Celebration on Rimini Street as it achieves significant (c)/Lanham Act victories in 9th Circuit

Posted on December 18, 2024 by rtushnet

Oracle Int’l Corp. v. Rimini Street, Inc., — F.4th —-, No.
23-16038, 2024 WL 5114449 (9th Cir. Dec. 16, 2024)

Rimini Street gets a reasonably substantial victory in its
long-running battle with Oracle in this appeal.

Prior rulings held that Rimini’s processes for serving
clients who use Oracle’s software programs infringed on Oracle’s copyrights.
Rimini therefore developed new processes for servicing its Oracle-using
clients. After a bench trial, the district court ruled that many of these new
processes still infringed Oracle’s copyrights and found that certain
security-related statements violated the Lanham Act. The court of appeals
vacated in part, reversed in part, and remanded.

Oracle’s programs include PeopleSoft, which can be
customized to manage all sorts of business processes, including HR processes
such as timekeeping, benefits administration, and recruitment and financial
processes such as expense tracking and payroll. Oracle also provides optional
software support for PeopleSoft, including updates to reflect changes to tax
laws and other regulations. Customers can also modify and customize the
software themselves or through third-party providers.

“Rimini Street is a third-party provider and direct
competitor with Oracle in the support-services market.” Its services include
troubleshooting support and software updates, including creating files that
only work with Oracle’s products. After the first Oracle lawsuit in 2010, the
court found that Rimini infringed Oracle’s copyrights by engaging in
“cross-use” and creating copies of Oracle’s materials on Rimini’s computer
systems. The court of appeals largely affirmed the district court’s permanent
injunction. The district court later found that Rimini violated the injunction
and held it in contempt on five issues, four of which the court of appeals
upheld. Rimini changed aspects of its business model and sought declaratory
judgment that its revised process, “Process 2.0,” did not infringe. Oracle
counterclaimed for copyright infringement and violations of the Lanham Act. The
district court held that Rimini had, in fact, infringed by engaging in
cross-use prohibited by PeopleSoft license agreements and that an update
created for the City of Eugene’s PeopleSoft software environment was a
“derivative work.” After Oracle abandoned claims for monetary relief, the
district court held a bench trial and additionally found that Rimini (1)
created infringing derivative works, (2) violated Oracle’s PeopleSoft and
Database licensing agreements, and (3) made several statements violating the
Lanham Act.

Derivative works: The court says several useful things, in
line with Pam
Samuelson’s exposition of the derivative works right. (I note amicus
support from, among others, EFF, Glynn Lunney, and Betsy Rosenblatt.) The
district court held that Rimini’s Process 2.0 files and updates were infringing
derivative works because they “only interact[ ] and [are] useable with” Oracle
software. But this was the wrong test.  

The Copyright Act defines a “derivative work” as:

a work based upon one or more
preexisting works, such as a translation, musical arrangement, dramatization,
fictionalization, motion picture version, sound recording, art reproduction,
abridgment, condensation, or any other form in which a work may be recast,
transformed, or adapted.

This “broad” language nonetheless has limits. The text
starts with examples. Although “such as” means the list isn’t exhaustive, it
still indicates the “kind” of works covered. Thus, “based upon” requires “copying
of the kind exhibited in translations, movie adaptations, and
reproductions. Mere interoperability isn’t enough.” I would have thought that
this was the canon of noscitur a sociis, which means we define a term by
“the company it keeps,” but the court treats that as a second principle: “[t]he
examples of derivative works provided by the Act all physically incorporate the
underlying work or works.” Thus, a derivative work “must be in the subset of
works substantially incorporating the preexisting work.” That substantiality
can be literal or nonliteral, in total concept and feel.

