Monday, June 27, 2016

Allegations of undisclosed sponsorship defeat anti-SLAPP motion at pleading stage

Woodard v. Labrada, 2016 WL 3436434, No. 16-00189 (C.D. Cal. May 12, 2016)

Woodard brought a putative class action alleging that various defendants (Media Defendants) misrepresented the weight loss benefits of weight loss supplement products made by the Manufacturing Defendants. Woodard alleged that Dr. Oz fraudulently promoted and marketed the weight loss benefits of the products on his daytime television show “The Doctor Oz Show.” Dr. Oz was allegedly “paid by Defendants Labrada, Interhealth, and/or Naturex in exchange for promoting Green Coffee Bean Extract, Garcinia Cambogia, and Raspberry Ketones on The Dr. Oz Show.”  Media defendants Zoco, Harpo, and Sony produce The Doctor Oz Show and that Sony distributes the show. Woodard alleged that Dr. Oz, Zoco, Harpo, and Sony were jointly liable for Dr. Oz’s misrepresentations.

The court found that Woodard didn’t allege sufficient facts showing Zoco, Harpo, and Sony engaged in a joint venture or civil conspiracy with Dr. Oz to fraudulently promote the products, or that they were liable through an agency relationship or aiding and abetting. However, the court declined to dismiss various consumer protection claims against Dr. Oz.

The court briefly dealt with the argument that Dr. Oz’s statements weren’t commercial speech, because Dr. Oz didn’t propose a commercial transaction in any of his challenged statements and repeatedly told viewers of his television show that he did not promote or sell any of the Products. However, the complaint alleged that Dr. Oz informed viewers of his show that specific brands of commercial weight loss products were effective. Moreover, the Complaint alleged that Dr. Oz was paid by the manufacturing defendants in exchange for promoting the products. That was enough under Kasky v. Nike.

Although defendants argued that California’s anti-SLAPP law applied, FRCP 56(d) overrode it for discovery purposes.  Woodard was entitled to discovery about the relationships between Dr. Oz, the other media defendants, and the manufacturers, to determine whether the speech at issue was in fact commercial speech.  The court thus declined, at this point, to shift fees under the anti-SLAPP law.


Friday, June 24, 2016

EFF/OTW/library/etc. comments on Copyright Office proposal on DMCA registration renewals

Read them here.  The Copyright Office has indicated, unwisely, an intent to make DMCA registrants re-register every three years, which will set up another hurdle for ISPs and encourage copyright trolls.

class action complaint survives GNC in 4th Cir. by pleading misleadingness

Midwestern Midget Football Club Inc. v. Riddell, Inc., 2016 WL 3406129, No. 2:15-00244 (S.D. W. Va. Jun. 17, 2016)

Midwestern is a nonprofit youth football organization, and Riddell makes helmets for football players.  Midwestern bought 12-24 Riddell Revolution Helmets per year; the market price allegedly reflects Riddell’s claim to provide greater concussion reduction compared to other helmets. Midwestern sued for false advertising under the West Virginia Consumer Credit and Protection Act.  Initially, the court dismissed the claim because “marketing statements that accurately describe the findings of duly qualified and reasonable scientific experts are not literally false ....” In re GNC Corp., 789 F.3d 505, 509 (4th Cir. 2015).  (Ugh.)

Midwestern refiled, claiming misleadingness and unjust enrichment.  [Discussion of GNC’s wrongheaded description of state consumer protection statutes omitted.]  Given GNC, Midwestern’s amended complaint alleged misleadingness, claiming that ads that cited the study on which Riddell relied were misleading because the youth helmets at issue were not examined in the study.

Riddell argued that Midwestern’s theory of misleadingness contradicted its earlier claims of literal falsity (since Midwestern had to concede that the claims were “literally true” but misleading). The court disagreed, because that’s not how allegations in superseded complaints work.  Also, Midwestern didn’t need to identify any particular statement as “literally true”; it was enough under GNC to identify a statement that was misleading.  “This central allegation, that Riddell used the Pittsburgh study to suggest a safety benefit for youth Revolution Helmets even though it was a different class of helmets that was subject to testing, provides enough basis to plausibly support a claim for false advertising.”  Midwestern didn’t need to plead with more specificity what the differences between the helmets were.

For causation, reliance, and injury, it was enough to plead that,

[b]ecause Riddell’s claims were included in advertisements, marketing, and sales presentations, a reasonable consumer would likely be misled into believing that the Revolution Helmet will reduce concussions, and may do so by 31%. This allowed Riddell to capitalize on consumer confusion and charge a premium price of approximately $50 for the Revolution Helmet, which reflected the illusory safety benefit of its “Concussion Reduction Technology.”

The complaint also satisfied Rule 9(b) by alleging that Midwestern purchased Revolution Helmets on an annual basis since 2002 and that Riddell made concussive reduction technology claims through a number of advertising channels at that time and up to the present day.


Likewise Midwestern plausibly stated a claim for unjust enrichment under West Virginia law by alleging that a benefit was conferred on the defendant when it knowingly collected a market premium for its youth helmets thanks to its misleading marketing claims. 

Thursday, June 23, 2016

Reading List: The Copyright Wars

Peter Baldwin, The Copyright Wars: Three Centuries of Trans-Atlantic Battle (2014)

Baldwin’s basic proposition is that there has been a long history of struggles between creators, distributors and the public, and a related struggle between the idea of Continental authors’ rights (fundamentally moral) and UK/US copyrights (fundamentally economic).  The book is full of tidbits about copyright and authors’ rights.  For example, I did not know that the French word for ghostwriters is “nègres,” which is amazing.  More detail, from JakeLamar at The Root
The French started calling ghost writers nègres back in the 1700s, just as colonialism and the slave trade were gaining momentum. The idea was that writing under someone else’s name, erasing your own identity, was thankless servitude on a par with the labor of colonialism’s black subjects and victims.  
Speaking of slavery, the US was a pirate nation for a long time, refusing to grant rights to foreign authors, and during the Civil War the South found time to enact a more protective copyright law, “[t]o distinguish itself from the North, cultivate an aristocratic and nonmercantile national identity, and appeal to the British.”  It didn’t work.

I liked Baldwin’s argument that, if, as some authors claim, the ability to own Blackacre in perpetuity justifies the ability to own Black Beauty in perpetuity, then authors should also have to pay property tax every year. He’s trying to understand what might seem to be a perplexing phenomenon: While authors gained more rights over the past few centuries, our commitment to absolutism in real property rights has declined with the acceptance of the social aspects of private property, operationalized in zoning, rent control, health and safety regulation, etc.

