Should Rogers apply to this language learning app? What about the transformative use test?
 |
| Duolingo screenshot showing response to perfect lesson: “Are you Beyonce? You made 0 mistakes. You’re flawless.” |
from Blogger http://tushnet.blogspot.com/2024/12/right-of-publicity-question-of-day.html
Spotlight Ticket Management, Inc. v. Concierge Live LLC, No.
2:24-cv-00859-WLH-SSC, 2024 WL 4866813 (C.D. Cal. Aug. 30, 2024)
Spotlight provides ticket and event management enterprise
solutions. It entered into an exclusive agreement with Ticketmaster, a ticket
sales and distribution company, giving it “the exclusive right to directly
integrate its technology with Ticketmaster’s software and systems platform.” Integration
means “the ability to access Ticketmaster’s application programming interfaces
(‘API’) to automatically and directly move Ticketmaster tickets without needing
to go through the Ticketmaster website….” In exchange, Spotlight pays
Ticketmaster an annual fee and a percentage of its revenue—millions of dollars
for “a significant competitive edge in relation to its competitors.”
Concierge competes with Spotlight to provide similar ticket
and event management services. Spotlight alleged that Concierge falsely
advertised through its “public website, marketing materials, and direct
communications with potential clients” in pitch meetings that it has the same
functionality and integration capability with Ticketmaster as Spotlight does,
and falsely characterizes Spotlight’s relationship with Ticketmaster as merely
a marketing agreement, and not an exclusive agreement.
For example, Spotlight alleged that it lost out on a pitch
to an online food ordering and delivery company because Concierge “falsely
represented… that it could perform all the same functionality as
[Plaintiff]—including integrations with Ticketmaster—but for a lower cost.” It
brought false advertising claims under California and federal law along with
tortious interference claims.
When brought by competitors, California UCL/FAL claims are
basically Lanham Act claims, so they were analyzed together; the court applied
Rule 9(b)’s heightened pleading standard, and found that the complaint passed
it because it identified several specific pitches/requests for proposals. “While
Plaintiff fails to allege the ‘who’ including the individuals present at the
meetings (other than the Defendant and the entity issuing the RFP), the ‘where’
including the location or place of the pitches/RFPs, and the specific content
of the allegedly false representations including a statement about why each
statement is false, this is because Plaintiff was not in the room during the
pitches.”) Spotlight provided enough, including discussing whether the
statements were contained in marketing materials, the RFP, or were provided
orally.
However, applying the Lanham Act’s “commercial advertising
or promotion” requirement to both state and federal claims, some of the alleged
false statements didn’t qualify. Specifically, Concierge’s public website’s
user support articles weren’t advertising. The titles included “How do I add
Ticketmaster inventory into Concierge Live?” and “How do I add Ticketmaster
inventory into Concierge Live?” Plaintiff’s characterization of these as
“marketing materials” did not persuade the court, since they were under the
support subdomain, and the content was “written in a question-and-answer format
suggesting that this material is a guide for users of Defendant’s platform.”
These were “more akin to guides or instruction manuals and not commercial
advertisement.”
Tortious interference with contractual relations: Spotlight didn’t
sufficiently allege Concierge’s knowledge of its contract with Ticketmaster or
the exclusive agreement; it wasn’t enough to allege that Ticketmaster issued a
public letter in 2021 stating that it was in an exclusive partnership with
Spotlight.
Tortious interference with prospective economic advantage:
There was no independent tort alleged other than the alleged misrepresentations
on Concierge’s website, which the court had just held not actionable.
from Blogger http://tushnet.blogspot.com/2024/12/individual-pitchesrfps-are.html
Tarvin v. Olly Pub. Ben. Corp., 2024 WL 4866271, —
F.Supp.3d —-, No. 2:24-cv-06261-WLH-PD (C.D. Cal. Nov. 12, 2024)
Olly makes dietary supplements, e.g., “Sleep Extra Strength
Melatonin 5 mg.” Each product includes the dosage amount and the net quantity
of units per container on its front label. But, unlike some other brands, Olly
Products do not state the serving size on the front label or that the dosage
amount is per serving. Serving size and servings per container information is on
the back label. This means that a consumer must ingest two units of gummies of
Olly Extra Strength Sleep Product, rather than one, to obtain the 5 mg of
melatonin that is advertised on the product’s front label. Tarvin brought the usual
California statutory and other claims.