Here, though there were several examples of literal copying,
Rimini challenged only the ruling that Rimini’s programs were derivative works
“even if the work[s] do[ ] not contain any of [Oracle’s] copyrighted code … because
they interact only with PeopleSoft,” “are extensions to and modifications of
Oracle’s copyrighted software” and they “cannot be used with any software
programs other than PeopleSoft.” But without more, “derivative status does not
turn on interoperability, even exclusive interoperability, if the work doesn’t
substantially incorporate the preexisting work’s copyrighted material.” Because
the district court applied the wrong legal standard, the court remanded and
didn’t reach Rimini’s alternative argument that Oracle’s licensing agreements
nonetheless authorize any derivative work or analyze whether Rimini’s programs
incorporated protectable nonliteral elements of Oracle’s programs.

In addition, the district court applied the wrong legal
standard on Rimini’s § 117(a) defense, which provides that it’s not infringing
when an “owner of a copy of a computer program … mak[es] … another copy or
adaptation of that computer program” for certain purposes, such as when it’s an
“essential step” in using the program. At the pleading stage, the district
court struck this affirmative defense because it found that “Oracle’s customers
only license, rather than buy, Oracle’s copyrighted software.”

In the Ninth Circuit, courts look for “sufficient incidents
of ownership” to distinguish a license to a copy from ownership of the copy.
Mere labeling of an arrangement as a license, while relevant, is not itself
dispositive. Courts also consider whether the parties’ arrangement
“significantly restricts the user’s ability to transfer the software” and
whether the agreement “imposes notable use restrictions.” Because the concern
is ownership of the copy of the copyright, not of the copyright itself, use
restrictions that only protect against the infringement of the copyrighted
material are less relevant. Instead, courts should attend to use restrictions
that affect using the copy of the computer program, such as limiting the
user to “one working and one back up copy of the software,” forbidding the
“examination, disclosure, copying, modification, adaptation, and visual display
of the software,” and permitting the “software use on [a] single computer,
[while] prohibit[ing] multicomputer and multi-user arrangements, and
permitt[ing] transfer to another computer no more than once every thirty days.”
Other “incidents of ownership” may be considered, including whether the user
paid “significant consideration to develop the programs for [the user’s] sole
benefit” and whether the user could use the “programs ‘forever,’ regardless of
whether the parties’ relationship terminated.”

The district court seemed to rely only on the labeling of
the agreements between Oracle and its customers as a “license,” and that wasn’t
enough. Remand again, both on ownership and on the other elements of the §117
“required step” defense.

The court of appeals also found that the Oracle Database
licensing agreement did not prohibit third-party support providers, like
Rimini, from possessing a copy of Oracle’s software to further a client’s
“internal business operations,” requiring reversal of the district court’s
conclusion that it infringed Oracle’s copyright in Database.

A similar ruling about Rimini’s delivery of PeopleSoft
updates to clients was intertwined with the derivative works ruling above and
needed further sorting out.

Lanham Act: The district court found that Rimini engaged in
false advertising; Rimini challenged whether 12 statements about its security
services could be found to be misleading.

Oracle provides periodic security patches, aka “Critical
Patch Updates,” to customers who buy Oracle software support. Rimini offers its
own security service using a technology called “virtual patching.” Unlike
Oracle’s patches, virtual patching does not modify source code. Instead, it
acts as a firewall for software programs, attempting to intercept and block any
exploits. Rimini’s statements covered: (1) statements about the relative
security of the parites’ services; (2) statements that Rimini offers “holistic”
security; and (3) statements about the need for software patching.

(1)  “Relative
security” statements

• “Security professionals have found that traditional vendor
security patching models are outdated and provide ineffective security
protection.”

• Oracle’s [Critical Patch Updates] are unnecessary to be
secure.

• It is not risky to switch to Rimini and forgo receiving
[Critical Patch Updates] from Oracle.

• Virtual patching can serve as a replacement for [Oracle]
patching.

• “Virtual patching can be more comprehensive, more
effective, faster, safer, and easier to apply than traditional [Oracle]
patching.”

• “Rimini Security Support Services helps clients
proactively maintain a more secure application compared to [Oracle’s] support
program which offers only software package-centric fixes.”

• Rimini provides more security as compared to Oracle.

• Rimini’s [Global Security Services] can “pinpoint and
circumvent vulnerabilities months and even years before they are discovered and
addressed by the software vendor.”

