity Conference

Posted on April 24, 2015 by rtushnet
The Motion Picture Association of America, in partnership with Microsoft and ABC News
Creativity Conference
(File under: you invited me!  Also, no surprise, the food was good and the perks nice—you could get your photo made in a James Bond pose with the swirl around you, among other things. Stormtroopers accompanied the MPAA intro: is that really the message you want to send?)
 
Chris Dodd, MPAA: Film & tv industry = greatest innovators of the country. 1.9 million jobs dependent on flim & TV industry. More than 450 unique online services available for legally streaming movies & TV, more than 100 in the US.  MPAA created a website, wheretowatch.com, to find them. Tech & content support and rely on one another (Microsoft).
 
Fred Humphries, Microsoft: Industry is sustaining America’s global competitiveness. Microsoft invests more than $10 billion in R&D each year. Devoted to empowering 300 million young people.  (Wonder about the young people they’re not devoted to empowering …)  Need policies and programs to enable us to do more—gov’t, entertainment, and tech sectors discussing future of growth.
 
Tom Sebroski (sp?), ABC News: ¾ of consumers about to own smart device.  We don’t want to be left out.  Will we be surfing 500 channels or telling our fridge to play Scandal?  ABC News now available on the Apple Watch and X-Box. We are learning how to tell stories in 6 seconds; storytelling is the heart of the endeavor. Instantly we’re all storytellers w/power of social media w/ability to curate and form our own narratives with one click.  Charleston, SC footage as example.
 
Cathy McMorris Rodgers, House Republican Conference Chair
Interviewed by John Carl, White House correspondent for ABC News
Rodgers: our office looks a lot like a startup, because we want to encourage that culture.  (Oh, for Evgeny Morozov commenting on this.) 
Carl: did fictional portrayals of Washington inspire you?
Rodgers: American history, biographies.  (I guess the answer is no.)
Carl: portrayals of Washington are so dark right now—Scandal, House of Cards.
Rodgers: that is a concern; people ask about it.  (Earlier she jokingly blamed House of Cards for Congress’s low approval ratings.) Congress is based on relationships, getting to know each other and finding common ground. People are hungry to get things done.  (Like the TPP, I guess?)
Carl: what’s necessary for creativity to prosper?
Rodgers: Americans taking the risk to fail.  Smart, creative people with ideas for positive impact.  (Wow, this is more anodyne than I thought it could be.)  Sometimes the status quo stamps down any new approach on Capitol Hill. Potential to improve federal gov’t delivery of services—Veterans Administration.  A private company knocked on my door and said it could help.  App providing appointments for doctors that accept your insurance.  The VA gives lots of reasons it can’t do that.  Need to embrace new tools.  (For a very small fee.)  Need to start embracing the ideas of these companies w/in the gov’t. Education, encouraging blended learning.  Bringing tech into the classroom—a student spends a portion of time one on one w/teacher, a portion in a small group, and a portion on the computer, watching a video or getting curriculum from different perspective & taking a test.  Kids love it!
 
Carl: Trade and the TPP.
Rodgers: I’m optimistic it will pass. 
Carl: you are giving President authority to make the deal.
Rodgers: in the negotiations, this is different than past years. Congress laid out a long list of criteria, and has the committees of jurisdiction allowed to vote up or down if it meets our intent. That provides more oversight.  I’m hopeful.  Good vote on Ways & Means.  Washington is the most trade-dependent state in the country.  We want to make it here and export it there.
 
Jim Williams, FAA manager.  Unmanned aircraft. We figured out how to approve these aircraft, but can’t grant exemption to everyone at once—has to be individual companies.  Movie companies were attractive model.  (Now we get a drone demo. I think this is also the Star Wars music playing, which again makes me a tad nervous.  I don’t have a lightsaber to fend the drones off.)
 
Aerial mob drone guy: drones allow continuous motion across 360 degrees, allowing new film angles, movement along path. Low-altitude aerial cinematography: crane shots, etc. can be gotten and combined: we can fly through a front window and out the back door of a building, which is the only way to get that shot.  New creativity, budget savings—a lot faster to set up.  Not just a creative tool—used for many different jobs.  We’re very proud that we’re creating new things with our hands.  Can be used to inspect power lines, turbines, oil pipelines; security robots to monitor a facility; labor resource.  (He’s talking about creating new jobs but the description is of technologies that will allow employers to shed jobs.  That’s not to say these innovations are bad, but query what jobs they create.)  We feel very creative in that we’re developing new businesses. 
 
