Friday, July 21, 2017

Transformative work of the year (so far): To tell my story, showing near DC now

Runs until July 30


Although the structuring conceit is a loose retelling of Hamlet, with a modern-day fangirl as the tragic protagonist Elsie, there are a number of other fandoms represented, most obviously Harry Potter, secondarily Twilight (though only identified as “vampire” in the promo materials, grrr), MCU (similar, grr), LoTR, Sherlock, and Historical RPF (Abraham Lincoln).  Some observations:

1.     Just as Ready Player One hails as its ideal reader an 80s fanboy, this play hails a 21st-century fangirl.  I laughed a lot. 
2.     Me, a pedant: Technically, this isn’t a “fanfic,” but a “fandrama” or “fanwork,” though I understand why they used the more well-recognized term.
3.     For a number of reasons, commercial “fanworks,” if you accept the application of that term to them—and for this play at least I think we should—tend to be metafictions, interested in the mechanisms of storytelling (see, e.g., Jasper Fforde’s series, Dumas père’s Kean as remixed by Sartre, Supernatural’s Fan Fiction and Slash Fiction episodes), especially if you include in the metafiction category retellings from the perspective of a character whose experience is elided from the original (see, e.g., Wide Sargasso Sea, Lo’s Diary, The Wind Done Gone, Jacqueline Carey’s retelling of LoTR).  This play is no exception, as the title indicates, and I also sense a reference to Hamilton’s “who lives, who dies, who tells your story”—especially since Petri’s play, much more than Shakespeare’s, emphasizes that you (the character) have little to no control over those things.  In Petri’s version, Elsie is not able to orchestrate the narrative for Horatio to repeat.

4.     The program fascinated me because the format is very specifically taken from the Archive of Our Own, with its major tags, additional tags and kudos count, as well as fandom categorizations.  And I’m pretty sure all the additional tags are canonical, even though some of them are not what we envisioned when we set up the additional tags field.  That’s folksonomy for you.  Anyway, obviously I don’t think there’s any trademark problem, and wouldn’t be for a creative work even if it used more of the Archive’s trade dress, but it’s notable that the AO3 now provides some standard formatting choices.

FFrom outside, a wall inviting audience members to share their fandoms.  I recognized maybe half?

Tuesday, July 18, 2017

9th Circuit burps up a correction to recent Gerber case

Bruton v. Gerber Prods. Co., No. 15-15174, 2017 WL 3016740, -- Fed. Appx. --- (9th Cir. Jul. 17, 2017)

On a petition for rehearing, the previous panel opinion and partial dissent were withdrawn and replaced with the following, still partially reviving plaintiff’s consumer protection class action but getting rid of a deception theory, as the dissent had wanted.

Bruton filed a putative class action against Gerber, alleging that labels on certain Gerber baby food products included claims about nutrient and sugar content that violated FDA regulations as incorporated into California law.

Again, the court of appeals rejected the district court’s ruling that the class wasn’t ascertainable. There is no separate “administrative feasibility” requirement for class certification.

However, there was no genuine dispute of material fact on Bruton’s claims that the labels were deceptive in violation of the UCL, FAL, and CLRA.  Her theory of deception was that the combination of “healthy” claims on Gerber’s products, in violation of FDA regulations, and the lack of claims on legally compliant competitors’ products made Gerber’s labeling likely to mislead the public into believing that Gerber’s products were of a higher quality than its competitors’ products.

This theory “may be viable,” since even technically correct labels can be misleading under California law.  However, Bruton didn’t produce enough evidence to survive summary judgment; her own vague, uncorroborated, and self-serving testimony was insufficient.  Further, the record included Gerber’s and some competitors’ labels, but it showed that those competitors made many of the same allegedly illegal claims. “A reasonable jury comparing the labels side by side could not rationally conclude that Gerber’s labels were likely to deceive members of the public into thinking that Gerber’s products were of a higher quality than its competitors’ products that made the same type of claims.”  Likewise, FDA warning letters (informal and non-binding) didn’t indicate that competitors complied with the law.

However, the district court erred in granting summary judgment to Gerber on Bruton’s claims that the labels were unlawful under the UCL. The unlawfulness prong “borrows” predicate legal violations and treats them as independently actionable under the UCL. “The best reading of California precedent is that the reasonable consumer test is a requirement under the UCL’s unlawful prong only when it is an element of the predicate violation.” The predicate violation here was of California’s Sherman Law, which itself incorporates standards set by FDA regulations, and those standards didn’t include any requirement of likely deception. (Though query how that works with modern First Amendment jurisprudence.)


Park claim fails to fly: formerly well-known mark lacks current secondary meaning

Parks LLC v. Tyson Foods, Inc., 2017 WL 3014273, -- F.3d --, No. 16-2768 (3d Cir. Jul. 6, 2017)

District court opinion discussed previously here. Since the 1950s, Parks Sausage Company has manufactured or licensed sausage under the brand name “PARKS,” though its registration expired in the early 2000s.  In 2014, Tyson, the owners of the frankfurter brand BALL PARK, which is responsible for 23% of the revenue of all franks sold in the US, launched the super-premium line PARK’S FINEST, and Parks sued for trademark infringement and false advertising.  Here, the court of appeals affirms the rejection of both claims.

“False advertising claims do not require proof of secondary meaning, so litigants may be tempted to frame a false association claim as a false advertising claim, to ease their evidentiary burden.”  That’s what seems to have happened here, so the court tried to clarify the distinction between §43(a)(1)(A) and §43(a)(1)(B) claims, holding that the false advertsing claim here failed because it was “essentially a false association claim in disguise.”

False advertising requires a misrepresentation of “the nature, characteristics, qualities, or geographic origin” of a product.  “PARK’S FINEST is only misleading in the way that Parks suggests if a consumer makes the connection between PARK’S FINEST and PARKS and has in mind a pre-existing association between PARKS and high quality products. This is a false association claim and nothing more.”  Even the argument that the name would misleadingly imply that the product was a sausage when it’s really an inferior frankfurter depended on the consumer knowing that PARKS was a mark for sausages and making a false association.

Even if Parks argued that “PARK’S FINEST” was misleading for blurring the distinction between frankfurters and sausages, the packaging was unambiguous that the product was frankfurters and the rest of the label couldn’t confuse consumers; plus Parks repeatedly took the position that a frankfurter is a kind of a sausage, meaning that there was no misleadingness by its own lights.

Parks contended that PARK’S FINEST was misleading with regard to “origin,” but that didn’t work both for the reasons given above and because §43(a)(1)(B) is about geographic origin, not other types of false designations of origin.  It’s not the right vehicle “for addressing claims of false designation of origin that are not concerned specifically with geographic origin.” “Geographic origin” “refers solely to the place of origin and not to the creator, manufacturer, or any broader conception of the term ‘origin.’”  (In a footnote, the court commented that it wasn’t resolving the issue of whether a term had to be a “geographically distinctive trademark” before a manufacturer could be found liable for falsely advertising the geographic origin of its goods.  Here “trademark” seems to mean something like “common-law certification or collective mark.”)  Because the name PARK’S FINEST says nothing about the product’s “geographic origin,” there was no valid §43(a)(1)(B) claim.