Other things I didn’t know: German composers were free to set poems to music until 1965, when the poets’ lobby achieved a law preventing this, perhaps connected to the decline of Lieder, “the once archetypical German musical art form.”  The US’s refusal to protect foreign authors made American edition print runs as big or bigger than British print runs even when the US had only half Britain’s population.  In 1775, almost as many copies of Blackstone’s Commentaries had been sold in America as in England, and Dickens was later serialized on the back of railroad times tables.  Baldwin suggests that higher prices in the UK were somewhat offset by its lending libraries, whereas the greater distances separating people in the US meant that books had to be bought rather than borrowed.  I loved the statement of Senator John Daniel of Virginia, opposing international copyright in 1891: “It is a bastile [sic] of letters which is here constructed, and not a republic.”  Separately, but not unrelatedly, Wordsworth insisted that his friends not lend copies of his books to anyone who could afford to buy them.

Moral rights, Baldwin shows, emerged in fascist Europe, part of the self-contradictory conception fascists had of authors as cultural icons of the state, both worth protecting (when they produced the right stuff) and ultimately subordinate to the needs of the community.  Authors’ honor deserved protection, but honor was defined by the community rather than by the individual.  Baldwin doesn’t consider this a knockout strike against moral rights; after all, he notes, Germany outlawed the death penalty at the prompting of a far-right party hoping to spare Nazis.  Moral rights were in part a response to technological change, holding out hope for the author to fix meaning.  They were also, especially in France, a response to specific legal issues, like divorce and inheritance—surely a child, an ex-wife, or a creditor shouldn’t just get to change an artist’s work to make it more marketable!  This relatively autonomous legal character may be connected to the fact that the authors’ rights/copyright conflict doesn’t map well onto any traditional left/right divide: copyright loves the ideology of the market, but also the public domain; authors’ rights sneer at the market but support cultural conservatism.

But perpetual moral rights lead to bizarre situations.  “In 1988 the sole lineal descendant of the painter Achille Deveria (died 1857) secured a court decision against the French magazine L’Express for printing a portrait of Franz Liszt from 1832, removing its bottom part and adding some color.”  Also, the Danish director Jens Jørgen Thorsen made a film on the life of Christ, enhanced “in the tediously predictable way of would-be provocateurs—with brothels and orgies, Mao and Uncle Sam.”  Result? “The Danish parliament and public asked whether the project was blasphemous and if it violated the moral rights of the authors of the gospels of Matthew, Mark, Luke, and John (whoever they were).”

This leads Baldwin to a more significant theoretical point: moral rights begin as highly individualistic, reinforcing “the author’s claim to enforce the singularity of his vision even after death.”  But time marches on, despite the claims of descendants and heirs.  Ultimately, some representative of the broader society steps in “to preserve what by now—if he remained of interest—had become the author’s position in a canon.… [C]ultural bureaucrats safeguarded not his individual vision, but a socialized understanding of where he fit in the pantheon.”  Authors’ rights hardened in Europe in the 1950s and 60s, when “France and Germany sought to distinguish their nascent postwar democracies both from their totalitarian predecessors and from what they and their facist forbears alike saw as the Anglophone world’s crass commercialization of culture.”  They abandoned the fascists’ populism and embraced a moral rights of elitism, preventing any debate on balancing the interests of the author and the audience for a long time after WWII. 

By contrast, Britain and America had an audience focus; “[r]ights of aesthetic control were shunned as fanciful and needless concessions to foppish artistes.”  Only when the US became such a major content producer that economic realities drove us to accede to Berne did we pretend to recognize moral rights.  Hollywood enthusiastically embraced the strong rights and long terms of Europe, without moral rights.  But, though expansive copyright is often considered an American export, it can also be seen as a Europeanization of rights, just as the U.S. ultimately adopted the European first-to-file patent regime (and, though he doesn’t mention it, a more registration-based trademark system).  As Baldwin points out, American positions actually lost out in GATT on performers’ rights (included) and favoritism for local cultural productions (preserved, as a bastion against American media intrusion).  Meanwhile, the magpie/collaborative nature of film forced Europe to adjust its former model of the individual author and the printer, bringing Continental and Anglo approaches closer together.  And then digitization unsettled balances all over—including on the Continent, where skeptics such as the Pirate Party have finally asked whether authors’ rights have gone too far.

Baldwin takes the long view, arguing that technological disruptions have occurred before, as has the democratization of media, often to the same laments/predictions of utopia just around the corner.  Washington Irving’s “The Mutability of Literature” announced the age of “excessive multiplication,” where freedom from parchment and quill made “every one a writer, and enabled every mind to pour itself into print, and diffuse itself over the whole intellectual world”—in 1819.  In 1933, a French observer lamented that recorded music was omnipresent, yet authors hadn’t been “rewarded in proportion to this enormous expansion of consumption.” Truly, there is nothing new under the sun.

Baldwin sees the aim of Google Books as Dionysian—to dissolve all books into a greater carnival of knowledge, and he’s a bit suspicious, though not condemnatory.  In fact, he’s suspicious of all sides, who generally look out for their own interests as readers, authors, publishers, intermediaries, etc. and not for the overall good.  And watch out, Twilight and Fifty Shades critics: “At no moment do we more date our selves than when we draw the line between culture and barbarism. Your artistic abuses are your children’s classics.”

One nit to pick when he gets to American academics, whose generally restrictionist views he attributes to not needing to sell books to make a living—Carol Rose is not, as he strongly implies, a “retooled humanities PhD[], refugee[] from the academic downturn of the 1980s and ‘90s,” nor would I consider her “heavily influenced by literary theories from English and comparative literature departments.”  She’s one of our most eminent property scholars and as hard-nosed a realist as one might hope to find.  

In Baldwin’s view, the lack of elite/academic support for less expansive authors’ rights regimes in Europe meant that resistance, when it did come, was even more populist, in the form of Pirate Parties.  Of course, the U.S. also got Google arguing in more corporatist terms in favor of “balanced” copyright.  To Baldwin, the Anglo perspective is not just that of crass commerce, but also populist/democratic; both of those  features lead to pressure to limit authors’ rights and see copyright as an economic bargain.  I’m reminded of the time I heard proud expansionist Hugh Hansen decry the expansion of the franchise from white male property owners because the rest of us were more likely to want to limit IP rights. 

Somewhat inexplicably to my mind, Baldwin claims that in the U.S., “it was the salaried intelligentsia which dominated the airwaves” in discourse about copyright, since “[n]o well-organized class of literati had sprung forth in nineteenth-century America.”  But that’s only true if you only focus on writers of texts, as opposed to performers, directors, etc., who do very well for themselves in arguing for more rights.  And, as he later points out, most authors can’t survive on royalties in any Western country, no matter how strongly it protects authors’ rights; patronage and self-patronage is the usual name of the game, so that can’t really explain the Anglo/Continental divide in academic perspectives.  His conclusion that only the salaried can advocate for freedom misses voices like Cory Doctorow and Becky Boop, and appears tied to his apparent belief that self-interest underlies everyone’s positions.  (Because claims about the economic impact of copyright are so common, I did like his point that “American colleges and universities employ ten times as many people as the motion picture and recording industries.”)