Howard Lukk, Indie Filmmaker and Uber Geek: Most of the stuff in Back to the Future 2 is here, except for the flying cars.  (He left out the other part of the quote: “The future is already here. It’s just not very evenly distributed.”)
Sidhant Gupta, Researcher, Microsoft: What inspired him growing up was Stargate: SG1.  (One of us!) What tech do they have, what’s next?
Juju Chang, Co-anchor of ABC News Nightline: lifelong Star Trek fangirl.  Engineers are often inspired by creative works.
Lukk: Engineering is a creative field.
Chang: then take the tech and infuse it into the creative process.
Lukk: historically it took 10-15 years for technology to become commercial (film, radio, TV).  But the creative side doesn’t change in terms of storytelling: that’s still the core.
Hollywood is wrestling with VR—changing the passive experience of what the filmmaker wants us to see. VR = look around and see new things, not just the actors.  Audience can have control. How do we get the story across?
Gupta: in video games, you still have cut scenes with director controlling. Still trying to figure out how to let the viewer run the show.
Lukk: most of the time the audience isn’t interested in selecting its own ending.  Game design and filmmaking are likely to merge.
Gupta: in a game if you don’t do well you criticize yourself; in a film you criticize the director.
Haptic technologies: trying to use bursts of air so that it feels like you get feedback from the physical world, e.g. when you hit a curb in a game. Trying to detect gestures without putting a camera everywhere.
Lukk: computational cinematography: use multiple cameras to capture different parts of a scene, allowing sophisticated visual effects.  (That is very cool.)
Gupta: we are moving towards making medical devices to diagnose cancer by sensing in the same way.
 
Daniel H. Marti, U.S. Intellectual Property Enforcement Coordinator, Executive Office of the President: IP industries accounted for over 60% of US exports.  Recorded music, software, etc. over $156 billion dollars. That’s why it’s so important to protect IP and open foreign markets to US creative content.  This year’s IP Day theme is “Get Up! Stand Up!” for music, invoking Bob Marley’s song—an anthem for human rights. Tap into this spirit/call to action to speak up for artistic communities the world over. Respect right to make a living off artistic labor, and reject those who believe that theft of creative output is acceptable.
 
Creativity = human expression, building communities. Sharing brings communities together and helps create common identities.  (Well, it depends on what you pay, I guess.)  We need to build a safe, secure, and stable internet.  Fostering multistakeholder processes in which all participants—government, private sector, civil society—can marginalize antisocial/criminal activity. Stakeholder responsibility promotes environment conducive to creativity. Promote innovation in those in the business of connecting creators and consumers. Respecting IP promotes tech for communicating creativity. Desire to tell stories to wider audiences has long chain of innovation, creating new industries along the way—print, film, radio, TV.  (Interesting how all of those industries have an early and sometimes extended history of copying w/out paying that enabled them to get off the ground.  Sauce for the goose?)  (Also I am a little creeped out that he just straight-up introduced a Microsoft ad for its holotechnology, as if he worked for Microsoft and not for the US government.  Truth in advertising?)
 
U.S. Representative Karen Bass (CA-37): “I represented Fox when I was in the state legislature.”  Upside of redistricting, I got Fox back.  (So she is literally the representative from Fox?)  Stories and characters once thought unmarketable have been catapulted to fame: 12 Years a Slave.
 
Nancy Utley, President, Fox Searchlight Pictures: some interesting stuff about getting films at film festivals—you could see why she got into this business.  Also discussed that her movies aren’t very effects-driven/tentpole, and screens are pretty big at home, so they need to get people to go to theaters/not wait for Netflix. Sometimes it’s a star, sometime it’s participating in a cultural conversation, sometimes it’s just very different (Black Swan), or awards; it’s easier for older people who don’t mind going out as much.
 
Juju Chang, ABC Nightline (chair)
Lori McCreary, Executive Producer, “Madam Secretary,” and President, Producers Guild of America
Barbara Hall, Creator & Executive Producer, “Madam Secretary”
Evan Ryan, Assistant Secretary of State for Educational & Cultural Affairs, U.S. Department of State: In Egypt, met with high school students: one asked “do you see drag races every day?”—his impression of US was determined by Fast and Furiousfilms—people who haven’t visited the US think of the US as being its films. No way to overstate the impact of our media globally.  The Interview of course; House of Cardsis popular among the Chinese leadership, who thinks it’s reality-based.  It would be great if film & TV portrayed other countries/the people of other countries as more complex and human in their aspirations.
U.S. Representative Rosa DeLauro (CT-3): don’t trivialize the hard work of these jobs; women don’t get as many bites at the apple as men do in these jobs. So don’t make them frivolous characters.
This discussion was mainly interesting because of how ego-boosting it was for non-Hollywood types in DC—what did the shows get right and wrong—and for Hollywood from DC’s perspective—how important and influential they are. It’s the entertainment/political/industrial complex.
 