The false association claim then failed for want of a showing of secondary meaning.  As a surname-based mark, PARKS was required to show acquired distinctiveness; it didn’t have that any more.  Parks argued that inherent distinctiveness should have been a jury question because “parks” is also the plural of “park,” as in recreational land, and therefore could be seen as an “arbitrary” mark. “But it is undisputed that Parks was named after its founder, someone who Parks describes with justifiable pride as ‘an important figure in the history of American Business,’ and Parks’s reputation is closely linked to its founder,” so no reasonable juror could conclude that PARKS was anything other than a reference to the founder. (Isn’t there a logical problem here?  If in fact PARKS lacks acquired distinctiveness, why wouldn’t the hypothetical reasonable consumer encounter the mark in ignorance of its history, and thus not make the “link” as described, leaving her to figure out what was going on?)

Of note in the secondary meaning discussion, Parks tried to use its confusion survey to show secondary meaning; that didn’t work well.  An Ever-Ready survey shows consumers only the potentially-infringing product and asks open-ended questions to determine whether they believe the product is associated with the senior mark; it can also provide evidence of secondary meaning. This kind of survey works best for commercially strong marks.  “Holders of weaker marks more frequently employ a Squirt survey,” as here.  A Squirt survey puts two products side by side and asks consumers about their beliefs about source.  “[A] well-designed Squirt survey may show a likelihood of confusion. What it does not do or even purport to do, however, is prove secondary meaning.”  Because of how the survey is conducted, “a consumer who had never heard of PARKS could still conclude that the two products were affiliated.” Follow-up questions might have allowed participants to identify the source of PARKS or PARK’S FINEST, which could have shed light on secondary meaning, but the survey didn’t ask them.


Parks argued that proof of likely confusion proved secondary meaning, but that’s just wrong.  The evidence sometimes overlaps, but not always. “Establishing that two marks are similar does not necessarily lead to any valid conclusion about whether either of the two has secondary meaning.”

Bee aggressive: Copied ad leads to grab bag of claims

Fischer v. Forrest, 2017 WL 2992663, -- F. Supp. 3d –, 14 Civ. 1307 (S.D.N.Y. Jul. 14, 2017) (report and recommendation)

Fischer invented Fischer’s Bee-Quick, a product used to facilitate honey harvesting, and marketed it using, among other things, the following four phrases:
a) “Are you tired of your spouse making you sleep in the garage after using Butyric Anhydride?”
b) “Are you tired of using a hazardous product on the bees you love?”
c) “Fischer’s Bee-Quick is a safe, gentle, and pleasant way to harvest your honey”
d) “A Natural, Non-Toxic Blend Of Oils and Herbal Extracts”

Defendants were in some way involved with Brushy Mountain Bee Farm, which initially resold Fischer’s product, using the text (whose authorship was disputed):
This 100% Natural, non-toxic blend of oils and herb extracts works just like Bee Go and it smells good! Fischer’s Bee Quick is a safe, gentle, and pleasant way to harvest your honey. Are you tired of your spouse making you sleep in the garage after using Bee Go? Are you tired of using a hazardous product on the bees you love? Then this is the product for you!

Around 2010, Brushy Mountain decided to sell a comparable product that performed the same function; Brushy Mountan bought a third party product and labeled it as “Natural Honey Harvester,” but continued to use nearly the same promotional text.  A 2011 Brushy Mountain catalog used the phrases as follows:
For years we have promoted the use of a natural product to harvest honey but an unreliable supply of such a product has forced us to come out with our own. This 100% Natural, non-toxic blend of oils and herb extracts works just like Bee Go® and it smells good! Natural Honey Harvester™ is a safe, gentle, and pleasant way to harvest your honey. Are you tired of your spouse making you sleep in the garage after using Bee Go®? Are you tired of using hazardous products on the bees you love? Then this is the product for you!

Fischer also alleged that defendants intentionally removed copyright management information (“CMI”) from Fischer’s promotional brochure and the Fischer’s Bee-Quick bottle photos. Defendants changed the textual reference in one of the phrases from “Fischer’s Bee-Quick” to “Natural Honey Harvester,” and allegedly also stripped the metadata from Fischer’s original Fischer’s Bee-Quick bottle photo displayed on Brushy Mountain’s website, and overlaid the photo with a watermark of the Brushy Mountain Bee Farm logo.

There were lots of factual disputes; the magistrate recommended not granting summary judgment on the ground that Fischer’s copyright registration was invalid, even though the first submission (of several) to the Copyright Office didn’t contain the brochure at the heart of the case.  The magistrate also recommended finding the brochure as a whole copyrightable, and concluded that the relevant portions evinced enough originality to be protected, at least as a whole. The “rhetorical questions that play on the worries of beekeepers” were unique and the whole of the brochure was greater than the sum of its parts, although the phrase “A Natural, Non-Toxic Blend Of Oils and Herbal Extracts” was merely descriptive of the product ingredients. Even in isolation, though, most if not all of the rhetorical questions were long enough for copyright protection, particularly the “sleep in the garage” bit.

Unfortunately for Fischer, the copyright claim still had fatal problems.  (1) He did not register before the infringement began, so he was not eligible for statutory damages or attorneys’ fees.  (As an aside, the magistrate analyzed the relevance of secondary liability to the rule that infringements that continue past the date of registration don’t provide eligibility for statutory damages—although two of the vendors for  which Brushy Mountain was allegedly secondarily liable began their infringing activities after the registration, their infringements were republications of the initial ad, and thus part of an ongoing series of infringing acts that didn’t restart the clock.)  (2) Fischer elected statutory damages and declined to submit evidence of actual damages (which probably would have been hard to prove; this is not the type of work for which there is a licensing market in which money changes hands).  (3) Defendants agreed to remove the challenged text, mooting the claim for injunctive relief.  With nothing left for a court to do, the magistrate recommended granting summary judgment to defendants on the copyright claim.

DMCA claim:  Fischer alleged that defendants stripped the metadata from Fischer’s original Fischer’s Bee-Quick bottle photo displayed on Brushy Mountain’s website, but the magistrate recommended rejecting that argument because he submitted no evidence that the metadata included CMI; not all metadata is CMI. Fischer also argued that the allegedly infringing ad had CMI stripped from it because defendants changed the phrase, “Fischer’s Bee-Quick™ is a safe, gentle, and pleasant way to harvest your honey,” by replacing “Fischer’s Bee-Quick™” with “Natural Honey Harvester”:
  
side by side comparison
Fischer argued that the product’s name, because it had Fischer’s name in it, was CMI.  To prevail on a §1202 claim, Fischer had to show that defendants “intentionally remove[d]” CMI that was “conveyed in connection with copies ... of [his] work or ... displays of [his] work.” The relevant “work” here was the the brochure, while defendants created derivative works of the brochure. The creation of infringing derivative works didn’t qualify as the “removal” of CMI from the original work. 

The magistrate was also skeptical that even more direct “extraction” of phrases from a larger work could constitute “removal” of CMI, since the statute contemplates “copies” of a work and extraction of “distinct elements” of a work doesn’t constitute a “copy.” 
If, for example, someone extracted and reproduced several sentences from a copyrighted Sherlock Holmes story, without crediting the Conan Doyle Estate, it would stretch the definition of “removal” to say that CMI had been “removed” from the copyrighted “work.” It might be copyright infringement, but it would not be a DMCA violation.
This conclusion makes total sense—otherwise Blurred Lines should also have been the basis of a §1202 claim—but it requires a bit of fancy footwork to reconcile with the idea that substantial similarity can constitute a violation of the reproduction right, further strengthening my view that the derivative works right should be where such claims live.