I also liked Baldwin’s point that, in fighting English hegemony online, the French turned to claims for “diversity” rather than claims for the preeminence of French language and culture. Ironically, American films fund French ones because the French government taxes media, then subsidizes French media; that intertwines the two cultures in a very practical way.  In another irony, French objections to Google Books meant that the project became even more English-heavy, rather than more evenhanded—German books make up more than 12% of Harvard’s collection, and if fully digitized would match the entire University of Heidelberg library.  But French and German books were removed because of publishers’ objections.  Google’s project violates French law because its short quotation exception didn’t apply to random snippets, and presenting excerpts violated the moral right of integrity; in a bit of hypocrisy, the French court determined that publishers, not authors, held the rights to digital dissemination and thus could sue even though such blanket transfers are generally not approved in European law.  

Baldwin reserves his greatest condemnation for the greediness of the big publishers, mostly European, who monopolize scientific publishing, with profit margins of 35-40%, as well as for the German publishers who charge large amounts to publish Ph.D dissertations, since publication is required to make the dissertation official.  He doesn’t have very nice words for the French version of orphan works legislation, either; the stringent requirements make the provision essentially useless, since it’s limited to certain institutions, who must first conduct a diligent search, and must still pay writers and publishers (somebody else’s money, by definition).  Authors could refuse permission to digitize, and a senator explained that an author who’d written something regrettable during the occupation by the Nazis should be able to prevent it from reappearing.  “Rarely had the unappetizing aspects of moral rights been so baldly stated.” Ultimately, he concludes rather mildly that there’s room for more pro-public reform, but the real value here is in the journey.


Tuesday, June 21, 2016

Bank of No Confusion: BNC National Bank fails to enjoin Bank of North Carolina rebranding

BNC Bancorp v. BNCCORP, Inc., 2016 WL 3365428, No. 15-cv-793 (M.D.N.C. Jun. 16, 2016)

Bank of North Carolina sought a declaratory judgment against BNC National Bank to settle rights in the BNC mark, and BNC National Bank sought a preliminary injunction to keep Bank of North Carolina from rebranding its North Carolina operations from “Bank of North Carolina” to “BNC Bank.”

Bank of North Carolina, a commercial bank incorporated and chartered under the laws of North Carolina, opened its doors in North Carolina in 1991.  In 2010, it opened branches in South Carolina and Virginia. In 2011, Bank of North Carolina it registered a BNC BANK word and design mark in connection with banking services:


In South Carolina and Virginia, Bank of North Carolina is known as “BNC Bank,” and it announced plans to rebrand its North Carolina operations from “Bank of North Carolina” to “BNC Bank” as well.

BNC National Bank is a federally chartered bank with branches in North Dakota, Minnesota, and Arizona. It adopted its current name in 1995. In December 2014 and January 2015, BNC National Bank filed federal trademark applications for the word marks BNC and BNC NATIONAL BANK, in connection with banking and financial services. Bank of North Carolina’s opposition was suspended for this case.

BNC National Bank, the court concluded, couldn’t show likely success as to its prior ownership of a valid mark in North Carolina.  Use requires deliberate and continuous use.  BNC National Bank’s evidence was as follows: by 1996, it had three general banking accounts linked to addresses in Norh Carolina.  In 2001, it had 13 such accounts.  In 2016, it had 54 such accounts.  BNC National Bank closed its first mortgage loan in North Carolina in 2008 and consistently closed mortgage loans in the state every year thereafter. BNC National Bank also had at least one wealth management customer in North Carolina in 2007.  BNC National Bank argued that it used the BNC marks in North Carolina when it communicates with its North Carolina customers through account statements, notices, brochures, and business cards, delivered through mail, email, and BNC National Bank’s website, as well as its mobile banking application. The earliest communication BNC National Bank may have mailed to North Carolina was a brochure informing customers of BNC Bank Line, a free service that allows customers to make account inquiries and transactions over the phone, mailed in either December 1995 or January 1996.
  
Bank of North Carolina claimed to have used the BNC mark “[a]t least as early as 1995.” Shortly after opening in 1995, it introduced BNC Free (a free checking account) and BNC Mortgage (a small mortgage business). In September 1992, when Bank of North Carolina moved from a temporary location to its headquarters, a VP testified that he remembered hanging BNC Free and BNC Mortgage banners on the front of the new building. BNC Free and BNC Mortgage were also part of the marketing for a new branch opened in 1995.

Given this evidence, BNC National Bank didn’t meet its burden of demonstrating it was likely to succeed in proving ownership of the BNC marks in North Carolina. The evidence as of 1996 boiled down to three general banking accounts with North Carolina addresses plus regular communications with customers bearing the BNC marks.  But BNC National Bank presented no evidence that its North Carolina customers actually received communications bearing the marks. Furthermore, Bank of North Carolina’s evidence called into question whether even 1996 would suffice to give BNC National Bank priority.  The court also questioned whether BNC National Bank’s use of the marks was either deliberate or continuous. BNC National Bank didn’t know how it has acquired customers in North Carolina, or whether it had any customers in North Carolina in the years immediately following 1996.  “This showing does not suggest deliberate and continuous use; rather, it appears more sporadic, casual, and transitory.”

In a footnote, the court noted that Belmora didn’t require ownership of trademark rights to bring a §43(a)(1) claim.  However, Belmora emphasized that it was “not a trademark infringement case,” and this is.

Then, even if BNC National Bank could claim priority, the court found that it couldn’t show likely success on confusion.  When evaluating likelihood of confusion, “it is important to remember that ‘trademark infringement protects only against mistaken purchasing decisions and not against confusion generally.’ ”

Similarity of the marks weighed in favor of finding confusion, since BNC was the dominant portion of each mark, and the parties directly competed, also favoring a confusion finding.  However, BNC National Bank didn’t show that its marks had any strength in North Carolina, and there was no intent to confuse, weighing against likely confusion.

BNC National Bank focused on evidence of actual confusion.  However, “[i]f there is a very large volume of contacts or transactions which could give rise to confusion and there is only a handful of instances of actual confusion, the evidence of actual confusion may receive relatively little weight.”

BNC National Bank claimed that, from July 2015 to March 2016, its employees kept track of over one hundred instances of alleged confusion. The court found many of these entries to be incomprehensible.  “Several of these entries state only ‘N/A.’ Others include short phrases like ‘North Carolina’ or ‘Looked on internet,’ which convey little information and require the Court to speculate as to what happened in each instance.”  But they seemed to involve instances where a Bank of North Carolina customer mistakenly called BNC National Bank or visited BNC National Bank’s website.

Also, a Twitter user posted a tweet complaining that “BNC has the worst online banking setup ever.” She tagged BNC National Bank in her post, but clarified that she was talking about “BNC National Bank located in SC.” A vendor emailed Bank of North Carolina but mistakenly copied BNC National Bank employees on the email. A professional auditing company seeking to verify confidential information related to a Bank of North Carolina customer mailed its request to BNC National Bank instead. And a South Carolina resident applied on BNC National Bank’s website to open a checking account, thinking she was applying to open an account with Bank of North Carolina.