Statutory claims: Would a reasonable consumer have consulted
the back label? This wasn’t the rare situation in which the claim could be
dismissed on the pleadings. In addition to the labels themselves, Tarvin pled images
of competitor labels as points of comparison to demonstrate “appropriate
labeling conduct” and establish the expectations of a reasonable consumer. Misleadingness
was plausible.
Olly argued that the labels were at most ambiguous, and that
consumers are required to consult the back in cases of ambiguity. But a front
label may be “unambiguously deceptive” for Rule 12(b)(6) purposes “even if it
has two possible meanings, so long as the plaintiff has plausibly alleged that
are reasonable consumer would view the label as having one unambiguous (and
deceptive) meaning.” Representation of dosage amount on the front label without
qualifying serving information may be considered “unambiguously deceptive” on a
motion to dismiss.
Warranty claims, however, failed for want of an unequivocal
promise that the dosage was per gummy. Likewise, negligent and intentional
misrepresentation claims failed, because they required actual falsity: a
“perfectly true statement couched in such a manner that is likely to mislead or
deceive the consumer, such as by failure to disclose other relevant
information” may be actionable under consumer protection statutes but not
common law fraud.
from Blogger http://tushnet.blogspot.com/2024/11/omitting-serving-size-on-package-front.html
They’re even in my size! Heavy, but not as hard to walk in as I feared.
from Blogger http://tushnet.blogspot.com/2024/11/my-latest-acquisition.html
Recommended! Short and thought-provoking.
Property, Speech, and Authorship: A Dilemma for Personhood Theories of Copyright
Cambridge Volume on Intellectual Property & Private Law (forthcoming 2024)
15 Pages Posted: 2 Aug 2024
Date Written: July 22, 2024
In the theoretical literature on the normative foundations of copyright law, a substantial body of work has endeavored to justify the legal institution by grounding it in the allegedly “special” relationship that authors have with their expressive works. Often drawing from cultural or philosophical views about authorship, art, and expression, much of this scholarship seeks to explain and vindicate copyright law with the idea that, in some way or another, authorial works are distinctly personal—and perhaps even parts or extensions of their authors—by their very nature. Typically, legal scholars approach this task by plucking ideas from influential philosophers about personhood, property, or speech to serve as their theoretical starting points and then venturing to expand or adapt these ideas into a justification for copyrights. In the most prominent (and promising) of such interventions, scholars have advanced personhood-based defenses of copyright law adapted from Wilhelm Friedrich Hegel’s self-formation argument for private property rights and Immanuel Kant’s compelled speech argument against unauthorized publication. This essay argues that the task of bridging the gap between personhood and copyright is not so easy—if it is even possible at all. I first argue that, properly understood, neither Hegel’s self-formation argument nor Kant’s compelled speech argument can be adapted or extended into a justification for anything like copyrights. I then argue that these attempted adaptations—and their shortcomings—ultimately reveal a fundamental normative conflict between personhood and copyright. It will follow that, even if authors have distinctly “personal” relationships with their works in the strongest possible sense, personhood-based arguments cannot be used to justify copyright law. Indeed, if anything, the idea that an author has a distinctly personal connection to her work—one that must be recognized and protected by the law—ultimately cuts against the existence of copyrights and might even render them unjustifiable.
