Is a free trial version “commercial speech”?

Posted on June 11, 2024 by rtushnet

Enigma Software Gp. USA LLC v. Malwarebytes Inc., 2024 WL
2883671, No. 17-cv-02915-EJD (N.D. Cal. Jun. 6, 2024)

This is the latest decision in long-running litigation over
Malwarebytes’ characterization of Enigma’s competing cybersecurity and
anti-malware software as “malicious,” a “threat,” and as a Potentially Unwanted
Program (“PUP”). The court refuses to dismiss Malwarebyte’s claims for violations
of the Lanham Act; violations of New York General Business Law § 349; and
tortious interference with business (the last on the ground that the 9th
Circuit already said it was sufficiently pled).

Malwarebytes argued that its characterizations of Enigma’s
products as “malicious” and a “threat” didn’t occur in commercial advertising
or promotion but rather as part of the operation of its products. The court
characterized this as a fact-driven question (raising the issue of whether the jury
will be asked to decide it).

screenshot of Malwarebytes characterizing Enigma programs as threats; green “upgrade now” button at top of screen

There’s no categorical rule that in-product statements are
immune from Lanham Act claims. Here, the allegations sufficiently stated a
marketing context. (It’s not clear to me, but it’s possible that the court is holding
that this is true only to the extent that they were presented with the free
version with an upselling invitation. I think that, as to the free trial version, this is difficult–Eric Goldman doesn’t–it seems to me distinguishable from the database ROP cases where people get truthful information about other people during a free trial and also an invitation to access further/more entries in the database, because Malwarebytes is offering a non-informational service–removing programs–in the upsell, not additional noncommercial speech content. But it does seem like an edge case.)

Were the statements in an advertisement? The court reasoned
that, although the words at issue—“malicious” and “threat”—were not themselves
advertisements, “Enigma has alleged facts permitting an inference in its favor
that Malwarebytes makes the speech in an advertising context.” Specifically, it
alleged that the words appeared “during a free trial period designed to
showcase Malwarebytes’s product capabilities,” so that the users experience “a
marketing mechanism for Malwarebytes to entice users to ultimately purchase the
Malwarebytes products.” Enigma alleged that Malwarebytes displays the
challenged speech directly alongside buttons with phrases such as “Upgrade
Now.” See SAC ¶¶ 118–19 (depicting scan results with “threats” near “Upgrade
Now” button). This was plausibly an advertisement for purportedly superior
products.

Other relevant factors—whether the speech refers to a
particular product and whether the speaker has an economic motivation—also
weighed in favor of characterizing this as commercial speech. (The court also
cited the competition between the parties as relevant to satisfying the Gordon
& Breach test for commercial advertising or promotion, even though Lexmark
should probably be understood as removing that requirement.)

Enigma also sufficiently alleged that the statements were
made to encourage people to buy Malwarebytes’ products and were sufficiently
disseminated to the relevant purchasing public, even though only existing Malwarebytes
customers saw the designations, because Enigma alleged that the majority of
Malwarebytes users are free users and not paying customers, and that
Malwarebytes’s sales model relies on its free programs to function as
advertisements to induce users to upgrade to paid products. Malwarebytes allegedly
displays the challenged designations to all consumers who seek to
simultaneously deploy both Malwarebytes and Enigma products.

Material deception: Malwarebytes argued that it sufficiently
disclosed to consumers its definitions for “threat” and “malicious,” as well as
the specific criteria used to reach those designations, so that a reasonable
consumer would understand that the challenged designations did not identify
Enigma’s software as malware. In addition, it argued, because the Ninth Circuit
held that the “PUP” classification was not an actionable statement of fact
under the Lanham Act, the challenged designations were not materially deceptive
because they were a disclosed result of the PUP classification and specifically
were not statements that Enigma’s products were malware.

The court disagreed. Enigma alleged that it received
hundreds of complaints from users of its products who had viewed Malwarebytes’s
designations, and that the complaints included statements indicating that the
users understood the designations to identify Enigma’s products as malware. Customers
allegedly canceled orders for Enigma’s software and requested refunds, which
allowed the court to infer that the statements influenced users’ purchasing
decisions. The disclosures weren’t dispositive at the motion to dismiss stage.

The NYGBL claim survived for the same reasons.

from Blogger http://tushnet.blogspot.com/2024/06/is-free-trial-version-commercial-speech.html

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where ingredients list can’t clarify ambiguity, “manage blood sugar” claim is plausibly misleading

Posted on June 10, 2024 by rtushnet

Prescott v. Abbott Laboratories, — F.Supp.3d —-, 2024 WL
2843092, No. 23-cv-04348-PCP (N.D. Cal. Jun. 5, 2024)

Abbott Laboratories’s Glucerna line of powders and shakes
are marketed as scientifically designed for people with diabetes to help manage
blood sugar. Plaintiffs alleged that because the products contain sucralose and
other additives, the products don’t provide the promised health benefits. They
brought the usual
California statutory claims. The court accepts the allegations as
sufficient, except for standing for injunctive relief.