Was this the type of confusion against which the Lanham Act was designed to protect?  The Fourth Circuit has cautioned, “trademark infringement protects only against mistaken purchasing decisions and not against confusion generally.” When there are mistaken calls and letters from people attempting to reach a different party with a similar name, there still needs to be evidence linking “the confusion evinced by the calls to any potential or actual effect on consumers’ purchasing decisions.”  There wasn’t any here:

While these individuals contacted the wrong bank, there is no evidence they were confused about the source of their banking services. That is, while these individuals may have believed BNC National Bank’s phone number, website, and Twitter handle belonged to Bank of North Carolina, there is no indication that they believed they were banking with BNC National Bank, rather than Bank of North Carolina. Similarly, there is no indication that the vendor and professional auditing company emailed or mailed information meant for Bank of North Carolina to BNC National Bank under the belief they were doing business with BNC National Bank. At most, this evidence suggests perhaps a lack of careful attention on the part of the companies, not confusion in the minds of consumers.


The only relevant evidence was the individual in South Carolina who attempted to open a checking account with Bank of North Carolina by submitting an application on BNC National Bank’s website. “This evidence may suggest a mistaken purchasing decision.”  But, given that both banks had opened thousands of bank accounts, a single instance of confusion carried little weight. “Quite simply, there is little indication that consumers are likely to be confused about ‘the origin of the goods or services’ offered by each bank.”  [Another instance of a court shrinking the concept of confusion to reach a result it considers just. I have no quibble with this result! But compare the broad concept of confusion over affiliation/association recently reemphasized by the Second Circuit.]

TM/design patent question of the day

Consider the iPhoney:
Does this infringe any rights Apple might have?  We know the trade dress is functional for phones; I would argue that the trade dress is functional for realistic toys as well (and possibly more so, given what a kid could do with a sharp edge).  And the design patents?  What about dilution for the name "iPhoney"?

How it works: Understanding Copyright Law in the New Creative Economy

Re:create Coalition’s How It Works: Understanding Copyright Law in the New Creative Economy

Alex Feerst, Corporate Counsel, Medium: Medium strives to present a range of options for community-driven and commercial and in-between writing. Porous: some writers have found ways into pro and semi-pro careers.

Katie Oyama, Sr. Policy Counsel, Google: Showed a video about the Missouri Star Quilting Co., whose success drives a whole town’s and it’s all because of YouTube.  YT allows content creators to experiment at lower costs; allows time-shifting by comedians (e.g., John Oliver); opens global markets. Psy’s Gagnam Style was the first billion-view video, and had enormous effect on an entire genre: looking at metrics, K-Pop moved outside Korea in a big way; increased ability to interact w/fans.

Becky “Boop” Prince, YouTube CeWEBrity, Internet news analyst: Started out making gameplay videos, got interested in ©, now makes a living creating news.  Diversity of creative voices/creator can be central v. network TV; global audiences allow you to prove your worth w/o a gatekeeper.

Betsy Rosenblatt, Legal Director, Organization for Transformative Works: 700,000 registered users on AO3, 150 million page views/week, all through volunteers.  Fandom brings people together who wouldn’t have found each other; underrepresented groups in particular. Find audience of those who love what they love; gift economy isn’t about making a living, but about making yourself.

Prince: She never thought she’d have an impact like this, but found people were watching to help themselves feel better.

Rosenblatt: Money isn’t the whole story. Online creativity can/does lead to financial success, but also creativity, selfhood even without commercial success—we need all the options.

Feerst: Low-cost production means that content can go viral; open letter to CEO on Medium went viral and the company raised people’s salaries—the effects are unpredictable.

Oyama: secondary markets: people can gain audience, which sometimes becomes part of the overall business model; YouTubers getting book deals.

Rosenblatt: we collected powerful stories from around the world; people told us that making transformative fanworks literally saved their lives.  People talked about depression, about not knowing others shared their sexual identities, about how no one was representing them in major media. One wrote stories about the X-Men and being in a wheelchair and found others to talk about her experiences—connecting via connection to a superhero in that situation.

Prince: discussed an instance in which a viewer imagined having her and other vloggers as friends in high school—he felt accepted with us.

Feerst: “Why I don’t talk to white people about race”—opened up a far larger discussion online though started more personal.

Oyama: a way to make connections to others’ humanity.

Feerst: Running your own website is difficult.  Instead, you can sit inside our network for distribution via Twitter etc. Value of creating within network even fro new media launches—Bill Simmons from ESPN is building on Grantland model—allows interaction between market sectors, finding new voices.

Oyama: Disney used YouTube well to reestablish Frozen, which topped box office for longer than usual.  90% of Content ID matches now stay up; ½ of music revenue on YT comes from UGC.

Rosenblatt: The OTW can’t build Content ID, but fanworks often drive demand. Users are often creators, and boost/build markets for ©. That means we need a system that encourages people to build on what came before.

Prince: Fair use is really important: reaction channels are a new phenomenon, polarizing—sometimes it may be infringing but often it’s critical commentary.  She’s had a quote from Buzzfeed generate a Content ID block even though she was talking over the clip and it was a short clip for commentary. When your voice can be blocked, fair use is a huge issue. Content ID is only available to those with a lot of content—it favors large companies over small.

Oyama: On balance, US system is remarkable in how it lets creators thrive.  New economic sectors based on fair use are growing.  Google search snippets depend on fair use.  Safe harbors are also core protections for free speech; YT has 400 hours/minute uploaded and couldn’t work otherwise.  §512 also allows small companies to grow; this is under threat outside the US.

Feerst: We’d all like our name attached to our modest original contributions, but anger may lead people to use DMCA when © isn’t the problem. © is a powerful regime for regulating all content. When people feel plagiarized, they may turn to ©.  Quotations shouldn’t lead to DMCA wars but they do in some cases.  The DMCA helps sites, but only by rolling back ©’s overcoverage in which everything, even shopping lists, is covered by default.  But the DMCA also means we’re incentivized to take things down even when the claims are weak. Counternotice requires people to surrender personal info and is rarely used.  A lot of folks who don’t like a picture or think they were plagiarized use takedowns.  Copyright and 1A are fundamentally in tension. We often see DMCA used as a frictionless means to get takedowns, as when someone paraphrases a text exchange they had and the other person is unhappy. That’s copyright misuse; the incentives of © are not involved.

Rosenblatt: Fair use is designed to protect the 1A. The OTW believes we can screen notices for legitimacy and not just automatically take stuff down. The people who come to us often feel voiceless; they fear counternotice in a system they already don’t trust.

Prince: Privacy is important. Counternotice requires revealing name/location. Someone figured out her location and sent a false takedown using a username referencing the Boston Bombing: clearly threatening.  Counternotice required revealing personal info.  Result: Chilling effect and self-censorship.  Multiple strikes filed at once can be particularly damaging, because the DMCA requires repeat offenders to be punished; your account can be shut down before you can respond.