from Blogger http://tushnet.blogspot.com/2024/11/reading-list-mala-chatterjee-property.html
Ketonatural Pet Foods, Inc. v. Hill’s Pet Nutrition, Inc., 2024
WL 4679219, No. 24-2046-KHV (D. Kan. Nov. 4, 2024)
Ketonatural is a start-up that sells grain-free pet food,
treats, and supplements. Hill’s is a large pet food company that makes
traditional grain-containing products, one of the big three that does. Hill’s
markets to vets, including by offering free continuing education courses, product
literature, and incentive programs. It funds research at vet schools and also
funds non-profit entities and influential professional organizations, such as
the American Veterinary Medical Association. Some nonprofits are largely funded
by Hill’s, and Ketonatural labels them “cut-outs.” One provided more than $149
million to fund approximately 3,000 veterinary studies. Another produces
textbooks, continuing education courses and veterinary nutrition courses,
complete with credentialed faculty, course materials and lectures. Through the
years, Hill’s officers, directors and other agents have served on their boards.
Hill’s also partners with vets in support of its marketing, such as Dr. Freeman
is a veterinary professor at Tufts University and co-founder of the
“Petfoodology” web site, which Hill’s actively promotes. Other vet partners
have authored various articles on pet nutrition.
Grain-free foods started to gain a foothold in the last
decade, and Hill’s market share fell by more than 20%. Ketonatural alleged that
Hill’s and individual vets began a coordinated campaign to raise concerns about
the risks of grain-free pet foods. Hill’s described these foods as “BEG” diets:
boutique, exotic or grain-free. “Boutique” refers to the company size and
“exotic” describes the ingredients used. “Exotic ingredients can include
kangaroo, lentils, duck, pea, fava bean, buffalo, tapioca, salmon, lamb,
barley, bison, venison and chickpeas. This definition describes every pet food
sold in America except for those made by defendant and two other companies.”
In 2018, the FDA announced that it had begun an investigation
into a potential link between canine dilated cardiomyopathy and diets containing
peas, lentils, other legume seeds, or potatoes as main ingredients,” which
“appear to be more common in diets labeled as ‘grain-free.’ ” As a result of a
FOIA request, Ketonatural discovered that some of Hill’s pet vets had set up a
meeting to discuss their “clinical observations and concerns concerning a
potential relationship between grain-free canine diets and Dilated
Cardiomyopathy.” Since 2014, 80% of cases reported to the FDA (triggering the
investigation) came from two vets affiliated with Hill’s. They allegedly didn’t
send an unbiased, representative sample of the canine DCM cases that they
encountered in their respective professional practices, but withheld cases
involving grain-containing diets, without initially disclosing their selection
protocol to the FDA. The FDA investigation attracted mainstream media
attention, which also featured statements by Hill’s pet vets.
Allegedly because of the biased reporting, in 2018 the FDA
issued a warning about repots of DCM in dogs “eating certain pet foods
containing peas, lentils, other legume seeds, or potatoes as main ingredients.”
This allegedly “created panic among pet owners, resulting in a disproportionate
number of new cases reported to the FDA on dogs fed grain-free diets when
compared to dogs fed diets that contained grain.” In 2022, the FDA issued a
press release saying it didn’t intend to release further public updates until
there was meaningful new scientific information to share. After four and a half
years, it allegedly had not found a causal relationship between BEG diets and
DCM. “Even so, the panic, media attention and misinformation surrounding the
investigation caused massive financial and reputational harm to manufacturers
of BEG pet food.”
Scholarly journals were allegedly a big part of the problem.
Individual Hill’s-affiliated ets wrote at least 15 different journal articles that
allegedly featured intentionally false or misleading statements about DCM,
including a non-peer reviewed article asserting that grain-free diets
contributed to DCM that was widely read. Another study was, after publication,
the subject of an “Expression of Concern” written by the editors of the journal
in which it was published. “The journal did not retract the article but
provided a statement describing undisclosed financial conflicts (including
defendant and MMI), methodology irregularity, faulty reasoning and other
misconduct.” Hill’s also moderated, sponsored and controlled a private Facebook
group on diet-associated DCM in dogs with more 129,000 members. “The moderators
have repeatedly blocked, banned and deleted comments by individuals who
contradict the assertion that BEG diets are correlated with higher rates of
canine DCM, even when the commenters are board-certified veterinary
nutritionists, tenured professors at veterinary schools or others highly
qualified in pet nutrition.”