The challenged language includes “to help manage blood
sugar,” “#1 doctor recommended brand,” and “scientifically designed for people
with diabetes.” The side label states that the beverages are “designed to help
minimize blood sugar spikes in people with diabetes compared to high glycemic
carbohydrates.”

one of the challenged products with front label claims

“Online and in stores, Glucerna shakes and powders are
placed with health and nutritional supplements near diabetes diagnostic
equipment and blood glucose tests. One retailer specifically categorizes
Glucerna products as ‘Diabetes Management’ on its website.” Plaintiffs alleged
that the artificial sweetener used, sucralose, is associated with obesity, type
2 diabetes (as well as its precursor condition, metabolic syndrome),
hypertension, and cardiovascular disease; that sucralose can deregulate blood
sugar by disrupting the gut microbiome and killing pancreatic cells that release
insulin; and that sucralose can cause cells to become resistant to insulin,
which can lead to type 2 diabetes or obesity. Several organizations, including
the World Health Organization, have advised against consuming sucralose and
other artificial sweeteners. Plaintiffs cited similar scientific findings for
the additional ingredients maltodextrin and carrageenan.

They alleged that “#1 doctor recommended brand” and “scientifically
designed for people with diabetes” conveyed that Glucerna products “aid in
managing blood sugar generally” and are “scientifically capable of the
treatment of diabetes or other health conditions.”

Abbott argued that the labels didn’t make such broad claims:
they didn’t plausibly advertise that the products were “over-the-counter aids
to help manage diabetes and blood sugar generally” and “can be used to
regulate, achieve, and manage normal and healthy blood sugar levels.” Instead,
the drinks were merely intended as a “snack or meal replacement” formulated “to
help minimize blood sugar spikes in people with diabetes compared to high
glycemic carbohydrates.”

This was a factual question. And unlike in other cases where
an ambiguous label could be easily clarified by reading the ingredient list, the
side label explanation about minimizing blood sugar spikes didn’t directly contradict
the claims that plaintiffs alleged they took away. “This is not the sort of
ambiguity that can be definitively resolved by reference to a back label.”
Plaintiffs also  plausibly alleged that
the other claims on the front label—that Glucerna products are recommended by
doctors and scientifically designed for diabetics—make more sweeping
representations about how the products work.

As for the alleged harms of the ingredients, Abbott argued
that the studies cited didn’t support the claims and that plaintiffs had
layered inference on top of inference. This was a factual question that could not
be resolved at this stage. “If the allegations directly contradicted the cited
studies plaintiffs’ allegations might fairly be deemed implausible, but that is
not the case here.” 

However, plaintiffs’ alleged intent to buy Glucerna products
again in the future if they can be sure the products will provide the promised
benefits was insufficient; because of the nature ofe the alleged deception,
they could easily determine based on the ingredients list whether Glucerna had
been reformulated without the challenged ingredients.

from Blogger http://tushnet.blogspot.com/2024/06/where-ingredients-list-cant-clarify.html

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“#1 Brand” claim was literally false because of apples-to-oranges comparison

Posted on June 10, 2024 by rtushnet

Zesty Paws LLC v. Nutramax Labs., Inc., No. 23 Civ. 10849
(LGS), 2024 WL 2853622 (S.D.N.Y. Jun. 4, 2024)

Finding Zesty Paws’ “#1 Brand” claim literally false, the
court grants a preliminary injunction despite Zesty Paws’ attempt to create a factual
dispute about what a “brand” is.

Nutramax and Zesty Paws are direct competitors in the pet
supplement market. Zesty Paws’ products claim to promote joint health (Mobility
Bites), behavioral health (Calming Bites), gut health (Probiotic Bites) and
skin and coat health (Skin & Coat Bites). Nutramax’s products are intended
to support similar pet health needs: joint health (Cosequin and Dasuquin),
behavioral health (Solliquin), gut health (Proviable) and skin and coat health
(Welactin).

Zesty Paws began an advertising campaign claiming to be (1)
the “#1 Brand of Pet Supplements in the USA,” (2) “USA’s #1 Brand of Pet
Supplements” and (3) the “#1 selling Pet Supplement Brand in the USA.” Nutramax
and Zesty Paws stipulated that, at relevant times, (1) the combined sales of
Nutramax pet supplement products exceeded the combined sales of Zesty Paws pet
supplement products and (2) the combined sales of Zesty Paws pet supplement
products exceeded the combined sales of each individual pet supplement product
sold by Nutramax, including Cosequin and Dasuquin. (This seems like a classic
apples-to-oranges comparison. Zesty Paws even uses “TM” on some of its
advertising for, e.g., the Mobility Bites, suggesting that it’s trying to have
sub-brands too, though it may have dialed back on that attempt for purposes of
this litigation.)

#1 selling pet supplements brand in the USA ad from website

Mobility Bites image using TM symbol after Mobility Bites

The court found that Nutramax showed that the claims were likely
literally false. The dispute turned on what a “brand” is; Zesty Paws argued
that Nutramax was not a brand, but Cosequin etc. were. 

Based on the ordinary dictionary meaning of “brand,”
Nutramax was a brand. Nutramax also offered two experts from
business/management schools who testified that Nutramax satisfied the
definition of a “distinctive feature … that identifies goods or services.” It’s
used on every package and in advertising. Zesty Paws’ arguments to the contrary
critiqued the strength of the brand, not its existence; Zesty Paws argued that
it was the #1 “driver brand” in the US, that is, “the brand name that plays the
primary driver role in a consumer’s purchase decision.”

But that didn’t create ambiguity. The ordinary meaning of “brand”
didn’t include the primary driver concept. (A brand can be a limping mark!)  And there was no evidence that consumers
understood the #1 Claims to refer to a “driver brand,” whether from expert
opinion, survey, academic literature or even anecdotal evidence.