Josh Lamel, Re:create director: We’ve heard that over 50% of Amazon DMCA notices are by competitors attempting to keep competing books from being sold—being off for 48 hours can kill a book’s rankings, which are key to its ability to be noticed. [This is important and not well understood yet in the policy space: the profiles of DMCA notices are very different across services. YT receives different notices from Google Web Search, which is different from Google Image Search, which is different from Wikipedia, which is different from Wordpress.]

Prince: Same thing happens on YT for ranking.  Can be weeks you’re gone; if you’re not growing you’re not picked up by the algorithm.

Oyama: we try to facilitate due process. Big US © owners are generally responsible but activists in other countries report they face abuse. In a Content ID dispute, about ½ the time the sender will release the claim. Sometimes putting people together can be effective.

Lamel: What would notice and staydown mean?

Oyama: worst thing for a startup is to change the rules. Government obligation doesn’t work in many circumstances. It’s technically impossible, and doesn’t account for fair use or licensing. SOPA died in part for these concerns.  There are some hosted platforms that do functionally have staydown, with Content ID, but that doesn’t work for search where we don’t have fingerprints, for startups, for nonprofits.

Rosenblatt: “notice and staydown” is a hollow phrase, too broad and too narrow. They mean mandatory monitoring and filtering. Piracy is bad, but once you require monitoring and filtering you shut down small platforms. We couldn’t do it, especially not in a way that accounted for fair use.  Collateral damage is fair use—using a sledgehammer to remove a barnacle.

Prince: Staydown doesn’t work.  I downgraded the Buzzfeed video and messed with the audio until it went up.  Evasion means it doesn’t work, and also chills speech; many people worry about getting blocked.

Feerst: Saying “build a machine to figure out fair use” isn’t something you can do even with $60 million.  Staydown requirements would skew towards established incumbents.  We have disappointments with the DMCA but it provides a structure we can use.  The problem is how people behave when statutory damages etc. feed up into creators’ behavior, such as fear of using a counternotice.

Oyama: 512 is most critical for startups that haven’t been invented yet (and aren’t here to defend themselves).

Rosenblatt: Think about protecting people’s ability to express themselves. Who gets to speak? Those who already have a voice or those who don’t?

Prince: need clarity, especially globally—creators are in different countries.

Q: How do DMCA wars on YT start?

Prince: Revenue comes from being recommended on related videos, etc.  DMCA claim stops competitor from appearing on search.  Separately, Content ID means people can claim your video and get the $ for it. Music owner may claim 100% of revenue based on 30 seconds in hour long video. 

Rosenblatt: Emotional incentive too, or sometimes just machines. Often our DMCA requests (to AO3) come from matching titles.

Q: Harsher laws in other countries. How can global companies protect creators against those regimes?

Oyama: Other countries do have fair dealing; we are seeing startups and entrepreneurs explain that they need safe harbors as well. Should also be very focused on licensing regimes. We have resources to have teams for each country, but music and film systems are extremely fragmented. We’ve given $5 billion to music from YT, but it has taken huge time and effort.


Feerst: We operate in the US, though we’re online and have goals to expand. One reason platforms largely grew up in the US is the DMCA.  Largely we are less able to protect users overseas. Small companies with no expansion plans overseas may roll the dice, but companies that hope to grow have to make choices.

Monday, June 20, 2016

False endorsement claims based on resale fail

Hart v. Amazon.com, Inc., 2016 WL 3360639, No. 15 C 01217 (N.D. Ill. Jun. 13, 2016)

What is the difference between a plausible and implausible allegation of likely confusion over endorsement?  Beats me!  Here, Hart’s pro se complaint alleged that Amazon violated the Lanham Act by allowing resales of counterfeit copies of his books, Vagabond Natural and Vagabond Spiritual.

First, Hart didn’t plausibly allege that the copies were counterfeit, making Amazon’s conduct legitimate under the first sale doctrine.  All he had was “his own conclusory say-so.”  Resales of legitimate goods don’t confuse about source or qualities.

Even without first sale, the confusion allegations failed.  Hart alleged that Amazon’s sales caused endorsement confusion by falsely suggesting that Hart was affiliated with Amazon. “Plaintiff must be able to show that the public believe[s] that the mark’s owner sponsored or otherwise approved of the use of the trademark.”  Because the claim relied on individual third-party sellers reselling Hart’s book, it wasn’t plausible:

The mere fact that Amazon offers a platform to third-party sellers to sell various products and, subsequently, those individuals sold Plaintiff’s books, does not imply that Plaintiff has endorsed Amazon or has any specific affiliation with Amazon. This is not the reality of commerce. As a comparison, a shopper at a bookstore does not automatically believe that just because a used book is appearing at the store, the author is expressly endorsing that store. The same is true for a book that is resold on Amazon.

Note how limited this is: the analysis would apparently need to differ if Amazon were selling the products directly.  If taken seriously, of course, that could destroy first sale, at least where the goods had not actually been used before resale.

State law claims also failed, including a promissory estoppel claim based on Amazon’s alleged representation that it would remove Hart’s books from its website within 2-3 days of receiving his request to remove the books. Amazon wrote: “Thank you for your message. Please be advised that we are in the process of removing [Vagabond Natural and Vagabond Spiritual] ... from Amazon.com.... It typically takes 2-3 days for a listing to disappear once it has been removed from our catalog. We trust this will bring this matter to a close.”  There was no unambiguous promise that the process would only take 2-3 days, and Hart acknowledged that the books were eventually removed.  “These allegations do not articulate a clear, definite promise that would support a promissory estoppel claim.”  [Useful guidance for those worried about promissory estoppel claims evading §230.]


Using generic art that may evoke plaintiff is fair

Sturgis Motorcycle Rally, Inc. v. Rushmore Photo & Gifts, Inc, 2016 WL 3282197, No. 11-5052 (D.S.D. Jun. 10, 2016)

This case has occasionally shown up in my Westclip, but this time I’m writing about it because the court set forth specific designs that the defendants were allowed to use as descriptive fair use.  Previously, the defendants were preliminarily enjoined from using plaintiff SMRI’s STURGIS word mark, STURGIS BIKE WEEK, BLACK HILLS MOTOR CLASSIC STURGIS RALLY & RACES BLACK HILLS S.D., STURGIS MOTORCYCLE RALLY, STURGIS RALLY & RACES, or any colorable imitations (also covering dilution).  They were also enjoined from using “Officially Licensed Sturgis,” “Authentic Sturgis,” “Legendary Sturgis,” “Licensed Sturgis,” “Official Sturgis,” “Sturgis Central,” “Sturgis Motor Classic,” and “Sturgis Rally” in any confusing way, and from using various domain names such as AuthenticSturgis.com, Legendary-Sturgis.com, LicensedSturgis.com, OfficialSturgis.com, SturgisCentral.com, SturgisMotorClassic.com, or SturgisRallyOnline.com.
 