Challenged statements included:
• “[H]eart problems [are] linked to grain-free food.”
• “What seems to be consistent is that it [DCM] does appear
to be more likely to occur in dogs eating boutique, grain-free, or
exotic-ingredient diets.”
• “The FDA, researchers, and individual clinicians and pet
owners have all reported reversal of disease with a diet change.”
• “We want to be extremely clear that the FDA advisory does
not apply solely or exclusively to grain-free foods. It applies to any foods
that are generally un(der)tested or un(der)studied as long-term dog diets. We
sometimes talk about them as ‘BEG’ diets.”
• “DCM is caused by boutique brands, exotic proteins, or
grain-free or a combination thereof…”
After the FDA investigation, Hill’s revenues grew by more
than 50 per cent to $3.3 billion per year, while Ketonatural lost business and
market value: “former customers stopped buying its products, veterinarians
advised pet owners not to purchase its products and members of its target
market chose not to do so.”
For purposes of its Lanham Act analysis, the court assumed
that defendant would vicariously liable for statements by the cut-out nonprofits
and the individual veterinarians.
The big problem was commercial advertising or promotion. “Courts
have consistently concluded that scientific articles do not constitute
commercial speech and therefore cannot be the basis for false advertising
claims under the Lanham Act, even when a commercial entity has funded the
research.” However, “the secondary dissemination of scientific and academic
research can constitute actionable commercial speech under the Lanham Act if
defendant uses the material to promote its product and influence purchasers.”
Likewise, “web site links to other commercial sites, which are one step removed
from defendant’s own web site, do not render defendant’s web site commercial
speech.”
Thus, the court dismissed any claims related to statements
in scholarly journals and statements on the respective web sites of Hill’s and its
captive nonprofit which linked to articles, interviews and or/blog posts of the
individual veterinarians. (I really don’t get excusing Hill’s website here—it’s
definitely a commercial site, and linking to others’ messages is the same as a
for-profit company disseminating scientific articles in purpose and effect.)
Also, allegedly false statements by Hill’s-associated veterinarians
to mainstream media and pet owners and statements by Hill’s in educational
programs for veterinarians and on Facebook and its web sites were not
commercial speech. “At best, plaintiff alleges that the statements influenced
consumers to purchase products other than its own grain-free products— but not
to specifically purchase defendant’s products.” (This again seems wrong: giving
people reasons to avoid an entire category of competitors does promote
sales, even if there’s some leakage—that’s why disparagement of a competitor is
generally actionable.)
Using the traditional Bolger factors for identifying
commercial speech, these weren’t traditional advertisements. “[N]one of the
allegedly false statements expressly promote defendant’s products relative to
plaintiff’s products or relative to the products of other grain-based pet food
manufacturers.” They weren’t sent directly to consumers or on product
packaging. Thus, Ketonatural didn’t plausibly allege that the statements in
question “proposed a transaction or offered certain goods or services, let
alone for defendant’s products.” Also, “[t]he statements by individual
veterinarians in blog posts, to mainstream media and to pet owners are too
attenuated to deem them promotional in nature because plaintiff’s allegations
assume multiple levels of promotion before reaching an end consumer. Plaintiff
has not alleged that statements by defendant to veterinarians in educational
programs were anything but educational in nature, and the Court cannot
reasonably infer that a continuing educational program on the safety of a pet
food diet is an advertisement.”
Nor did the statements reference specific pet food
manufacturers or products. (Because they disparaged an entire category of competitors.)
Ketonatural did allege Hill’s economic motive, but that wasn’t
enough.