Nancy Pelosi, House Democratic Leader: Culture, creativity, good jobs.  I had a depressing realization during her conversation with Chris Dodd: Sarah Palin is probably not even two standard deviations away from regular politicians on the word salad scale.  Pelosi finished with: you wouldn’t steal a sweater, so you shouldn’t steal movies because they are property—it’s in the Constitution.
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Deducting points for a 3-point landing in copyright claim

Posted on April 24, 2015 by rtushnet

Horizon Comics Prods., Inc. v. Marvel Entertainment, LLC, No. 15-cv-11684 (D. Mass. filed Apr. 23, 2015): Newly filed; the claim is that movie Iron Man’s armor infringes the copyright in another comic armored suit.  All I’ll say right now is that one part of the allegations is clearly silly: the complaint alleges that one movie poster is a copy of an image from plaintiffs’ cartoon:

Radix image and Iron Man 3 poster

Three Point Landing is such a trope that it has its own supercut, as well as its own entry on TVTropes.  (Warning: link goes to TVTropes.  I accept no responsibility for the time you’ll spend there.)  I would kind of love to put together the exhibits for the motion to dismiss, actually.

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Ad agency liability for false advertising without scienter

Posted on April 24, 2015 by rtushnet
Nestlé Purina Petcare Co. v. Blue Buffalo Co., No. 4:14 CV
859, 2015 WL 1782661 (E.D. Mo. Apr. 20, 2015)
 
Purina sued Blue Buffalo for false advertising of its dog
food as “grain free” and containing “no chicken by-product.” Purina issued
press releases about the suit and launched PetFoodHonesty.com, criticizing Blue
Buffalo for its alleged false advertising. Blue Buffalo denied the allegations
and alleged that the “independent testing” Purina relied upon for its claims
against Blue Buffalo was unreliable. 
Blue Buffalo countersued Purina for false advertising and defamation,
and added the ad agencies working with Purina.
 
PetFoodHonesty.com began with an “open letter” to pet owners
from Purina describing Blue Buffalo’s allegedly false advertising. Blue Buffalo
alleged that a number of statements about Blue Buffalo and the content of Blue
Buffalo’s dog food were false, e.g., “[T]esting conducted by an independent
laboratory revealed that several of Blue Buffalo’s top-selling ‘Life
Protection’ pet food products actually contain substantial amounts of poultry
by-product meal” and “Blue Buffalo is not being honest about the ingredients in
its pet food.” Blue Buffalo made similar allegations about Purina’s Facebook
and Twitter pages, with content developed by ad agency Blue State Digital.  Purina also allegedly promoted its Honesty
website through Google ads developed by Blue State Digital, e.g., “A dog food
company is lying about its ingredients. Learn the facts.”
 
Under Lexmark,
Lanham Act false advertising liability isn’t limited to direct competitors. And
those who work with competitors to produce false ads can also be liable.  There isn’t much caselaw on this, but what
there is has held that ad agencies can be liable under the Lanham Act as joint
tortfeasors for knowing participation. 
The ad agency defendants argued that they weren’t active participants in
preparing the ads and didn’t know or have reason to know of its falsity. 
 
Blue Buffalo pointed out that the Lanham Act doesn’t have a
scienter requirement, but the ad agency defendants argued that the law “silently”
imposes such a requirement as to ad agencies. But the main case supporting
that, Gillette v. Wilkinson Sword,
relied on the pre-1988 version of the Lanham Act, which did have a knowledge
requirement for false advertising claims. Thus, given the express removal of “knowing”
as an element of Lanham Act false advertising, knowledge was not required.
 
The ad agency defendants also argued that Blue Buffalo
failed to satisfy Rule 9(b). Blue Buffalo pled that defendant PRCG Haggerty
“designed and built” the Honesty website, and that Blue State Digital
“developed the content” of the ads on Purina’s Facebook & Twitter accounts and
“arranged for these links to PetFoodHonesty.com to appear when Google.com users
search for terms related to Blue Buffalo.”
 