Zesty Paws’ expert’s survey didn’t address how consumers interpreted
the #1 claims. Instead, the survey respondents saw an image of Nutramax’s
Cosequin product and asked to specify “the brand name of the product, any other
names the product goes by, and the manufacturer of the product.” In response,
“86.8 percent of respondents identified Cosequin® as the brand name of the
product,” and “10.1 percent of respondents indicated that Nutramax Labs was the
brand of the product.” The main survey question asked, “Based on your review,
what brand is this product? (Please be as specific as possible.)” That was less
about whether respondents generally perceive NUTRAMAX to be a brand in its own
right and more about whether respondents identify NUTRAMAX to be the most
specific brand name of the particular Cosequin product package. Both ecommerce
listings and the tamper-evident seal, not shown to respondents, referenced
Nutramax.  “Even without these cues, 10.1
percent of respondents still identified NUTRAMAX as the brand for the Cosequin
product. Zesty Paws’ own internal brand awareness studies from about 2020
through 2022 showed that NUTRAMAX frequently scored higher than ZESTY PAWS when
respondents were presented with a list of brands that included both names.” Nor
did Nutramax’s internal documents concerning a possible move to a
COSEQUIN-centered branding strategy matter, because the strategy was never
implemented.

Market research data that aggregated sales data under one “brand”
per product were also unhelpful, since there can be several brands associated
with a product, e.g., Frito Lay® Flamin’ Hot® Cheetos®.” In other words, that
COSEQUIN is a brand does not mean that NUTRAMAX is not also a brand. Also,
Zesty Paws suggested how one of the market research entities should make the
brand comparison, encouraging it to reach out with any questions about “brand
delineation” and stating, “As a reminder, please ensure all brands are
evaluated at the consumer facing level (i.e. Dasuquin not Nutramax) ….” And
an expert testified that “[t]here is nothing [about] Nielsen’s processes or
motivations as a data seller that makes them an authority on what is and is not
a brand.” They could be inaccurate and inconsistent, and they tracked only a
small segment of the pet supplement market.

Thus, Nutramax would likely show literal falsity.

Materiality: Nutramax’s expert testimony satisfied its
burden. One marketing expert testified that the effectiveness of various number
one claims “has been studied for a long time by academic marketers and there is
very consistent evidence that when you make a number one claim, you enhance the
perceptions and the purchase of the claimed brand and you depress the
perceptions and the purchase of the non-claimed brands.” He also testified that
a number one claim in this case is “especially potent because … we don’t
actually get direct experience with these products and so we really have to
rely on these claims even more than [we] would with a product like Coke or
Pepsi where we get to taste it for ourselves.”

Injury: Likewise, the experts testified that this would
likely harm Nutramax, both in the eyes of consumers and retailers: “[t]he
belief that Zesty Paws is the market leader will likely lead retailers to give
Zesty Paws more shelf space, more prominent shelf positioning and overall
increased availability of Zesty Paws products.”

Irreparable harm was presumed and not rebutted by a five-month
delay in bringing a preliminary injunction motion because “Nutramax first sent
Zesty Paws a notice-of-dispute letter about the #1 Claims on July 17, 2023,
shortly after learning of them. The parties then continued to exchange letters
until they participated in an unsuccessful mediation on December 7, 2023. Zesty
Paws commenced this action on December 13, 2023, and Nutramax filed its
preliminary injunction motion on December 22, 2023.” That didn’t show any lack
of worry about harm on Nutramax’s part.  

In addition, Nutramax’s experts specifically testified that,
in the court’s words, “once a brand’s market leadership is lost, that loss is
nearly always permanent along with the benefits brought by the market
leadership position.” He stated: “[W]hat we find from the extensive literature
is that consumers think more highly of number one brands, they perceive them to
be higher quality, they are going to purchase them more frequently, [and]
they’re willing to pay more for those products because of that associated
higher quality.” Indeed, the court summarized, “the power of signaling market
leadership is so strong that even when consumers misperceive a brand as a
market leader, the misperceived brand still accrues all of the benefits of
market leadership, particularly higher evaluations from consumers.” A second
marketing expert testified that lost market share is difficult to regain due to
habit, status quo and brand loyalty.

With that out of the way, a preliminary injunction was
essentially inevitable.

from Blogger http://tushnet.blogspot.com/2024/06/1-brand-claim-was-literally-false.html

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Another challenge to “up to 8 hours of relief” proceeds

Posted on June 4, 2024 by rtushnet

Sheiner v. Supervalu Inc., 2024 WL 2803030, No. 22 Civ.
10262 (NSR) (S.D.N.Y. May 28, 2024)

Supervalu sold a “Maximum Strength Lidocaine Patch” product
which contained “topical anesthetic 4% Lidocaine” which “desensitize[s]
aggravated nerves” to provide “temporary relief of pain” to the “back, neck,
shoulders, knees, elbows” for “up to 8 Hours of relief.” Sheiner’s GBL claims challenged
the “up to 8 hours numbing relief” claim, alleging that the patch “is unable to
adhere to skin for more than four hours, often peeling off within minutes of
light activity” and “did not reliably adhere to Plaintiff’s body for anywhere
close to eight hours, which prevented it from providing even temporary pain
relief,” also citing a study by the Journal of Pain Research.

Sheiner also challenged “Maximum Strength” because “prescription
lidocaine patches exist on the market that deliver greater amounts of lidocaine
to the user.” In addition, the package’s “compare to Salonpas® Lidocaine Patch
active ingredient” instruction allegedly contributed to confusion because
Supervalu’s product “contains roughly forty percent less lidocaine” than found
in the Salonpas® OTC Lidocaine Patch product.

In addition, Steiner alleged that the phrase “numbing
relief” implies the OTC Product provides relief associated with “medical
treatments requiring a prescription and FDA approval,” implying that the
product would “completely block and numb nerves and pain receptors, eliminate
responses to painful stimuli, and can treat neuropathic and musculoskeletal
pain, including back pain.”