I believe this is an example of infringing merchandise
SMRI’s registered and common law trademarks were specifically limited to the motorcycle rally event held annually in Sturgis, South Dakota.  Thus, defendants were allowed to use “the name Sturgis or other phrases which contain the name Sturgis in the distribution, marketing and sale of non-rally-related Sturgis, South Dakota, products.”  Since they were preliminarily enjoined against infringement, the defendants had a heavier burden of showing they’d avoided a colorable imitation or dilution than a non-enjoined party.  (How do you show non-dilution? Also, how on earth is this a famous mark among the general consuming public?)  An adjudicated infringer must keep a safe distance from the protected mark.

The court considered several groups of symbols/art.  First, “Legendary South Dakota” (versus the enjoined “Legendary Sturgis”).  The moving defendants argued that their use now referred to the Wild West.  The court found that Sturgis was prehistorically and historically important enough, as indicated by numerous volumes of history “dedicated to Sturgis and its environs having nothing to do with the Sturgis Rally,” to make Sturgis “legendary” without reference to the Rally.  Thus, SMRI had no right to block non-rally-related “Legendary Sturgis” or “Legendary Sturgis, South Dakota.”

Next: “Sturgis, South Dakota.”  SMRI argued that the defendants shouldn’t be able to remove “Sturgis Motor Classic” and use “Sturgis, South Dakota” on the very same, or nearly identical, designs they previously sold as “rally merchandise,” since SMRI’s rights covered STURGIS on motorcycle rally-related goods.  SMRI also objected to the use of “Sturgis” in a font much larger than “South Dakota.”  SMRI wanted any “Sturgis, South Dakota” product to “add some non-rally related indicia,” because the geographical term, standing alone, wasn’t at a safe distance.  Further, SMRI argued that use of “skulls, stylized eagles, [and] American flags” on rally-related goods now made those symbols off-limits.

The court disagreed. Though SMRI won a jury trial, SMRI’s lawyer “specifically told the jury that plaintiff’s trademark claims were not asserted against the defendants or others ‘using Sturgis fairly to denote their geographic location. That’s a fair use.’ The preliminary injunction was issued with that concession, the limitations of SMRI’s trademark registrations with the United States Patent and Trademark Office, and the jury verdict in mind.”  SMRI’s rights didn’t cover American flags, bald eagles, gothic artwork/fonts, the skull and crossbones, flames, pistols, or any combination thereof.  “Whether some members of the motorcycle community, rally attendees or SMRI may envision these symbols and artwork as signs of the rally, that argument was not the basis of plaintiff’s claims at trial and not the foundation for the jury’s verdict in favor of SMRI.” 


The defendants’ proposed uses were consistent with the language and intent of the preliminary injunction.  The symbols/art didn’t imitate or resemble SMRI’s marks and were a “safe distance” from infringement. [Even though they clearly are concepts that motorcycle-related art uses heavily.  Interesting limit on unfair competition—one might see this as almost the inverse of cases like Belmora.  Having stayed away from plaintiff’s precise mark, the defendant is entitled to use generic terms; no more is required, and if generic terms happen to invoke associations with the mark, that’s too bad for plaintiff.]

Here are some of the okayed designs:








Certification nonprofit engaged in commercial speech when it badmouthed uncertified seller

Handsome Brook Farm, LLC v. Humane Farm Animal Care, Inc., 2016 WL 3348431, No. 16-cv-592 (E.D. Va. Jun. 15, 2016)
 
Nice thorough opinion playing out the interaction between Lexmark and the definition of “commercial advertising or promotion.”  The USDA has the National Organic Program, for eggs “Certified Organic.” The American Humane Association has a standard for pasture-raised eggs allowing those who use it to claim “American Humane Certified™” or “Pasture Raised.”  Humane Farm Animal Care, a nonprofit, certifies eggs as “Certified Humane®.”  Handsome Brook sells egs with the USDA organic and AHA pasture-raised and humane labels, but not the HFAC Certified Humane label.
 
Producers that pass HFAC’s inspection may use the Certified Humane® logo on their eggs; the licensing agreement is renewable annually and application/inspection fees must be paid annually to renew, as well as $.05 per case of thirty dozen eggs.  HFAC’s largest source of revenue in 2013 and 2014 was the licensing fees paid based on the quantity of product sold with the HFAC logo.
 
Handsome Brook doesn’t use the HFAC logo.  Some of its eggs are packaged in Illinois, at Phil’s Fresh Eggs, which packages eggs from three farmers, each of which is certified organic under the USDA program and also AHA-certified, as is Handsome Brook.  None of Handsome Brook’s eggs are HFAC-certified, though HFAC does certify other farmers whose eggs are packaged at Phil’s Fresh Eggs.
 
In May 2016, Phil’s Fresh Eggs’ Vice President contacted HFAC to update its certification. During the resulting inspection, the inspector observed that Handsome Brook’s USDA certification was from 2013 and an annual update was not on file, and though Handsome Brook had an AHA certification on file, the three source farms did not. The inspector stated that she could not verify that Handsome Brook’s eggs were “American Humane Certified” because the AHA had not inspected Phil’s Fresh Eggs.
 
However, Handsome Brook and its three suppliers were in fact all appropriately certified  under the USDA and AHA programs; Handsome Brook emailed the suppliers’ USDA certifications to Phil’s Fresh Eggs five months before the audit, and the AHA’s publicly viewable website listed Handsome Brook’s three suppliers as “currently considered certified under the umbrella of Handsome Brook Farm, LLC.”   HFAC’s VP believed that the audit report confirmed a complaint she received about a month earlier about Handsome Brook mislabeling its eggs, so she drafted an email titled “Unverified Pasture Raised Label Claims”:
 
I am writing you to share some potentially troubling news about one of your egg suppliers, Handsome Brook Farms. Based upon a whistleblower complaint we recently conducted a traceability inspection of a packaging plant that packs Certified Humane® eggs and also packs Handsome Brook Farm’s (HBF) eggs. It came to our attention that the “Pasture Raised” claims on the Handsome Brook cartons could not be verified. In fact, of the three producers whose eggs were being packed into HBF cartons, none were pasture raised. These eggs had tags that stated, “Certified Organic” but our auditors found that the organic certification was not current.
 
The email continued that the auditor found “there was no validation that the eggs going into HBF cartons were from [AHA] certified farms,” that there was no update of Handsome Brook’s USDA certification on file at Phil’s Fresh Eggs, and that the “veracity” of Handsome Brook’s American Humane Certified labeling claim “could not be substantiated.”  It ended:
 
I hope you will reconsider changing suppliers. Producers who are Certified Humane® undergo traceability audits to verify that every egg that goes in every carton that has claims such as “free range” or “pasture raised” are verified by our inspectors to be exactly that. This in turn protects you.
 
She sent the email to 69 people at 39 companies, including the top 10 conventional grocery chains in the United States. She chose them because they were all “retailers who were thinking of switching from actual pasture-raised laying hens to the Handsome Brook eggs.”  “The email had the intended effect,” causing Handsome Brook to lose customers; Whole Foods temporarily pulled Handsome Brook’s eggs from its shelves, while a large group of retailers indefinitely pulled the eggs, and a prospective customer indefinitely delayed plans to launch HB’s eggs in its stores.
 