Even assuming that the relevant “work” was the four key phrases collectively, Fischer didn’t show that the phrases contained CMI.  “The DMCA’s expansive definition of CMI cannot trigger liability any time a person’s name is contained in a copyrighted work without reference to how that information was used and displayed on the work itself.”  The name of the product discussed in the work is not CMI for the work; such a name, even if includes the author’s name, “does not have any CMI significance—it simply is part of the product’s name (just like Kellogg’s Corn Flakes or Wrigley’s Chewing Gum).”

Fischer didn’t plead a trademark infringement claim, the magistrate reasoned, because he consistently alleged only “counterfeiting,” even when represented by counsel. 

Fischer’s §43(a) false endorsement claim also failed.  This claim was based on Brushy Mountain’s use of URLs that, even after they switched products, still contained “fischer” as part of the address string, e.g., http://brushymountainbeefarm.com/Fume-Pad-w_-Fischers-Bee-Quick/productinfo/777F/
 
page for Fischer replacement, with Fischer's name still in URL post-domain path
The judge applied the multifactor confusion test, and found that the claimed strength of the mark, mark similarity, and product similarity all favored Fischer.  But there was no evidence of actual confusion or bad faith, which the judge found to be the most significant under these circumstances.  This wasn’t a domain name case; the use of “Fischers.com” or “Fischersbeequick.com” to sell a competing product would support a false endorsement claim. But a name “buried in the post-domain paths of the Brushy Mountain web pages” wasn’t likely to confuse consumers about Fischer’s endorsement or approval. “No consumers are likely to believe that Fischer has somehow endorsed or approved Natural Honey Harvester when viewing the post-domain portion of the URL, if they even see it at all.”  Likewise, consumer sophistication favored defendants.  “Whether defined as the typical consumer of beekeeping products, or internet users writ large, no ordinary consumer is likely to see Fischer’s name in the post-domain path of the URL and wonder if that signified his endorsement of a completely different product in the accompanying web page.”  Nor did Fischer provide evidence that, as he contended, the use of his name in the address led Brushy Mountain’s pages to appear higher in search results, or that, even if that were true, that fact would have any bearing on consumer confusion..

Fischer’s only evidence of actual confusion was an undated review on the Brushy Mountain website complaining: “The first bottle I bought last year worked well but this new stuff was a complete waste of time and money.” But there was no evidence that the commenter ever bought Fischer’s product, as opposed to two different bottles of the replacement product; defendants submitted an affidavit stating that the review was posted two and a half years after Brushy Mountain stopped selling Fischer’s product.

The New York unfair competition claim is like a §43(a) claim, but requires “‘either actual confusion or a likelihood of confusion, and there must be ‘some showing of bad faith’ on the part of the defendants.” So that was a no-go too.

Note: why not a right of publicity claim?  Would the court’s CMI reasoning “this is a product name, not an author name” also apply there?  Would there be any other defense?

The magistrate also recommended tossing out Fischer’s false advertising claim, which was based on the statement, “For years we have promoted the use of a natural product to harvest honey but an unreliable supply of such a product has forced us to come out with our own. This 100% Natural, non-toxic blend of oils and herb extracts works just like Bee Go® and it smells good!”  Fischer primarily argued that “our own” was false, because they bought a third-party product, though he also claimed that “the third-party manufacturer makes nothing but cleaning products, calling into question if the product is even food-grade, let alone ‘100% Natural”’  Furthermore, the only thing one defendant said about whether the product was “actually natural” in deposition was “I assume so.”  Given where the burden of proof lies in a private false advertising claim, this wasn’t enough to proceed on the 100% natural claim, even though it was material.

As for “our own,” that wasn’t literally false; while it could mean that defendants selected the ingredients and personally created the product, but “another reasonable interpretation is that defendants marketed a natural honey harvesting product, from whatever source, under their brand name,” which was true. There was no evidence of consumer deception, even though Fischer testified that unnamed competitors had responded to the ad by making their own knockoffs—even if knockoffs emerged, that didn’t mean the ad caused them, or that consumers were deceived.


Thursday, July 13, 2017

Court gags on Utah's ag-gag law

Animal Legal Defense Fund v. Herbert, No. 13-cv-00679 (D. Utah Jul. 7, 2017)

The court strikes down Utah’s ag-gag law, relying on Alvarez, Reed, and the idea that not all access procured by lying is “trespass” or “harmful.” H/T James Grimmelmann, who thinks the reasoning doesn’t quite work, perhaps because of the court’s reluctance to rely on the legislature’s obvious speech-suppressive intent.

A series of high-profile investigations into agricultural facilities in the mid- to late 2000s spurred a new round of ag-gag laws. While one might once have thought that film of workers jabbing sick cows in the eye, grinding up live chicks, and skinning calves alive might have led to increased protections against animal abuse, it instead mostly led to increased protections against investigation of agricultural facilities. (One wonders what Upton Sinclair would have thought: the animal rights organizations aimed for the heart, and apparently hit the public in the eye.) Utah’s law was introduced, according to its sponsor, because of “a trend nationally of some propaganda groups . . . with a stated objective of undoing animal agriculture in the United States.” Another representative, a farmer, stated that the bill was targeted at “a group of people that want to put us out of business,” and noted that farmers “don’t want some jack wagon coming in taking a picture of them.” The sponsor of the Senate bill said that the bill was meant to address the “vegetarian people that [are] trying to kill the animal industry” by “hiding cameras and trying to . . . modify the films and stuff like that.”

Utah’s law criminalized “obtain[ing] access to an agricultural operation under false pretenses,” as well as (1) bugging an agricultural operation; (2) filming an agricultural operation after applying for a position with the intent to film; and (3) filming an agricultural operation while trespassing.

In 2013, Amy Meyer became the first person to be charged under the law—apparently the only person ever charged under an ag-gag law nationwide. She was arrested while filming what appeared to be a bulldozer moving a sick cow at a slaughterhouse, though she was on public property at the time and thus not subject to the law. She was actually charged, though the State dismissed the case without prejudice (!). This is an interesting case study not of chilling effects (of which more below) but of licensing effects—the police, whose acts are likely to be far more important than those of prosecutors, and harder to constrain, felt empowered to suppress her recording because they had a general sense that some kinds of recording were illegal, and prosecutors backed them up.

Meyer, joined by ALDF and PETA, sued. The state challenged their standing. Allegations of subjective chill aren’t injury in fact, but “a plaintiff need not expose himself to actual arrest or prosecution to be entitled to challenge a statute.” In the Tenth Circuit, standing requires (1) that in the past, the plaintiff engaged in the kind of speech implicated by the statute; (2) that the plaintiff has a desire, but no specific plans, to engage in the speech; and (3) that the plaintiff presently has no intention of engaging in the speech because of a credible threat the statute will be enforced.  This test was satisfied by all three plaintiffs.  No concrete plans to violate the law were required.

The state argued that lying and recording without permission weren’t protected by the First Amendment at all.  Starting with lying: lying is speech, but some speech is outside the First Amendment categorically.  Alvarez, however, says that “lies are not categorically unprotectable by the First Amendment,” though lies that cause “legally cognizable harm” are outside of First Amendment protection.  Do the lies targeted here—“obtain[ing] access to an agricultural operation under false pretenses”—cause legally cognizable harm?