These statements were puffery.

Comparative assertions about
effectiveness, riskiness, and security are the kinds of generalized statements
of product superiority that we have routinely found to be nonactionable. Here,
neither Oracle nor the district court provided any objective, quantifiable metric
to measure software’s security, risk to vulnerabilities, or security protocols’
effectiveness to prove the falsity of Rimini’s statements. Indeed, the
possibility of exploitation by hackers always exists. No product can offer
complete “security” or eliminate all “risk.” Without an objective measure of
the difference between perfect security and the security programs offered by
Rimini’s and Oracle’s products, any statement about comparative security is
necessarily tinged with subjectivity. As Oracle’s security expert acknowledged,
“security experts can reasonably disagree on what constitutes adequate
security.”

The district court held that Rimini’s statement that its
security services could “pinpoint” future vulnerabilities “before they even
exist” was literally false because such technology is “not technically
feasible.” But “Rimini never claimed clairvoyance in spotting vulnerabilities;
instead, it was merely claiming that its products can spot problems before they
are ‘discovered and addressed by the software vendor.’” That was “a comparative
statement of superiority—not a statement of psychic ability. Indeed, Rimini
presented evidence that it had identified and addressed specific
vulnerabilities before Oracle released a patch to address them.” Reversed.

(2)  The
claim that Rimini offers “holistic security” solutions for Oracle software for
enterprises

The district court found that “holistic security” is a term
of art within the world of software security that refers to “a comprehensive
approach to security at all layers of a system, and includes security patching
at the software level.” Because “industry standards can provide objective
meaning to otherwise subjective or ambiguous terms in particular contexts,” the
statement was actionable.

If “holistic security” means “multi-layered security
protection including at the source-code level” that’s a “binary determination”
with “falsifiable criteria.” The district court found that Rimini doesn’t offer
multi-level security, so the court of appeals affirmed.

(3)  “No
need for software patching” statements

• Oracle’s [Critical Patch Updates] provide little to no
value to customers and are no longer relevant.

• Once an Oracle ERP platform is stable, there is no real
need for additional patches from Oracle.

• If you are operating a stable version of an Oracle
application platform, especially with customizations, you probably cannot apply
or do not even need the latest patches.

The district court held that these statements were
misleading because the “security community recognizes that software-level
patching is one of the most important aspects of any modern IT security
strategy.” These too were puffery.

The record showed that Oracle’s
customers are “some of the most sophisticated companies in the world” and “take
the security of their systems seriously.” Whether to deploy or skip software
patching is a matter of subjective discretion. One Oracle customer testified
that it made the decision not to apply Oracle’s Critical Patching Updates
because it focused on its firewall security and believed that the patches could
introduce new problems—all before it considered signing up with Rimini. Thus,
it is doubtful that any of Oracle’s customers would be fooled about its own
security needs merely based on Rimini’s fanciful but vague statements. Indeed,
Oracle could not identify “any customers that left Oracle and went to Rimini
because of a statement about security.” Nor did Oracle present any evidence of
a security breach suffered by a Rimini client. So while these statements border
on falsehood, we cannot say that they are so specific and measurable to become
actionable under the Lanham Act. We thus reverse.

All this also required the district court to reconsider the
scope of the injunction.

Judge Bybee dissented in part, and would have found that the
statement “Oracle’s [Critical Patch Updates] provide little or no value to
customers and are no longer relevant” was not puffery.  “Little or no value” and “no longer relevant”
were “absolute characteristics” that could be “falsified”—Oracle’s product was
either valueless and irrelevant or not, even if using software patching is a
discretionary decision, and even if Oracle’s “sophisticated” customers would
not be “fooled” by this statement. Rimini “internally acknowledges that
patching … is necessary,” and has said that “no one is thinking of not
applying patches at all.” Most of Rimini’s statements were puffery because they
used qualifiers like “probably,” “can,” and “more”—and made generalized
statements. [FWIW, the “qualifiers” justification doesn’t persuade me—most
studies I’ve seen show that consumers don’t distinguish in that way.]