Supervalu argued that courts have “recognized that ‘up to’
statements ‘are generally not construed as concrete promises about a product’s
maximum yield.’ ” But it was “plausible to contend that the ‘Up to 8 Hours’
language on the label indicates the patch can provide pain relief for as long
as eight hours, and the label says nothing about other factors relating to the
patch that may result in a much shorter period of pain relief.” Compared to
other situations, where self-evident or disclosed contextual factors (like the strength
at which coffee is brewed affecting the number of cups that could be brewed
from a given amount) informed consumers about whether they could expect to get
the “up to” results, “the lidocaine patch labels at issue ‘include no
identification of any factors that might limit the amount of time that the
patch would remain adhered to the body and deliver relief.’ ”

The other alleged deceptions failed less well: “The argument
that a consumer would expect an OTC product to be equivalent to the most
powerful prescription medicine is a nonstarter.” A reasonable consumer “would
plainly ‘understand that OTC products differ from products that are available
with a prescription,’ ” and contain only the “maximum strength” dose available
at the drug store. But 4% is the maximum lidocaine concentration allowed by law
in OTC products, which this product had, and Steiner failed to identify an OTC
lidocaine patch available on the market that is stronger. (The court
distinguished cases reaching the opposite conclusion; they only made sense when
an OTC drugmaker made a direct comparison to a prescription product.) Also,
even if the FDA cautioned manufacturers not to use “Maximum Strength” claims, “the
FDA’s regulations or views are irrelevant or at least not dispositive when it
comes to determining whether a reasonable consumer would be deceived or misled
under GBL §§ 349-50.”

Claims based on “numbing relief” also failed. The
interpretation that it would completely block pain was unreasonable. The label
explicitly limits its use to “temporary relief of pain,” and Steiner didn’t
even allege that he believed that the product would completely block or
eliminate pain. Breach of express warranty claims failed for want of timely,
prelitigation notice.  

On fraud, the plaintiff failed to allege facts that give
rise to a strong inference of fraudulent intent.

from Blogger http://tushnet.blogspot.com/2024/06/another-challenge-to-up-to-8-hours-of.html

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Second Circuit affirms rejection of “All Natural” survey as too leading

Posted on June 3, 2024 by rtushnet

Bustamante v. KIND, LLC, 100 F.4th 419 (2d Cir. 2024)

The court of appeals affirmed summary judgment in favor of
KIND on Bustamante’s false advertising consumer protection class action claims
based on KIND’s “All Natural” labeling. The complaint alleged that eleven
ingredients contained in some relevant KIND products were “non-natural”: Soy
Lecithin; Soy Protein Isolate; Citrus Pectin; Glucose Syrup/“Non GMO” Glucose;
Vegetable Glycerine; Palm Kernel Oil; Canola Oil; Ascorbic Acid; Vitamin A
Acetate; D-Alpha Tocopheryl Acetate/Vitamin E; and Annatto.

Eventually, the district court excluded plaintiffs’ survey
and scientific experts and granted summary judgment.

“To establish deception under the reasonable consumer
standard at the summary judgment stage, plaintiffs must present admissible
evidence establishing how the challenged statement – ‘All Natural’ – tends to
mislead reasonable consumers acting reasonably.”

Although errors in survey methodology generally go only to
weight rather than admissibility, it was not an abuse of discretion to exclude
the survey expert here. The court found that the survey “does not assist the
trier of fact because it is biased, leading, and to the extent it provides any
insight, cannot provide the objective standard necessary to answer the key
question in this case.”

The survey surveyed California, Florida, and New York
consumers who had purchased KIND products, or products from a KIND competitor,
in the last twelve months. Respondents saw “a mock-up of the front of a
brand-neutral product package and [were instructed] to ‘examine it like you
were shopping’ ” and “to assume that the nutrition snack bar is a ‘popular
national brand.’ ” The mock-up label displayed the words “All Natural,” and in
several respects resembled the packaging of a KIND bar.

The first relevant question asked: “Because of this
descriptor [All Natural], what is your expectation for this product?” It
offered three possible choices: (a) “Will NOT contain artificial and synthetic
ingredients;” (b) “Will contain artificial and synthetic ingredients;” or (c)
“Not sure/No expectation.” “86.4% of consumers expected the Product with the
‘All Natural’ claim ‘will NOT contain artificial and synthetic ingredients.’ ”
The survey did not define the terms “artificial” or “synthetic.”

The district court found that this question didn’t help
determine “in any meaningful sense how reasonable consumers understand the ‘All
Natural’ claim, or to test plaintiffs’ theory.” It was “biased” and “lead[ing]”
because it “improperly directs survey participants to the ‘correct’ answer” and
“is plainly designed to validate plaintiffs’ theory” of liability. This
characterization was not manifestly erroneous, especially because the expert
conceded that he “worded [his] substantive response options on the basis of
[his] understanding of the Plaintiffs’ theory of liability.” The Second Circuit
has previously held that a plaintiff could not rely on a survey based on a
question that, like this one, “was an obvious leading question in that it
suggested its own answer.” (Citing Universal City Studios, Inc. v. Nintendo
Co., 746 F.2d 112 (2d Cir. 1984), where the question was “To the best of your
knowledge, was the Donkey Kong game made with the approval or under the
authority of the people who produce the King Kong movies?” That’s a far more
leading question; the sin here seems to have been that the question was
closed-ended, even though it had a don’t know/not sure option. Would the Second
Circuit be ok with starting with an open-ended question? With asking people
whether “All Natural” means “no artificial/synthetic ingredients”? What else
could you possibly ask to test plaintiffs’ theory of liability?)