Hill’s also challenged Ketonatural’s claim of literal
falsity. Ketonatural argued that Hill’s made false establishment claims about
the correlation between DCM and BEG diets. A plaintiff challenging “tests
prove” or “establish” claims does not need to affirmatively prove that
defendant’s assertions are false, but only that the studies do not support the
conclusions. But the court found that this standard (which the court called “more
lenient” even though it’s not, it’s just focusing on the falsity of the “tests
prove” claim) didn’t apply, because (1) the statements weren’t made in
advertising (this makes no sense) and (2) Hill’s never claimed that studies “proved”
a link between DCM and BEG. (Reason (2) is at least coherent, though it
conflicts with cases holding that statements about scientific/health matters
are often inherently establishment claims, because they don’t make sense
otherwise—why are you invoking the FDA or “links”?)
But the court did not further agree with Hill’s that
Ketonatural’s claims were barred on the pleadings by laches. Ketonatural filed
suit within a year of the FDA announcing that it had insufficient data to
establish a causal relationship between BEG diets and DCM, and it alleged that Hill’s
did not make costly expenditures in reliance on the purported delay. Thus,
Ketonatural sufficiently alleged that its delay was reasonable, and that Hill’s
did not suffer undue prejudice.
from Blogger http://tushnet.blogspot.com/2024/11/coordinated-campaign-to-disparage-grain.html
Nolen v. PeopleConnect, arguing that ROP laws applied to noncommercial speech like reprinting high school yearbooks are generally unconstitutional.
from Blogger http://tushnet.blogspot.com/2024/10/another-rop-amicus.html
Wesley Financial Gp. v. Westgate Resorts, Ltd., 2024 WL
4581512, No. 6:23-cv-2347-RBD-LHP (M.D. Fla. Aug. 28, 2024)
A rare timeshare exit company lawsuit against a timeshare
developer, alleging false advertising and related claims. It’s unsuccessful but
points to practices that the FTC or AGs might have something to say about.
At one point, plaintiff WFG obtained accreditation and an A+
rating from the Better Business Bureau, which it advertised with the AARP,
allegedly bringing in more than $10 million in revenue. Its methods to secure
exits do not include the use of attorneys or the provision of legal services.
Meanwhile, Westgate will not repossess financed timeshare
interests with outstanding loan balances if owners are current on their
payments. “Only paid-off (or inherited) timeshares qualify for voluntary
repossession or termination with Westgate, and only at its discretion.” WFG’s
advice is apparently to stop making payments and then wait for the developer to
foreclose on an interest and offer to take it back, because the credit hit is better
than the costs of other paths.
In response to exit companies, timeshare developers have rebranded
their existing voluntary repossession procedures as developer-backed “exits.” Westgate
has tried to divert consumers to its own “exit” program along with suing exit
companies. In addition, it “stopped taking back interests from owners whom the
developer even suspected of consulting an exit company, conditioning its
repossessions on an affidavit swearing the owner has not worked with ‘any
timeshare exit company, lawyer or law firm’ in seeking cancellation, or if they
have, disclosing the third party, handing over any contract with them, and
promising to cooperate in any future lawsuit against them.” WFG responded to
this development with a confidentiality clause in its contracts requiring its
customers not to reveal they are working with an exit company. Westgate has in
fact sued owners it later discovered were WFG customers and signed the
affidavit anyway. (I don’t understand why one would get into a relationship with
a timeshare developer.)
Anyway, the timeshare coalition ARDA, on whose board two
Westgate executives sit, allegedly got the BBB to revoke plaintiff’s
accreditation, despite the exit company’s five-star rating based on more than a
hundred customer reviews. Then, it successfully lobbied AARP to stop running
WFG’s ads because it lost its accreditation. “Westgate later sued the exit
company in its home state for violating the Tennessee Consumer Protection Act,
which WFG violated by engaging in the unlicensed practice of law, the district
court ruled.”
This lawsuit followed.