from Blogger http://tushnet.blogspot.com/2024/12/celebration-on-rimini-street-as-it.html

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Reading list: Carys Craig, The AI-Copyright Trap

Posted on December 12, 2024 by rtushnet

 The AI-Copyright Trap

Carys J. Craig

Abstract

As AI tools proliferate, policy makers are increasingly being called upon to protect creators and the cultural industries from the extractive, exploitative, and even existential threats posed by generative AI. In their haste to act, however, they risk running headlong into the Copyright Trap: the mistaken conviction that copyright law is the best tool to support human creators and culture in our new technological reality (when in fact it is likely to do more harm than good). It is a trap in the sense that it may satisfy the wants of a small group of powerful stakeholders, but it will harm the interests of the more vulnerable actors who are, perhaps, most drawn to it. Once entered, it will also prove practically impossible to escape. I identify three routes in to the copyright trap in current AI debates: first is the “if value, then (property) right” fallacy; second is the idea that unauthorized copying is inherently wrongful; and third is the resurrection of the starving artist trope to justify copyright’s expansion. Ultimately, this article urges AI critics to sidestep the copyright trap, resisting the lure of its proprietary logic in favor of more appropriate routes towards addressing the risks and harms of generative AI.

from Blogger http://tushnet.blogspot.com/2024/12/reading-list-carys-craig-ai-copyright.html

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incontestable LIZZIE BORDEN registration + actual confusion insufficient to overcome weight of history, 1st Circuit rules

Posted on December 11, 2024 by rtushnet

US Ghost Adventures, LLC v. Miss Lizzie’s Coffee LLC, No.
23-2000 (1st Cir. Nov. 15, 2024)

The Lizzie Borden House “bears a storied history that
originates with the still-unsolved murders — in 1892 — of Lizzie Borden’s
father and stepmother.” Ghost Adventures “provides ghost tours and related
hospitality services across the United States.” It owns a bed and breakfast operated
out of the Lizzie Borden House featuring a museum, “ghost tours,” and kindred
activities. 

bed & breakfast sign

Its success “depends in large part on the Lizzie Borden name and
lore.” Ghost Adventures owns incontestable trademark registrations for both the
name “Lizzie Borden” for hotel and restaurant services and for a realistic
hatchet logo displaying a notched blade (a reference to the implement that
allegedly killed Borden’s parents).

Ghost Adventures’ registered logo

Miss Lizzie’s Coffee LLC recently opened a coffee shop next
door to the Lizzie Borden House. You will not be surprised to learn that it,
too, markets itself by reference to the Lizzie Borden saga. One sign says “Miss
Lizzie’s Coffee” between a cup of coffee and a stylized bloody hatchet. A
second sign advertises Miss Lizzie’s as “The Most Haunted Coffee Shop in the
World!” “The hatchets on both signs include handles and dramatic blood
splatters.”

2 hatchets and blood splatters, “The Most Haunted Coffee Shop in the World!”

Miss Lizzie’s Coffee in Sweeney Todd-like font and a bloody hatchet

Some visitors have incorrectly assumed that the Lizzie
Borden House and Miss Lizzie’s are affiliated or asked about whether such a
relationship existed. Some guests of the Lizzie Borden House were frustrated to
learn that they could not bring Miss Lizzie’s coffee on their tours of the
Lizzie Borden House, having bought the coffee under the erroneous impression
that the coffee shop was affiliated with the historical site. A Fall River city
official called Ghost Adventures to discuss its “new business in the building
next door named Miss Lizzie’s.”

Ghost Adventures sought to enjoin Miss Lizzie’s from using
either the “Lizzie Borden” trademark or the hatchet logo in the coffee shop’s
trade names, trade dress, and marketing materials.