The choice “to display the ‘All Natural’ claim in isolation,
rather than as part of the ‘All Natural/Non GMO’ statement, as it always
appeared on KIND labels” further undercut the relevance of the results.

The second question asked: “Because of this descriptor [All
Natural], what is your expectation for this product?” The options were: (a) “Is
NOT made using these chemicals: Phosphoric Acid, Hexane, Potassium Hydroxide,
Ascorbic Acid”; (b) “Is made using these chemicals: Phosphoric Acid, Hexane,
Potassium Hydroxide, Ascorbic Acid”; or (c) “Not sure/No expectation.” The
survey didn’t describe or define these “chemicals” (court’s scare quotes). The
results were similar: over 76% of respondents chose (a)

It was also not manifestly erroneous to find this
irrelevant. By providing a list, the survey “led survey participants down the
path of selecting the answer preferred by plaintiffs.” (Would it have been
better to give them an actual ingredient list?) Also, by listing the
“chemicals” without defining them, the survey failed to differentiate between
“ascorbic acid,” a form of Vitamin C safe for human consumption, and
“phosphoric acid,” which is “not safe for ingestion.”

Likewise, it was not an abuse of discretion to exclude the
scientific expert because he wouldn’t assist in identifying what reasonable
consumers considered artificial or synthetic. He developed a framework that “examined
each ingredient’s origin, the extent to which the ingredient had been processed
from its natural form, and the final form of the ingredient.” He opined on
whether the ingredients could be classified as “natural” under his framework,
but didn’t apply a definition used elsewhere, including in the complaint or by
the survey. Nor did he specifically analyze KIND ingredients, only how they
were “typically” sourced. “But, without some evidence to the contrary, there is
no reason to assume that [the expert’s] personal understanding of the term ‘natural’
is relevant to how a reasonable consumer would understand that same term.”
Because of that flaw, “the report adds no useful information that would help
the trier of fact determine the answer to the relevant legal question: whether
consumers were actually deceived.”

Without the expert evidence, summary judgment for KIND was
appropriate. Named plaintiffs’ own testimony wasn’t enough because they didn’t
provide a cohesive definition of what “All Natural” meant, whether it would
mean “containing no artificial or synthetic ingredients, or what it means to be
artificial or synthetic. Plaintiffs’ depositions instead showed how variable
definitions of “All Natural” can be:

For example, one plaintiff
testified that she expected “All Natural” to mean not synthetic. Another
plaintiff testified that she expected “All Natural” to mean that the product
was made from whole grains, nuts, and fruit. Yet another explained her belief
that “All Natural” meant that the ingredients were literally plucked from the
ground. Notably, several plaintiffs testified that consumers could have
different understandings about the implications of the term “All Natural,” that
these understandings could change over time, and that not everyone would agree
with their particular understanding of that term. Plaintiffs fail to explain
how a trier of fact could apply these shifting definitions to reach a
conclusion as to whether the use of the term “All Natural” on KIND product
labels was deceptive.

KIND’s own internal documents weren’t helpful because all
they showed was that KIND had its own conception of the term, but didn’t show
what a reasonable consumer’s understanding was. (Courts used to be more willing
to say “the seller’s beliefs about what its audience wants are good
circumstantial evidence, given the seller’s incentives,” and they still do in
trademark cases.) The FDA’s own request for comments also demonstrated lots of
varied understandings.

Nor was it enough for plaintiffs to use the dictionary.
(That’s just for courts.) The definition identified, “existing in or caused by
nature; not made or caused by humankind,” “is not useful when applied to a
mass-produced snack bar wrapped in plastic. Such a bar is clearly made by
humans.”

 

from Blogger http://tushnet.blogspot.com/2024/06/second-circuit-affirms-rejection-of-all.html

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“up to” absorbency claims for period underwear were plausibly misleading

Posted on May 28, 2024 by rtushnet

Gamino v. Thinx Inc.,
No. EDCV 23-2067 JGB (SHKx), 2024 WL 2429307 (C.D. Cal. Apr. 18, 2024)

Gamino brought a
host of California statutory and common law claims against Thinx, alleging that
Thinx’s period underwear didn’t function as advertised; specifically, that it
was incapable of holding the amount of liquid advertised. The court declined to
dismiss the complaint on a variety of grounds.  

Thinx argued that
the absorbency of its products is advertised as performing “up to” a certain
threshold, and that reasonable consumers therefore expect that the products’
performance could be less than the maximum. In addition, it argued that no
reasonable consumer would read the phrase “prevents leaks” as guaranteeing the
products will “absorb whatever amount of fluid is dispensed into them.”

The court disagreed:

The basis of Plaintiff’s claims is not that Defendant’s products
occasionally perform below the maximum absorbency advertised, but that the
products “do not hold” and “cannot absorb” the “claimed amounts of fluid, and
instead leak.” … Plaintiff alleges that Defendant represents its products’
absorbency using specific fluid amounts on its website, product pages, and
packaging. … Plaintiff also alleges that testing reveals representative Thinx
products cannot absorb the amount advertised on Thinx’s packaging and website,
but that each of the products leaks. …  Finally, Plaintiff alleges that other
consumers of Thinx products have experienced leakage “with even the smallest
amount[t] of blood” or “in less than 15 minutes.” … Based on Plaintiff’s
allegations, a reasonable consumer could be misled into believing Defendant’s
products can fulfill their advertised, maximum absorbency.