The state identified two kinds of harm from such lies: (1) danger to animals and employees, and (2) trespass. The first is (no pun intended) bullshit.  There was no evidence of it, and no evidence that it motivated the law’s enactment.  Plus, even though some lies could endanger animals or employees, not all would, e.g., “the applicant who says he has always dreamed of working at a slaughterhouse, that he doesn’t mind commuting, that the hiring manager has a nice tie.”  These are interesting examples because they’re all, in some way, unfalsifiable.  There are falsifiable lies that also wouldn’t inherently pose dangers, though they might be somewhat more correlated with various risks—e.g., the applicant who claims to have a college degree but doesn’t; the applicant who fails to report a conviction twenty years ago; and so on.  Query what the fate of a more specific law targeted at lying about qualifications ought to be where the job itself doesn’t actually require a particular qualification.

On to trespass: the state argued that access to private property procured through misrepresentation is trespassing, and trespassing is inherently legally cognizable harm.  But misrepresentation doesn’t always negate consent, and with consent there is no trespass.  Courts to consider the issue have concluded that it depends on the type of harm, if any, the liar causes. “[I]f the person causes harm of the type the tort of trespass seeks to protect—interference with ownership or possession of the land—then her consent to enter becomes invalid, and from that point on she is not merely a liar, but a trespasser as well.”  This is where James Grimmelmann objects, as I understand it; trespass can also be about interference with the right to exclude, which is why we teach Jacque v. Steenberg Homes, and that is inherent in the tort.  But there is still physical trespass that harms only dignitary interests—as in Jacque—and dignitary interests have at best a mixed track record against First Amendment interests (note that I am doing the usual slip/slide between coverage and protection here, sorry).  Anyway, without interference with ownership or possession, the consent given to the liar remains valid even if procured through misrepresentation. 

“Thus, a competitor who enters a business to steal secrets while posing as a customer is a trespasser, as is the man who is invited into a home while posing as a repairman, but is in fact just a busybody looking to snoop around (because both have interfered with ownership or possession of the property).” 

Okay, that’s a little harder to explain, because the secret-stealer may cause economic harm, but not to the land, and the busybody may not cause any economic harm (and we may have to default to the concept of high-risk categories, since someone who will lie to get into your house poses obvious dangers to you and your property).  Contrast those people with the court’s examples of liars who don’t cause trespass-type harm: “the restaurant critic who conceals his identity, the dinner guest who falsely claims to admire his host, or the job applicant whose resume falsely represents an interest in volunteering.”  These seem to be, respectively, socially productive, social, and hard-to-see-how-a-jury-could-judge-harm lies.  It’s not clear to me that the concept of “possession” helps much here in figuring out the difference between lies that are generally recognized as causing more harm than they’re worth and lies that aren’t.  It seems that trespass doctrine itself may encode the same “lies that cause harm” category as Alvarez, with all the resulting questions about when the inquiry should be retail or wholesale.  I can’t say that feels wrong to me, but it does expose the structure of Alvarez’s consequentialism. 

Back to the court’s reasoning: “the Act here is immune from First Amendment scrutiny under the State’s trespass theory only if those who gain access to an agricultural operation under false pretenses subsequently cause trespass-type harm.”  Because such people don’t necessarily cause harm, and the law sweeps in trivial, harmless lies—“an applicant’s false statement during a job interview that he is a born-again Christian, that he is married with kids, that he is a fan of the local sports team,” or the use of a local address for an applicant who’s out of town—the law is subject to First Amendment scrutiny.

The state argued that the court should construe “false pretenses” to exclude harmless white lies and cover only lies material to a person’s access.  That had vagueness implications, and might cover the applicant who’s really a fan of the crosstown rival rather than the local team, but regardless, the lie’s materiality to the owner does not itself make a liar into a trespasser, as several cases about undercover investigations have held.  So when is an invited guest a trespasser? The court offered the example of a landscaper who gets a contract by misrepresenting his previous experience, then does a great job—has he committed a trespass?  The court found the “trespass-type harm” standard to be the most persuasive.  The materiality of the lie might render it harmful, but not in a legally cognizable way.  Ultimately, absent a further showing of harm, at least some of the lies criminalized by the law were protected by the First Amendment.

The state then argued that obtaining a job under false pretenses causes legally cognizable harm.  Alvarez says: “Where false claims are made to effect a fraud or secure moneys or other valuable considerations, say offers of employment, it is well established that the Government may restrict speech without affronting the First Amendment.” This might work if the law were limited to obtaining employment under false pretenses, but instead it covered “access,” which would include “lying about wanting to take a tour, lying about an interest in acquiring the facility, or lying about wanting to write an article about the facility for Modern Farmer.”

The First Amendment also applied to the recording provisions, even though the state argued that the act of recording wasn’t speech.  But we know that speech-suppressive laws can operate at different points in the speech process.  The government can’t circumvent the right to disseminate a video by regulating the making of that recording instead.  The state can regulate the act of recording, but the regulation must be justified and tailored appropriately.

Finally, the state argued that the First Amendment wasn’t implicated because the law applied only to speech on private property, to which the First Amendment didn’t apply. The state’s argument conflated “a landowner’s ability to exclude from her property someone who wishes to speak” with “the government’s ability to jail the person for that speech.” The First Amendment is not itself a license to trespass on private property, or a defense to a private trespass claim.  (But isn’t that exactly what it is here, run through a concept of consent?  After all, the state is involved in the enforcement of the private trespass claim, as it was in NYT v. Sullivan.  One way to think about it, tentatively: what we are really talking about is the idea of consent, and how some lies don’t vitiate consent; it might be a different question if the state explicitly legislated to make clear that a particular lie vitiated consent, but absent that there is a common-law background against which relevant harm is defined.  Framed like that, this implicates the question of standing/legislative competence to identify harm, but at least provides a roadmap for how one might alter the definition of harm by finding something new and cognizable.) 

Generally, a landowner can remove someone from her land even when that person wishes to exercise First Amendment rights. But the question here was whether the state could prosecute a person based on her speech on private property, without even justifying or tailoring the law.  It can’t.  The state certainly couldn’t criminalize any criticism of the government on private property.  (Could it criminalize political discussions without the consent of the property owner on whose property the discussions were held?  This hypothetical has some relevance to various proposals about whether, for example, Delaware ought to change its corporate law so that shareholders should have to affirmatively vote to allow corporations to give political donations.)

What level of scrutiny applies?  Under Reed, a law is content-based “if determining whether someone violated the law requires looking at what was said.”  Still, it’s not entirely clear what level of scrutiny is applied to anti-lying laws after Alvarez, in which a plurality applied strict scrutiny and two other Justices applied “proportionality review,” seemingly a variant of intermediate scrutiny.  The court wasn’t sure what the “narrowest” ground in Alvarez was, because it characterized the disagreement among justices as “one of kind—whether to apply strict or proportional scrutiny—not of breadth.”  That seems odd to me; ordinarily we’d say intermediate scrutiny was the narrower ground, but in any event, lower courts have generally applied strict scrutiny to laws implicating lies post-Alvarez.

Here’s where everything would be much simpler if we just admitted this was a viewpoint-based law; there’s a reason they’re called “ag-gag” laws.  But instead, the court reasoned that the law was content-based because determining whether there’s been a lie requires scrutinizing what the person said.  The state argued that an anti-lying provision is content-neutral because it barred all persons, regardless of the message they intend to disseminate, from lying to gain access to agricultural operations.  But that’s not the test under Reed.  As for the recording provisions, the question was whether criminalizing the recording of a particular location was a content-based restriction.  It was, because the law criminalizes the recording “of” the operation, not merely any recording “at” the operation.  “[A] person standing on agricultural operation property who films a passing flock of geese is certainly at an agricultural operation, but nobody watching the film would contend it was a recording ‘of an agricultural operation.’ … In short, if a person walks off an agricultural facility with a recording, the only way to know whether she is criminally liable under the Act is to view the recording.”  That’s content-based.