Handsome Brook sued for false advertising, tortious interference, and trade libel.  Previously, the court granted a TRO against further dissemination of the email; in this opinion, it granted a preliminary injunction.
 
The court used the Gordon & Breach test to determine whether this was “advertising or promotion.”  HFAC argued that the email did more than propose a commercial transaction, because its primary purpose was to support humane animal treatment.  It also argued that its certification fees didn’t provide a sufficient economic incentive for the email to be commercial in nature.
 
The court disagreed.  HFAC pursued its anmal welfare objective through “distinctly commercial means.”  It sought to leverage consumer demand for humane treatment to encourage producers to adhere to its standards.  “Thus both the achievement of HFAC’s public interest objective and its economic survival critically depend upon its licensing agreements with producers.”  In light of that economic reality, the email was primarily commercial in nature.  In the VP’s own words, she sent the email to protect the interests of her own licensees. The context additionally supported calling the email commercial, since the VP intentionally sent it “to retailers who were thinking of switching from actual pasture-raised laying hens to the Handsome Brook eggs.”  
 
Gordon & Breach also asks whether the parties are in commercial competition.  The court, citing Lexmark, rejected the idea that the parties have to compete at the same level of the distribution chain.  Although Lexmark expressly disclaimed any comment on whether the communications before it constituted “commercial advertising or promotion,” the court here sensibly pointed out that
 
it would be a perplexing decision by the Supreme Court to conclude that indirect competitors had standing to bring a Lanham Act claim, but those same plaintiffs’ claims would necessarily fail on the merits due to lack of direct competition. Many post-Lexmark cases have seized on that intuitive conclusion and the absence of a direct-competitor requirement in the plain language of § 1125(a)(1)(B) to conclude that such a relationship is not necessary to show commercial advertising or promotion.
 
Indeed, the court noted, no post-Lexmark case finds the absence of a direct-competitor relationship to be dispositive in a Lanham Act claim. The competitive relationship in this case was sufficient: HFAC-certified eggs compete directly with Handsome Brook’s eggs.
 
HFAC argued that its speech wasn’t made “for the purpose of influencing consumers to buy defendant’s goods or services,” as required by Gordon & Breach, because it only promoted a class of goods and would only tangentially raise revenue for HFAC.  But this wasn’t a nonprofit fundraising letter to prospective donors.  Further, the email promoted HFAC’s product: the license it offered licensees.  “It is true that the license promotes a public interest, but it is commercial nonetheless.” s
 
And the email was disseminated sufficiently to constitute advertising and promotion within the relevant industry, even if “many national and countless regional and local retailers” weren’t included: the top ten conventional grocery chains, over 16,000 stores nationwide, were included.  HFAC argued that it only targeted retailers that already carried Humane Certified eggs, but a targeted ad is still an ad.  HFAC specifically chose retailers that were considering switching to Handsome Brooks eggs, which “clearly demonstrates an attempt to penetrate the relevant market.”
 
As for falsity, the email falsely stated that (1) “of the three producers whose eggs were being packed into HBF cartons, none were pasture raised,” (2) “[b]ased upon a whistleblower complaint we recently conducted a traceability inspection of a packing plant that packs Certified Humane® eggs and also packs Handsome Brook Farm’s (HBF) eggs,” and (3) Handsome Brook eggs inspected at Phil’s Fresh Eggs were being mislabeled as certified organic. This last was stated by necessary implication: the email said that Handsome Brook’s organic certification documentation was issued in 2013 and “no annual update was on file” and also that “our auditors found that the organic certification was not current.” In fact, Handsome Brook sent its suppliers’ current certificates several months before the inspection, and even if the auditor didn’t find them in the file, the statements created the impression that Handsome Brook was mislabeling its eggs.
 
There was no dispute about materiality, which was supported by intuition, HFAC’s own business model, and HFAC’s own statements about the importance of reputation “[i]n the ethically-sourced products space.”  HFAC’s VP testified that she sent the email, in the court’s words, “hoping retailers would find the allegations of mislabeling relevant in their purchasing decision.”  There was also no dispute about actual deception and injury.
 
Handsome Brook also showed irreparable injury:
 
Plaintiff is a young, but quickly growing company. The email had a clear effect on that growth and Handsome Brook’s goodwill, causing Handsome Brook to lose one customer temporarily and two large customers indefinitely. Those injuries are irreparable and would likely compound if the email is disseminated further.
 
Nor was prohibiting further dissemination enough.  Handsome Brook offered evidence that the information in the email “has now seeped even beyond the initial recipients,” having been forwarded among its competitors.  A broker reported that rumors have been repeated at an industry trade show that “Handsome Brook Farm had failed a Certified Humane audit.” Each forward or word-of-mouth communication threatened “additional loss of goodwill, customers, and growth opportunities,” which were irreparable injuries. Handsome Brook estimated that the monthly loss of revenue from even one grocer pulling Handsome Brook eggs was in the hundreds of thousands of dollars. “Even if this number could be sufficiently estimated so as to be recoverable at trial, there is a very small likelihood that HFAC could satisfy such a judgment if the injuries continue to swell, as HFAC is a nonprofit operating at a [deficit].”
 
Handsome Brook’s own defense of itself wasn’t sufficient.  “HFAC’s email directly impugns Handsome Brook’s credibility, such that an email from Handsome Brook is not likely to have the intended palliative effect.”  HFAC’s accusation gave the claim credibility; the same credible source was required to halt the harm.
 
Thus, the balance of the equities favored ordering HFAC to issue a corrective email.  Though that might harm its reputation, that was HFAC’s self-inflicted injury, by sending the email after performing only a cursory investigation.  The auditor or the VP “could have made some effort to contact Handsome Brook, Handsome Brook’s suppliers, AHA, the USDA, regional certifying organizations, or publicly available information to verify the conclusions reached in the audit.” However, an order requiring HFAC to post a corrective statement on its website was too much; it would just be public shaming.  The corrective email would also further the public interest in avoiding false advertising.

Friday, June 17, 2016

Fellowship opportunity: Science, tech, and law


For people with PhDs and an interest: the American Association for the Advancement of Science Science & Technology Policy Fellowships (STPF) is committed to actively recruiting competitive applicants to the Judicial Fellowship.


An August 29 webinar will focus specifically on the Judicial fellowship.  Details and to RSVP here: http://www.aaas.org/event/stpf/enhance-your-career-st-policy-fellowships-judicial-fellowship

Thursday, June 16, 2016

Functionality: it's in the bag

Schutte Bagclosures Inc. v. Kwik Lok Corp., No. 12-cv-5541 (S.D.N.Y. Jun. 14, 2016)
 
Following up from previous post on an earlier ruling. (Thanks to an eagle-eyed correspondent who probably knows way more than anyone else wants to know about plastic bag closures.)  There’s a bit of tacking here—the court finds that Kwik-Lok’s registrations for bag closure designs cover current versions, despite some changes, forcing Schutte to bear the burden of proof on functionality.  That’s Kwik-Lox’s last victory, though. 
 