The court quoted
prior caselaw: “[M]ultiple courts have found that ‘up to’ representations may
materially mislead reasonable consumers.” The allegation that Thinx’s products
lacked the capacity to absorb the advertised amounts, plus the lack of
allegations that Thinx listed customer-specific factors which could reduce performance
(beyond the broad statement that “individual results may vary”), meant that “up
to” was no help.

Thinx also argued
that Gamino did not suffer an economic injury because she could have received a
refund for her purchase. That conflated injury with remedy—despite available
refunds, she suffered an economic injury “as soon as she relie[d] on a
defendant’s deceptive advertising and part[ed] with more money than she
otherwise would have paid.”

Also, Gamino plausibly
alleged lack of absorption with allegations of (1) her own experience, (2) the
experiences of other consumers, and (3) testing “by using cough syrup to mimic
the viscosity of menstrual flow, just as some manufacturers do to test pads and
tampons.” At this stage, she didn’t need to allege “which products were tested,
who did the testing, whether Thinx uses the same method to test its products,”
or “how much the products absorbed when she wore them.”

Gamino also had
standing to seek equitable remedies because she plausibly pled that she was
still interested in period underwear and wanted to purchase it if she could rely
on the advertising. “While the Court likely cannot order Defendant to
manufacture a wholly new product … it surely can issue some form of
injunctive relief that would redress Plaintiff’s injury.”

Finally, the court
declined to wait for the FDA under the primary jurisdiction doctrine. Among other
things, “there is no concrete evidence that the FDA is currently involved in
creating a new regulation about how to test the absorbency of period
underwear.” Courts “have generally declined to dismiss the complaint on primary
jurisdiction absent concrete evidence that the FDA is currently involved in
creating a new regulation concerning the subject of the lawsuit.”

from Blogger http://tushnet.blogspot.com/2024/05/up-to-absorbency-claims-for-period.html

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BIPLA (Boston Intellectual Property Law Association) Writing Competition call for papers

Posted on May 16, 2024 by rtushnet

1st Prize:$1,000

2nd Prize:$500 

BIPLA is once again holding its annual Writing Competition. Law school students are encouraged to submit papers relating to topics involving intellectual property law. Judges will consider the merits of each paper based on: (i) contribution to knowledge respecting intellectual property law; and (ii) the extent to which it displays original and creative thought or information not previously published or available. The requirements for eligibility are outlined below. 
 Content Rules
 1. Articles must be written solely by a student or students either in full-time or part-time attendance at a law school (day or evening) within the jurisdiction of the First Federal Judiciary Circuit or prepared in connection with a course at a law school in the First Circuit. 
 2. Articles must be written or published between September 1, 2024 and August 31, 2024.
 3. Articles must be submitted to the Boston Intellectual Property Law Association on or before September 30, 2024. 
 4. Papers should be no more than the equivalent of ten (10) law review pages including footnotes (30-40 pages typed copy). 
 5. Submission of the paper as a .pdf file is required. Submissions must include the submitter’s name, current address, current telephone number, law school, and employment information (if applicable).

Please send all article submissions to:

Kevin MacDonald, PhD

Shareholder

Wolf, Greenfield & Sacks, P.C.

Kevin.MacDonald@wolfgreenfield.com

Office: 617.646.8497

from Blogger http://tushnet.blogspot.com/2024/05/bipla-boston-intellectual-property-law.html

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Reminder on Call for Papers: Trademark and Unfair Competition Scholarship Roundtable 2024

Posted on May 13, 2024 by rtushnet

 The Trademark and Unfair Competition Scholarship Roundtable co-hosted by Harvard, NYU, and the University of Pennsylvania will take place this year at Harvard. The Roundtable is designed to be a forum for the discussion of current trademark, false advertising, and right of publicity scholarship, covering a range of methodologies, topics, and perspectives. Five to six papers will be chosen for discussion over the course of the Roundtable, with each paper allocated an entire hour for discussion and assigned a commentator.   

The Roundtable will be held on Friday, October 18, 2024. If there is a critical mass of papers, we may also extend the Roundtable through Saturday morning, October 19. Participation at the Roundtable will be limited and invitation-only and we expect all participants to have read the papers in advance. The Roundtable will cover the travel and lodging expenses for invited authors. 

We invite submissions from academics working on any aspect of trademark, false advertising, marketing, right of publicity, or related areas of the law. Priority will be given to those who can attend the entire event and a dinner the night of Friday, October 18. Submissions must be of full drafts in Microsoft word format. The deadline for submission is May 15, 2024, and decisions on participation will be made shortly thereafter, ideally, by June 1st.   

To submit a draft paper, please fill out the form here (https://ift.tt/j1twGQl) and upload an anonymized version of your draft.  Please note that the maximum file size that may be uploaded is 10MB. Appendices or other supporting material can be uploaded separately; please do not submit a CV or cover letter. 

For further information about the Roundtable, please email: Barton Beebe (NYU): barton.beebe@nyu.edu; Jennifer Rothman (Penn): rothmj@law.upenn.edu, or Rebecca Tushnet (Harvard): rtushnet@law.harvard.edu.

from Blogger http://tushnet.blogspot.com/2024/05/reminder-on-call-for-papers-trademark.html

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court remands NYC’s false advertising case against oil companies to state court

Posted on May 13, 2024 by rtushnet

City of New York v.
Exxon Mobil Corp., 2024 WL 2091994, No. 21-CV-4807 (VEC) (S.D.N.Y. May 8, 2024)

Being a multitrillion-dollar
corporation means you can survive a “ridiculous” argument or two. Here, the
city successfully wins remand (and a fee award) in this opinion rejecting
removal of its false advertising suit against Exxon, other fossil fuel
companies, and their top trade association for violations of New York City’s
Consumer Protection Law. Following a similar case, Connecticut v. Exxon Mobil
Corp., 83 F.4th 122 (2d Cir. 2023), the court understandably refuses to
distinguish it.