There’s a split over whether 9(b) applies to Lanham Act
claims “grounded in fraud,” but only one bound the court here: In re
NationsMart Corp. Sec. Litig., 130 F.3d 309 (8th Cir.1997). The Eighth Circuit
held that Rule 9(b) does not apply to § 11 Securities Act claims for false
statements and misrepresentations because proof of fraud is “not a prerequisite
to establishing liability,” and it would be unjust to dismiss a case because
plaintiffs alleged more than was necessary to recover under the law.  So too here, because Lanham Act liability
doesn’t require fraud, even if Blue Buffalo did include fraud allegations.  (This has always eemed to me to be the right
approach.)
 
Blue Buffalo’s Lanham Act claim met the notice pleading
standards of Rule 8(a). Blue Buffalo attached and cited several examples of allegedly
false statements and advertisements from Purina’s Honesty website, Facebook
page, Twitter account, and Google search results. Blue Buffalo also alleged
that the ad agencies participated in the design and creation of those ads.  These allegations weren’t “particularly
robust,” but “it would be difficult for Blue Buffalo to plead many additional
facts at this time without the benefit of discovery.” And even if 9(b) did
apply, Blue Buffalo alleged sufficient details to put the ad agency defendants
on notice, quoting language from specific ads, and noting the dates on which
those ads ran.
 
PRCG/Haggerty argued that it was immune under CDA § 230.  The court rejected this for two reasons: (1) CDA
immunity is an affirmative defense that a plaintiff is not required to plead
around (yikes!), and (2) given the allegations of the complaint, PRCG/Haggerty was
an “information content provider” for the content it created for the Honesty
website—allegations that PRCG/Haggerty “designed and built” the advertising
campaign were sufficient.
 
The court dismissed claims for false advertising under Missouri
common law, concluding that no such claim exists under Missouri law. Unfair
competition and unjust enrichment claims survived for the same reason as the
Lanham Act claims. The ad agency defendants also didn’t get the injurious
falsehood and defamation claims kicked out, because scienter can be alleged
generally even under Rule 9(b).
 
Unfair competition under Connecticut common law: the ad
agency argued that this claim could only be maintained against competitors. Blue Buffalo said the state
law tracked the Lanham Act, but under Connecticut law, “the word ‘competition’
as used in ‘unfair competition’ limits coverage to claims by competitors.”  (This language came from an insurance case
but provided guidance.)  Although state
trademark law follows the Lanham Act, false advertising/unfair competition isn’t
the same thing. Claim dismissed.

Finally, the court dismissed claims for violation of trade practice statutes of
different states because the counterclaim “summarily lists citations to
statutes of twenty-six different states,” which wasn’t enough to make a
plausible claim or provide notice.

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Deducting points for a 3-point landing in copyright claim

Posted on April 24, 2015 by rtushnet

Horizon Comics Prods., Inc. v. Marvel Entertainment, LLC, No. 15-cv-11684 (D. Mass. filed Apr. 23, 2015): Newly filed; the claim is that movie Iron Man’s armor infringes the copyright in another comic armored suit.  All I’ll say right now is that one part of the allegations is clearly silly: the complaint alleges that one movie poster is a copy of an image from plaintiffs’ cartoon:

Radix image and Iron Man 3 poster

Three Point Landing is such a trope that it has its own supercut, as well as its own entry on TVTropes.  (Warning: link goes to TVTropes.  I accept no responsibility for the time you’ll spend there.)  I would kind of love to put together the exhibits for the motion to dismiss, actually.

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Ad agency liability for false advertising without scienter

Posted on April 24, 2015 by rtushnet
Nestlé Purina Petcare Co. v. Blue Buffalo Co., No. 4:14 CV 859, 2015 WL 1782661 (E.D. Mo. Apr. 20, 2015)
 
Purina sued Blue Buffalo for false advertising of its dog food as “grain free” and containing “no chicken by-product.” Purina issued press releases about the suit and launched PetFoodHonesty.com, criticizing Blue Buffalo for its alleged false advertising. Blue Buffalo denied the allegations and alleged that the “independent testing” Purina relied upon for its claims against Blue Buffalo was unreliable.  Blue Buffalo countersued Purina for false advertising and defamation, and added the ad agencies working with Purina.
 