The court’s reading of Reed is readily defensible (though it doesn’t address the internal contradictions of Reed, as it has no reason to do so).  Essentially, at least outside of commercial speech, only time/place/manner restrictions are exempt from strict scrutiny.  One might wonder what is left for the concept of viewpoint-based laws.  In a pre-Reed world where content-based meant “not time, place and manner, but covering broad categories in some way that doesn’t inherently suggest that a government attempt to distort debate is afoot,” the concept of viewpoint-based regulation did useful work in identifying government attempts to distort debate that would get scrutiny that was strict in theory and fatal in fact.  Post-Reed, who knows?

Unsurprisingly, the law didn’t survive strict scrutiny.  The court didn’t have to wade too far into “complex policy questions” because of the breadth of the law.  The government identified four allegedly compelling interests: (1) the law protects animals from diseases brought into the facility by workers; (2) it protects animals from injury resulting from unqualified or inattentive workers; (3) it protects workers from exposure to zoonotic diseases; and (4) it protects workers from injury resulting from unqualified or inattentive workers. The state explicitly disclaimed reliance on privacy or property interests.  As the court noted, there’s no mention of worker or animal safety in the legislative history, which was instead “rife with discussion of the need to address harm caused by ‘national propaganda groups,’ and by ‘the vegetarian people’ who are ‘trying to kill the animal industry.”

Even assuming that animal and worker safety were actually the reasons for the law, there was no evidence that the law advanced those interests.  The targeted harm was entirely speculative, and that can’t establish a compelling state interest. 

At most, there was “some evidence in the record of Plaintiffs’ undercover operatives perhaps prolonging suffering of animals by not reporting abuse in a timely manner.” The state didn’t claim that the law furthered the interest of quickly addressing animal abuse by agricultural operations, but even had it done so, the law wasn’t “remotely” tailored to that goal.  Several states require employees who record abuse to turn over the recording to authorities within a certain time period.  While not opining on the constitutionality of such a provision, that would be both more narrowly tailored to and more effective at addressing delays in reporting animal abuse.

Even if the state had shown a compelling interest in animal and employee safety, it hadn’t shown narrow tailoring.  Narrow tailoring requires that a law be “actually necessary” to achieve the state’s interests, and may not be over or underinclusive.  The record didn’t show necessity, and was both hugely overinclusive, criminalizing “the most diligent well-trained undercover employees, and underinclusive because “it does nothing to address the exact same allegedly harmful conduct when undertaken by anyone other than an undercover investigator.”  What the law was perfectly tailored to do was preventing undercover investigators from exposing agricultural facility abuses. ß We are apparently having a general debate over whether, or in what circumstances, courts can look at what the government officials responsible for a policy were actually trying to do, based both on what they said and on what they wrote into the policy.  If you think that the analysis above was too much work for an obvious conclusion, or that it may have unintended consequences for much less pernicious laws, as I do, then it may be useful to rely more heavily on the objectively manifested indicia of intent: who was targeted?  There’s often no separate need to ask “why.”


Anyway, as the state didn’t contend that preventing such exposure was a compelling state interest, that was the end of the analysis, and of the law.

Documents from my ICE suit

Available here, via Public Citizen. From what we have, I think it's fair to say that most seizures are legitimate counterfeits, so to speak.  That doesn't excuse ICE or the brand owners who supply them with information from the obligation to comply with the law, of course, especially when the exceptions are particularly likely to serve free speech values.  But it's much better than the alternative.

Wednesday, July 05, 2017

Another thought on ICE's statements

This isn’t specifically IP-related, but I’m pondering the part of my FOIA suit requesting training materials for ICE agents relying on case law, etc.  Initially, the ICE spokesperson who responded to my inquiry said that ICE based its seizure decisions on consultation with agency and Department of Justice attorneys, including consideration of “potential fair use provisions and federal circuit-specific case law.”  When ICE didn’t produce any documents relating to any of that, we used the initial statement as evidence that ICE hadn’t met its FOIA obligations.  The court found it perfectly plausible that all ICE used to determine counterfeit status were manufacturers’ guides, rather than materials of its own.


Now, I will admit that I too suspected that the initial claims were bullshit, in the specific sense of being made with complete indifference to their truth or falsity in order to achieve a non-truth-related conversational aim, that of getting me to shut up and go away.  (That worked really well, as you can see.)  But it’s depressing—I wish I could say extraordinary—that the court didn’t even count that statement as evidence that such guidance existed.  What does it mean for a democracy when a court tells us we shouldn’t take official statements seriously, even—maybe especially—statements made at such a low level about matters that are relatively low-stakes?  Is government only to be trusted when it's under oath?

Today in likely unlicensed goods

These Joker fireworks:
And just because the typo is awesome--not a portmanteau word you see that often, or usually want to have go together:
"open cap to explose the fuse"

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

When last I reported on this, the judge had ordered ICE to unredact materials showing company advice to ICE to seize parody merchandise, since such merchandise wasn't counterfeit and there could be no legitimate law enforcement interest in keeping this advice from the public.  Indeed, ICE's subsequent production showed that, like the NHL, the NFL has instructed ICE that obvious parodies/nonconfusing uses are counterfeit:
From NFL manual: Dallas Sucks shirt is counterfeit because "NFL licensed merchandise will never favor one Club over another or make derogatory use of another Club's marks"

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

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

a few misrepresentations aren't commercial advertising or promotion

Solmetex, LLC v. Dental Recycling, Inc., No. 17-cv-860, 2017 WL 2840282 (S.D.N.Y. Jun. 26, 2017)

The parties compete in the market for devices for removing particulate from dental office wastewater. (Did I mention how much I love learning about market niches I never even considered? This job is the best job.) The court here dismisses defendant DR’s amended counterclaims against Solmetex.  In 2009, DR entered into an exclusive marketing contract and licensing agreement with the Michigan Dental Association and its subsidiary; MDA agreed to promote DR’s product to its members. Solmetex, upon learning of a 2017 promotion, allegedly made two kinds of misrepresentations about DR’s product to MDA and another third party.  Solmetex allegedly told representatives from MDA that DR’s product hadn’t been tested by a relevant organization, wasn’t compliant with safety standards, and couldn’t replace Solmetex’s product, and repeated these statements in a C&D to MDA.  DR alleged that these statements were false, but MDA nonetheless terminated its marketing and licensing agreements with DR as a result.  Solmetex also allegedly contacted an unknown representative of the dental distributor Henry Schein and stated that DR’s devices “were not approved by the EPA ..., and infringed a patent.” In reality, the relevant EPA rule had been put “on hold” by the Trump administration, and Solmetex had no patents on its devices, but DR lost at least one sale as a result.

Solmetex sued DR for allegedly unlawfully marketing its device as equivalent to Solmetex’s product, which among other things produced counterclaims and then amended counterclaims.  The court found that DR didn’t sufficiently allege “commercial advertising or promotion” for its Lanham Act claim—it didn’t plausibly allege that Solmetex’s isolated misrepresentations were disseminated to the wider purchasing public. Though DR alleged that Solmetex requested that MDA disseminate the alleged misrepresentations to its members, it didn’t allege that this actually happened.  So too with similar allegations about Schein.  Although DR could plead based on information and belief, “such allegations must be accompanied by a statement of the facts upon which the belief is founded.” DR’s sole factual support for alleging that the statements were widely disseminated is that a single representative from Schein told a single member of the purchasing public that DR’s product was not EPA-approved and had infringed upon a patent. Even assuming that Solmetex was plausibly the source of Schein’s misrepresentation, this allegation didn’t support the inference that Solmetex conducted “a wide-reaching false advertising campaign disseminated to the wider purchasing public,” as required.