The core problem here was causation. Ghost Adventures needed
to show that Miss Lizzie’s used its mark in commerce in a way that
caused confusion, not the Lizzie Borden mythos. The district court found that
the hatchet displayed on Miss Lizzie’s signage was “not at all the hatchet
trademarked by Ghost Adventures” nor even “a colorable imitation of it.” It
continued: “Miss Lizzie’s mark associates its business with the historical
story of Lizzie Borden, not the mark ‘Lizzie Borden’” that Ghost Adventures
owns. Although “Ghost Adventures has an ‘incontestable’ trademark in ‘Lizzie
Borden’ and its hatchet, Miss Lizzie’s is using neither the mark ‘Lizzie Borden’
nor the Ghost Adventures hatchet.” “Ghost Adventures has not demonstrated that
its mark bears the strength which might give it the ‘secondary meaning’ reach
that, for example, ‘Sam Adams Beer’ might claim regarding the historical figure
Sam Adams.”

The court found the consumer confusion “limited” and caused
mainly by physical proximity, their common but independent reliance on the
shared Lizzie Borden mythos, and the tendency to associate services related to
a historical site with the site itself, not by the similarity of the businesses’
marks. After all, “the same issues would arise if Miss Lizzie’s called its cafe
‘Forty Whacks Coffee’ and used a different image as its logo.”

The district court also noted that the parties’ services
were different: “on one hand, sophisticated buyers who come from afar with
tickets or reservations to experience the Lizzie Borden House; and the other,
buyers seeking food or coffee.”

The parties also rely on different forms of advertising, and
a sign on Miss Lizzie’s storefront explicitly disclaimed any relationship with
the neighboring Lizzie Borden House. Such a disclaimer can “tip the scales to a
finding of no likelihood of confusion and no infringement” where, as here, “the
multi-factor analysis points to a low likelihood of confusion.”

disclaimer of affiliation or association in window

The court of appeals affirmed, noting, for example, that “Miss
Lizzie’s hatchet spews blood, whereas Ghost Adventures’ is spotless. Indeed, it
appears that the only similarity between the hatchet logos is that they both
depict hatchets. The court, then, did not clearly err in finding that the
hatchet logos are facially dissimilar.” Also, “the district court supportably
found that Miss Lizzie’s reference to ‘Lizzie’ was to the lore of Lizzie Borden
— which Ghost Adventures does not own — rather than to the mark ‘Lizzie Borden.’
Thus, the meaning associated with the name ‘Miss Lizzie’s Coffee’ is only
incidentally similar to that of the ‘Lizzie Borden House.’” Ghost Adventures
didn’t persuade the court of appeals that consumers would associate “Lizzie
Borden” with its services rather than with Lizzie Borden herself.

Likewise, the district court permissibly viewed the parties’
differences as more important than their joint presence in the broad
hospitality industry. “Ghost Adventures’ registration of the mark ‘Lizzie
Borden’ did not prohibit other businesses in the hospitality industry from
setting up shop in the vicinity of the Lizzie Borden House. Nor did it prohibit
such businesses from marketing themselves by the use of Lizzie Borden’s story.”

What about actual confusion?

The relevant consumer confusion in
a trademark infringement action is confusion caused by an infringing
mark. Consumer confusion due to non-trademarked similarities between businesses
or products does not indicate infringement. For example, if two outdoor
Saturday farmers’ markets opened on the same block, causing wandering shoppers
to think that they were affiliated, their proximity and similar business
models, without more, would not be suggestive of trademark infringement. This
basic principle tracks a core purpose of trademark law: to prevent a copycat
from appropriating the goodwill of a brand by wrongly copying the brand’s mark.
Because the district court supportably found that the source of consumer
confusion was not the similarity of their marks, but something else altogether,
the evidence of confusion relied upon by Ghost Adventures is of no consequence.
(emphasis added)

Of course, this means that we have to be very sure what you
can and can’t own as a mark! The foundational proposition of the district court
and court of appeals here is “Ghost Adventures can’t own the Lizzie Borden mythos,
even if consumers think they do.” I agree! But apparently a beer company might
own the Sam Adams mythos, at least for sufficiently beer-related activities?
This is of course related to the difference between owning a mark for something
and confusion about affiliation, which is a very different animal.