PetFoodHonesty.com began with an “open letter” to pet owners from Purina describing Blue Buffalo’s allegedly false advertising. Blue Buffalo alleged that a number of statements about Blue Buffalo and the content of Blue Buffalo’s dog food were false, e.g., “[T]esting conducted by an independent laboratory revealed that several of Blue Buffalo’s top-selling ‘Life Protection’ pet food products actually contain substantial amounts of poultry by-product meal” and “Blue Buffalo is not being honest about the ingredients in its pet food.” Blue Buffalo made similar allegations about Purina’s Facebook and Twitter pages, with content developed by ad agency Blue State Digital.  Purina also allegedly promoted its Honesty website through Google ads developed by Blue State Digital, e.g., “A dog food company is lying about its ingredients. Learn the facts.”
 
Under Lexmark, Lanham Act false advertising liability isn’t limited to direct competitors. And those who work with competitors to produce false ads can also be liable.  There isn’t much caselaw on this, but what there is has held that ad agencies can be liable under the Lanham Act as joint tortfeasors for knowing participation.  The ad agency defendants argued that they weren’t active participants in preparing the ads and didn’t know or have reason to know of its falsity. 
 
Blue Buffalo pointed out that the Lanham Act doesn’t have a scienter requirement, but the ad agency defendants argued that the law “silently” imposes such a requirement as to ad agencies. But the main case supporting that, Gillette v. Wilkinson Sword, relied on the pre-1988 version of the Lanham Act, which did have a knowledge requirement for false advertising claims. Thus, given the express removal of “knowing” as an element of Lanham Act false advertising, knowledge was not required.
 
The ad agency defendants also argued that Blue Buffalo failed to satisfy Rule 9(b). Blue Buffalo pled that defendant PRCG Haggerty “designed and built” the Honesty website, and that Blue State Digital “developed the content” of the ads on Purina’s Facebook & Twitter accounts and “arranged for these links to PetFoodHonesty.com to appear when Google.com users search for terms related to Blue Buffalo.”
 
There’s a split over whether 9(b) applies to Lanham Act claims “grounded in fraud,” but only one bound the court here: In re NationsMart Corp. Sec. Litig., 130 F.3d 309 (8th Cir.1997). The Eighth Circuit held that Rule 9(b) does not apply to § 11 Securities Act claims for false statements and misrepresentations because proof of fraud is “not a prerequisite to establishing liability,” and it would be unjust to dismiss a case because plaintiffs alleged more than was necessary to recover under the law.  So too here, because Lanham Act liability doesn’t require fraud, even if Blue Buffalo did include fraud allegations.  (This has always eemed to me to be the right approach.)
 
Blue Buffalo’s Lanham Act claim met the notice pleading standards of Rule 8(a). Blue Buffalo attached and cited several examples of allegedly false statements and advertisements from Purina’s Honesty website, Facebook page, Twitter account, and Google search results. Blue Buffalo also alleged that the ad agencies participated in the design and creation of those ads.  These allegations weren’t “particularly robust,” but “it would be difficult for Blue Buffalo to plead many additional facts at this time without the benefit of discovery.” And even if 9(b) did apply, Blue Buffalo alleged sufficient details to put the ad agency defendants on notice, quoting language from specific ads, and noting the dates on which those ads ran.
 
PRCG/Haggerty argued that it was immune under CDA § 230.  The court rejected this for two reasons: (1) CDA immunity is an affirmative defense that a plaintiff is not required to plead around (yikes!), and (2) given the allegations of the complaint, PRCG/Haggerty was an “information content provider” for the content it created for the Honesty website—allegations that PRCG/Haggerty “designed and built” the advertising campaign were sufficient.
 
The court dismissed claims for false advertising under Missouri common law, concluding that no such claim exists under Missouri law. Unfair competition and unjust enrichment claims survived for the same reason as the Lanham Act claims. The ad agency defendants also didn’t get the injurious falsehood and defamation claims kicked out, because scienter can be alleged generally even under Rule 9(b).
 