The common law unfair competition counterclaim also failed.  In New York, that’s misappropriation.  Product disparagement generally involves no misappropriation and therefore must be plead as a claim for trade libel, which it was not here.  Alleged violations of Delaware and Massachusetts consumer protection statutes also failed. Delaware’s Deceptive Trade Practices Act required a “pattern [ ] of deceptive conduct,” not alleged here; two instances of deceptive conduct weren’t enough.  Massachusetts Gen. Laws c. 93A requires that the conduct “(1) fall within at least the penumbra of some common-law, statutory, or other established concept of unfairness, (2) it must be unethical or unscrupulous, and (3) it must cause substantial injury to a consumer or another businessman.” But DR didn’t get past the first element because it hadn’t successfully alleged another wrong.

Tortious interference: DR alleged that Solmetex’s false representations caused MDA to terminate its marketing and licensing agreements with DR, but didn’t allege that MDA breached a contract by doing so. DR also failed to plead that Solmetex acted solely out of malice, or used dishonest, unfair, or improper means, as required for a tortious interference claim. While misrepresentations can constitute dishonest, unfair, or improper means, they must rise to the level of an independent tort to do so.


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

Monday, July 03, 2017

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

FilmOn.com v. DoubleVerify, Inc., 2017 WL 2807911, No. B264074 (Cal. Ct. App. Jun. 29, 2017)

FilmOn, an Internet-based entertainment media provider, sued DoubleVerify, a provider of authentication services to online advertisers, for trade libel and related claims for falsely classifying FilmOn’s websites under the categories “Copyright Infringement-File Sharing” and “Adult Content” in confidential reports to certain clients that subsequently cancelled advertising agreements with FilmOn. The court of appeals affirmed the grant of DoubleVerify’s anti-SLAPP motion.  DoubleVerify was engaged in conduct in furtherance of its constitutional right of free speech in connection with an issue of public interest, even though its information was provided confidentially and not disseminated.

DoubleVerify argued that its reports concerned matters of public interest because the prevalence of adult content and copyright infringement online had received attention from both the public and government regulatory agencies. DoubleVerify submitted, among other things, press reports concerning numerous lawsuits filed by media production companies against FilmOn, as well as complaints filed and injunctions entered in a number of federal district courts against FilmOn for copyright infringement.

The trial court analogized DoubleVerify’s reports to more public media advisory efforts, observing it was “not any different, really, than the Motion Picture Association putting ratings on movies.”  Because of the “massive amount of attention” paid to FilmOn’s relationship to copyright infringement, DoubleVerify’s reports clearly concerned a matter of interest to the public. On the merits, the trial court found FilmOn failed to establish a probability of success because the undisputed evidence showed DoubleVerify’s statements were essentially true and DoubleVerify did not make the statements with the intention to harm FilmOn’s business.

On appeal, FilmOn argued the statements at issue didn’t concern “a public issue” or “an issue of public interest,” because (1) the reports contained only “[b]asic classification and certification decisions” with “little to no analysis or opinion”; and (2) the reports were made “entirely in private, to individual companies that subscribe to [DoubleVerify’s] services.”  The anti-SLAPP statute doesn’t define the key terms, but it should be construed broadly to protect free speech.  Thus, an issue of public interest is any issue in which the public is interested, though mere curiosity isn’t enough.  Moreover, the breadth of the statute means that it covers even private communications about a public issue.

As for the claim “[b]asic classification and certification decisions that contain little to no analysis or opinion are not constitutionally protected activity within the ambit of the anti-SLAPP statute,” the court of appeals examined All One God Faith, Inc. v. Organic & Sustainable Industry Standards, Inc. (2010) 183 Cal.App.4th 1186 (OASIS).  In that case, a commercial trade association sought to develop an “organic” certification for use by its members with their personal care products. A nonmember competitor sued, arguing the certification was contrary to federal standards for the term “organic,” and thus using an “ ‘OASIS Organic’ ” seal would be false advertising. The court of appeals affirmed the denial of an anti-SLAPP motion, reasoning that the association wasn’t being sued for its opinion about what made a personal care product “organic,” but for authorizing its members to use the seal on their products in the market. While the former might be a matter of public concern, “certification of commercial products—the activities that [the plaintiff] seeks to enjoin”—didn’t further such speech, because the protected conduct, articulating a standard, would be complete before any authorization occurred.  Thus, the act of placing a seal on a member product communicated nothing about the proper standards for labeling a personal care product organic.  However, FilmOn’s business tort and trade libel claims were based entirely upon the message communicated by DoubleVerify’s “tags.” And advertisers only abandoned FilmOn based on the tags because they believed that the public would be interested in whether adult content or copyright infringing material appears on a website. Thus, the claims were based on conduct in furtherance of speech.

Also, the conduct concerned issues of interest to the public. DoubleVerify showed that the presence of adult content on the Internet generally, as well as copyright infringing content on FilmOn’s websites specifically, had been the subject of numerous press reports, regulatory actions, and federal lawsuits. The public debate over legislation to curb children’s exposure to adult and sexually explicit media content also showed that DoubleVerify’s reports identifying such content on FilmOn’s websites concerned an issue of public interest.  Common sense also supported this conclusion.

Nor did the private nature of the communications matter.  It’s just not true that to qualify as speech in connection with an issue of public interest, “the statement must itself contribute to the public debate.”


Friday, June 30, 2017

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

First Resort, Inc. v. Herrera, 2017 WL 2766094, -- F.3d –, No. 15-15434 (9th Cir. Jun. 27, 2017)

First Resort, a nonprofit providing free pregnancy-related services, challenged San Francisco’s Pregnancy Information Disclosure and Protection Ordinance, which targeted false or misleading advertising by limited services pregnancy centers (LSPCs). The court of appeals affirmed the district court’s ruling that the Ordinance was constitutional and not preempted by state law.

First Resort’s target clients are “women who are unsure how to proceed with unplanned pregnancies, including women considering abortion.” It bought keywords such as “abortion” and “emergency contraception”; its advertising competes with abortion providers for viewers’ attention.  Online, it advertised itself “as an unbiased and neutral organization that provided ‘abortion information, resources, and compassionate support for women’ with ‘unintended pregnancies’ who are ‘considering abortion,’” promised to “equip [women] with the resources [they] need to make a well-informed decision about [their] options,” and offered information about abortion procedures and costs. “Notably, the website and advertising materials did not mention First Resort’s anti-abortion stance or that it did not provide referrals for abortions.”

Further background: false and misleading advertising by pregnancy clinics is a well-documented problem.  Some such clinics “frequently fail to provide medically accurate information” and “the vast majority of pregnancy centers” contacted during a federal investigation misrepresented the medical consequences of abortion.  San Francisco’s City Attorney sent First Resort a letter in 201 expressing his “serious concerns” about First Resort’s misleading advertisements and asking First Resort to “correct” its advertising “to clarify that the clinic does not offer or make referrals for abortion services.”

The city’s ordinance defined a “[p]regnancy services center” as “a facility, licenced or otherwise ... the primary purpose of which is to provide services to women who are or may be pregnant, that either (1) offers obstetric ultrasounds, obstetric sonograms or prenatal care to pregnant women, or (2) has the appearance of a medical facility.” A limited services pregnancy center (LSPC) is a pregnancy services center that doesn’t directly provide or provide referrals to clients for abortions or emergency contraception.”