What about intent? Ghost Adventures argued that the coffee
shop “opened a location in immediate proximity to [Ghost Adventures’] business”
and “intentionally used the word ‘Lizzie’ and a hatchet in [its] name and
signage.” The district court supportably found that Miss Lizzie’s sought to
benefit from the Lizzie Borden story in its own right, “not from the manner in
which Ghost Adventures used that story.” It was not clear error to decide, “given
the historical significance of the location,” neither Miss Lizzie’s acts alone
nor those acts “considered in light of the entire record” evinced an intent to
appropriate Ghost Adventures’ trademark.

What about incontestability? It didn’t affect the
marketplace strength of the mark, which was not strong enough to displace
consumers’ association with the real Lizzie Borden. 

The district court also pointed to a sign taped to the physical storefront that conspicuously reads: “Miss
Lizzie’s Coffee is NOT ASSOCIATED, NOR AFFILIATED in any way with the Lizzie
Borden Museum or Bed and Breakfast next door, nor any other business.” The district court supportably found that this
clarification “further distinguish[ed] the businesses,” noting that effective
disclaimers can “tip the scales to a finding of no likelihood of confusion and
no infringement.”

from Blogger http://tushnet.blogspot.com/2024/12/incontestable-lizzie-borden.html

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allegations of copied instructions lead to finding of noninfringement and possible 512(f) violation

Posted on December 11, 2024 by rtushnet

MFB Fertility, Inc. v. Action Care Mobile Veterinary Clinic,
LLC, — F.Supp.3d —-, 2024 WL 1719347, No. 23 cv 3854 (N.D. Ill. Apr. 22, 2024)

MFB sued Action Care for copyright and trademark
infringement; Action Care counterclaimed for misrepresentation under 17 U.S.C.
§ 512(f), tortious interference, defamation per se and per quod, and
cancellation of Plaintiff’s “PROOV” trademark. Defendant won dismissal of the copyright
claim and plaintiff won partial dismissal of the counterclaims.

MFB was founded by fertility expert Dr. Amy Beckley, who invented
PROOV to measure the presence of progesterone (PdG) metabolites in urine and to
allow women to confirm successful ovulation by tracking their PdG levels.
Through Amazon and its website proovtest.com, MFB “promotes, offers for sale,
and sells products … under the trademark PROOV.” Proov products include ads
and instructions, such as FDA-required labels and their website’s Frequently
Asked Questions page, so that Proov can be readily used by unskilled persons at
home.

Competitor Action Care also specializes in the sale of PdG
ovulation test strips. Action Care’s PdG test is called OvuProof, using Amazon  and buyovuproof.com.

MFB sent a DMCA takedown notice to Amazon in 2023 targeting
Action Care, resulting in at least 174 units of Action Care’s products being
stranded or lost. MFB’s DMCA Takedown Notice included, along with the statutorily
required language, the following statements:

They [Action Care] found a cheap
Chinese manufacturer to copy our tests then used all of our wording on the
product page and product inserts. Copyrighted content: They copied all of our
FAQs and product description from this product page [ ] They also took wording
from our FAQ on our website: https://ift.tt/BMX7LZI
including the ‘who might have a problem with ovulation, comment FAQ, when to
test, and what is successful ovulation.

Action Care counternoticed, but MFB sued, sent its complaint
to Amazon, and got Amazon to take down OvuProof again. The putative copyright
infringement is here:

 

comparison of instructions (far from identical)

Action Care’s legal strategy (waiting on the trademark part,
which courts are often reluctant to decide on a motion to dismiss) was good
here, and Amazon might well be willing to restore its storefront, though I have
no insight into its decisionmaking. The court reasoned that MFB’s works were “scientific
and factual,” “entitled to the narrowest copyright protections.”

It is “axiomatic” that copyright law denies protection to
“fragmentary words and phrases” and to “forms of expression dictated solely at
functional considerations” on the grounds that “these materials do not exhibit
the minimal level of creativity necessary to warrant copyright protection.” “[L]anguage
describing what a product does and how it is used is generally
noncopyrightable; and even where it is copyrightable, infringement can be
demonstrated only by precise copying.” Even assuming validity of MFB’s
copyright and access, there was no substantial similarity given the highly
factual nature of the works and the lack of striking similarity, a limit
imposed to avoid “monopolistic stagnation.” There was no verbatim copying here;
any overlap was necessary to describe an unprotected process.