Lanham Act false advertising: WFG argued that Westgate’s exit
program was not in fact available to most owners. It challenged the statement
that “[b]y working with Westgate Resorts, owners who chose to relinquish their
timeshare have been able to do so with very little effort and have been able to
relieve themselves of all future maintenance fee obligations” because this
offer is open only to a very limited subset of owners.
The court rejected this claim because the ads truthfully stated
that direct “exits,” like voluntary repossession and contract termination, were
available to “qualified owners” and “qualifying accounts,” “but without
detailing those qualifications.” Given the reference to qualifications, the “owners
have been able to relinquish” claim wasn’t likely to be materially misleading,
even if “exit” is not available to most owners regardless of loan balance. The
court reasoned that “qualified owners” does not mean or imply “most owners.”
This is where the FTC might well disagree: if the conditions
are mostly unattainable and the qualifications are possible to explain—like “you’ve
paid off the purchase”—then further disclosure is required to prevent consumers
from wasting their time/money on something that won’t help them.
But, the court reasoned, “[f]alsely advertising an available
‘exit’ cannot deceive owners into no longer seeking an exit,” so it couldn’t
have harmed the plaintiff if hopeful owners inquired further and found Westgate’s
program unavailable. I don’t get this logic. Why wouldn’t the failure of the
supposedly best option (as other parts of the ad campaign touted) plausibly
lead at least some consumers to despair and give up? If I try a headache remedy
that’s “the best available” and it doesn’t work, why would I try lesser
versions?
Anyway, antitrust claims failed because they were antitrust
claims.
FDUTPA prohibits “[u]nfair methods of competition,
unconscionable acts or practices, and unfair or deceptive acts or practices in
the conduct of any trade or commerce.” But, as explained above, “[a]dvertising
the Legacy Program—which is undisputedly the only developer-backed way to
cancel a Westgate timeshare—does not injure consumers substantially, even if
the ads lead consumers to phone trees or high-pressure sales pitches before
learning Westgate will not let them out.” So too with lobbying the BBB, and
anyway that was the developer coalition, not Westgate directly, and FDUTPA
doesn’t “extend indirect liability to third parties for the unfair and
deceptive acts of another, regardless of their relationship.”
What about the affidavit of non-involvement with exit
companies? The court agreed that the language was “sweeping.” “Blocking
consumers from speaking with attorneys about a contract as a condition of
bargaining, and punishing consumers if they have done so, offends public
policies favoring ‘access to redress,’ ‘access to courts,’ and the uninhibited
ability to engage in ‘full and frank communication’ with an attorney about
potential legal matters.” But Westgate denied that the affidavit’s language
encompasses “all lawyers, law firms, or third parties”—only the ones that
potential clients are likely to find and ones that have developed expertise.
Still, the court found that WFG couldn’t succeed, because a
prohibition on contracting a non-lawyer exit company was fine. “[E]mploying
contracts of adhesion is not an unfair trade practice on its own.”
Timeshare contract terminations are
not some overriding consumer good whose blanket availability the law protects.
It is not plausible to suggest that it is unethical, unscrupulous, or
substantially injurious to consumers for Westgate to change its termination and
repossession policies and procedures—even intending to nullify exit outfits’
methods that rely on getting the developer’s owners to stop payments.
This is true even if WFG is forced to refund a client’s money,
because of its full refund guarantee, if Westgate finds out about its
involvement. Refunds don’t harm consumers.
Tortious interference/civil conspiracy claims also failed,
especially since WFG inserted its own nondisclosure provision after Westgate changed
its practice—forcing disclosure can’t cause tortious interference under those
circumstances.
from Blogger http://tushnet.blogspot.com/2024/10/timeshare-companys-own-exit-program-for.html
Sanho Corp. v. Kaijet Technol. Int’l, 2024 WL 4553279, —
F.Supp.3d —-, No. 1:18-cv-05385-SDG (N.D. Ga. May 20, 2024)
Note: A jury found Kaijet liable for design patent and
copyright infringement after this opinion, but rejected the TM claims, which I
guess says something about a jury’s ability to distinguish claims. It didn’t
get a chance to decide the false advertising claims, which I think reflects
courts’ relatively lax approach to TM compared to the rigors to which false
advertising claims are subjected before reaching a jury; personally, I likely
would have gone the other way.