The complaint alleged
that defendants “misled consumers about the impact of their products on the
climate and falsely represented themselves as corporate leaders in the fight
against climate change.”

Defendants removed,
alleging (eventually) six bases for federal jurisdiction: (1) the City’s claims
arise under federal common law because they implicate transboundary pollution
and foreign affairs; (2) the action falls under the federal officer removal
statute, 28 U.S.C. § 1442(a)(1); (3) Defendants’ production and sale of fossil
fuels occur on “federal enclaves;” (4) the Court has diversity jurisdiction
over the action under the fraudulent joinder doctrine; (5) the action is
removable under the Class Action Fairness Act; and (6) the City’s claims
include federal constitutional elements.

The federal removal
statute allows a defendant to remove to federal court “any civil action brought
in a State court of which the district courts of the United States have
original jurisdiction.” “[O]ut of respect for the limited jurisdiction of the
federal courts and the rights of states,” federal courts must “resolv[e] any
doubts against removability.” The “well-pleaded complaint rule” provides that
federal question jurisdiction “exists only when a federal question is presented
on the face of the plaintiff’s properly pleaded complaint.” However, a
plaintiff cannot defeat federal question jurisdiction by pleading its complaint
as if it “arises under state law where the plaintiff’s suit is, in essence,
based on federal law.” Nonetheless, federal question jurisdiction cannot be
created “on the basis of a federal defense, … even if the defense is
anticipated in the plaintiff’s complaint, and even if both parties concede that
the federal defense is the only question truly at issue.” There are only three
circumstances in which a complaint that does not allege a federal claim may
nevertheless “arise under” federal law for purposes of removal: “(1) if
Congress expressly provides, by statute, for removal of state-law claims; (2)
if the state-law claims are completely preempted by federal law; and (3) in
certain cases if the vindication of a state-law right necessarily turns on a
question of federal law.”

Federal common law
that completely preempts state claims based on transboundary pollution and
foreign affairs: That’s not a thing. False advertising claims “do not become
claims about transboundary pollution and foreign affairs just because the
alleged deception relates to the impact of fossil fuels on the climate.” Plus, “there
is no indication that Congress expressly authorized or intended to completely
preempt state laws that have a glancing relationship to transboundary pollution
or foreign affairs,” and the constitutional structure doesn’t do that all on
its own. “Even if federal common law could, in the abstract, have complete
preemptive effect, it would not preempt Plaintiff’s claims, which are
garden-variety false advertising claims…. There is simply no conflict between
the State’s interest in ensuring its consumers are not misled by false
advertising and any federal interest in regulating environmental pollution.” So
too with foreign affairs: “[T]his Court cannot imagine any state of affairs
under which [foreign affairs] would be affected by an order enjoining
Defendants from disseminating misleading ads in New York City.”

Federal officer
removal: The federal officer removal statute permits removal of a state court
civil action “that is against or directed to … any officer (or any person
acting under that officer) of the United States or of any agency thereof …
for or relating to any act under color of such office.” For non-federal
officers to invoke this statute, they “must (1) show that [they are] a person
within the meaning of the statute who acted under a federal officer, (2) show
that [they] performed the actions for which [they are] being sued under color
of federal office, and (3) raise a colorable federal defense.” They did not.

Federal enclave
jurisdiction: This is the “silliest” of defendants’ argument. Section 8 of
Article I of the U.S. Constitution authorizes Congress “[t]o exercise exclusive
Legislation in all Cases whatsoever … over all Places purchased by the
Consent of the Legislature of the State in which the Same shall be, for the
Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful
Buildings.” Defendants’ theory, “contrary to fact,” was that the complaint
targets their extraction, production, and sale of fossil fuels, including
“operations that occur on military bases and other federal enclaves.” Also, the
advertising the City alleged is false reaches federal enclaves, i.e., “API’s
Super Bowl ads reach federal enclaves, such as Ellis Island and Fort Tilden.” This
is silly because (1) the complaint doesn’t target extraction, production, and
sale of fossil fuels, and (2) the “advertising reaches federal enclaves”
argument is “ridiculous” and would federalize “all consumer protection laws
that relate to advertisements (and probably everything else); it is
self-evident that all advertisements on the internet, television, radio and in
newspapers can be viewed or heard by persons who happen to be in a federal enclave.”

Diversity
jurisdiction: Defendants argued that the only non-diverse party, ExxonMobil,
was fraudulently joined. Not so.

CAFA: This was “[s]econd
in absurdity.” The City was suing under its parens patriae power, not as a class
action. As the court pointed out, the City can sue without proof that consumers
have actually been injured, “a far cry from the basic requirement in Rule 23
that a class representative have a representative injury.”

First Amendment: Federal
jurisdiction where a complaint doesn’t state a federal claim exists if a
federal issue is: “(1) necessarily raised, (2) actually disputed, (3)
substantial, and (4) capable of resolution in federal court without disrupting
the federal-state balance.” For a federal issue to be “necessarily raised,” the
“mere presence of a federal issue in a state cause of action” is inadequate;
the question of federal law must be “a necessary element of one of the
well-pleaded state claims.” The false advertising claim would “necessarily
raise” a federal issue only if it was “affirmatively ‘premised’ on a violation
of federal law.” But they didn’t: the false advertising claim requires that
defendants (1) engaged in “deceptive or unconscionable trade practice[s]” and
(2) those practices involved “consumer goods or services.”