Unfair competition under Connecticut common law: the ad agency argued that this claim could only be maintained against competitors. Blue Buffalo said the state law tracked the Lanham Act, but under Connecticut law, “the word ‘competition’ as used in ‘unfair competition’ limits coverage to claims by competitors.”  (This language came from an insurance case but provided guidance.)  Although state trademark law follows the Lanham Act, false advertising/unfair competition isn’t the same thing. Claim dismissed.
Finally, the court dismissed claims for violation of trade practice statutes of different states because the counterclaim “summarily lists citations to statutes of twenty-six different states,” which wasn’t enough to make a plausible claim or provide notice.
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8th Circuit dismisses right of publicity claim as copyright preempted

Posted on April 23, 2015 by rtushnet
Ray v. ESPN, Inc., No. 14-2117 (8th Cir. Apr. 22, 2015)
 
Steve “Wild Thing” Ray wrestled professionally in
the Universal Wrestling Federation (UWF) from 1990 to 1994. ESPN obtained films
of his wrestling matches and re-telecast them without his consent.  He sued for invasion of privacy and
misappropriation of name.  The Copyright
Act preempts state-law claims if (1) the work at issue is within the subject
matter of copyright as defined in § 102 and 103 of the Copyright Act, and (2) the
state law created right is equivalent to any of the exclusive rights within the
general scope of copyright as specified in § 106.
.
The films of Ray’s wrestling performances were within the subject
matter of copyright law. Ray argued that ESPN’s use of his “likeness”
was the true “focal point of this case.” Not so. The cases he cited
were distinguishable because they involved use of an identity to sell something
else. Downing v. Abercrombie & Fitch, 265 F.3d 994 (9th Cir. 2001) (use in
ads suggesting endorsement of clothing seller); Brown v. Ames, 201 F.3d 654
(5th Cir. 2000) (use to sell “cassettes and CD’s,” “music
catalogs,” “posters,” and “videotapes,” even though
the defendants “lacked copyrights”). “Brown specifically distinguished Baltimore Orioles—and in so doing, distinguished this case as
well—on the grounds that ‘the right of publicity claimed’ by the plaintiffs in Baltimore Orioles ‘was essentially a
right to prevent rebroadcast of games whose broadcast rights were already owned
by’ other parties.” I find this frustrating because it just announces a
conclusion: use in ads is use of likeness but use of the same copyrighted work
in a broadcast isn’t, at least if defendants own the copyright. But the result’s
right.  “ESPN did not use Ray’s likeness
or name in an advertisement without his permission to promote its commercial
products, and, as the district court correctly noted, Ray’s ‘likenesses could
not be detached from the copyrighted performances that were contained in the
films.”
 
And the rights were equivalent: they were “‘infringed
by the mere act of reproduction, performance, distribution or display'” of
his performances. Dismissal affirmed.

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8th Circuit dismisses right of publicity claim as copyright preempted

Posted on April 23, 2015 by rtushnet
Ray v. ESPN, Inc., No. 14-2117 (8th Cir. Apr. 22, 2015)
 
Steve “Wild Thing” Ray wrestled professionally in the Universal Wrestling Federation (UWF) from 1990 to 1994. ESPN obtained films of his wrestling matches and re-telecast them without his consent.  He sued for invasion of privacy and misappropriation of name.  The Copyright Act preempts state-law claims if (1) the work at issue is within the subject matter of copyright as defined in § 102 and 103 of the Copyright Act, and (2) the state law created right is equivalent to any of the exclusive rights within the general scope of copyright as specified in § 106.
.
The films of Ray’s wrestling performances were within the subject matter of copyright law. Ray argued that ESPN’s use of his “likeness” was the true “focal point of this case.” Not so. The cases he cited were distinguishable because they involved use of an identity to sell something else. Downing v. Abercrombie & Fitch, 265 F.3d 994 (9th Cir. 2001) (use in ads suggesting endorsement of clothing seller); Brown v. Ames, 201 F.3d 654 (5th Cir. 2000) (use to sell “cassettes and CD’s,” “music catalogs,” “posters,” and “videotapes,” even though the defendants “lacked copyrights”). “Brown specifically distinguished Baltimore Orioles—and in so doing, distinguished this case as well—on the grounds that ‘the right of publicity claimed’ by the plaintiffs in Baltimore Orioles ‘was essentially a right to prevent rebroadcast of games whose broadcast rights were already owned by’ other parties.” I find this frustrating because it just announces a conclusion: use in ads is use of likeness but use of the same copyrighted work in a broadcast isn’t, at least if defendants own the copyright. But the result’s right.  “ESPN did not use Ray’s likeness or name in an advertisement without his permission to promote its commercial products, and, as the district court correctly noted, Ray’s ‘likenesses could not be detached from the copyrighted performances that were contained in the films.”
 
And the rights were equivalent: they were “‘infringed by the mere act of reproduction, performance, distribution or display'” of his performances. Dismissal affirmed.
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