Under the ordinance,

(a) It is unlawful for any [LSPC], with intent directly or indirectly to perform pregnancy-related services (professional or otherwise), to make or disseminate or cause to be made or disseminated before the public …, in any newspaper or other publication, or any advertising device or in any other manner or means whatever, … any statement, concerning those services, professional or otherwise, or concerning any circumstance or matter of fact connected with the proposed performance or disposition thereof, which is untrue or misleading, whether by statement or omission, that the [LSPC] knows or which by the exercise of reasonable care should know to be untrue or misleading.
(b) It is unlawful for any [LSPC], with intent directly or indirectly to perform pregnancy-related services (professional or otherwise), to make or disseminate or cause to be so made or disseminated any such statement identified in subsection (a) as part of a plan or scheme with the intent not to perform the services expressly or impliedly offered, as advertised.

Before filing an action, the City Attorney must provide the LSPC with written notice of the violation and indicate that the LSPC has ten days to cure the violation.  If it doesn’t, the City Attorney can sue, with penalties from $50-500 per violation.

First, the court of appeals found that the ordinance was facially valid; it had a constitutional application and it was not unconstitutionally overbroad or vague, but regulated only unprotected false or misleading commercial speech.  (I might have gone with “apparent professional speech” to bolster the commercial speech analysis; whether or not the centers provide medical services in the ordinary sense, they seem to be offering medical advice—at least in the limited way targeted by the ordinance.  The professional speech consideration is at least implicit in the discussion of the services and marketplace at issue.)

First Resort argued that the Ordinance regulated all advertising, not only false or misleading advertising, and also that it regulated only noncommercial speech. First, the Ordinance clearly limited itself to false or misleading speech.  As for commercial speech, “[w]here the facts present a close question, ‘strong support’ that the speech should be characterized as commercial speech is found where the speech is an advertisement, the speech refers to a particular product, and the speaker has an economic motivation.” These factors are not individually necessary, however.  In American Academy of Pain Management v. Joseph, 353 F.3d 1099 (9th Cir. 2004), the court of appeals held that advertisements for paid medical services constituted commercial speech, as to a California state law prohibiting doctors from advertising they were “board certified” in certain circumstances.  The advertising at issue related to a specific product, medical services, and the advertiser had an economic motive: to solicit a patient base.

Here, the ordinance’s purpose was similarly to regulate advertising related to medical services, and the LSPCs had  “at least one similar economic motive for engaging in false advertising: to solicit a patient base.”  However, in American Academy, the patients were paying clients, and here they were not. The court of appeals declined to limit American Academy to “circumstances where clients pay for services.”  In this case, soliciting patients “directly relates to an LSPC’s ability to fundraise and, in turn, to buy more advertisements.” The joint statement of undisputed facts included: “First Resort’s employees are encouraged to share client stories because they are useful in fundraising,” and “[a] majority of First Resort’s fundraising communications reference the benefit of its services to clients and often include client stories.” Furthermore, successful advertising directly affects First Resort’s employees’ compensation, as “[m]embers of First Resort’s senior management team are eligible to receive bonuses based on criteria which may include ... the number of new clients.” Thus, LSPCs had an economic motivation for advertising their services.

Moreover, an economic motive for speech is not absolutely required to make the speech commercial. The court of appeals pointed to Fargo Women’s Health Org., Inc. v. Larson, 381 N.W.2d 176 (N.D. 1986), which upheld a preliminary injunction preventing a “pro-life” pregnancy clinic from engaging in “false and deceptive advertising and related activity [that] misleads persons into believing that abortions are conducted at the clinic with the intent of deceptively luring those persons to the clinic to unwittingly receive anti-abortion propaganda.” Even though clients didn’t pay for services, the court explained that, “[m]ore importantly, the Help Clinic’s advertisements are placed in a commercial context and are directed at the providing of services rather than toward an exchange of ideas.”  

So too here: the ordinance is limited to “the pregnancy-related services an LSPC offers in a marketplace for those services.” Indeed, the record indicated that First Resort viewed itself as “advertising and participating in a competitive marketplace for commercially valuable services.” The undisputed facts included First Resort’s admission that it “views its online advertising as competing with that of abortion providers for the attention of online viewers,” and that “[t]he medical services offered by First Resort, such as pregnancy testing, ultrasounds, and nursing consultations have monetary value.”

Nor was the Ordinance void for vagueness.  (If it had been, how could general prohibitions on false or misleading ads have survived?)  The Ordinance specified that its purpose was to prevent false or misleading ads about the nature of the counseling and services provided by LSPCs. A person of ordinary intelligence could understand what’s prohibited.

For basically the same reasons, the Ordinance was valid as applied to First Resort.  First Resort’s regulated speech wasn’t inextricably intertwined with its fully protected speech. First Resort’s commercial speech about the limited medical services it provides can easily be separated from its fully protected speech, that containing truthful information about pregnancy, on its website.  As the City Attorney’s letter explained, the clinic’s website included “detailed information about abortion procedures offered at outpatient medical clinics” and “implie[d] on its ‘Abortion Procedures’ page that First Resort perform[ed] pregnancy tests and ultrasounds as a prelude to offering abortion as an outpatient procedure, or referring clients to a provider who performs abortions.” The Ordinance regulated only misleading aspects of the website, which could easily be separated from other portions of the website, such as: “If you have missed at least one period, you may be pregnant .... The only sure way to know is by having a pregnancy test or pelvic exam.”

Nor did the Ordinance discriminate based on viewpoint. Whether the Ordinance applies depends on the services offered, not on the particular views espoused or held by a clinic. Even if an LSPC chooses not to offer abortions or abortion referrals for reasons that have nothing to do with their views on abortion, such as financial or logistical reasons, it’s covered.  Further, the Ordinance regulates LSPCs “because they engage in false or misleading speech, irrespective of their viewpoints.”  Applying only to the service providers that presented this “grave threat to women’s health” wasn’t viewpoint-based and didn’t restrict them from expressing their views.  The motivation for LSPCs’ false or misleading advertising might be anti-abortion views, but the Ordinance didn’t target the motivation, only the threat to women’s health.  Similarly, there was no equal protection problem based on the Ordinance’s use of a classification based on the speaker’s identity; rational basis review applied and was satisfied.

Separately, the Ordinance wasn’t preempted by California’s FAL (a matter that one of the judges, concurring, would have certified to the California Supreme Court).  “[A]bsent a clear indication of preemptive intent from the Legislature,” California courts presume that a local law in an area of traditional local concern “is not preempted by state statute.” However, preemption applies “if the local law ‘duplicates, contradicts, or enters an area fully occupied by general law, either expressly or by legislative implication.’ ” “Local legislation is ‘duplicative’ of general law when it is coextensive therewith.”  But California courts have mostly confined duplication preemption to penal ordinances, because when local and state offenses are duplicative, “a conviction under the [local] ordinance will operate to bar prosecution under state law for the same offense.”