Sanho sells accessories under the HyperDrive name, including
MacBook dongles. Kaijet sells competing UltraDrive MacBook dongles.
 |
| Kaijet product |
 |
| Sanho product |
(My spouse uses a third competitor that looks basically indistinguishable; FWIW, he says that he would not buy the same product again because it’s easy to whack it in a way that detaches it from the laptop and that a cable connection would have been a better choice.)
Sanho has a
registration for HYPERDRIVE.
 |
| HyperDrive logo |
 |
| UltraDrive logo |
The court first found that there was a factual issue about
whether the hubs were “power adapters” as specified in the trademark
registration. The hubs can be used “to transmit[ ] power from a ‘source’
(MacBook Pro) to a ‘sink’ (a cell phone being charged).”
The court also found a factual issue on likely confusion
between UltraDrive and HyperDrive, reasoning that because a power hub is not a
drive (and also that there’s a Star Wars reference), the mark was suggestive.
Third-party use of the weak components “hyper” and “drive” didn’t reduce the
strength of the mark (but somehow that didn’t make confusion less likely just
because the overlap was in “drive”). Although the marks weren’t similar in
appearance, they were “similar in sound, meaning, and usage,” since they both
had a two-syllable prefix followed by the word “drive,” and “hyper” and “ultra”
were roughly synonymous. They were directly competing. Although there’s a
distinction between bad “[i]ntent to benefit from a competitor’s goodwill” and
good “intent to copy,” they’re often related and bad can be inferred from good,
as it could be here. Email communications repeatedly referenced Sanho’s design,
and expressed a desire to use similar elements in its own product. Kaijet US
changed its existing product name from “ultrastation” to “UltraDrive” after
Sanho began selling its hubs, and as Kaijet US was preparing to introduce a
competing product into the same market.
Whether there was evidence of actual confusion was a
contested issue about interpreting consumer complaints.
Sanho’s false advertising claim alleged that the defendants falsely advertised
a hub as an “8-in-1” product, when it contains only seven ports. But the court
agreed that this wasn’t literally false, and Sanho offered no evidence of
likely confusion. It seems like a jury should at least have addressed the
literal falsity issue, because it’s hard to say that no reasonable jury could
have found literal falsity, when there are eight numbers for ports and the
numbers don’t correspond to, or even add up to as far as I can tell, eight
distinct functions. But the court reasoned that “labels do, in fact, count out
eight functions. Several of those functions do seem duplicative—(5) and (6) are
both labeled ‘USB 3.0.,’ (7) and (8) are both labeled ‘Memory Card’—but that
suggests the labels are misleading, not literally false.” I would instead have
said that means that both possible meanings—number of functions or number of
ports—are literally false.
 |
| neither eight functions nor eight ports shown |
There were also factual disputes on the copyright
infringement claim based on the parties’ packages. Sanho’s packaging contained both protectable
and non-protectable elements:
 |
| Sanho packaging |
Non-protectable are Sanho’s product name and description,
the packaging’s selection of typographies and colors, and familiar images such
as MacBooks and laptop ports.
Also non-protectible are functional
elements like the listing of product information and specifications. The way in
which the product-shaped cutout or window on the front of the packaging allows
consumers to view the product without opening the packaging is likewise
functional and therefore non-protectable.