The court finds the Kwik-Lok registered bag closures to be functional under Traffix, and just in case under Morton-Norwich too, rejecting the proffered alternative designs (which were produced using 3-D printers, for those of you tracking clever litigation innovations at home) as unproven in their ability to hold up to the kind of rapid automated application required for large-scale production of closed bags.  Apparently these things come in reels, like ticket reels, and work in machines specifically designed to fit the closures.
 

Schutte on L; Kwik-Lok on R.
 
Then, to be extra extra sure, the court continued on to find that confusion was unlikely—these are only sold in batches of at least 4000 to sophisticated consumers, in clearly marked packages.  And, as I commented in my initial post, the federal dilution claim failed for want of fame among the general consuming public.  Interestingly, the court then dismissed the state dilution claim as preempted by patent law under Bonito Boats, since the claim was one regarding product configuration trade dress. While states can require labeling for trade dress to avoid confusion, NY dilution law contemplated a flat ban on potentially patentable “publicly known design and utilitarian ideas which were unprotected by the patent laws,” and that’s a no-no.
 
I don’t recall seeing this reasoning before, but the court cites a few similar cases: Luv N’ Care, Ltd. v. Regent Baby Prods. Corp., 841 F. Supp. 2d 753 (S.D.N.Y. 2012); E. Am. Trio Prods., Inc. v. Tang Elec. Corp., 97 F. Supp. 2d 395 (S.D.N.Y. 2000); Escada AG v. The Limited, Inc., 810 F. Supp. 571 (S.D.N.Y. 1993). 

Query: why not reason similarly about copyright, per Sears/Compco, and invalidate state dilution laws at least as based on copyrightable designs?

Wednesday, June 15, 2016

A dog's breakfast of false advertising counterclaims

Blue Buffalo Co. v. Nestlé Purina Petcare Co., No. 4:15 CV 384, 2016 WL 3227676 (E.D. Mo. Jun. 13, 2016)
 
Blue Buffalo sued Purina for false advertising; Purina counterclaimed.  On a motion to dismiss the counterclaims, the court got rid of most and kept a few. 
 
Super 7 Lifesource Bits: Purina alleged that Blue Buffalo’s use of the term “Super 7 Lifesource Bits” and associated graphics suggested that they were superior in nutrition to other pet foods and that the products contained a significant amount of the ingredients found in the Lifesource Bits, when the depicted fruits and vegetables likely only made up .25% of the product overall. The challenged ads, packaging, and website statements, taken as a whole, supported a plausible claim for false advertising, though Purina’s claims were weak. Consumer reaction evidence could prove them.
 
Website image touting "exclusive LifeSource Bits"
Savory Sizzlers: Purina alleged that Blue Buffalo falsely advertised its Kitchen Cravings Savory Sizzlers Homestyle Dog Treats as containing bacon as a main ingredient when in fact the product contained no bacon. The front of the pork-based product packaging states in prominent lettering that it features “USA PORK FIRST INGREDIENT.” Likewise, the chicken-based version states “USA CHICKEN FIRST INGREDIENT” prominently on the front of the package. “The only mention of bacon is on the back of the package, which states in small lettering ‘If there’s one thing that will bring dogs running, it’s the smell of bacon sizzling in the pan. Tasty BLUE Sizzlers are the naturally healthy alternative to the real thing, so you can feel good about rewarding your canine companion with the bacon flavor he craves.’”  Purina challenged this language, plus the clear window on the package showing that it was shaped like bacon strips.
 
The court concluded that “no reasonable consumer could believe that Savory Sizzlers contain bacon as a main ingredient,” because the package clearly stated that pork or chicken was the first ingredient [ed. note: I’m a vegetarian, but isn’t bacon made of pork?], and “the only mention of bacon is in the context of a statement about how Savory Sizzlers are not bacon, but rather, are an alternative to bacon.” Dismissal on the pleadings was appropriate because  “the claim alleges that a consumer will read a true statement on a package and will then disregard ‘well-known facts of life’ and assume things about the products other than what the statement actually says.”
 
Health Bars: Purina challenged the names and packaging of two BLUE Health Bars, alleging that they indicated that certain ingredients were primary: Health Bars Baked with Banana and Yogurt (with yellow and cream packaging; bananas and yogurt are ingredients four and five) and Health Bars Baked with Bacon, Egg & Cheese (red packaging; bacon is the fifth ingredient and dried egg and cheese powder are seventh and eighth).  But this didn’t plausibly allege misleadingness. These were dog biscuits; “reasonable consumers know as a fact of life that biscuits are not composed primarily of fruit and yogurt, but rather, like all baked goods, are primarily composed of grains and flours…. While color schemes are often used to connote flavor, they do not necessarily imply ingredient primacy.”
 
Family Favorite Recipes: Mom’s Chicken Pie, Shepherd’s Pie, Backyard BBQ, Turkey Day Feast, and Turducken flavors have photos on the product labels depicting the traditional title dish, allegedly misleading consumers into thinking that the can contains human-grade meals comprised of identical ingredients and ratios of ingredients as those in the traditional dish, in combination with the “family favorite recipes” tagline.  Specifically, Mom’s Chicken Pie flavor doesn’t contain any pie crust or wheat; Shepherd’s Pie doesn’t contain equal parts of meat mixture and potatoes [and no actual shepherd either]; and the rest aren’t comprised of high-quality, whole ingredients, nor are some of the ingredients depicted primary ingredients.  The court found these allegations to “defy credulity. No reasonable consumer would expect these cans of dog food to contain whole turkeys, turduckens, or pies. Nor would any reasonable consumer believe that the Family Favorite Recipes’ references to traditional American meals mean that the same, human grade ingredients are in the cans of dog food.”  [But see the experience of Serena Williams.]
 
Wild Bones Dental Chews: Purina alleged that the packaging misled consumers into thinking the product contains actual bone. Membership in the Wilderness product line allegedly implied “a link to nature and containing ingredients one would find in the wild,” and other products in the Wilderness line contained real elk antlers and beef bones, strengthening the impression.  Also, the bones were in the shape and color of “true bones,” visible through a clear window in the packaging.  Again, the court was distinctly unimpressed.  The “bone” shape was “the shape of a cartoon bone, sized just like a dog biscuit, and is embossed with the word ‘WILDNERNESS.’ The Wild Bones do not even remotely resemble real bones.”
 
Healthy Gourmet Flaked Fish & Shrimp Entrée: the product name allegedly consumers into believing that the product was “comprised primarily of wholesome seafood and shrimp,” while shrimp was only the eighth ingredient, though “ocean fish” was the first ingredient, and “fish broth” was the second. While the allegation that the product was not “comprised primarily of wholesome seafood” was therefore self-defeating, it was tenuously plausible that consumers would believe that shrimp comprised more of the product than it actually does.  The claim “is not so incredible that a reasonable consumer would have to disregard well-known facts of life to believe it.”