The Ordinance here was civil and created no double-jeopardy bar to a state criminal prosecution for the same false advertising, and First Resort failed to show that the Ordinance would interfere with the enforcement of state law.  At least, the lack of a penal component weighed against finding preemption.  Also, the laws didn’t bar “precisely the same acts.” The Ordinance, which only applies to LSPCs and to statements about pregnancy-related services, was narrower in scope than the FAL in both covered parties and topics.  But First Resort didn’t show that the FAL covered all acts barred by the Ordinance—the Ordinance barred untrue or misleading statements whether through affirmative statements or by omission, while the FAL’s text didn’t mention omissions.  The Ordinance also regulated services “expressly or impliedly offered,” while the FAL didn’t mention implied offers. In addition, the Ordinance barred LSPCs from makng untrue or misleading statements about pregnancy-related services with the “intent not to perform” those services “as advertised.” By contrast, the FAL barred untrue or misleading statements about property or services with “the intent not to sell” them as advertised. Thus, the Ordinance covered false advertising concerning the performance of services, regardless of whether those services were  offered for sale.  The enforcement schemes were also entirely different, with the Ordinance lacking a criminal component that the FAL has.

Judge Tashima’s concurrence pointed out that many of the things the majority opinion said about the FAL weren’t really true—for example, the FAL covers omissions where affirmative statements become misleading because of the omission, which is pretty obviously the situation targeted by the Ordinance.


Reading list: unregistered marks in the EU

Verena von Bomhard & Artur Geier, Unregistered Trademarks in EU Trademark Law, Trademark Reporter, May-June, 2017 Vol. 107 No. 3
Abstract: The European Union (“EU”) trademark system is based on registration. Nevertheless, the laws of the EU Member States also protect unregistered rights, and these can be held against the use and registration of later EU trademarks. The article provides an introduction to unregistered trademarks in the EU and their enforcement in proceedings before the EU Intellectual Property Office. 
Excerpt: "[T]he law relating to unregistered trademarks is vastly different from one Member State to another. Some Member States do not recognize unregistered marks at all (beyond Article 6bis Paris Convention); others require varying degrees of market recognition or goodwill to protect trademarks based on use, while Denmark alone within the EU provides protection based on simple use."

Thursday, June 29, 2017

Second Circuit holds that allegations of "systematic" underweighing plead injury in fact for specific individual

John v. Whole Foods Market Gp., Inc., 858 F.3d 732 (2d. Cir. 2017)

John filed a putative class action under GBL §§ 349-350 alleging that New York City Whole Foods grocery stores systematically overstated the weights of pre-packaged food products and overcharged customers as a result. The court of appeals reversed the district court’s holding of lack of Article III standing on the pleadings.

John alleged that he “routinely shopped” for two years at two Whole Foods stores in Manhattan and made “regular[ ] purchase[s]” of pre-packaged products, including “pre-packaged cheese and cupcakes approximately one or two times per month.” The complaint didn’t identify a specific food purchase as to which Whole Foods overcharged John, but described pervasive overcharging of pre-packaged food throughout Whole Foods’ stores in New York City. The complaint a June 2015 press release of the New York City Department of Consumer Affairs announcing preliminary findings that Whole Foods’ New York City stores “routinely overstated the weights of its pre-packaged products—including meats, dairy and baked goods”:

DCA tested packages of 80 different types of pre-packaged products and found all of the products had packages with mislabeled weights. Additionally, 89 percent of the packages tested did not meet the federal standard for the maximum amount that an individual package can deviate from the actual weight, which is set by the U.S. Department of Commerce. The overcharges ranged from $0.80 for a package of pecan panko to $14.84 for a package of coconut shrimp.

The DCA’s findings, the press release continued, “point to a systematic problem with how products ... are weighed and labeled” and “suggest[ ] that individual packages are routinely not weighed or are inaccurately weighed, resulting in overcharges for consumers.” The investigation took place during the same period as John’s purchases and focused on the eight Whole Foods stores in NYC, including the two stores he patronized.  Whole Foods confirmed that cheese and cupcakes were among the pre-packaged products that the DCA alleged were mislabeled.

Because Whole Foods brought only a facial challenge to John’s allegations of standing, John had no evidentiary burden at the pleading stage. The district court thought that John didn’t plead injury in fact, which consists of “an invasion of a legally protected interest that is concrete and particularized and actual or imminent, not conjectural or hypothetical.”

The court of appeals disagreed. It was undisputed that overpaying for a product results in a financial loss constituting a particularized and concrete injury in fact. But the critical basis for John’s claim that he was overcharged was the DCA’s press release announcement that 89 percent of Whole Foods’ pre-packaged products tested by the DCA were mislabeled, and the press release’s conclusion that the mislabeling was “systematic” and “routine[ ].”  The district court didn’t think that was enough, but it failed to draw all reasonable inferences in John’s favor.  It wanted “an investigative finding of ubiquitous, systematic over-weighting at Whole Foods’ New York City stores,” “invariable incidents of this deceptive labeling practice,” and “across-the-board overcharging so as to embrace, other than by conjecture, the cheese and cupcakes ... that John ... occasionally bought in 2014 and 2015.” It also wanted a description of the DCA’s methodology.


But the DCA’s press release asserted that the mislabeling was “systematic” and “routine[ ],” and a facial attack on the pleadings wasn’t the right place to test the DCA’s sampling methods.  His alleged facts made his alleged injury plausible.  The district court was concerned over evidentiary obstacles on the merits, but targeted discovery might be able to address those. 

Wednesday, June 28, 2017

What I said to the USTR

Thanks for the opportunity to participate.  I’m here on behalf of the Organization for Transformative Works, a nonprofit which has over 770,000 registered users who have created more than a million works, and our website receives over 115 million page views per week.  Our users, who are the creators of the next generation and today, come from all over, including substantial numbers in the US, Canada, and Mexico, and we have a strong interest in preserving a balanced copyright regime.

Copyright’s limitations and exceptions are vital to creative practices and to creators as well as to educators, journalists, and ordinary citizens.  Any renegotiation should ensure flexible limitations and exceptions, including the highly successful model of American fair use and Canadian protections for user-generated content and educational uses.

It’s also important not to repeat the SOPA/PIPA debacle through the trade route.  SOPA and PIPA tried to change the online copyright rules in ways that would have harmed America’s advantage in internet innovation; the ideas don’t get better when suggested as trade policy.  Negotiations shouldn’t be based on the prospect of tampering with internet service provider protections that have proven so successful for American companies operating worldwide.  The Section 512 safe harbors for internet service providers who respond expeditiously to notices of claimed infringement have enabled American internet companies to thrive and remain innovative.  Section 512 and Section 230 of the Communications Decency Act, which provides a broader safe harbor for non-intellectual property related claims, are far from perfect.  But that just makes them like democracy—the worst possible regime except for all the alternatives that have been tried or proposed.  Proposals in some of the submissions to change the law to require filtering after a notice of infringement would shut down huge sections of the internet, and piracy would still continue as it always does. 

Similarly, requests to require more countries to create quasi-copyright anticircumvention rights for digital locks hamper innovation and would make American products less attractive—why would a farmer buy a John Deere tractor when he knows he won’t be able to repair it himself because of the digital locks that only Deere can release?  The Copyright Office only last week proposed loosening the rules on anticircumvention measures.  Imposing rules on other countries we already know aren’t working well would be a mistake.  At a bare minimum, anticircumvention provisions should require a nexus to copyright infringement and exceptions to anticircumvention rules should be explicit and flexible, like fair use.


Likewise, we oppose negotiating with Canada to extend its domestic copyright term or restrict its limitations and exceptions and with Mexico, with its very different legal system, to impose significant statutory damages in domestic infringement cases—when statutory damages are already desperately in need of reform in the US.  Balanced copyright policy is an important goal that shouldn’t be sacrificed in any negotiations.