Still, defendants
argued that their speech was on a matter of public concern, so the court couldn’t
resolve the misrepresentation claims without addressing whether the First Amendment
protected the advertising. That argument confused a defense (the statements
were truthful protected speech) with an element of the city’s claim. “If the
law were as Defendants urge, every libel, slander, and false advertising claim
in the country” would be removable.

Fee-shifting in unsuccessful
removals is up to the district court’s discretion, but should deter “removals
sought for the purpose of prolonging litigation and imposing costs on the
opposing party.” Here, the Second Circuit rejected three of the (initially)
seven grounds for removal defendants argued, plus three that weren’t before the
Second Circuit, but had been “roundly rejected by countless courts throughout
the country.”

Even if removal was
in good faith before the Second Circuit’s ruling, the renewed motion to remand
was briefed afterwards, and it made multiple already-rejected arguments. The
court found it appropriate to award costs and fees “in connection with
arguments that it was not reasonable for Defendants to press when the City
renewed its motion for remand: arguments that had largely been decided by the
Circuit in Connecticut – federal common law, federal officer removal,
and First Amendment defenses, and those that were objectively absurd – federal
enclaves and CAFA.” Only the diversity jurisdiction argument was not
unreasonable.

from Blogger http://tushnet.blogspot.com/2024/05/court-remands-nycs-false-advertising.html

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reasonable consumers of ovulation test kits understand details of hormone signalling

Posted on May 10, 2024 by rtushnet

La Rosa v. Abbott
Laboratories, No. 22-CV-5435 (RER) (JRC), 2024 WL 2022297 (E.D.N.Y. May 7, 2024)

Plaintiffs alleged
that defendants’ at-home ovulation test kits were deceptive because they
advertised “ovulation test kits” alongside the front-of-package statement “99%
ACCURATE,” which conveyed that that the tests are 99% accurate at testing for
ovulation, when in fact, the products detect a surge in luteinizing hormone (LH),
and not actual ovulation. “All the kits state in small writing on the side or
back of the packaging that they are 99% accurate at detecting LH levels.” Some kits
include an asterisk next to the claim “99% ACCURATE”;  others include statements on the front of the
packaging that they detect “LH Surge” or “No LH Surge.”

As alleged, the kits
detect a rise in urinary LH levels, which typically precedes ovulation by
twenty-four to thirty-six hours. But LH surges may occur at other times in a
person’s menstrual cycle; body mass index, age, contraceptive use, sports
activity, and smoking may affect urinary LH levels; when a person has an
irregular cycle, the test could inaccurately indicate that no ovulation occurred;
and more than ten percent of menstrual cycles are subject to a condition known
as “Luteinized Unruptured Follicle Syndrome,” during which there is a normal LH
surge and menstruation, but no egg releases. LH surges may also be detected in
women who are infertile. The only current method for predicting ovulation with
“a high degree of accuracy” is an invasive transvaginal ultrasound.

The court found that
plaintiffs failed to state a claim under NY and California consumer protection
law. Courts sometimes demand a lot of “reasonable” consumers—here, the court reasoned
that reasonable consumers know the scientific details of fertility and should
know the difference between LH surges and ovulation, especially given the
package disclosures:

First, a key contextual inference arises from the products themselves:
it is impossible to test for actual ovulation. A reasonable consumer does not
expect to purchase a product that is impossible to find in the marketplace. …
The FDA explains that at-home ovulation urine tests measure LH to detect
ovulation and are successful at doing so “reliably about 9 times out of 10[.]”
This explains that tests that reveal actual ovulation do not exist. Although a
reasonable consumer is not expected to have medical expertise, in the context
of a niche, specialty product, purchasers exhibit a higher degree of care. And
indeed, Defendants’ products are a specialty item targeted to a class of
informed consumers to aid in their attempts to become pregnant. Many buyers of
ovulation test kits have had trouble getting pregnant in the past, and as such,
seek help from various sources. According to Plaintiffs, “[a]s of 2015, an
estimated 7.3 million women had received some sort of infertility service[.]” In
turn, many ovulation test kit consumers would be expected to have at least some
information leading up to their purchase, and therefore know what to expect to
find in the marketplace—they do not expect to find at-home test kits that
indicate actual ovulation.

This does not seem
to me—as someone who has indeed been in the general market for this type of
product—to be a description of reasonable consumers of specialized medical
services, who tend to outsource a lot of the details to presumed experts.

In addition, the
court reasoned,

a reasonable purchaser of Defendants’ products necessarily looks to the
side and back of the box to understand how to use the products. Alongside these
directions, the boxes for all the products in question clarify that the
products test for LH, not for ovulation itself, and that an LH surge typically
precedes ovulation. By contrast, a consumer of something such as a basic food
item is not expected to flip over the packaging to look for clarification or
disclaimers.

Read together,
“Ovulation Test Kit” and “99% Accurate” could imply 99% accuracy at
testing for ovulation, but the two phrases could also be read separately. And,
true, some products include phrases on the front like, “Predicts Your 2 Most
Fertile Days” and “Early ovulation test … tells you the best 2 days to
conceive.” Nonetheless, “regardless of where the front package falls on the
spectrum, the product requires a standard of care that necessitates looking at
the complete package.” And it wasn’t alleged that the tests didn’t reliably
predict ovulation, even if not at the 99% accuracy level. Thus, “the clarifying
language on the side or back of the packaging dispels any confusion.”

from Blogger http://tushnet.blogspot.com/2024/05/reasonable-consumers-of-ovulation-test.html

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