MFB’s own claims of similarity showed their weakness:

• “The term ‘Cycle’ is identical to the term ‘Cycle.’ ”

• “The phrase ‘Works Great with Tests’ is substantially
similar to the phrase ‘Works Well with Ovulation/LH Tests.’ ”

• “The term ‘PdG Test Strips’ is identical to the term “
‘PdG Test Strips.’ ”

• “The term ‘CONFIRM OVULATION’ is identical to the term
‘CONFIRM OVULATION,’ and both are used in the first paragraphs of their
respective works as a way to distinguish from predicting ovulation.”

• “The phrases ‘THE ONLY FDA-CLEARED PdG Test’ is
substantially similar to the phrase ‘OvuProof is FDA registered,’ and each work
includes that point in the third paragraph of their respective works.”

“In fact, under MFB’s construction, Action Care would
ostensibly be required to violate the FDA’s labeling requirements for in vitro
diagnostic products to bypass MFB’s copyright.” The court cited Feist in
support of the idea that regulatorily mandated statements may not be original;
here the FDA requires name and intended use(s), a statement of warnings or
precautions, and other key details. “This functional, regulated language is
precisely the ‘expression’ that MFB improperly claims intellectual property
over.” Any copying was “limited to fragments that are descriptive of its
product and is compelled by the legislature. MFB cannot claim ownership of
medical terms such as ‘cycle’ or ‘PdG Test Strips’ no more than Pfizer or
Moderna can claim ownership over ‘COVID-19 vaccine.’”

512(f) misrepresentation: Given the lack of binding precedent,
the court looked at Lenz; did Action Care plausibly plead a lack of good
faith? MFB’s DMCA notification represents that Action Care copied “all” of
MFB’s Copyrighted Works. The word “all” means 100 percent, or verbatim. That
was false as a matter of law, rendering Action Care’s allegations significantly
more plausible than in other cases, and Lenz makes willful blindness
actionable as well. “[W]hether a copyright owner formed a subjective good faith
belief is, in most instances, a factual issue that is not appropriate for
resolution on a motion to dismiss.” Thus, “a DMCA notice submitter like MFB
must proactively consider the potential that similarities in materials are
unprotectable. … Given the discrepancy between ‘all’ and, apparently, no
copying …, there is a triable issue as to whether the MFB formed a subjective
good faith belief that Action Care’s sale of its OvuProof was infringing, or if
instead MFB were willfully blind to the fact that Action Care was not
infringing in violation of 512(f).”

Defamation and tortious interference claims based on
statements to Amazon also proceeded.  (It
does not appear that MFB argued that 512(f) had preemptive effect.)

But the trademark cancellation claim failed because Action
Care argued that there was no likelihood of confusion, depriving Action Care of
standing.

from Blogger http://tushnet.blogspot.com/2024/12/allegations-of-copied-instructions-lead.html

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Right of publicity question of the day, Duolingo edition

Posted on December 6, 2024 by rtushnet

 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

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individual pitches/RFPs are advertising/promotion, but not user support/FAQ pages

Posted on December 2, 2024 by rtushnet

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

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omitting serving size on package front may mislead if dosage suggests per-gummy dose

Posted on November 25, 2024 by rtushnet

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

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My latest acquisition

Posted on November 18, 2024 by rtushnet

 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

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Reading list: Mala Chatterjee, Property, Speech, and Authorship: A Dilemma for Personhood Theories of Copyright

Posted on November 13, 2024 by rtushnet

 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

Mala Chatterjee

Columbia Law School

Date Written: July 22, 2024

Abstract

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

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coordinated campaign to disparage grain-free & other pet food not actionable under Lanham Act

Posted on November 11, 2024 by rtushnet

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

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