However, there was “a spark of creativity here in Sanho’s
arrangement and coordination of the packaging’s otherwise unprotectible
constituent elements—most notably in the alignment of the right side of the
product-shaped cutout with the left edge of a depiction of a MacBook to suggest
the physical docking of the hub to the laptop.” Packaging for similar products
contained “more or less the same elements—product name and description,
specifications and features, cutouts or windows—but in a variety of
arrangements, none of them resembling Sanho’s in overall layout, and none of
them suggesting its product’s physical compatibility with another device in the
way that Sanho’s does.”
 |
| packaging front comparison |
 |
| packaging side comparison |
The court found that defendants
appropriated the most original
element of Sanho’s design: the cutout in the center showing the product hub
physically interfacing with a depiction of a MacBook to the right. In addition,
the front of [defendants’] packaging presents mostly the same information as
Sanho’s, and in the same layout: product name at top, product description at
bottom, “4K” and “50 Gbps” callouts at bottom right. The back of j5create’s
packaging, like Sanho’s, depicts a MacBook, open at a similar angle and viewed
from a similar perspective, with the product hub attached and its ports
labeled, followed by a bulleted list detailing the ports’ capabilities. The
left side panel of [defendants] packaging, like Sanho’s, depicts and labels the
hub’s ports. These are significant similarities in the packagings’ arrangement
and coordination of dominant design features.
But they were also “far from identical,” including
differences in color and font, as well as defendants’ product carrying product
specifications in four languages and depicting the product’s side profile on
the side of the package. Because substantial similarity is qualitative, this
was for the jury.
Finally, the court rejected Kaijet’s false advertising
counterclaim based on Sanho’s allegedly false “fake review campaign” of
positive product reviews on Amazon, based on failure to show materiality. It
was insufficient to provide:
1. A study showing that 74% of
respondents “read online reviews” from online stores like Amazon and BestBuy;
2. A study showing that 32.7% of
respondents cited “[p]roduct reviews and recommendations as a “[m]ain reason
for shopping at Amazon”; and
3. Sanho CEO Daniel Chin’s
declaration testimony that “The UltraDrive is an inferior and lower quality
version of the HyperDrive. It receives less favourable customer rating reviews
on Best Buy’s website and has many complaints.”
“Evidence about where consumers read online reviews is not
probative of what they do with the information in those reviews. Likewise,
evidence about why consumers choose to shop at Amazon is not probative of why
they would choose the HyperDrive over the UltraDrive, when the latter was sold
exclusively through Best Buy.” There was no evidence tending to prove that
Sanho’s alleged fake reviews caused consumers to buy Sanho’s products instead
of defendants’, and self-interested testimony on superiority was insufficient.
(This is a bit of conflating materiality with harm causation, but ok. Imagine a
court finding evidence that consumers generally care about brand names, or
other general testimony about branding, insufficient in a TM case!)
Also, defendants failed to rebut Sanho’s evidence of
immateriality, which was deposition testimony that No such evidence has been
produced. Furthermore, the Kaijet Defendants have failed to meaningfully rebut
Sanho’s evidence of immateriality: deposition testimony that the Sanho product had
a better aggregate rating on Best Buy (where it is actually sold) than it did
on Amazon, and Sanho’s expert’s testimony that the sales metrics of its
products, both of themselves and relative to the sales metrics of Kaijet, were
uncorrelated with the timing of Sanho’s alleged fake review campaign. No
reasonable jury could find, on this record, that Sanho’s fake review campaign
was material.
from Blogger http://tushnet.blogspot.com/2024/10/when-weak-tm-claims-do-better-than.html
Ty, Inc. v. GMA Accessories, Inc., 132 F.3d 1167 (7th Cir. 1997), features dueling bean bag animals. I’ve never been convinced the two pigs at issue were substantially similar, even in staged pictures, but Harvard’s amazing librarians finally dug up a color picture of the two cows at issue, and they’re a lot more similar …. which plausibly influenced the court’s reasoning on the pigs.
 |
| Ty’s Daisy the cow and GMA’s Louie the Cow |
from Blogger http://tushnet.blogspot.com/2024/10/revisiting-ty-v-gma.html
